37 ms·

Another Inside Job

85 points by bakbak 16y ago

bugmenot 16y ago
Wake up, sheeple?
tomelders 16y ago
Where are the accounts from the people who maned the phones and signed the letters that made all this possible? I doubt any BOA executive picked up the phone and told a customer to default on their mortgage. That would have been someone like me or you just doing their job, doing what they're told. Where are their accounts of what the were told to do? I'm worried that these people don't care about the people they helped screw over. I hope thats not the case, but I'm worried that it is.
- varjag 16y ago
  It's like being a guard in a death camp, just a job that someone has to do. Or so you think.
- brown9-2 16y ago
  I'm worried that these people don't care about the people they helped screw over. I hope thats not the case, but I'm worried that it is. Or they are just more worried about the NDAs they signed and the army of lawyers the bank's employ.
  - tomelders 16y ago
    Perhaps. But there's ways and means to get their accounts out into the open. And no NDA can prevent a person from speaking in court.
jcromartie 16y ago
What I hate about all of this is that, to the baby boomer generation, any point of view that wants to hold banks and Wall St. accountable for what they have done is "communism" or "socialism" or "fascism" or some other nonsense. It's like anything that goes against any business is automatically discredited. It is absolutely plainly obvious that banksters basically hate you and the government is right along with them. Look at the UBS whistleblower Bradley Birkenfeld, who is in prison right now while every single one of the 19,000 tax cheats who diverted billions in taxes are free (save for one guy on a two-year probation). He was wealthy right along with his clients... but he went against the grain. It's interesting to note that Eric Holder was a lawyer and represented UBS at one point, and won't touch the case. But you just can't make this point in some circles.
- jswinghammer 16y ago
  I'm not sure if it's baby boomers or rather just the people who are part of the establishment. The establishment rallied pretty hard to get TARP pushed through despite massive public resistance. And now all we have gotten for it is low interests (again) and a junk bond bubble waiting to explode in our faces.
  - carmelo5 16y ago
    Sorry, but even Paul Krugman, as well as every other Nobel Laureate in economics, supported TARP. A collapse to the financial system would've wreaked havoc to the economy (ala The Great Depression). "All we have gotten now" is a stablization to the system that didn't collapse, and didn't cause massive bankruptcies and unemployment.
    - jswinghammer 16y ago
      Wait and see. We're not even close to out of the woods yet.
      - carmelo5 16y ago
        GDP is up. Dow is back to 12,000. Banks are liquid. Output is as high as it's ever been. Krugman and friends, not to mention the more conservative economists, do not share your views. I really don't understand the populist sentiment.
        jswinghammer 16y ago
        Most of that is government stimulus which cannot last forever. The banks are definitely not liquid. They are basically insolvent. You can tell this because they don't mark their assets to market.
        carmelo5 16y ago
        The government stimulus (QEs) can last forever because we have a monopoly on our currency. The Fed can print as much money as it wants. Of course, too much stimulus causes inflation. Banks have the cash, and are lending.
loup-vaillant 16y ago
Tragically unsurprising. And the tip of the iceberg, considering that private banks basically create money out of thin air, then loan it at an interest. We could, I dunno, give back the control of the money to elected people?
- nazgulnarsil 16y ago
  actually we need non-centralized currency. centralized currency regardless of who is in control is bad, just like with any other good. what we need is at the very least state currencies that float against each other.
  - jcromartie 16y ago
    So what about BitCoin? It seems like a thoroughly decentralized currency. The only problem is the limited size of the Bitcoin economy. There is currently 5.68 million BTC, or $5,108,175 USD, worth of Bitcoin in the world right now, with a max of about 21 million. Could multiple open distributed digital currencies work?
    - nazgulnarsil 16y ago
      the number in the world doesn't limit anything. bitcoins float against the dollar. if demand for them increases their value will increase dollar wise. money is not magical, it is a convenient commodity of exchange. the rules of supply and demand govern it.
      - jcromartie 16y ago
        I see. I also did not know that BTC was divisible into very small amounts.
todayiamme 16y ago
This is just an observation about such distress calls, but I am trying to learn economics, and something shocks me every time I read up about it. Absolutely no major book, be it pop or a college text touches on the role of power in the relationship. It might be easier to project and create models by assuming human beings to be rational beings, but that still doesn't mean you need to ignore the calculus of power. What we have over here is something most economists simply don't study. Systematic use of power. These banks strut like mafia bosses, because they're exactly like mafia bosses. Their strength and survival depends on having power to push the consumer into beneficial deals. Their survival also depends on pulling the carpet from underneath when the consumer fails to jump through enough hoops. Yes, it's all related to capital in the markets etc., but it's all driven by power. I don't know why we want to ignore this, but as a society these power relationships lurk everywhere. It doesn't mean that they are immoral or anything like that. They're just a fact of human nature. Every contract signed or transaction made is made with the assumption that someone with power will ensure that it will go off without a hitch. What is a contract except for the threat of violence sublimated into abstruse jargon? Think about the robber barons and their ideological descendants wall street bankers. The only difference is that now they're holding a gun made out of paper (or a database). In this case, of course the law makers and everyone else are on their side, but like everything else it's all a matter of time. As things change power will get redistributed from Morgan to Milken. What I'm trying to say is that I think that economics doesn't make sense without this variable. These people call the shots, because they have power. Not capital assets. Those are just symbols of power they have accumulated by various means. Yes, this can't explain everything, but it's just a very different way to look at it and things just make sense after this.
- _delirium 16y ago
  I'm not sure it's sufficiently studied, but there is some study of power relationships in economics, mostly in areas of economics that argue over the effects of entity sizes and coordination. The theory of both antitrust law and labor law is mostly based on arguments over power imbalances, e.g. whether cartels exercise coercive power that distorts markets, and what power relationships are involved when an individual negotiates with a large corporation (or on the other side, when a large union negotiates with a smaller employer).
martythemaniak 16y ago
This is an example of why I think the next crisis won't be many decades into the future, but much sooner. Basically, nothing changed after the crisis of 2008 - no one was punished, laws were not changed (they were tweaked at best) and the most important, the culture of fraud and criminality on wall street has only been emboldened. I don't expect Wikileaks to change anything either. They may have helped the Tunisian revolution along, but no matter how complete and damning their evidence against BoA is, nothing will be done against BoA.
- carmelo5 16y ago
  The "culture of fraud and deception" is illegal. Acts of deception can range from fines to decades in jail. Wall Street firms make money from customers who choose to do business with them. Any hint of deception completely destroys any future business with that client, as well as many other clients. I know this might sound like a shock to some of you, but banks make their money by providing services to customers who choose to pay for those services. It's basic capitalism.
  - rbarooah 16y ago
    You're obviously a troll. You aren't seriously trying to claim that Wall Street firms don't engage in deception are you?
    - carmelo7 16y ago
      Please cite specific examples of common deceptive practices (not just anomolies) if you're claiming that Wall Street fully practices deception on a daily basis. To claim that they do so is just absurd. Taking a populist opinion without understanding specifically how the banking industry works, and what it can and can't legally do, just wreaks of the Dunning-Kruger effect.
      - rbarooah 16y ago
        What's the point? You can google for yourself. If I bring up examples they will be flawed because they are populist and because I don't understand banking as well as you do. The banking system is flawless but you have to be a banker to understand this.
gadders 16y ago
I'm so old I can remember when Krugman was an economist, rather than an op-ed columnist.

