NationStates Jolt Archive

This is a thread about bankers as people, and perceptions about them. I've been noticing over the past weeks that the language here, in news sources from the US and even here in Oz has become more vitriolic. And though some of you will surely try to stay balanced and blame some bankers and not others (in fact, hold the vast, vast majority of them blameless), overall the picture painted of the actual people and their characters is not a pleasant one. No doubt a big part of the reason is the fact that the fall-out from the collapse is reaching more and more people personally.

But then, were bankers particularly popular before then? If someone had come to you and told you they were a private equity analyst or derivatives trader, would you have thought of them as extremely hard-working, intelligent, driven and successful people? Or would there have been more negative connotations with it?

What do you think motivates someone to put themselves into one of the most demanding jobs out there, to enter a career that quite literally consumes your entire life (I was in the office all day today - a Saturday - and I'm an intern) and that leaves you with lots of money to spend but nothing to spend it on but alcohol and other random fancies of the moment? What does this choice say about them?

If you have some time to spend, have a browse through the articles and stories on this website: http://www.leveragedsellout.com/

It's satire and black humour, of course, but extremely close to reality and to the point where I quite literally recall situations that feature in these stories. The people who write on the site are bankers or were at some point, and the overall message of who these people are, who they want to be and how they deal with the fact that they find it so hard to bridge the gap I think adds another dimension to the discussion that has so far been lost in the political rhetoric and occasional voice of reason mentioning economics that has dominated our treatment of the crisis.

I can honestly say I never liked them. I just have this thing about never trusting people wearing suits and ties...

it says to me that they are completely motivated by money.

which is why they need strong regulations to keep them from doing the wrong thing to make a profit.

i only know small town bankers. they are good and bad people in proportion to the rest of the population. but when the local bank president is an asshole he affects far more people than you average asshole does.

although personally i am happy that there are places where i can go to get the money to buy a house--an amount that i will never be able to save up on my own--and all i have to do is pay them back a little at a time with interest.

looking at your link....

My opinion of bankers is just as low as it's always been.

I have no problems or issues with bankers in general. Then again, for natural reasons I have no issues with lawyers in general either, for example.

Some of the hardest working and most intelligent people I know are in IB. I even know some virtuous bankers.

They all do it for the money and intellectual stimulation.

It's not a big deal, no different from being a nurse or doctor or pimp or a prostitute. It's just like any other human career and endeavor, something to put food on the table with the skills one has.

Some of the hardest working and most intelligent people I know are in IB. I even know some virtuous bankers.

They all do it for the money and intellectual stimulation.

It's not a big deal, no different from being a nurse or doctor or pimp or a prostitute. It's just like any other human career and endeavor, something to put food on the table with the skills one has.

Doctors and pimps, perhaps, but in my experience nurses and prostitutes are a lot nicer than bankers as a general rule.

I think people who try to divert the blame of the current situation onto bankers are just scapegoating. The system of economics that we've worked by for years, with all of its flaws and its baseless mechanism of value, was something in which much of the western world was complicit. Nobody chose to speak up when it was a totally reasonable time to do so. And to turn around now and blame bankers for a crumbling social structure is hypocrisy.

Let's not pretend here - playing financial games in lieu of actual contribution to society was always going to lead to ruin. But we let it go on. We sat by and thought "yeah, that's an alright way to get by". And we did. In fact, it was essentially the done thing, at least in the UK. All the while, it was grossly under-waged factory workers, cruel farming practices, the pillage of the environment and the arms trade, living off the murder of civilians and turning people into militants for the sake of profit, that supported the treatment of those who were fortunate enough to win that meaningless game of chance like kings.

We were silent. Thus, the blame is as much ours as it is theirs.

it says to me that they are completely motivated by money.
You know, I'm not actually that sure about this point anymore...

Earning lots of money is great, but it's only ever a means to another end. The people who earn the big bucks just have no lives outside work, and except for those who end their advancement by leaving the industry or having a family (the lack of office time brought about by a wife and kids tends to make you a bit useless, particularly in IB), they never get the chance to actually use the things they could spend the money on.

Don't get me wrong, to someone who was never wealthy and has spend many years in what would probably be classified as poverty or financial distress of some form, the money is a part of it. But looking at these people, who they are and what they do, there is more.

I used to think banking was about a bunch of losers who have no lives

I currently think banking is about a bunch of losers who have no lives

:p

What do you think motivates someone to put themselves into one of the most demanding jobs out there, to enter a career that quite literally consumes your entire life (I was in the office all day today - a Saturday - and I'm an intern) and that leaves you with lots of money to spend but nothing to spend it on but alcohol and other random fancies of the moment? What does this choice say about them?

its says bankers are a bunch of cunts who conveniently ignore doctors and soldiers so they can feel justified that they work oh so hard

You know, I'm not actually that sure about this point anymore...

Earning lots of money is great, but it's only ever a means to another end. The people who earn the big bucks just have no lives outside work, and except for those who end their advancement by leaving the industry or having a family (the lack of office time brought about by a wife and kids tends to make you a bit useless, particularly in IB), they never get the chance to actually use the things they could spend the money on.

Don't get me wrong, to someone who was never wealthy and has spend many years in what would probably be classified as poverty or financial distress of some form, the money is a part of it. But looking at these people, who they are and what they do, there is more.
i said that because you are describing people who only work.

at a job that is not ..... uplifting.

would you do the job and work that hard if all you got was $50k/year? if the max you would ever make is ....$100k/year?

I think people who try to divert the blame of the current situation onto bankers are just scapegoating. The system of economics that we've worked by for years, with all of its flaws and its baseless mechanism of value, was something in which much of the western world was complicit. Nobody chose to speak up when it was a totally reasonable time to do so. And to turn around now and blame bankers for a crumbling social structure is hypocrisy.

Let's not pretend here - playing financial games in lieu of actual contribution to society was always going to lead to ruin. But we let it go on. We sat by and thought "yeah, that's an alright way to get by". And we did. In fact, it was essentially the done thing, at least in the UK. All the while, it was grossly under-waged factory workers, cruel farming practices, the pillage of the environment and the arms trade, living off the murder of civilians and turning people into militants for the sake of profit, that supported the treatment of those who were fortunate enough to win that meaningless game of chance like kings.

We were silent. Thus, the blame is as much ours as it is theirs.
This is typical of the self righteous rhetoric circulating around these days purporting to explain the economic crisis with soaring pseudo-philosophical commentaries, vivid and misplaced metaphors, and melodious and ambiguous similes. The cause of the current famous economic crisis is simple and can be explained in one sentence (a clause, not even a sentence): government intervention and price fixing in the credit markets.

But looking at these people, who they are and what they do, there is more.
It's the sport of it. They're like kids who stay home all day playing Warcraft; building their reputation and standing in this totally fictitious system for the sheer rush they get out of it. They don't acknowledge the real world because they don't have to. The game gives them everything they want.

Negligent parenting can be said to be responsible for the Warcraft addiction, to some extent. I wonder what the equivalent for the financial industry is?

government intervention

yes thats how Iceland ended up bankrupt

Something that amuses me is how most of my student friends are buying into the generic "bankers are shit" meme that's so popular in London right now, but they have absolutely no problem grabbing the free goodies at Freshers' Fair, getting the banks to sponsor their student activities (including the student magazine in which they write pissy articles about how "bankers are shit"), and even working internships there.

Not that they're the first people to use the rhetoric of "bankerphobia" while secretly enjoying the merits of the institutions: Thomas Jefferson springs to mind.

yes thats how Iceland ended up bankrupt

Sure it was. The absurd asset bubbles seen in Iceland and other parts of the world would never have existed in the first place had not government central banks intervened in the credit markets and forced interest rates down to artificial, unsustainably low levels throughout the 1990s and 2000s.

Had the world's government central banks refrained from intervening, the free market would've been allowed to do its job of determining rational prices, and in the free market the price of money (interest rates) would've been much, much higher, thereby preventing all these asset bubbles from ever existing.

It's the sport of it. They're like kids who stay home all day playing Warcraft; building their reputation and standing in this totally fictitious system for the sheer rush they get out of it. They don't acknowledge the real world because they don't have to. The game gives them everything they want.
Wait, so you decide what the real world is now? My team is involved in project finance for mines - is that not real enough for you? What about when we offer derivative-based hedging products to those very same mines to make sure they can lock in a sales price? Or interest rate or currency derivatives to insure them against other risks that have nothing to do with what they're good at? And if we then took the IOU for the loan repayments from this mine, turned it into a CDO and sold it off to someone else, has it suddenly become any less real?

