Thanks to “M,” who contacted me directly with a referral to a great site, I made an amazing discovery this morning: There exists a banker with brains and scruples. Such a sighting is extremely rare, as most of you who are regular readers already know. Many of them have brains, don’t get me wrong, that’s how they acquire their MBAs, banking industry certifications, and law degrees, so that they can write one-way contracts that screw other people; it’s the combination that’s rare: brains and scruples.
“AB,” stands for Anonymous Banker, and AB’s site goes by that same name with the subhead, “An Insiders View Into the Banking Industry and Economic Crisis.”
In reading some of AB’s posts, written from the point of view of someone who has spent the bulk of his/her career working with small businesses, I find that he/she is just as disgusted and alarmed as I am about what is to come for our nation and our economy, if we don’t restore confidence.
And frankly, given that I am still stuck in a perfectly maintained home in a decent middle class neighborhood (that would have ordinarily sold in about 60 days, before the depression), I have a hard time mustering up much confidence these days that a life of misery for my family will not go on for many months to come; it’s already been two years.
As I have said several times before, in my opinion, this is because we bailed out big banks and their executives (with their perks, jets, and bonuses), instead of creating loan programs (that would have been break even) for distressed homeowners. If we had simply addressed the problem that started this mess in the beginning — and it wasn’t even a big mystery to unravel like a health problem or an intermittent rattle coming from a car — real estate, I wouldn’t be here today, using the D-word.
This all started with bad news about real estate foreclosures. Consumers were scared about what was happening in their neighborhoods, rightfully so. Consumers lost confidence. Then, we witnessed one of the biggest giveaways to corporate executives in history. Outrage over AIG parties, trips and bonuses resulted in no substantive penalties or reforms. Business “as usual” ruled the day.
The financial services industry greased the palms of Congress, and everybody (except the citizens at large who have to foot the bill), still had a really nice time. Meanwhile, the cost of fuel for a day to run one of their jets or yachts is probably about the amount of money any of us serfs would need to “make our month,” or give us the wiggle room we need to negotiate the sale or purchase of a home.
After everyone lost confidence, consumers tightened their purse stings and stopped spending. This led to trouble in the auto industry and another round of bailout disbursements. The fact that one of our economy’s biggest industries (it’s not just the automakers, but all of the interdependent businesses: steel, glass, plastics, et cetera) was in trouble and would also need a bail out, further shook confidence in government’s ability to address fundamental issues and root causes.
Threats to the survival of small businesses, accompanied by (i.e., resulting in even more) unemployment have followed. AB states that he/she “[has] been a small business advocate for thirty years,” and further observed:
“Each day I encounter consumers and business owners that had been able to keep current on their revolving debt. But with each rate increase in the midst of declining revenues, brought about by this economic crisis CREATED BY THE BANKING INDUSTRY, more and more consumers and business owners are falling behind. The rate increases are a self-fulfilling prophesy. The banks say they need an increase in rates to help offset the increase in credit card losses. I say, the increase in rates is CAUSING a good portion of the credit card losses.”
A few months ago (July 22, 2009), someone attempted to post a comment, which I suppressed:
“Perhaps instead of buying a domain name, you should budget properly and pay your bills off in time.”
Not wanting to fire off in a knee-jerk reaction, here’s my answer:
I do pay my bills on time. I always have. This site is not about me, it’s about justice, fairness, efficiency of the banks for the benefit of a citizenry at large, small businesses and consumers in particular, and “the economy, stupid.” If you want to “dis” me, while demonstrating a lack of understanding or caring about people or the issues that impact us all (and our children, their children, and so on): “budget properly” and get your own site. Since ChangeInTerms.com is a pg-rated site, I can’t respond in more basic terms such as “‘expletive’ you, too!” (that you would more likely have the intellectual capacity to grasp). But in “southern-speak,” I can say: “Bless Your Heart.”
A glimmer isn’t a recovery and there will be no recovery, without confidence. There is not going to be any confidence as long as we are trapped, squeezed, and coming soon to a household and small business budget near you: taxed to death (and beyond the grave). Small businesses and the economy — all of us — must have a properly functioning banking system, and we don’t.
Banks are making very bad decisions, causing defaults (this is especially tragic when account holders were making their payments, on time) when if they would instead work with people, they could get their money back (not to mention maintaining a loyal customer base instead of destroying their own brands). They could prevent a frightening downward spiral and “self-fulfilling prophesy” from coming true.
The purpose of the banking system is to provide an exchange system for our currency and our economy. It is failing in its fulfillment of that purpose. AB knows it, I know it, and anyone with enough brains to buy a domain name and try to fight back before it’s too late knows it. Bless Your Heart, too, if you don’t join the fight!
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on Oct 2nd, 2009 at 7:41 pm
unfortunately, all true. Today I got notices from 2 credit card companies.
The first increased the minimum monthly payment, but not too badly.