85 points by bakbak 16y ago

Wake up, sheeple?

Where are the accounts from the people who maned the phones and signed the letters that made all this possible? I doubt any BOA executive picked up the phone and told a customer to default on their mortgage. That would have been someone like me or you just doing their job, doing what they're told. Where are their accounts of what the were told to do? I'm worried that these people don't care about the people they helped screw over. I hope thats not the case, but I'm worried that it is.

varjag 16y ago
It's like being a guard in a death camp, just a job that someone has to do. Or so you think.
brown9-2 16y ago
I'm worried that these people don't care about the people they helped screw over. I hope thats not the case, but I'm worried that it is. Or they are just more worried about the NDAs they signed and the army of lawyers the bank's employ.
- tomelders 16y ago
  Perhaps. But there's ways and means to get their accounts out into the open. And no NDA can prevent a person from speaking in court.

jcromartie 16y ago

What I hate about all of this is that, to the baby boomer generation, any point of view that wants to hold banks and Wall St. accountable for what they have done is "communism" or "socialism" or "fascism" or some other nonsense. It's like anything that goes against any business is automatically discredited. It is absolutely plainly obvious that banksters basically hate you and the government is right along with them. Look at the UBS whistleblower Bradley Birkenfeld, who is in prison right now while every single one of the 19,000 tax cheats who diverted billions in taxes are free (save for one guy on a two-year probation). He was wealthy right along with his clients... but he went against the grain. It's interesting to note that Eric Holder was a lawyer and represented UBS at one point, and won't touch the case. But you just can't make this point in some circles.

jswinghammer 16y ago
I'm not sure if it's baby boomers or rather just the people who are part of the establishment. The establishment rallied pretty hard to get TARP pushed through despite massive public resistance. And now all we have gotten for it is low interests (again) and a junk bond bubble waiting to explode in our faces.
- carmelo5 16y ago
  Sorry, but even Paul Krugman, as well as every other Nobel Laureate in economics, supported TARP. A collapse to the financial system would've wreaked havoc to the economy (ala The Great Depression). "All we have gotten now" is a stablization to the system that didn't collapse, and didn't cause massive bankruptcies and unemployment.
  - jswinghammer 16y ago
    Wait and see. We're not even close to out of the woods yet.
    - carmelo5 16y ago
      GDP is up. Dow is back to 12,000. Banks are liquid. Output is as high as it's ever been. Krugman and friends, not to mention the more conservative economists, do not share your views. I really don't understand the populist sentiment.
      - jswinghammer 16y ago
        Most of that is government stimulus which cannot last forever. The banks are definitely not liquid. They are basically insolvent. You can tell this because they don't mark their assets to market.
        carmelo5 16y ago
        The government stimulus (QEs) can last forever because we have a monopoly on our currency. The Fed can print as much money as it wants. Of course, too much stimulus causes inflation. Banks have the cash, and are lending.