You're making it way too easy for yourself.

This is typical of the self righteous rhetoric circulating around these days purporting to explain the economic crisis with soaring pseudo-philosophical commentaries, vivid metaphors, and melodious and ambiguous similes. The cause of the current famous economic crisis is simple and can be explained in one sentence (a clause, not even a sentence): government intervention and price fixing in the credit markets.
I don't care what the cause of the current crisis in economics is. It is of no concern to me what the rules of this game are, and I would gladly see it get to the point where I could have nothing more to do with it. What I care about is the fact that when this game goes sour, people struggle to make ends meet. When market economy stops toying with that which keeps people alive, then, and only then, will I argue alongside you that government intervention and price-fixing are unnecessary.

-snip-
Stay on topic, please. You can make plenty of other outlets for your rants, but this topic is actually close to my heart and something that I consider worth talking about.

I don't care what the cause of the current crisis in economics is. It is of no concern to me what the rules of this game are, and I would gladly see it get to the point where I could have nothing more to do with it. What I care about is the fact that when this game goes sour, people struggle to make ends meet. When market economy stops toying with that which keeps people alive, then, and only then, will I argue alongside you that government intervention and price-fixing are unnecessary.

The only thing that toyed with what keeps people alive were government interventions. Wars, price-fixing... all these things you mention were actions of governments. Had the free market been allowed to function in the last few decades, had governments refrained from war expenditures, had governments refrained from blowing asset bubbles through credit manipulation, we would not be suffering these devastating consequences today.

Stay on topic, please. You can make plenty of other outlets for your rants, but this topic is actually close to my heart and something that I consider worth talking about.

I was on topic, discussing the banking profession. I'm just replying to Kamsaki-Myu's tangent. Tell him/her to stay on topic.

But then, were bankers particularly popular before then?

http://img2.timeinc.net/ew/dynamic/imgs/061017/155113__psycho_l.jpg

I was on topic, discussing the banking profession.
I direct your eyes towards the OP:
This is a thread about bankers as people, and perceptions about them.

And if it makes you happy, yes, the same thing goes for everybody else. We have a billion threads and a "Create new" button to talk about the financial crisis. This is about the people involved in it, not about the process.

I direct your eyes towards the OP:


And if it makes you happy, yes, the same thing goes for everybody else. We have a billion threads and a "Create new" button to talk about the financial crisis. This is about the people involved in it, not about the process.

Exactly, I was on topic... Post #6: http://forums.jolt.co.uk/showpost.php?p=14488138&postcount=6

My stereotyped perception of a banker is as follows :an arrogant, unpleasant, borderline socially retarded white man in his twenties or thirties, focused obsessively and unhealthily on their job and squeezing out every last dollar, and buying every last status symbol, to the extent that they have no life outside of the job and showing everyone how rich they are. No-one likes the banker, and he doesn't care, he sits in his ivory tower and makes donations to political parties of the political right, caring about nothing except which party will allow him to make that extra million or billion.

Eventually, he'd get married to some dumb trophy wife who seeks and gets nothing out of the relationship except money, and as a product of their one moment of intimacy, gives birth to the heir to the fortune, who enjoys a life of extraordinary privilige and develops an attitude of utter distaste towards ordinary people, and thus no doubt grows up to be an asshole themself.

Of course, this stereotype is no doubt a gross exaggeration of the personality traits of some bankers, and for a large number probably has no relevance whatsoever. But if you wanted me to come up with a stereotypical image of the 'banker', this would be it. And such perceptions are probably why the narrative of 'bastard bankers' is so instrinsically appealing.

My stereotyped perception of a banker is as follows :an arrogant, unpleasant, borderline socially retarded white man in his twenties or thirties, focused obsessively and unhealthily on their job and squeezing out every last dollar, and buying every last status symbol, to the extent that they have no life outside of the job and showing everyone how rich they are. No-one likes the banker, and he doesn't care, he sits in his ivory tower and makes donations to political parties of the political right, caring about nothing except which party will allow him to make that extra million or billion.

Eventually, he'd get married to some dumb trophy wife who seeks and gets nothing out of the relationship except money, and as a product of their one moment of intimacy, gives birth to the heir to the fortune, who enjoys a life of extraordinary privilige and develops an attitude of utter distaste towards ordinary people, and thus no doubt grows up to be an asshole themself.

Of course, this stereotype is no doubt a gross exaggeration of the personality traits of some bankers, and for a large number probably has no relevance whatsoever. But if you wanted me to come up with a stereotypical image of the 'banker', this would be it. And such perceptions are probably why the narrative of 'bastard bankers' is so instrinsically appealing.

High powered bankers are the furthest from socially retarded you can imagine. To be a successful banker you have to be charming as a mo'fucker.

Of course, that doesn't rule out the possibility of psychopathy, in the sense that the banker's emotional expressions and charisma are completely fake and only a very skilled and devious simulacrum of genuine human emotions.

Wait, so you decide what the real world is now? My team is involved in project finance for mines - is that not real enough for you?
The real world is that where if you starve or catch disease, you die. It is that where when you take a bullet to the head, you die. I don't know much about the nature of that world, which I happily admit, but I do know that it doesn't get more real than staring mortality in the face.

Your world of numbers is no more or less real than Warcraft. It just so happens that people think your fantasy a more appropriate mechanism for contract. The problem is, this fantasy is subject to fluctuation at the whims of a select few, which is ultimately what makes it an unsuitable basis for the system that people use to stay alive.

Politics is equally fantastical, but at least we have mechanisms of accountability, representation and constitution that mean the fantasy is a collective and evolving one. It has always seemed to me that I would rather engage in a fantasy in which people are the subjects of value rather than objects of it.

You're making it way too easy for yourself. You usually do, with your esoteric but basically nonsensical comments on this entire matter.
Such is the problem of dialogue, regretfully. It's difficult to communicate my points without referring to concepts that aren't in the hardened libertarian lexicon. It's a slow, and probably futile process, so thanks for your patience.

And if it makes you happy, yes, the same thing goes for everybody else. We have a billion threads and a "Create new" button to talk about the financial crisis. This is about the people involved in it, not about the process.
Sorry, I'll lay off. Though I would point out that both my original posts were directed at (a) the disdain people hold for bankers, and (b) one potential reason why bankers do what they do.

Why do I always get the feeling when people start talking about the work that bankers do as simply 'playing with numbers' that they don't really grasp the concept of finance? I don't understand quantum mechanics, but I don't doubt that the work that theoretical physicists do is useful and valid because from the outside they appear to be just looking at equations all day.

The real world is that where if you starve or catch disease, you die. It is that where when you take a bullet to the head, you die. I don't know much about the nature of that world, which I happily admit, but I do know that it doesn't get more real than staring mortality in the face.

Your world of numbers is no more or less real than Warcraft. It just so happens that people think your fantasy a more appropriate mechanism for contract. The problem is, this fantasy is subject to fluctuation at the whims of a select few, which is ultimately what makes it an unsuitable basis for the system that people use to stay alive.

Your either-or dichotomy and gory metaphors are faintly ridiculous.

Banking marshals capital and facilitates investments in the improvements in living standards for society, so that you don't have to worry about dying of some rampant disease.

You freely admit you don't know much about the nature of the world, which appears to be an accurate statement. Just because you are mystified by how banking and finance work does not mean that the only type of world you do understand - apparently some type of marginal existence in a deadly jungle - is close to any approximation of what we should be striving for.

Like algae. I don't really understand how they do what they do, or find it attractive or tasty, but I like the keeping the whole system running part and don't mind if they grow large off the back of it.

When they (as a collective) bugger the system up, I've got nothing left to like.

Banking marshals capital and facilitates investments in the improvements in living standards for society, so that you don't have to worry about dying of some rampant disease.
A tidy profit also motivates, methinks.

-Snip-
I'm happy to continue this in another thread, if you like

A tidy profit also motivates, methinks.

A tidy profit is a key motivation for all work that is ever done in this world, and it also motivates improvements in productivity. There's a reason farmers get up in the morning to tend to their fields, and there's a reason research scientists attempt to invent new farming technologies, and it's not just because they are pure humanitarians interested in feeding all the people in the world. Needless to say they want to make a buck doing it.

A tidy profit is a key motivation for all work that is ever done in this world
Tell that to me and all the other folks handing in (philosophy) dissertations.

