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PrintWhatever happened to honour amongst thieves?
News Type: Event — Tue Aug 21, 2007 2:09 AM EDT
Bank managers investing my pension
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Now wait a minute! As a responsible citizen I put a little cash aside every month in the bank in case of emergencies. I put it in the bank because it's safer there than under the mattress.
So it's been a shock to me this week to discover that my German savings bank has been gambling my money away on a giant round of international poker.
It seems that while we responsible citizens were sleeping soundly in our beds, the banks have been running a global racket that the Mafia would envy. The racket involves hedging their loan risks at other banks. All the banks are lending and borrowing and covering each others risks in a great big off-balance-sheet merry-go-round.
A sensible precaution you might think? Well no. At least not if the fact that the risk is shared by the rest of the banking world makes you less picky about who you lend money to.
So last week we suddenly saw the IKB - a German bank which offers loans to small business, being saved from collapse by an emergency cash infusion. This week it was the small state savings bank of Lower Saxony which needed to be rescued.
What went so drastically wrong? Well, like with any round of poker...suddenly one of the players will get cold feet. All of a sudden the mood in the gambling den has turned ugly. The players are staring at each other waiting for one to make the first move. So last week Deutsche Bank suddenly withdrew its credit lines to the IKB. This is the banking equivalent of waiting until they're soaped up in the shower before turning off the water. And the house of cards started to crumble.
And what were the dodgy loans which these small scale German banks had got themselves into? US sub-prime mortgages, that's what. The core problem is that too many Americans are defaulting on their mortgages. Mortgages which no right-minded bank would have lent them in the first place.....oh except that they were going to sell on the risk, so they really didn't care....
From now on I'll be investing my savings on Lucky Lady in the three-fifteen at Kempton park. Looks like a far less risky bet than my local savings bank!
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{"commentId":966533,"authorDomain":"Pasi"}
{"commentId":967837,"authorDomain":"djd"}
Lucky Lady is a donkey - stick with the UMB (Unter Matratzebank) ;)
{"commentId":967837,"threadId":"140909","contentId":"909412","authorDomain":"djd"}
- 4 votes
#2 - Wed Aug 22, 2007 3:26 PM EDT{"commentId":968122,"authorDomain":"cartooncat"}
{"commentId":968174,"authorDomain":"djd"}
April newsvine earnings?
{"commentId":968174,"threadId":"140909","contentId":"909412","authorDomain":"djd"}
- 4 votes
{"commentId":968262,"authorDomain":"cartooncat"}
{"commentId":4878484,"authorDomain":"harlee20087"}
G'day Cartoon. Long time no hear. Growing up in the criminal world i have to say (and I mean this. There is honour amongst. I've seen it, I've witnessed it nd I've been apart of this. Believe me friend there is honour amongst friends.
And! There is honour amongst people who do that right thing. While i'll admit there are a lot of backstabbler amongst theives/friends. You have to know who your mates are.
{"commentId":4878484,"threadId":"140909","contentId":"909412","authorDomain":"harlee20087"}
- 3 votes
{"commentId":974193,"authorDomain":"WMK"}
Excellent post CC
It seems that while we responsible citizens were sleeping soundly in our beds, the banks have been running a global racket that the Mafia would envy. The racket involves hedging their loan risks at other banks. All the banks are lending and borrowing and covering each others risks in a great big off-balance-sheet merry-go-round.
WHY THEY DO THIS?!
they were going to sell on the risk, so they really didn't care
As long as someone can stick someone else with the consequences for bad behavior (like assuming stupid business risk) then there will be people who believe it is a great idea to do so. IMO it is called taking advantage of people and it isn't just a bad business idea - it's immoral. It is immoral to exploit the weakness of others to benefit yourself and harm them, yet if there isn't a law specifically prohibiting it and you wear a suit when you do it - it's considered 'business'.
Is business about winners and losers? The strong devouring the weak? Sometimes yes - when it is competition between businesses providing similar products/services then yes there will be some businesses who are simply better at what they do and they will come up with more satisfied customers hence 'winning' the competition. Should business win by devouring its customers directly, regardless of what its competitors do? IMO no, and that is what predatory lending and credit institutions have done and are doing.
{"commentId":974193,"threadId":"140909","contentId":"909412","authorDomain":"WMK"}
- 3 votes
#3 - Sat Aug 25, 2007 7:35 AM EDT{"commentId":1212135,"authorDomain":"seward"}
Sounds exactly the same as what has recently happened to the British Northern Rock bank. It is now in it's final death throes, it's shares have totally plummeted, despite a huge cash injection from the Bank of England, in other words, the British Taxpayer, OUR money!
Looking at this situation carefully, one can see that the whole economy is based upon Debt. This is another reason why various banks and financial institutions have been eager to loan us money, money that they probably know we will never be in a posistion to repay!
Just assume, (it'll never happen), but let's assume that suddenly the Public woke up, and PAID OFF all their debts. Have you any idea what would happen?
I'll tell you what would happen. The world economy would collapse, utterly and completely. Whatever happens, I feel that we still haven't seen the worst of it, yet.
{"commentId":1212135,"threadId":"140909","contentId":"909412","authorDomain":"seward"}
- 2 votes
#4 - Sat Nov 24, 2007 3:06 PM EST{"canLink":false,"threadId":"140909","isPrivate":false}
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