loup-vaillant 16y ago

Tragically unsurprising. And the tip of the iceberg, considering that private banks basically create money out of thin air, then loan it at an interest. We could, I dunno, give back the control of the money to elected people?

nazgulnarsil 16y ago
actually we need non-centralized currency. centralized currency regardless of who is in control is bad, just like with any other good. what we need is at the very least state currencies that float against each other.
- jcromartie 16y ago
  So what about BitCoin? It seems like a thoroughly decentralized currency. The only problem is the limited size of the Bitcoin economy. There is currently 5.68 million BTC, or $5,108,175 USD, worth of Bitcoin in the world right now, with a max of about 21 million. Could multiple open distributed digital currencies work?
  - nazgulnarsil 16y ago
    the number in the world doesn't limit anything. bitcoins float against the dollar. if demand for them increases their value will increase dollar wise. money is not magical, it is a convenient commodity of exchange. the rules of supply and demand govern it.
    - jcromartie 16y ago
      I see. I also did not know that BTC was divisible into very small amounts.

todayiamme 16y ago

This is just an observation about such distress calls, but I am trying to learn economics, and something shocks me every time I read up about it. Absolutely no major book, be it pop or a college text touches on the role of power in the relationship. It might be easier to project and create models by assuming human beings to be rational beings, but that still doesn't mean you need to ignore the calculus of power. What we have over here is something most economists simply don't study. Systematic use of power. These banks strut like mafia bosses, because they're exactly like mafia bosses. Their strength and survival depends on having power to push the consumer into beneficial deals. Their survival also depends on pulling the carpet from underneath when the consumer fails to jump through enough hoops. Yes, it's all related to capital in the markets etc., but it's all driven by power. I don't know why we want to ignore this, but as a society these power relationships lurk everywhere. It doesn't mean that they are immoral or anything like that. They're just a fact of human nature. Every contract signed or transaction made is made with the assumption that someone with power will ensure that it will go off without a hitch. What is a contract except for the threat of violence sublimated into abstruse jargon? Think about the robber barons and their ideological descendants wall street bankers. The only difference is that now they're holding a gun made out of paper (or a database). In this case, of course the law makers and everyone else are on their side, but like everything else it's all a matter of time. As things change power will get redistributed from Morgan to Milken. What I'm trying to say is that I think that economics doesn't make sense without this variable. These people call the shots, because they have power. Not capital assets. Those are just symbols of power they have accumulated by various means. Yes, this can't explain everything, but it's just a very different way to look at it and things just make sense after this.

_delirium 16y ago
I'm not sure it's sufficiently studied, but there is some study of power relationships in economics, mostly in areas of economics that argue over the effects of entity sizes and coordination. The theory of both antitrust law and labor law is mostly based on arguments over power imbalances, e.g. whether cartels exercise coercive power that distorts markets, and what power relationships are involved when an individual negotiates with a large corporation (or on the other side, when a large union negotiates with a smaller employer).

martythemaniak 16y ago

This is an example of why I think the next crisis won't be many decades into the future, but much sooner. Basically, nothing changed after the crisis of 2008 - no one was punished, laws were not changed (they were tweaked at best) and the most important, the culture of fraud and criminality on wall street has only been emboldened. I don't expect Wikileaks to change anything either. They may have helped the Tunisian revolution along, but no matter how complete and damning their evidence against BoA is, nothing will be done against BoA.

carmelo5 16y ago
The "culture of fraud and deception" is illegal. Acts of deception can range from fines to decades in jail. Wall Street firms make money from customers who choose to do business with them. Any hint of deception completely destroys any future business with that client, as well as many other clients. I know this might sound like a shock to some of you, but banks make their money by providing services to customers who choose to pay for those services. It's basic capitalism.
- rbarooah 16y ago
  You're obviously a troll. You aren't seriously trying to claim that Wall Street firms don't engage in deception are you?
  - carmelo7 16y ago
    Please cite specific examples of common deceptive practices (not just anomolies) if you're claiming that Wall Street fully practices deception on a daily basis. To claim that they do so is just absurd. Taking a populist opinion without understanding specifically how the banking industry works, and what it can and can't legally do, just wreaks of the Dunning-Kruger effect.
    - rbarooah 16y ago
      What's the point? You can google for yourself. If I bring up examples they will be flawed because they are populist and because I don't understand banking as well as you do. The banking system is flawless but you have to be a banker to understand this.

gadders 16y ago

I'm so old I can remember when Krugman was an economist, rather than an op-ed columnist.