Or every parent.

Or every voluntary worker.

Or every employee of a not-for-profit organisation.

Your assertion is quite clearly false, but we shouldn't trouble Neu Leo's thread any longer with this hijack.

it says to me that they are completely motivated by money.

You know, I'm not actually that sure about this point anymore...

Earning lots of money is great, but it's only ever a means to another end. The people who earn the big bucks just have no lives outside work, and except for those who end their advancement by leaving the industry or having a family (the lack of office time brought about by a wife and kids tends to make you a bit useless, particularly in IB), they never get the chance to actually use the things they could spend the money on.

I think you've just supported Ash's point rather than refuted it. Most IBankers are motivated by money -- money itself, rather than the things they can buy with it. Sure, there's the thrill of being right, of being cleverer than anyone else, but the signifier of "being right" is large amounts of money. The signifier of status is money. This is why you see bankers in particular buying extremely silly expensive things with mostly symbolic value. You see some poor soul who's been working eighty-hour weeks and smoking a pack a day down $40-a-shot whiskey on Friday nights; unless he's taken some sort of magic sleep-restoring palate-cleanser you could substitute Old Grand-Dad after the second shot and he'd never notice, but he'll tell you it tastes different -- sure it does, it's the taste of status. That's why the wife of an IBanker is almost always thin and blonde (and doesn't get in the way of his career because she's busy spending his money skiing in Gstaad.) Sure, occasionally you get the guy who's just in it for the academic thrill and truly doesn't care about money, but he almost always leaves in a few years for some career where he doesn't get paid as much but gets some other measure of status (and gets to see sunlight on a regular basis.)

That doesn't mean bankers are particularly bad people -- as I said, my opinion of them as a group is just as bad as it's always been. I'm slightly more sympathetic to retail bankers as they get spit on by the boys on the upper floors.

I don't know much about the nature of that world.

No, you clearly, clearly don't.


Your world of numbers is no more or less real than Warcraft. It just so happens that people think your fantasy a more appropriate mechanism for contract. The problem is, this fantasy is subject to fluctuation at the whims of a select few, which is ultimately what makes it an unsuitable basis for the system that people use to stay alive.


So the reason you hate bankers is due to nonsensical rhetoric?

Tell that to me and all the other folks handing in (philosophy) dissertations.

Or every parent.

Or every voluntary worker.

Or every employee of a not-for-profit organisation.

Your assertion is quite clearly false, but we shouldn't trouble Neu Leo's thread any longer with this hijack.

I don't see how that contradicts what I said. Gain and profit do not have to be currency. Money just happens to be the most widespread form of profit. There are plenty other forms of profit and they have their niche, and there's no reason to interfere with them.

I apologize for polluting a serious thread, but I instantly thought of this song: Mojo Nixon, I hate banks! (http://www.youtube.com/watch?v=brL1AKdhLyQ)

Lyrics:

I Hate Banks
by Mojo Nixon and Skid Roper

I hate banks...
I just can't stand 'em.
Gimme a shovel & man I'll plant 'em.
Six feet under thats where they belong...
I hate banks is the name of this song.
I think I'll rob myself one or two...
Yeah I hate banks, yeah, how 'bout you?

Well...lend me a nickel & lend me a dime,
repossess my house any old time.
Financial institutions think they're so high faluting...
Just a bunch of fruits in three piece suits,
trying to steal all my loot.
Things are smelling pretty rank,
We must be near a stinking bank.
Smells worse than Rockefellars feet,
Wall Street can eat my meat.

Yeah throw the moneylenders out of the temple;
I hate banks its just that simple.
Royal Crown Palm Ade Tin,
is a the best thing to keep your money in.
Mason jar is okay too,
if you see a bank well you know what to do.

Now, lemme tell you people something...
The only banks I like, well, I like Ernie Banks alright.
And I like the banks of the Mississippi River...
Yeah, and I like banks of fender twin reverb...
Electric guitar amplifiers behind me, raging on the stages...

Well,when I walk in they treat me like a dog;
want to hit them in the head with a doo-doo log.
Republicans, one and all...
Their talleywhackers are mighty small.
Stealing from the poor gonna give to the rich...
Wanna make the bank president twitch in a ditch.

Yeah, see that teller with the blue hair,
giving me the evil-eye stare.
Won't cash my check don't like my ID...
got the security guard after me.
If I was E. F. Sloane,
I'd say the Dow Jones can suck my bone.
Yeah.

Everybody say the three magic words!
I want you to help me say the words!
I want you to repeat after me!
I HATE BANKS!
Can't stand 'em!
I HATE BANKS!
Don't Like 'em!
I HATE BANKS!
Bunch of Foo-Foo's!
I HATE BANKS!
Contrary like a big zit!

I hate banks...
I just can't stand 'em.
Gimme a shovel & man I'll plant 'em.
Six feet under thats where they belong...
I hate banks is the name of this song.
I think I'll rob myself one or two...
Yeah I hate banks, yeah, how 'bout you?

Now lemme tell you something...
I'm not real fond of the PHONE COMPANY either!
You know?
Yeah, and I don't like the cable TV company.
You know why I don't like the cable TV company?
Cause they just be sucking that stuff right out the sky!
THEY don't have to pay nuttin for it!
I just get me one of them bootleg cable boxes,
and get me one of them climb the pole and stick the thing in...
I ain't gonna pay for it!
NOOOOO!!!!"

Tell that to me and all the other folks handing in (philosophy) dissertations.


I think that's a little unfair. I think these days, a degree in philosophy can offer many prospects.

I think that's a little unfair. I think these days, a degree in philosophy can offer many prospects.
Sure, though I don't know of anyone on my course whose "key motivation" for choosing an undergrad in philosophy was a "tidy profit".

I think that's a little unfair. I think these days, a degree in philosophy can offer many prospects.

...as many prospects as an MBA, at least.

I think that's a little unfair. I think these days, a degree in philosophy can offer many prospects.

according to data i saw recently, an undergrad in philosophy, while starting you out in the mid-range of the 'worthless' majors, allows really fucking ridiculous prospects for advancement and making crazy money within a couple years. though i suspect that at the time this isn't much on the minds of those who actually get the degrees.

Sure, though I don't know of anyone on my course whose "key motivation" for choosing an undergrad in philosophy was a "tidy profit".

But if the degree was really, absolutely useless in getting a job. Then I doubt so many people would have done it.

Sure, though I don't know of anyone on my course whose "key motivation" for choosing an undergrad in philosophy was a "tidy profit".

What we do know is they won't be willing to work for free. No one does work for no gain.

What we do know is they won't be willing to work for free. No one does work for no gain.

That's not quite true either. There is a huge number of voluntary and charity workers that work for free (although a large number of them are students looking to make their CV better).

What we do know is they won't be willing to work for free. No one does work for no gain.
But that gain does not necessarily equate to monetary profit; see the examples I gave above about parents, voluntary and not-for-profit workers, etc.

But that gain does not necessarily equate to monetary profit; see the examples I gave above about parents, voluntary and not-for-profit workers, etc.


That's not quite true either. There is a huge number of voluntary and charity workers that work for free (although a large number of them are students looking to make their CV better).

Charity workers work for gain, too, even if it isn't currency. Money just happens to be the most widespread (though by no means exclusive) form of profit, and all evidence points to money as the most efficient motivator, and one that can organize the economies of scale and increasing technology and living standards in a large and complex civilization.

With the exception of fear of the slavedriver's whip, other forms of profit and motivation to do work are no less valid than money and certainly shouldn't be persecuted.

Charity workers work for gain, too, even if it isn't currency...

With the exception of fear of the slavedriver's whip, other forms of profit and motivation to do work are no less valid than money and certainly shouldn't be persecuted.
Describing the 'gain' made by charity or not-for-profit workers, parents and the like as 'profit' seems completely arbitrary and nonsensical (and, perhaps, motivated by a particular economic point of view).

It seems just as arbitrary and nonsensical as describing those who do work solely for profit as working for 'charity'.

Describing the 'gain' made by charity or not-for-profit workers, parents and the like as 'profit' seems completely arbitrary and nonsensical (and, perhaps, motivated by a particular economic point of view).

It seems just as arbitrary and nonsensical as describing those who do work solely for profit as working for 'charity'.

Well it's consistent and reductionist, which any good theory should strive for. You're right that words like "profit" and "charity" have connotations which might get in the way of understanding. Perhaps the word "gain" can be used here to account for both the phenomena of "profit" and "charity".

