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05:41 PM EST, Thursday Jan 14, 2010
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Drop your bank like the abusive bitch she is... MUST READ!! |
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I don't care what your political preference is... this reads pretty right on with me.
www.huffingtonpost.com
Needless to say, i'm going to be exploring options soon in my quest to change over from one of the "big six."
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Talk to me about advertising on YNOT! Get your product in front of the eyes of thousands of Webmasters every day!
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06:20 PM EST, Thursday Jan 14, 2010
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I already use a credit union, have for many years... there's NO comparison, they're SOOOO much better than banks. Only downside is their online technologies aren't as advanced, but well worth that drawback.
_________________
If you pick up a starving dog and make him prosperous, he will not bite you; that is the principal difference between a dog and a man. -Mark Twain
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11:06 PM EST, Thursday Jan 14, 2010
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| Connor wrote: | | I already use a credit union, have for many years... there's NO comparison, they're SOOOO much better than banks. Only downside is their online technologies aren't as advanced, but well worth that drawback. |
Credit unions may be better, but not by much. I recently closed an account with a credit union I'd been with for a long time. I had bought a new place and did one of those change of address thingies with the Post Office. The Post Office had been forwarding my mail but inadvertently returned a statement that the credit union had sent to my old address. I later found out that the credit union deducted $5 from my account because of the returned mailpiece, and they debited it as a "returned mail fee". Now, I had heard that they charge fees if you overdraw your account or write a bad check, but I never heard of being charged a fee for returned mail. It sounded like BS to me. When I went to the customer service department about it, they claimed that all financial institutions now charge a similar fee. Is this true?
It only cost them 42 cents to mail the letter yet they charged me $5. On top of that the bitch across the counter had the nerve to tell me there would be a $15 fee to close the account!
I'm not going to miss the $20 they ripped me off over this BS, but I'm sure they're going to miss the interest they would have earned off my deposits. The people who operate these financial institutions are all thieves. Thats how they are able to pay their executives such obscene salaries and bonuses.
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01:46 AM EST, Friday Jan 15, 2010
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Sorry LAJ but Maher couldn't be more WRONG!
Forgetting all his attempts at inciting to riot-the basic premise is exactly NOT what you should do if you're pissed at your bank! Everything he's written is writhe with ignorance
If absolutely every average depositor pulled their business out of the big banks it would make them more profitable. It cost the bank the same amount of money to do a $100 transaction as it does to do a $1,000,000 transaction. But the bank can make a few bucks having the million on deposit. The TRUTH is the big banks would be very happy to see all but the top few percent of it's depositors switch banks. That is why they offer special services to big accounts.
Banks earn their money from institutional investors which is not the average guy in any way. The "HIGH" in high finance is where 90+ % of profit is made in the financial industry and not directly with John Q Citizen.
The TRUTH of the matter is: those credit unions are taking all their depositors money and using it as a single huge account in the large banks. THAT credit union account-is an institutional account that DOES matter to the big boys. If every average guy took their money out of the small financial institutions and put it IN the big boys, THAT actually would hurt much more as it is John Q Citizen's small account money that is under high banking regulation.
Small guys need protection so there are tons of laws to protect the average guy. Big players like credit unions, pensions funds and big business, etc., that are professionally manged shouldn't need protection-they are supposed to be PROFESSIONAL. That has a lot to do with why they have much fewer laws controlling them. If you are a pro-you are not supposed to need protection-you are supposed to understand the business and need the ability to choose risk.
John Q Citizen moving his money from big banks to small players that can pool the funds and play with the big guys as singular large players, would be playing right into the big bank's hands-THEY would benefit greatly and John Q will be MORE likely to get fucked!
_________________
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12:17 PM EST, Friday Jan 15, 2010
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| davilan wrote: | Sorry LAJ but Maher couldn't be more WRONG!
Forgetting all his attempts at inciting to riot-the basic premise is exactly NOT what you should do if you're pissed at your bank! Everything he's written is writhe with ignorance
If absolutely every average depositor pulled their business out of the big banks it would make them more profitable. It cost the bank the same amount of money to do a $100 transaction as it does to do a $1,000,000 transaction. But the bank can make a few bucks having the million on deposit. The TRUTH is the big banks would be very happy to see all but the top few percent of it's depositors switch banks. That is why they offer special services to big accounts.
Banks earn their money from institutional investors which is not the average guy in any way. The "HIGH" in high finance is where 90+ % of profit is made in the financial industry and not directly with John Q Citizen.
The TRUTH of the matter is: those credit unions are taking all their depositors money and using it as a single huge account in the large banks. THAT credit union account-is an institutional account that DOES matter to the big boys. If every average guy took their money out of the small financial institutions and put it IN the big boys, THAT actually would hurt much more as it is John Q Citizen's small account money that is under high banking regulation.