The second said their variable rate was going up to 24.5% in November. Of course, when rates go up, this will rise. I am only using credit cards for emergencies. Once debt is paid down, the banks will be losing alot of their revenues, and they will suffer. Consumers will uprise if there are anymore bailouts. It does not look good for the next few years. Banks are not satisfied in paying 1% to the feds, and getting 20% from their customers! It will come back on them, once the economy is totally destroyed.
on Oct 3rd, 2009 at 4:45 am
My calculations, which very few if anybody else ever talks about on the internet, reveal one trillion dollars in consumer credit card debt that then translates into 15-25 billion dollars in MONTHLY interest rate charges.
The economy would literally stabilize overnight (45-90 days) if programs were set up to waive all interest rate charges on EXISTING credit card debt for anybody intent on paying down their consumer credit card debt.
The government and the media made a big deal about the 2 billion dollar cash for clunkers program that actually just created MORE DEBT!
Imagine 15-25 billion dollars every month, instead of going directly to the banks (in interest payments alone!), first going to your neighbor, your local business, to either pay down a debt with them, or to order a new product or service that is paid with CASH!
The recipient of the money would in turn use it to, PAY DOWN THEIR OWN DEBTS, so the banks would STILL get the money back. The biggest difference is the money first circulated locally BEFORE it goes back to the banks.
Our esteemed Wall Street bankers either do not get the concept of what local economies need to be healthy, or they are knowingly wreaking havoc by doing the exact opposite to what needs to be done to stabilize local economies.
What is even more injurious, NEW IPO’S coming from the usual suspects involve INTERNET VENTURES, even as infrastructure companies such as SATURN are allowed to just twist in the wind and die.
on Oct 4th, 2009 at 12:18 pm
Alessandro…you still dont get it.
It isnt about helping the consumer or the economy. Its about filling the pockets of the banks, with kickbacks to the elected politicians. If you look at the bailouts, they targeted specific industries: Wall street, the banks, and the automotive industry. How did either one of these help main street?
Kickbacks from the banks, the investment firms, and the auto companies lined the politicians pockets. All the government would have to do to end the recession is to lower rates to 3-4%. This would stimulate housing and the auto industries, creating millions of jobs overnight. But why wont the government do it? Because there is nothing in it for the individual politician or banker. Why be happy with 4%, when the banks can earn 30% on their money? Why wotn the government reduce taxes? Unfortunately, the only way for the consumer to win the fight, is pay off their debt, and do not do business with the big banks again. And to spread the word. It wont happen overnight, but it will happen. I cannot believe Chase is not hurting for business, and write offs. This is only the beginning. They will hurt more as the recession deepens,,,which it has to, since the government is doing nothing to stop it. Ufortunately, that is how I see it. That is how it is.
on Oct 5th, 2009 at 4:43 pm
FYI,
There is a planned demonstration against the American Bankers Association in Chicago on October 27th. This should be interesting.
http://www.showdowninchicago.org/details.html
on Oct 6th, 2009 at 1:36 am
M,
It’s about time.
on Oct 6th, 2009 at 7:01 am
thanks Alessandro. I joined the mailing list.
on Oct 6th, 2009 at 8:33 pm
see cnn.com. they showed a couple on video whose minimum payments had been almost tripled. Great to watch since it portrayed Chase just like it is. Chase commented that it did this to a million customers because they wanted them to repay in a reasonable time frame!
on Oct 6th, 2009 at 9:55 pm
I found the CNN link. I’ll promote this to the home page as a post, with my comments when I get a chance. So Chase is still on the same old line: “deadbeats didn’t pay us back fast enough…”
http://www.cnn.com/video/#/video/us/2009/10/06/yellin.credit.card.outrage.cnn
on Oct 7th, 2009 at 9:31 pm
Wolf Blitzer tonight said that a congresswoman was furious when she watched the movie. Apparently she is going to try to get congress to vote tomorrow to move up the credit bill to start December. The big banks say they need months to adjust their computer systems!
In any event, it wont have any effect. The rate provision only applies to fixed rates; the banks have gone to variable. Coincidence eh!
on Oct 8th, 2009 at 12:11 am
The Banks have been so busy trying to figure out how to screw the American public and yet they had NO problem adjusting their systems for that!!
What is done is done and nothing is going to fix this. The minimum payment was NEVER addressed and the loop holes in variable rates are so large that you could drive a truck through them. We need to educate the future CHASE vic’s, it is the only way to be rid of CHASE and BANKS like them.
on Oct 9th, 2009 at 1:45 pm
Dear “clow,”
RE: Comment #10.
I agree with almost all of your points, which I think provide a very astute assessment of the situation overall, except one: “What’s done is done and nothing is going to fix this.”
I do understand the frustration, and I feel it every day, fighting a monster like Chase. The banking industry and the lobbyists, and the influence that they exercise, does make the situation seem hopeless. But it’s not. As a parent and an educator, too, I look forward to a future where our children know better than to support corrupt and evil banks.
If we fail to fight, our children will be enslaved. And I can’t accept that. I will keep looking for ways to mount a resistance.
Your observation did give me an idea for a funny cartoon. I wish I had time to draw it:
Time it takes to make rates go up: 1 second.
Time it takes for rates to come down: 18 months.
Take care.