Perhaps the word "gain" can be used here to account for both the phenomena of "profit" and "charity".
Or, to use perhaps a more neutral term, 'utility'.

Though, to add a further quibble, I think such terms do not fully indicate the motivations and character of those acting.

If you have some time to spend, have a browse through the articles and stories on this website: http://www.leveragedsellout.com/
Ha, I came across his book by complete coincidence yesterday. Worst timed book release of all times. So I guess there's at least one (formerly) high-flying investment banker whom I feel sorry for. ;)

People hate bankers now, they hated them before and they'll hate them later. I highly doubt there was ever a time people didn't hate bankers.

Why do I have scorn for bankers? As it has been stated their motivation is nothing but money.

In no particular order.

I applied for a house loan. I had Zero Debt. No credit cards, nothing. I had a down payment. I wanted a fixed loan. They wouldn't give me the full loan. I had to take a second for 75000 with a variable interest rate. Now: If I took an ARM, they would fund the whole loan.

Shall I mention fees? Fees for late, overlimit. Fees for covering checks. Fees for transferring money from savings to cover checks. Fees for ATM usage.

How about the fact, we can't cancel draft protection? In the old days if you went to use an ATM and you didn't have the funds you were declined. Of course that was bad business because they could allow it and charge you $35 every time you went over.

Predatory lending. 35% interest if you miss a payment? You have to wait 6 months for it to return to normal. Why does an 18 year old need a visa with a couple thousand limit?

Credit rating system geared more about charging higher rates versus credit worthiness. Good information falls off within a year. Bad information stays on for 7 years and they want it set to 10 years. How about knocking the credit score for going over 1/2 of your limit?

What about the fact I can't redo my mortgage because I am a good customer? I want the lower rate and they told me no.

Bank exec salaries. The institution is dying and yet they deserve 18 billion in bonuses and obscene salaries? (one guy was making 87 million a year in base salary). Argument "if we don't pay this we can't attract and retain talent" Yet of the workforce that argument is dismissed since it's a global market and we have to keep salaries low in order to remain competitive.

Somebody mentioned banks sponsoring events. Is that motivated by trying to give to the community or is more motivated by advertising?

How about a time where the bank screwed up a deposit and charged me 44 fees for checks bouncing etc. They argued the fees were justified.

How about ignoring state laws on harassment over debt collection?


They are only motivated by money.

People hate bankers now, they hated them before and they'll hate them later. I highly doubt there was ever a time people didn't hate bankers.

They certainly hated them back in the day when they were called "Knights Templar". Or "Moneychangers".

personally, i blame the jews

well, i've always thought investment bankers to be a waste of skin and air. they shovel other rich people's money around, making rich people and themselves more money and doing fuck all for anyone else or contributing to society. though they might contribute to the economy, but that's a different matter.


i think there is a general animosity felt against the banking profession as a result of the economic downturn. bankers are widely regarded as responsible, and the greed-ridden monetary excesses of the industry, which has for so long been let go as a necessary evil, is finally under question from most people. things like not passing on recent interest rate cuts onto customers, in this country, really haven't helped their greedy-as-fuck image; and at a time where most people are having to cut back, or are losing their jobs, the notion that the profession who created this mess is still handing out bonuses to employees is an insult.

the News Quiz on Radio 4, yesterday, sums up the mood pretty well, i feel: http://www.hlj.me.uk/ns/news%20quiz%20060209%202.mp3

the News Quiz on Radio 4, yesterday, sums up the mood pretty well, i feel: http://www.hlj.me.uk/ns/news%20quiz%20060209%202.mp3

That was brilliant! :D

When Steve Jobs (Apple), Steve Ballmer (Microsoft), and Herbert Kelleher (Southwest Airlines) each make less than $2M, and the dipshits who ran whole banks into the ground made anywhere between $5M and $70M EXCLUDING bonuses...y'know, for running their companies into the ground...it occurs to me that banking is well over it's reasonable allotment of greedy assholes. That's not to say that Carly Fiorino (Hewlett-Packard) wasn't a non-banking greedy asshole, but these golden parachutes for doing fuck-all seem far more common in banking/finance.

-snip-

Wow, impart from your part about bank exec salaries, which I can sympathise with, those were extremely immature reasons to 'hate bankers', based on massive generalisations based on your limited experience of a few bank employees and bank fees where you live.

well, i've always thought investment bankers to be a waste of skin and air. they shovel other rich people's money around, making rich people and themselves more money and doing fuck all for anyone else or contributing to society. though they might contribute to the economy, but that's a different matter.


How on earth is that a different matter? They get funds for businesses, new businesses mean new jobs. Jobs are very beneficial to society.

Wow, impart from your part about bank exec salaries, which I can sympathise with, those were extremely immature reasons to 'hate bankers', based on massive generalisations based on your limited experience of a few bank employees and bank fees where you live.

1980: Average CEO-to-peon salary ratio = 40:1

2003: that ratio is 350:1.

I don't need much more than that, banker or not.

1980: Average CEO-to-peon salary ratio = 40:1

2003: that ratio is 350:1.


You will find that this applies to almost all CEO's of major businesses.

You will find that this applies to almost all CEO's of major businesses.

My point. Thank you. I don't see the need to apply the disdain to only bankers.

Wow, impart from your part about bank exec salaries, which I can sympathise with, those were extremely immature reasons to 'hate bankers', based on massive generalisations based on your limited experience of a few bank employees and bank fees where you live.

Wow. And your opinion in this matter means.....nothing.

My point. Thank you. I don't see the need to apply the disdain to only bankers.

But I don't think simply being rich is a reason to hate someone. If they're rich, and fucking up the economy, I can understand that. But not every banker and bank exec is doing that.

This is typical of the self righteous rhetoric circulating around these days purporting to explain the economic crisis with soaring pseudo-philosophical commentaries, vivid and misplaced metaphors, and melodious and ambiguous similes. The cause of the current famous economic crisis is simple and can be explained in one sentence (a clause, not even a sentence): government intervention and price fixing in the credit markets.
I am Gurguvungunit and I approve this message.

Honestly, this is a case of people being angry and confused and wanting to blame someone. Since they are the "powerful elite", we like to blame the rich when the economy does something alarming. In this case, it's the banking industry. Last time, it was the oil industry. The Great Depression blamed the manufacturing industry. None of it has any basis, really, it's just a bunch of people mixing jealousy and fear up with rational blame-apportioning.

I wouldn't say I hate bankers as such. I have no real feeling towards the average banker. Not that I understand why they do what they do, or what the personal gain is from their work (or 'lifestyle' perhaps). I doubt I would ever socialise with one, partly because they would likely be spending the time in the office and not elsewhere, and the probable lack of any common interests.

I could say I have antipathy towards those who have got rich off a market at the expense of others (i.e. bonuses for CEOs in a dying company, bankers who lost millions of other peoples' money).

How on earth is that a different matter? They get funds for businesses, new businesses mean new jobs. Jobs are very beneficial to society.

to me, advancement of society does not necessarily mean the advancement of the economy. that's why its a different issue to me.

i can't deny that the massive bonuses will benefit the economy, with bank execs using their bonus money to buy luxury consumer goods, etc. but i don't have to like it. some form of bonus is fine, but the sheer scale of the bonuses, especially in the face of most people's current financial problems, turns it from a necessary evil to something i feel i can't put up with

I am Gurguvungunit and I approve this message.

Honestly, this is a case of people being angry and confused and wanting to blame someone. Since they are the "powerful elite", we like to blame the rich when the economy does something alarming.


You are right everybody blames them because they are rich and nothing to do with oh getting 18 billion in bonuses and 10's of millions in salary while the institution is getting our taxes in a bail out. Nor could it be for things like having a big superbowl party in front of the stadium or having a "morale" boosting trip to a nice place or getting your name on a stadium.....

It's only because they are rich.

In this case, it's the banking industry. Last time, it was the oil industry. The Great Depression blamed the manufacturing industry. None of it has any basis, really, it's just a bunch of people mixing jealousy and fear up with rational blame-apportioning.

