Toxic bankers need rounding up

The General Election in Britain is literally under a cloud. The volcanic ash cloud is vying for top billing on the news channels with the leaders' debates. However, such a natural disaster as a volcano popping off dangerous substances should not stop us knowing what our political parties are going to do about the financial crisis that will engulf us far more seriously than this Icelandic cloud.

Today we hear that Goldman Sachs are dishing out bonuses to people who have made a fast buck out of thin air. Over the weekend we are told that the SEC in the USA is getting tough and have charged the bank and one of its bosses with fraud for selling customers sub-prime mortgages as the American housing market collapsed. A senior vice president in the investment bank's London office, Fabrice Tourre, was named in court papers as the "architect of the scheme". More like a simply conman it seems to me, but I musn't get prejudicial, must I?

I remember seeing a British TV reporter interviewing an African-American mother of two or three children as she sat on the delapidated porch of her erstwhile house as she decried the fact that she had got in over her head with a sub-prime mortgage. She was in debt bigtime as she spoke. But when she took out the loan she was on welfare. Any loan arranger could have seen straight away she was not in any way suitable for the mortgage market. Cut to the loan arranger. He was now out of work bemoaning the fact that he had let himself put greed before conscience. Both were a sorry pair indeed.

But they are just pawns in the game played out by the likes of the real paper shufflers in the banks. Goldman Sachs probably doesn't have a dime of its own. Most of what they have is very similar to this Icelandic ash cloud. In this sub-prime fiasco they took these ridiculous mortgages and repackaged them as highly desirable "investment vehicles". The South Sea Bubble brigade were their amateur predecessors by comparison. The SEC's director of enforcement Robert Khuzami has said, 'The product was new and complex but the deception and conflicts are old and simple.' Precisely!

As Goldman Sachs continues to run its casino, the bonuses keep coming. Fabrice Tourre is the executive charged with fraud. The bank bosses let him go on working in London despite a lawsuit against him by the US regulators. Have these people got any integity?

What we need to know during this election is what is going to happen to these casino banks? They have no money other than what's shown in their computers. It's legalised gambling commonly passed of as hedge fund administration, leveraging and other such Humpty Dumpty phraseology. It's financial Chinese whispers played to the game of musical chairs.

The truth of the matter is that these banks are so big that no auditor on earth can give us a truthful picture of what is happening. But it is not the political parties who will hold power after the election, it is the bankers. How many more people are shuffling money around that has no origin in reality? Are the sub-prime loans still doing the rounds? There's much talk from politicians but no real answers.

Let's get the transparency that we are seeking in politics rushing through the banking system. Otherwise there will be more like Tourre drifting in on the financial ash cloud.

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Ron Paul's message beats Bush's - 228 to 205!

So George Bush's grand ideas of splashing money around have come to nought. The House voted it down. Ron Paul is right. This is nothing to do with "Free Enterprise" but rather the interventionist, special interest group, corporatist cabal that has created this mess.

This is Ron Paul's message from the floor of the House. I get the impression that his lone voice is not so lone anymore!

George Bush jokes - "If this were a dictatorship, it would be a heck of a lot easier. Just so long as I was the victor" - But it isn't, thank goodness!

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Bin Laden versus The Credit Crunchers

Yesterday it was put to be that the Credit Crunchers of the Sub-Prime Mortgage Fiasco had done considerably more damage to the world economy than Osama Bin Laden and his Ferral Fighters.

The Credit Crunchers have several banks to their score. Northern Rock, Lehman Brothers, Merrill Lynch, HBOS, Fanny Mae and Freddy Mac. They nearly got the AIG conglomeration, but Uncle Sam's Bag Carrier saw that one off. Which means that most Americans won't see their taxes come down anytime soon!

The Ferral Fighters have caused the full-blown Iraq debacle, Guantanamo Bay Incarceration Center, the Patriot Act, the World Trade Center and Pentagon outrages, and the London Bombings to occur.

The Credit Crunchers have almost destroyed the "system" by greed and subterfuge, causing untold misery for those with lost homes, businesses, jobs and inner well-being. However, they have not killed anybody as far as I know.

The Ferral Fighters have killed many but have yet to destroy our inner well-being and have caused considerably less destruction to the "system".

So who has done more damage? I think the jury is out on this one!

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Rogue trader runs up a tidy sum in bank fraud!

In the "it can't get much worse" department, French bank Societe Generale gets done by a rogue trader. The bank says it has uncovered "massive" fraud by a Paris-based trader, Jerome Kerviel (pictured), which resulted in a loss of €4.9bn ($7.1bn; £3.7bn). The rogue trader has done a disservice to his employers in two ways. The second is that they have had to come clean about losses of €2.05bn related to the sub-prime mortgage crisis in the US. This begs the question - are all banks subject to such sub-prime losses?

The problem with banks today is that they have let in the chancers and got rid of the local bank manager who knew something, if not everything about, his/her customers. Initially, the long distance approach met with approval, but gradually people have come to the conclusion that banks are glorified gambling outfits with spivs, chancers, and, yes, a few crooks, at the helm.

In Britain, the Chancellor of the Exchequer blinks wearily at the problems before him. Northern Rock has proved to be a sandstone based on a gamble. The Financial Services Authority has little authority and offers precious little in the way of service to the citizens.

We need transparency in our banking system, not behind the scenes deals and secretive policy making.