Small guys need protection so there are tons of laws to protect the average guy. Big players like credit unions, pensions funds and big business, etc., that are professionally manged shouldn't need protection-they are supposed to be PROFESSIONAL. That has a lot to do with why they have much fewer laws controlling them. If you are a pro-you are not supposed to need protection-you are supposed to understand the business and need the ability to choose risk.
John Q Citizen moving his money from big banks to small players that can pool the funds and play with the big guys as singular large players, would be playing right into the big bank's hands-THEY would benefit greatly and John Q will be MORE likely to get fucked! |
Actually, big banks earn a sizeable portion of their income from the little guy. Dollar for dollar, the risk appraisal people who work behind the scenes don't care who the depositors are or where the money comes from (some will even knowingly take a chance with money they suspect was rinsed from illegal sources). In any case, the deposits are pooled together in the same place and that money is spread out over a wide range of investments with varying levels of risk. They know that some of those investments will lose money (which they want because they need to be able to write some of these things off as losses for tax purposes), but because the risk is so cleverly distributed, they also know that, over time, there is a greater probability of profitability than of loss. They can even use statistics to calculate (with reasonable accuracy) what the profit/loss ratio is likely to be over a given period of time. The banks also keep shifting bad paper around to minimize the effect of how any potential (or actual) loss appears on the books. They also constantly shift their cash balance position by (officially and unofficially) borrowing large amounts of money from one another to give an appearance of compliance with FDIC regulations.
In some cases, the money moves from one place to another and changes appearances many times (i.e. from gold to oil to cash to mortgage futures to foreign exchange futures, then back to gold again) in tandem with the stock markets and this is sometimes done so quickly that its impossible for anyone (except the banks themselves) to know exactly what their assets are at any given point in time because they always have a trick or two to pull out of their ass if and when they need to---as they did when the mortgage crash forced all of them to take a closer look at their acquisitions and repackaging/re-selling operations. But just because the books looked bad during the banking crash a year ago this didn't at all mean that these banks were all broke and had no other resource besides a government bailout. Its just that they got caught screwing the public before they had the chance to pull their pants all the way up. Notice how fast they all bounced back and paid back the bailout money, and that the big bonuses are flowing again?
They all sell credit services, and this is where they make a lot of their profits. Businesses and individuals always want more money than they actually have to do something, and they're always going to access existing credit lines, apply for new ones, or try to get a loan for a specific purpose. Banks do not make a comparatively significant amount of money from people who are cash rich and who have very good credit. Most of these people aren't as likely to borrow money or use bank credit unless they really want to or absolutely have to, and if they need a short term cash infusion they can borrow it from their other cash-rich friends. When these people do access a bank's services, they usually pay minimal interest rates and no fees. Middle class and lower income people have to pay higher interest rates on loans because the appraisers rate them as being a higher risk. Why? Because they typically don't have a lot of tangible assets to use as collateral, or they may already be heavily leveraged, or they may have less than stellar credit scores. Those extra percentage points that the banks charge these people for credit adds up to billions of dollars in profits.
Regular access to lines of credit, unwise usage of credit cards, overdraft charges, and returned checks are typical even in the class of people who have decent credit but are facing difficult financial times. The banks are making a ton of money in fees from these people. People who are rich enough to have large amounts of cash in deposit accounts don't have these issues.
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02:09 PM EST, Friday Jan 15, 2010
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Hi Porngod
With all due respect-almost everything you said above is not true. It's this common misunderstanding of the banking system and finance industry that perpetuates articles like Maher's that people are happy to rally behind the emotional, fact-less crap then take the time to learn about some of the most important parts of a working person's life-their investments and financial future.
The ATM card was an invention of City Bank in the late 1960s. It was made public and put into use in the early 70s. If you read the City Bank annual report the year ATMs were introduced there was an article by the chairman that the original sole purpose was to do away with small depositors ever dealing with a live person face to face. It was City Bank's intention to not have to deal with people under a certain wealth level-service wise. Even today-look at the fees charged by the private banking part of any bank and compare them to what the average person's fees are.
Your bank is interested in investing the money in your company's pension fund. They can earn a good profit from it. Depositor's fees in a savings institution which are regulated by the Federal Reserve Bank and not the FDIC as to cash on hand requirements and all kinds of consumer protection laws including various community re-investment acts are a pain in the butt near NO profit part of the banking business.
People with big money pay tons of credit fees. They rarely have much money in quick cash convertibles and are more likely to be able to raise cash in a hour than the average guy. Credit is not extended by a bank from depositor's money. Credit such as Credit cards and car loans are secured by bond issues the same as mortgages. Mortgages are about the only thing that is a banks profit center and cash cow regardless of their size. Appraisers appraise property not people. Credit is judged by regulated standards-by underwriters based on your present and algorithms for your past.