Acutally the banks were hated in the depression as well.

to me, advancement of society does not necessarily mean the advancement of the economy. that's why its a different issue to me.

i can't deny that the massive bonuses will benefit the economy, with bank execs using their bonus money to buy luxury consumer goods, etc. but i don't have to like it. some form of bonus is fine, but the sheer scale of the bonuses, especially in the face of most people's current financial problems, turns it from a necessary evil to something i feel i can't put up with

I would add that to me it has moved from earning a bonus to deserving a bonus.....

i can't deny that the massive bonuses will benefit the economy, with bank execs using their bonus money to buy luxury consumer goods, etc. but i don't have to like it. some form of bonus is fine, but the sheer scale of the bonuses, especially in the face of most people's current financial problems, turns it from a necessary evil to something i feel i can't put up with

Again though, this applies to pretty much all execs, not just bank execs.

Again though, this applies to pretty much all execs, not just bank execs.

Ah but are the other CEOs able to affect the economies of the world like bank execs?

Some of my 'tin foil' friends are already aruging that in so many years after this mess is cleaned up; the oil industry would do something similar and they will get bailed out as well.

Well there are lots of reasons, some justified, some not. I've no doubt some of the low level animosity that was directed at bankers came, in part, from envy (though in the case of the US, part of that was a holdover from some of the industry's last escapades in the 1930s).

But I think, when you spend twenty odd years telling everyone else that they are lazy dumbasses and that is why their standard of living is falling, while simultaneously falling from incompetent mistake to incompetent mistake and being the beneficiary of successively larger and larger government interventions to protect you until the point is reached the entire global economy collapses due to your foolishness - at which point you scream for taxpayer donations to supply your bonuses, else you will permanently wreck the world financial infrastructure - there is bound to be a little bit of anger directed at you by the non-banking community.

And, you know, it's increasingly obvious that bankers don't really seem to know what they are doing, so all this talk of best and brightest is just irritating.

I'll grant that the above is all a bit of a generalization, and a simplification of what really are very complicated issues, but if the banking community can't see how it comes off that way to people, then they really aren't very intelligent at all.

And then there is all the corruption that has come out.

It doesn't help that all the poster children for the industry are such assholes either.

Look, I understand that banking is a vital part of any economy. It's completely necessary. But there is so much that is fucked up that has gone on, it's impossible to have a favorable opinion of it in general at this time.

Also, it's shit things up so badly it deserves to be nationalized en masse, until such time it can be floated to new owners and get new boards. (I would have preferred allowing institutions to collapse, but the banking industry has now made that impossible, so everyone suffers. Badly done to bankers should take it out on their colleagues instead of looking for sympathy).

The cause of the current famous economic crisis is simple and can be explained in one sentence (a clause, not even a sentence): government intervention and price fixing in the credit markets.

We've gone Through the Looking Glass, Alice.

*snip*

I will confess to some generalizing. But the scorn is still warranted.....

I agree with Lacadaemon, well said!

I've seen bankers being compared to parasites before. Tends to happen whenever the economy goes down; they get portrayed as leeches that do nothing, and harm society for their own greedy ends.
Like in say, pre-war Germany.

"OpEd Contributor
The Value of ‘Other People’s Money’
By MELVIN I. UROFSKY
Published: February 6, 2009
Gaithersburg, Md.

SOME things never change. When President Obama spoke last week of “shameful” bonuses for bankers and the financial community’s “irresponsibility,” he echoed charges leveled nearly a century ago by Louis D. Brandeis. Brandeis, a commercial lawyer, leading reformer and future Supreme Court justice, described a dangerous combination of avarice, lack of accountability and poor oversight in “Other People’s Money, and How the Bankers Use It,” one of the best-known exposés of the Progressive era.

Published in 1914, the book was based on the revelations of the House of Representatives’ Pujo Committee about the predatory practices of J. P. Morgan and other big bankers. “Other People’s Money” influenced both Woodrow Wilson’s New Freedom agenda and Franklin Roosevelt’s New Deal. It also offers valuable lessons for today.

Our current crisis, after all, was in part fueled by bankers making big gambles with other people’s cash. They bundled and sold sub-prime mortgages, took their profits, and then left others holding portfolios full of worthless, even toxic, paper. This was exactly the kind of behavior that Brandeis despised. He believed that it was one thing for an individual to put up capital in risky ventures, playing to win but prepared for failure. But he saw the bankers of his time dodging failure by manipulating the marketplace at the expense of smaller entrepreneurs and consumers.

As president, Wilson tried to put a stop to this. He read the book and called Brandeis in to help draft three bills crucial to the New Freedom agenda — the Federal Reserve Act, the Clayton Antitrust Act, and the law establishing the Federal Trade Commission. These measures allowed Congress to take away banks’ control over currency, banned interlocking directorates (in which banker representatives controlled other corporations), and established rules of fair competition.

Banks found it relatively easy to get around these rules in the 1920s, especially with Republican administrations that did not seem to believe in market regulation. Bankers promoted the purchase of stocks on low margins or down payments, often as little as 10 percent of the price, and then financed the difference by loans, while their brokerage divisions sold the stocks. Then the stock market collapsed in the fall of 1929, taking the banking system down with it.

During the Great Depression, people turned to Brandeis once again. “Other People’s Money” was reissued in an inexpensive edition, and many of those who came to Washington to work on Franklin Roosevelt’s New Deal read it. The New Deal laws, particularly the Glass-Steagall and the Securities Exchange Acts, imposed long overdue regulation of the banking system, required the separation of banking from stock brokerage, and established the Securities and Exchange Commission to regulate the stock markets.

For Brandeis, regulation was not supposed to be a restraint on innovation or the entrepreneurial spirit, but rather a check on unbridled greed. He believed in a free market, but one in which the government enforced rules of fair competition so that the most talented could succeed. Clear rules would help ensure that business was conducted fairly and openly.

“Other People’s Money” can help us navigate the new era of regulation that we are likely to enter. It would be wise for Mr. Obama to heed Brandeis’s advice before imposing stricter rules on banking and the stock market. For these plans to be effective, Brandeis would caution, they must be more than cosmetic. Government should oppose banks’ purchases of stock brokerages, for example, to avoid the problems that Brandeis exposed. Furthermore, new rules won’t accomplish much without effective watchdog agencies. The Securities and Exchange Commission, for example, seems to have abandoned its oversight responsibilities during the Bush years, and now, we are paying the price.

As we reel from the financial crisis, “Other People’s Money” and similar indictments of immoral banking behavior will likely find a new audience. Some of the trouble-making bankers will, perhaps, be temporarily chastened. But before we know it, they will once again be complaining about regulation’s “interference” with the market. Don’t listen to them. Good regulation will keep us from losing sight of the importance of those same principles that Brandeis emphasized so many years ago — honesty, openness and a fair playing field.

Melvin I. Urofsky is a professor at Virginia Commonwealth University and the author of the forthcoming “Louis D. Brandeis: A Life.”

What do you think motivates someone to put themselves into one of the most demanding jobs out there, to enter a career that quite literally consumes your entire life (I was in the office all day today - a Saturday - and I'm an intern) and that leaves you with lots of money to spend but nothing to spend it on but alcohol and other random fancies of the moment? What does this choice say about them?


Man, don't act like you have it so tough. A full day in the office on a Saturday is nothing. Try 15 hour days, 7 days a week for a month and a half for a thesis. Try an average of 60-70 hour work weeks when there isn't a deadline.

Try doing this while getting paid very little without prospects of getting paid much more for quite a while... and even then, the joke (well, it's really the truth, but we laugh at it) is that if we don't make it in our chosen career (academia) we're punished with a pay raise. Don't give me some "oh poor bankers, we don't get paid much and work hard". Everyone works hard if they want to get somewhere.

A side note: most physicists could do a better job with the economy than people trained in business.

A side note: most physicists could do a better job with the economy than people trained in business.

I'm all for technocracy, considering accountants are the technocrats of business...

I'm all for technocracy, considering accountants are the technocrats of business...
It's more that there is a lot of math involved and when your training is in hobnobbing and networking you're not necessarily equipped to do this very well. Physicists and mathematicians are much more qualified.

This is a thread about bankers as people, and perceptions about them. I've been noticing over the past weeks that the language here, in news sources from the US and even here in Oz has become more vitriolic. And though some of you will surely try to stay balanced and blame some bankers and not others (in fact, hold the vast, vast majority of them blameless), overall the picture painted of the actual people and their characters is not a pleasant one. No doubt a big part of the reason is the fact that the fall-out from the collapse is reaching more and more people personally.

But then, were bankers particularly popular before then? If someone had come to you and told you they were a private equity analyst or derivatives trader, would you have thought of them as extremely hard-working, intelligent, driven and successful people? Or would there have been more negative connotations with it?