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'Subprime' is word of year 2007

Not surprising, the word "subprime" comes out as the Number One word of the year for 2007 by linguists of the American Dialect Society. Says a lot about the way bankers and financiers worked themselves into a real mess now known as the "credit crunch".

Let's hope 2008 will produce a better year, and instead of being "less than ideal" will be more than ideal!

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Another fine mess!

I still can't believe you can be the CEO of a bank and not know where all the loans your bank grants end up. That is who you sell them on to in these wonderful "repackaging" jobs. Because of the so-called credit crunch, the public is now aware of the dodgy dealings that the banks have been getting up to. Funny that if any small business went into their bank and told the manager breezily "Oh, I can't remember who I've sold to, but I'm sure I will find out in time" they would be marked down with a big black pen in the credit ratings! No such ignominy for the blustering bank officials themselves.

Jenna from Houston, Texas, tells the BBC Online "I am a loan officer working in sub-prime lending. At the present time, I am looking for a job in other industries as we are facing a 20% reduction in our company. I have learned that lending to people with spotty credit and the promotion of ARMs was not the best of ideas. I am thankful that I was always quick to dissuade borrowers from ARMs, as I had my reservations about them even two years ago. Encouraging 100% financing with ARMs is a recipe for disaster, as proven by the hike in foreclosures on homes this year."

Charles Prince, otherwise known as Chuck, has just resigned from being Chairman and CEO of Citibank/Citicorp. What was he thinking over the last two years. That it was all fine and dandy selling loans and mortgages to people with "spotty credit"? Did he have any reservations, like Jenna? It really does defy belief! And we could all fall foul of this nonsense. I hope Chuck doesn't get more than ten cents in payoff!

The late great British comedian Tony Hancock, in the "Blood Donor" takes umbrage at the tone of the doctor about to take some of his blood. "I didn't come here to be insulted by a legalised vampire!" he intones, feeling that the doctor has not taken sufficient interest in this momentous act of selfless giving.

It would seem that in the financial world we now have been insulted by legalised fraudsters, quite able to offer the unsuspecting, the less capable, and the downright gullible all kinds of dodgy deals. Or at least they did. Hopefully the game is up. But no prison walls beckon, though. This has all been allowed to happen by a nod and a wink from the powers that be.

It can only get better, folks!

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Cowboys and Mortgage Lenders!

Panorama on BBC1 has exposed the rotten way the so-called "sub-prime" mortgage business has invaded the UK housing market. From salesmen no better than suited crooks to the turkeys running the FSA and the Council of Mortgage Lenders. In fact, the guy put up to respond to the way companies are offering mortgages seemed to suggest nothing was wrong. Ostriches can get jobs in Britain today, it seems.

One company, Home and County Mortgages, appears to be well and truly offering trees bearing money! The boss pays himself over £1 million but does a runner when a TV reporter arrives at his office. Home and County get their lawyers to respond. No mention of the alleged document shredding!

The whole thing stinks. It seems every bank in Britain has a subsidiary swilling around in this cesspit of monopoly money. And if, as Panorama suggested, large sections of the housing market where these mortages exist collapse, then we ALL suffer. Well, those with ordinary lives to lead. The cowboys will have left town!

The Panorama programme tonight. It's a depressing exposure of financial tomfoolery!

The Home and County response to the BBC

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Rock of the North!

Northern Rock is a bank that was once a building society. As a bank they can borrow large sums of money to bolster their liquidity. But just now, there is a problem in world banking. Some American banks have been flashing their cash in front of the noses of the less fortunate. All of a sudden the so-called Sub-prime Market has imploded in parts. Now banks don't want to lend to other banks.

Thankfully, the Bank of England has seen fit to assist Northern Rock. As the Chancellor of the Exchequor, Alastair Darling says, Northern Rock is a sound business that got caught up in the problems of the global banking industry. Pity, though, that this only applies to banks with a problem and not the rest of us!

A little curiosity in all this. Apparently these banks, having been used to taking in each others laundry, so to speak, have suddenly got a pile of dirty washing that they can't identify! I find it amazing that they can lend all this money in a cobweb of transactions, a few bad apples are thrown up, and they have to go back trying to find the lending routes.

Now if I told my bank, that I lent money to someone, that they lent it to someone else but that I didn't know who or where, would they give me a second chance to pay THEM back?

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Sub-prime? More like sub-second!

The so-called sub-prime market, whereby money lenders seek out the less well-paid and seduce them with "attractive" mortgages to buy houses, has taken a tumble. Now the Securities & Exchange Commission in the USA is investigating troubled sub-prime mortgage lender New Century, a company that is in more trouble than most.

What I don't get is that the SEC must have seen this coming. Or maybe they have the ostrich syndrome, just like those who saw Hurricane Katrina coming, then cleared out of town, leaving the poor and the destitute to fend for themselves.

George Bush says "Recent disturbances in the sub-prime mortgage industry are modest in relation to the size of our economy". Well, that's right, but it's cold comfort to those struggling to keep up. Bush has left all traces of his Episcopalian Republican politics behind to take up with a born-again credo that delivers precious little to those less fortunate. My, my! And he bears the name given to him by his family in honour of George Herbert!

When the Statue of Liberty went up overlooking New York Harbor, it was seen as the greatest symbol of liberty for the oppressed and the poor. Nothing about applying for sub-prime loans or being cast adrift in a stinking mudswamp due to poor levee maintainance!

"Keep ancient lands, your storied pomp!" cries she with silent lips. "Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!"

Pity she can't get down from that giant plinthe and hurry on down to the SEC to tell those guys what's what!

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