_________________
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05:34 PM EST, Friday Jan 15, 2010
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Playing word games was not the intent of my post. An underwriter calculates risk, an appraiser evaluates the nature, quality, etc. of the risk (or anything else about a thing or person). In the world of economics these terms are used interchangeably and understood to mean the same thing. If you travel outside the US on a regular basis you will see and hear this more. Also, the Fed makes rules for the banks in the system to follow, but the banks know how to play around those rules. It is the FDIC that the banks are more leery of because the FDIC is the agency that requires them to maintain a certain amount of risk balance---and this is exactly what some banks (i.e. Washington Mutual) did not have prior to the crisis and were trying to hide. You are making your point, perhaps, based on the assumption that banks always follow the rules of banking according to Fed. In real life, most of them practice rogue economics, and they have very clever ways of hiding it. The money is spread all over the place. A portion of it is returned to the system as profits and losses, but a huge portion of the profits end up in hidden offshore accounts. Much of this cash is never placed in commercial or consumer deposit accounts because the rich people to whom it belongs aren’t fond of paying their fair share of taxes to Uncle Sam.
The FDIC insures consumer deposits up to $250,000. People with serious money don’t invest $250,000, they invest millions. And these people know that they don’t get the best returns on their money by keeping it in a savings or fixed deposit account plus being obliged to pay capital gains taxes on whatever little interest their money earns. Banks also do not make most of their money from operating these accounts. They get it from consumer service fees, selling credit for a percentage, and investing large amounts of uninsured money in high-risk ventures.
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06:05 PM EST, Friday Jan 15, 2010
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In the financial industry an appraiser is licensed to give a professional value of property. It can range from real estate to diamonds they do not evaluate risk.
My point is that Meher is suggesting that if the average person moved their money from a large bank to various smaller financial institutions it would hurt them and the public may feel some satisfaction and/or the large banks would have to change their ways in order to win them back as customers.
This is fiction based on emotions not on facts. It would actually make them more profitable. The high transactions fees are not profit centers. They are close to the real cost for the bank for doing a transaction. Why do you think that most fee plans vary in price depending on the amount of money you have in the bank? The bank earns enough money on the 20 grand in your checking account to make it worth your while to process you checks without a fee. But if you have only $100 and you write 5 checks they have lost money so they make you pay a fee for the checks.
Your business works the same-to make a profit your income has to be higher then your expenses. If you can't charge enough to make a profit you have to raise your price, drop that product or go out of business.
Consumer credit-whether it's a mortgage, car loan or credit card is securitized and sold as bonds on Wall street. For the most part the money you borrow comes from bond sales and not depositors money. Banks earn a commission for originating the loan, they earn a commission for selling the bonds and they have a monthly cash cow for servicing the paper-collecting the money from individual borrowers and sending the lump sum to bond holders. For the most part there is nothing illegal about any of what you may think is "rouge" in the industry.
_________________
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08:53 AM EST, Tuesday Jan 19, 2010
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| davilan wrote: | | ...My point is ... |
Believe what you want to, I respect that right. I don’t take Maher’s words very seriously (though not for the same reasons that you do) and this is because I know a few things about banking from friends who work behind the scenes in that industry. I never suggested that there was anything illegal about ‘rogue economics’, only that some of the people who work in it are highly unethical and will do anything at all to turn a profit. And, a few of them actually have been involved in legally questionable activities. Now and then, somebody gets caught. Ever so often there’s a story of a takedown in the Wall Street Journal, and what usually happens is that the bank (or investment company) scapegoats one or a few employees but itself denies any wrongdoing, then they pay a fine, get a slap on the wrist, then its back to business as usual. Unless they were sloppy about cooking the books and covering up their tracks there’s usually no evidence to prove corporate wrongdoing.
But there have been cases of some of them getting caught with their hands in some pretty bad stuff while trying to make big profits for their investors (illegal oil, blood diamonds, guns, drugs, etc.). Some people think these stories are fictional. But they are real. One that I found particularly amusing was the scandal involving Riggs Bank about 6 or so years ago. That bank was found to be deeply involved in a huge international money laundering and terrorist financing operation. True to form, the bank scapegoated (and fired) one of its executives, whom it claimed had arranged these secret multi-million dollar investment deals on his own (yeah, right!). A Senate subcommittee report had found that several executives at Riggs Bank were actually involved in the scheme and that they went to extreme and extraordinary lengths to cover the whole thing up. But, because of its close relationship with the then president Bush and other Bush family members, the bank got away after denying any wrongdoing, paying a fine, and then quickly and quietly sold itself to another bank (PNC). The FBI quietly dropped the charges, and the Bush White House refused to release information about the investigations. The scandal VERY suddenly disappeared from the news as though it had never happened. This is the type of magic that banks can do.