What do you think motivates someone to put themselves into one of the most demanding jobs out there, to enter a career that quite literally consumes your entire life (I was in the office all day today - a Saturday - and I'm an intern) and that leaves you with lots of money to spend but nothing to spend it on but alcohol and other random fancies of the moment? What does this choice say about them?

If you have some time to spend, have a browse through the articles and stories on this website: http://www.leveragedsellout.com/

It's satire and black humour, of course, but extremely close to reality and to the point where I quite literally recall situations that feature in these stories. The people who write on the site are bankers or were at some point, and the overall message of who these people are, who they want to be and how they deal with the fact that they find it so hard to bridge the gap I think adds another dimension to the discussion that has so far been lost in the political rhetoric and occasional voice of reason mentioning economics that has dominated our treatment of the crisis.

People have ALWAYS hated Bankers-sometimes to the point of attacking innocent bystanders whom they mentally associate with banking. There are more tinfoil-hat "Konspeerasee" theories about Bankers than any other trade, or demographic, including Masons.

Mind ye now, of late a group of specific Bankers have done all they can to make sure people who were neutral about bankers into people who hate bankers, but that's an aside of sorts. While there aren't as many Banker jokes as Lawyer jokes, the reason has more to do with a perception of bankers as a group being rather bland, dull folk and uninteresting, but there's all kinds of fantasies going back a very, very, long time about "popular heroes" robbing banks and burning the mortgage papers, thus freeing farmers and such from foreclosure in hard times.

It's more that there is a lot of math involved and when your training is in hobnobbing and networking you're not necessarily equipped to do this very well. Physicists and mathematicians are much more qualified.

And our field is intensely focused on logic, individual judgement and a deep knowledge of the theory behind any given business activity. On average, we're far more capable of making good economic decisions than any other field in business or economics, albeit at the cost of a risk of committing major crimes thanks to our ability to manipulate numbers. If you spend your entire life following where money goes and why, it makes it easier to envision the macroeconomic effects of policy.

I think you've just supported Ash's point rather than refuted it. Most IBankers are motivated by money -- money itself, rather than the things they can buy with it.
Yeah, that was the point I was trying to get across. Money is a means to an end, but greed ultimately implies that this end is some sort of material benefit. But when money is just a status symbol, something to transmit to others how great you are, then the end is something else. It's not really a quest for acceptance, because bankers are evidently not particularly popular or accepted by society.

i think there is a general animosity felt against the banking profession as a result of the economic downturn. bankers are widely regarded as responsible, and the greed-ridden monetary excesses of the industry, which has for so long been let go as a necessary evil, is finally under question from most people.
For completeness' sake, I think it's worth pointing out that the bankers themselves didn't create most of the debts that ultimately brought the system down. It's not like people haven't been saying that the US (and many other countries) have been living off borrowed money and time for years now, with household debts rising and current account deficits blowing out. The banking system facilitated this process, but it didn't cause it. In a way, the good decade we had with low unemployment and strong growth for the most part was made possible by bankers who had the tools to enable everyone to cover up the problems.

Man, don't act like you have it so tough. A full day in the office on a Saturday is nothing. Try 15 hour days, 7 days a week for a month and a half for a thesis. Try an average of 60-70 hour work weeks when there isn't a deadline.
Yeah, but my penis is larger than yours.

Seriously, there are stories from all sorts of industries and places of ridiculous hours being worked. And we could talk about the motivations for all of them if you wanted. But my point was that the people in corporate finance in particular, the actual investment bankers (as opposed to risk managers, traders, retail bankers etc) never stop working and tend to spend the hours they can grab when their Blackberry isn't going off drunk or otherwise engaged in dead-end pursuits. I'm trying to figure what it is that makes them do it, and where it leaves that relationship between them, their profession and the pitchforks at the gates.

Don't give me some "oh poor bankers, we don't get paid much and work hard". Everyone works hard if they want to get somewhere.
The question is: where do they want to go?

A side note: most physicists could do a better job with the economy than people trained in business.
Actually, physicists in the economy were the ones doing the Quant risk modelling and trading strategies. They're the ones who would make great academic economists, forever doomed to be ignored by those with the finger on the trigger (ie media, politicians, et al).

On average, we're far more capable of making good economic decisions than any other field in business or economics...
Accountants?

I'm going to have to respectfully disagree.

Accountants?

I'm going to have to respectfully disagree.

Nobody can be as brutally efficient as us. If we need to cut expenses, a team of us will go line-by-line to weed out every unnecessary expenditure... we're the jackals of the business world, gnawing every last bit of meat off of the corporate carcass. If there's money that needs to be saved, let loose the audit hounds and we'll clean up what's out there.

Plus, accounting is an alphabet soup that's just plain fun. Everything can be compressed to an acronym.

Yeah, but my penis is larger than yours.

This isn't much of an accomplishment; my equipment is on the inside.

Seriously, there are stories from all sorts of industries and places of ridiculous hours being worked. And we could talk about the motivations for all of them if you wanted. But my point was that the people in corporate finance in particular, the actual investment bankers (as opposed to risk managers, traders, retail bankers etc) never stop working and tend to spend the hours they can grab when their Blackberry isn't going off drunk or otherwise engaged in dead-end pursuits. I'm trying to figure what it is that makes them do it, and where it leaves that relationship between them, their profession and the pitchforks at the gates.

Yes, and I'm just saying that if I make it in academia, I can expect to work hours like this for the rest of my life for a fraction of the pay that you can eventually make. Of course, I don't spend my time off getting drunk and engaging in dead-end pursuits... I greatly enjoy my work and I spend what little leisure time I have doing other things I enjoy. I'm just saying don't give me this "oh look at me, I work hard" crap because everyone works hard.

Actually, physicists in the economy were the ones doing the Quant risk modelling and trading strategies. They're the ones who would make great academic economists, forever doomed to be ignored by those with the finger on the trigger (ie media, politicians, et al).

Actually, tell that to the guy who came in to talk about how he turned a bank around entirely. PhD in physics, actually *did* the differential equations that the economists wuss out on... then he brought in some more physicists who did even better. If people who could properly model the economy weren't ignored, we wouldn't end up with the sort of fuck ups like the current economy.

Nobody can be as brutally efficient as us. If we need to cut expenses, a team of us will go line-by-line to weed out every unnecessary expenditure... we're the jackals of the business world, gnawing every last bit of meat off of the corporate carcass. If there's money that needs to be saved, let loose the audit hounds and we'll clean up what's out there.

Plus, accounting is an alphabet soup that's just plain fun. Everything can be compressed to an acronym.
I'd agree with all that. But that doesn't mean they understand what's going on or should be put in charge. Accountants rarely run things, and that's probably a good thing. They're enablers and supporters, not "doers".

hmmm...aggressive accountants...hmmm.

If you can get an Auditor and an Engineer to agree on something, that something is probably going to work rather better than something set up by a Manager.

And our field is intensely focused on logic, individual judgement and a deep knowledge of the theory behind any given business activity. On average, we're far more capable of making good economic decisions than any other field in business or economics, albeit at the cost of a risk of committing major crimes thanks to our ability to manipulate numbers. If you spend your entire life following where money goes and why, it makes it easier to envision the macroeconomic effects of policy.
I don't know what your field is.

But people with business degrees and economics degrees tend to just be able to kiss ass. People skills are useful, but I wouldn't want to trust the average person* with a degree in business to do anything else competently.

*There are bound to be some smart cookies, but mostly not.

I'd agree with all that. But that doesn't mean they understand what's going on or should be put in charge. Accountants rarely run things, and that's probably a good thing. They're enablers and supporters, not "doers".

We're often the power behind the throne. The CFO is usually the most powerful person in the organization because they're the ones that can make or break quarterly numbers, whereas the CEO can mostly only serve in an executive role without the same control as the CFO. Of course, in the brave new world of Sarbox everything is different, but it just amplifies the influence of accountants in the organization.

This isn't much of an accomplishment; my equipment is on the inside.
I know. But that discussion probably has more value than the "who works more" one. :tongue:

Actually, tell that to the guy who came in to talk about how he turned a bank around entirely. PhD in physics, actually *did* the differential equations that the economists wuss out on... then he brought in some more physicists who did even better. If people who could properly model the economy weren't ignored, we wouldn't end up with the sort of fuck ups like the current economy.
So you're agreeing with me? Physicist usually make excellent quants, they are trained in the tools and the way of thinking.