It is not a bad thing to keep an open mind, to understand that things are not always what they seem, and to realize that sometimes there’s more to certain situations than what we think we know about them. You continue to argue your point based on your knowledge of traditional banking setups. I tried to explain to you that that model of money management is not the same one that banks always use to make big profits, and that the information on their books at any given point in time is usually only a part of the real picture. You insist on arguing your beliefs, and, as I said before, that is your right. I like to discuss things, but I don’t argue, especially when it becomes apparent that the argument is redundant. But, consider that your statement that banks "for the most part" securitize loans with bonds may not to true. Here’s a little gem: many times those bonds are fake. They sometimes sell loans to dummy investors or to heavily cloaked business entities that are actually the banks themselves. One reason for doing this is to mislead the FDIC into believing that the bank is holding a lot less risk than it really is. The advantage of discretely holding on to certain papers is that (depending on the customer and the type and amount of risk involved in the deal) the bank can make more profit when the risk pays off. The bottom line is that sometimes there is no external investor money behind these bonds---just a piece of paper stating that there is. And a misdirecting paper trail is created to hide what was done.
You also claim that banks don’t use depositor money for the purpose of lending. I’m telling you that they sometimes do. They just don’t report that they do. And if the books are cooked appropriately, even an auditor will not be able to easily tell that this is what they have done. In most cases, cash coming back into the system from other short-term deals is sometimes used to temporary plug up the holes, until the big payback comes and floods the banks' coffers. There are other things that I could say but won’t.
I’m also not so sure about your statement that consumer banking fees are not a major profit center for commercial banks. Here is a link to a 2009 news article that shows that banks get as much as 40% of their [reported] profits from these fees.
articles.moneycentral.msn.com
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07:49 AM EST, Wednesday Jan 20, 2010
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1) I worked for a Wall St. bank, then I worked for Bank of America
2) I left Bank America to open my own bank with a partner.
3) my knowledge is from post grad level study, licensing credentials and first hand experience at most levels, instead of a friend.
4) I still have the credentials to render an expert opinion.
to answer the question that's now probably in your mind: I ended up in adult because I had to sell my half of the bank I founded to settle an abhorrent divorce, and pay the corporate lawyers relating to the bank sale and the divorce. During the nearly 3 years of court battles I was prohibited from working in the banking industry cause as the director of a bank it's a conflict of interest working for another bank in any capacity. The net was in its infancy, adult was still all on video, cable was booming and looking for content and it was a way to instantly be able to have income that would not become part of my frozen assets to pay my bills with. By the time things were settled in court I was well entrenched in adult, the then still wife had sent everyone she could find a name for in the banking industry a package showing I was in the adult video biz and I basically couldn't return to the banking industry. I won't go into how much grief that caused me.
Sorry but a lot of what you write about is just plain fiction. I am not telling you there has never been a questionable business transaction done by a bank. Questionable does not mean illegal. Of course there have been illegal transactions. You are mixing the two.
Factually speaking the bigger the bank the more difficult it is to hide stuff. A small bank has much better ability to hide questionable practices which again, are not necessarily illegal.
To put it more understandably-an adult video is not actually obscene until the jury calls it obscene. Wicked pictures takes a wide berth to avoid any possibility of prosecution even at the expense of producing income. Buttman did nothing to fly in the face of the Government but still got indicted. I doubt anyone here believes he actually did anything outside the law. He did however, enter deeply enough into the gray area of the law to allow a zealot to bring prosecution. Is Buttman a evil guy for doing that? Did he even break the law? Your calling banks evil for doing the same thing. In our industry there have been people that raped and then murdered children on film for profit. There was no gray area of the law. There aren't 2 sides to whether or not that is wrong. You're comparing the big banks to the Russian child porn ring that was arrested a few years ago rather than Buttman.
Separate from all this other subjective bullshit what I did say was and is: if you want to hurt the banks you must do exactly the opposite of what Maher said-open a checking account, never keep any money in it and write a hundred checks a month, never use the ATM, always see a teller and do nothing on-line. A bank will lose money on you that way.
For the record-"for the most part" means more than 50%-it does not mean "You also claim that banks don’t"
"This is the type of magic that banks can do"
This is not specific to the banking industry but is a problem about all big business in most parts of the world. Without a doubt when there is a way to earn money some people do not consider the law nor whom it may hurt to line their pockets and this does happen in the banking industry but the industry as a whole is less corrupt in this way than most other industries because it is so highly regulated and has very high probabilities of being caught. The financial industry is in fact one of the cleanest industries in the world-but it is of course not 100%.
More regulation is highly unlikely to bring the industry any closer to 100% but it will unquestionably cost more money to comply. It is the average consumer that will bear 100% of those costs so who actually is the winner? I can't pick the winner but I can tell you very confidently-the banks will not be the loser.
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