What they can't do is a) wow people, which is what makes I-Bankers special (being valedictorian and the captain of the football team, if you will) and b) all the stuff people criticise economists and financial modelers of not doing (namely comprehend the fact that the models can never really be relied upon).

PhD in physics, actually *did* the differential equations that the economists wuss out on...

As a first year economics student, I'm already doing differential equations that are a lot more advanced than what I had to do in A-level maths before hand. Unconstrained and constrained optimization can be hard!

If people who could properly model the economy weren't ignored, we wouldn't end up with the sort of fuck ups like the current economy.

Economists say this all the time, since they are ignored a lot.

What they can't do is a) wow people, which is what makes I-Bankers special (being valedictorian and the captain of the football team, if you will) and b) all the stuff people criticise economists and financial modelers of not doing (namely comprehend the fact that the models can never really be relied upon).

They also work 80 hours per week with no guarantee of success...I remember the finance chair talking to us during my freshman seminar (three years ago...goddamn) and he basically told us it was one of the most brutally difficult fields to get in to. Personally, since I'd prefer to keep my income than snort it up my nose I'll stay away from that kind of environment, but I've got to tip my hat to those that succeed.

As a first year economics student, I'm already doing differential equations that are a lot more advanced than what I had to do in A-level maths before hand. Unconstrained and constrained optimization can be hard!

I've seen economics math. I had to help some people on my floor get through it. It was an absolute joke compared to the math in the sciences (especially physical sciences).

I know. But that discussion probably has more value than the "who works more" one. :tongue:

You only say that because I beat you hard in the latter category.

So you're agreeing with me? Physicist usually make excellent quants, they are trained in the tools and the way of thinking.

What they can't do is a) wow people, which is what makes I-Bankers special (being valedictorian and the captain of the football team, if you will) and b) all the stuff people criticise economists and financial modelers of not doing (namely comprehend the fact that the models can never really be relied upon).

Yes, and this is stupid. Society places more value on idiots who fuck things the hell up but can talk their way into and out of situations than people who know what they're doing.

I've seen economics math. I had to help some people on my floor get through it. It was an absolute joke compared to the math in the sciences (especially physical sciences).

It really really heavily depends on what university and course you are studying. And when you learn economics, you learn a lot more than just maths, so it's pretty retarded to say "I wouldn't trust them with anything", based SOLELY on what maths they know. Also, many academic economists are maths prodigies, even Ben Bernanke taught himself calculus as a teenager.

Society places more value on idiots who fuck things the hell up but can talk their way into and out of situations than people who know what they're doing.

These generalisations are becoming ridiculous, especially based on your extremely limited experience with economists.

It really really heavily depends on what university and course you are studying. And when you learn economics, you learn a lot more than just maths, so it's pretty retarded to say "I wouldn't trust them with anything", based SOLELY on what maths they know. Also, many academic economists are maths prodigies, even Ben Bernanke taught himself calculus as a teenager.

It's more the commerce/business people who don't know what's going on. And it's not that I wouldn't trust them to do anything, if they're my friends, I'd trust them to get us a seat in a crowded restaurant or get us out of paying for cover... I wouldn't trust most of them to actually run a business. Being the face of a business and dealing with the people aspect, yes.

These generalisations are becoming ridiculous, especially based on your extremely limited experience with economists.

I was talking about people who do degrees in business. Economics is its own thing.

Also, what part of "I'm sure there are some bright cookies" don't you get? I'm not saying that all people who do these degrees and pursue this path are idiots.

It's more the commerce/business people who don't know what's going on. And it's not that I wouldn't trust them to do anything, if they're my friends, I'd trust them to get us a seat in a crowded restaurant or get us out of paying for cover... I wouldn't trust most of them to actually run a business. Being the face of a business and dealing with the people aspect, yes.

You wouldn't trust someone who has spent at least three years specifically studying how to best run a business, to run a business... why? There's a lot more to business than theoretical mathematical models.

Also, what part of "I'm sure there are some bright cookies" don't you get? I'm not saying that all people who do these degrees and pursue this path are idiots.

But you were implying a majority.

I was talking about people who do degrees in business. Economics is its own thing.

Also, what part of "I'm sure there are some bright cookies" don't you get? I'm not saying that all people who do these degrees and pursue this path are idiots.

General Motors
Ford
Chrysler
AIG
Bear-Stearns
McDonnell Douglas
Etc. Etc.

Yup, Business Majors are doing SUCH a good job running businesses.

You wouldn't trust someone who has spent at least three years specifically studying how to best run a business, to run a business... why? There's a lot more to business than theoretical mathematical models.

For most of them, yes. I'm not saying that it's just mathematical models, but most people who leave with business degrees get a degree in being a yes-man.

General Motors
Ford
Chrysler
AIG
Bear-Stearns
McDonnell Douglas
Etc. Etc.

Yup, Business Majors are doing SUCH a good job running businesses.

Are you trying to make my point for me?

But you were implying a majority.
I think a majority is a safe guess.

Dakini, do you think that if you were put in charge of a business, you would be very successful with it?

Dakini, do you think that if you were put in charge of a business, you would be very successful with it?
I wouldn't want to be put in charge of a business. But it depends what sort of business it is.

I wouldn't want to be put in charge of a business. But it depends what sort of business it is.

Ok, General Motors... what would be the first decision you make with them?

Ok, General Motors... what would be the first decision you make with them?
Why would I want to work for GM?

Why would I want to work for GM?

It's a hypothetical.

Jack Welch had a Ph.D in Chemistry, and he managed to fuck GE up beyond belief. Of course it didn't seem like it at the time, because he's a smooth talker, but he's the one that left hidden bags of shit all over the place.

Steve Jobs (college drop out) reckons that taking a calligraphy class was a big part of his success.

I just don't think that formal education has anything to do with how well people will run a business. It's a combination of native talent and experience.

I just don't think that formal education has anything to do with how well people will run a business. It's a combination of native talent and experience.

With a little bit of luck thrown in for good measure.

It's a hypothetical.
It's not a very good hypothetical. Running a company that size is going to have more to do with experience than receiving a bachelors degree in business. Furthermore, the people who are running GM clearly aren't doing an amazing job so it's not really like I could possibly make anything worse.

It seems like it would be such an incredible waste of time though.

With a little bit of luck thrown in for good measure.

That's true. Nobody can anticipate everything, the difference between great and mediocre can often be just the breaks going your way. Such is life though.

Leadership's always a kind of witches brew of things that you can't necessarily teach in a formal setting, or model mathematically.

I've seen economics math. I had to help some people on my floor get through it. It was an absolute joke compared to the math in the sciences (especially physical sciences).
http://www.uq.edu.au/economics/carbajal/Uniqueness-Groves-July-2008.pdf

That's a bit of econ math, by my micro-professor for next semester. The point I'm trying to make isn't that the actual equations are particularly complicated, but I'm trying to illustrate how math is used in economics. It's not used to solve problems, it's used as a language to describe certain ideas. Economists aren't mathematicians, they shouldn't be sitting there spending their time solving equations, they should be making sure what they're saying makes sense. And the same is true, I assume, for physicists. Hence the question of whose math is harder is even more childish than it appears at face value.

If it so happened that a physics problem required a more complex equation than an economic problem, then that's not a question of the sciences or their methodologies, but of the specific problem in question.

And as for economists in the real world, outside academia, they spend more time with econometrics and statistics anyways. And I assume the same is true of physicists again. In reality, the two disciplines have a lot in common (probably because economics is trying to be like physics). The differences are in the nature of the things being observed, and the fact that physics has about 2000 years on economics.

You only say that because I beat you hard in the latter category.
I'm an intern, you're a grad student (I assume). I work less than full-time employed finance professionals, you work more than tenured academics. I know how hard physics professors and students work.

But that's not the point of the thread, and hard or long hours don't convey anything about the nature or value of the work at any rate.

I think a lot of the current people is the perception that right now, bankers fucked up. But unlike other businesses that have gone bust, the gov has gone in to save the banks and nearly everyone's still getting paid and still getting their bonuses.

The perception of if they're successful they make money, if they're not they turn round to governments and say you have to save us or the entire economy's buggered and they still make money.

I think a lot of the current people is the perception that right now, bankers fucked up. But unlike other businesses that have gone bust, the gov has gone in to save the banks and nearly everyone's still getting paid and still getting their bonuses.
I know that's the perception, but the fact of the matter is that it's patently false. As a percentage, the jobs lost in the finance sector are far greater than in other industries at this point, and the money paid to these people is far less than it was before.

It's just that this doesn't make for as good a news headline. Better to focus on the CEO's options and then plant into the reader's head the idea that this sort of thing happens with everyone who works in the industry. It doesn't - people at my workplace aren't getting jack worth of bonuses this year, and we haven't actually done that badly compared to most banks out there. We fired 1000 people.

I don't know how much our CEO will end up getting, and quite frankly I don't care. It's not representative of the work, the workplace or the people who work there.

I remember a joke an economist (ish) friend of mine told me. It seems like something that'd only be really funny to those who know people in those fields.

An engineer, physicist, and an economist are trapped on an island with cans of food, and no can opener.

The engineer gets a rock, sharpens it and hacks the can open.
The physicist spends all day calculating the exact angle he needs to hit the can with a rock to open it. Then that evening does so.
The economist assumes that the can is open and works out how delicious the food will be.

Are all you math types chuckling or is it just a slightly dull joke?

Don't worry, no matter how much people may hate bankers, they will always hate lawyers more.

But that's because the latter are jewish scum.

Oh.

Wait.

I know that's the perception, but the fact of the matter is that it's patently false. As a percentage, the jobs lost in the finance sector are far greater than in other industries at this point, and the money paid to these people is far less than it was before.

It's just that this doesn't make for as good a news headline. Better to focus on the CEO's options and then plant into the reader's head the idea that this sort of thing happens with everyone who works in the industry. It doesn't - people at my workplace aren't getting jack worth of bonuses this year, and we haven't actually done that badly compared to most banks out there. We fired 1000 people.

I don't know how much our CEO will end up getting, and quite frankly I don't care. It's not representative of the work, the workplace or the people who work there.

You asked for the perceptions and the reasoning iirc. But it's not surprising that in a financial crisis highest % of jobs (thus far) have gone in the financial industry (btw, source). And they don't think in stats. They see x numbers of banking jobs gone and then higher numbers of other jobs that've gone.

The CEO options is part of it. They are the figureheads of the banking industry and they're still getting shedloads and that affects the perception.


Northern (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3177668.ece) Rock (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5561473.ece) staff for example still got/were getting bonuses.

Also isn't it the case that in the finance sector bonuses make up a larger part of the expected wage than in other industries (so not exactly bonuses if you see my meaning) so the meaning is confused somewhat.

The comparisons get made with previous recessions, in the UK memories tend to go back to the mining crisis or the crash in manufacturing etc. And they ask the question, do I remember the government plunging money of this size into saving companies like that to save them. And the answer is no, I don't remember that. 1000 people didn't get fired, the mines were closed and the factories went to the wall or went overseas.

And then they look at say Woolworths (major UK retail chain) going down and thousands of people (and usually everyone knows someone) out of work and they think "how the hell are those bloody bankers still in jobs when they've buggered it all up".

And they compare the idea of bankers as being well paid and see them as being able to cope with redundancy, rather than working class retail staff who will struggle.

And then they get the banks aggressively pursuing mortgages and repossessing left, right, and centre and they resent that.

Are you surprised bankers aren't exactly flavour of the month?

I know that's the perception, but the fact of the matter is that it's patently false. As a percentage, the jobs lost in the finance sector are far greater than in other industries at this point, and the money paid to these people is far less than it was before.

Look, I think this is part of the problem. It's not that the carnage is worse in the banking sector (though I doubt somehow that is true in reality, glancing at the BDI I would say shipping is much worse off) but the fact that there are any bailouts for them at all.

The perception is for years that the financial industry has been the champion of free market reforms: outsourcing, offshoring, global wage arbitrage, all that stuff. Now, we can argue whether or not this all is ultimately a good thing, but it is undeniable it has produced a lot of economic dislocation along with it.

But now, all of a sudden, the banking industry has decided it doesn't like free markets anymore and wants government subsidies. Moreover, you see bankers in the press saying they deserve bonuses because even though their company lost shit-loads, their department still completed so they 'deserve' the money.

This is exactly the opposite of how the banking industry has told everybody else the world should work for about three decades. If you can't see how that grates on a middle class that has seen stagnant wages and declining employment prospects, coupled with unaffordable shelter costs (driven by the banking industry), well...

People think the bad banks should fail; sauce for the goose. Nobody cares about the proportion of sacked bankers, they care about the principle behind all this. You cannot say subsidies bad, then turn around and demand one.

Further, as taxpayers supporting these companies (and they are) they feel that they have the right to set the compensation (which they do). They are just as angry with politicians about this for what it is worth.

We can argue about how much this reflects the reality of the situation. But you have to understand that it looks very, very hypocritical to very nearly everyone.

It's just that this doesn't make for as good a news headline. Better to focus on the CEO's options and then plant into the reader's head the idea that this sort of thing happens with everyone who works in the industry. It doesn't - people at my workplace aren't getting jack worth of bonuses this year, and we haven't actually done that badly compared to most banks out there. We fired 1000 people.

It's not about what makes good news copy. The media has, frankly, been quite light on this until recently. People are honestly angry about this. Part of it is a festering resentment about globalization/longer hours/decreasing job security/falling wages that has suddenly found focus. But a large part of it is justified in that risk has (and is being) socialized while profits have been privatized.

And the banking industry is walking a very fine line by acting in such a short sighted and insensitive manner. It's really fucking with the wrong bull here. If it doesn't start to think a bit more about PR, it'll end up wishing it was back in the 1930s regulation wise.

You can say people suck, that they don't get what is going on, that it's not fair, that it's not representative. But then you have to deal with the fact that the banking industry has never explained to people in general why every failing company - except for big banks (excluding LEH) - should be allowed to take a shit nap, when they could make exactly the same arguments when their firm went down.

I appreciate that the situation is different with banks because of what they do. But most people don't. I will say this however, there needs to be a long and hard think about how financial crises are managed in the future.

I'll add this. Bankers may feel bad now. Just wait until the prosecutions start.

Don't worry, no matter how much people may hate bankers, they will always hate lawyers more.

But that's because the latter are jewish scum.

Oh.

Wait.

Yah, but when lawyers start prosecuting the bankers they'll be heroes again. Just like the 1930s. Lovely.

Well, except for lawyers that work for banks. I suspect those guys are really fucked.

so no more hating China now i must hate the bankers.

so no more hating China now i must hate the bankers.

You forget China has bankers too....

You forget China has bankers too....

Yes, but they hang them there when they fuck up. So there is less resentment.

I've always hated bankers, lawyers, and anyone else who makes ridiculous profits from society while adding nothing other than the bureaucratic movement of goods and services.
My contemporaries are such poseurs. Next thing, they'll be meditating, wearing clothes beaten by 6-10 years of use, growing all their nails out (except the pinky and ring), and drinking their own blood.

Simply put, Wells Fargo got TARP funds and posted a few billion dollar losses for the quarter. Then it announced that it was taking its staff to have fun times in Las Vegas at the most expensive hotel-casinos there. Yes, I know it finally canceled it, AFTER a large uproar and AFTER it tried to defend it with the typical "Well, we need to appreciate our employees" (Though admittedly I'll miss the money coming into Nevada).

This is during a time when states are cutting down everything due to lack of money and people are getting laid off.

Neu Leonstein, you say that the money doesn't matter and you guys work hard, but I know many people who work just as hard and don't make the obscene salaries. Could be envy, possibly, but right now it just looks damned hypocritical.

Im okay with my Bank...I go with Keesler Federal, the Airforce Base Bank...

I have faith the Airforce wouldnt fuck me over, lol...

You forget China has bankers too....

:head explodes:

Yes, but they hang them there when they fuck up. So there is less resentment.

nope they shoot them. then charge the family for the cost of the bullet.
shoot them in the heart if the eye retinas sell for more on the market and shoot them in the head if the hear is selling for more.

Neu Leonstein, you say that the money doesn't matter and you guys work hard, but I know many people who work just as hard and don't make the obscene salaries. Could be envy, possibly, but right now it just looks damned hypocritical.
You know that I wouldn't consider the face time in an office a valid determinant of how much someone gets paid. As far as I'm concerned, a sports star who shows his face for two hours every weekend getting paid millions is just as justified as anyone else because apparently someone is stupid enough to pay them that sort of money, and it's ultimately no hair off my head.

The reason bankers get paid a lot of money is because they produce a lot of money by virtue of moving it to the places it is needed. Exactly how much this is can sometimes be measured fairly easily (or so it was thought). That this also involves long hours is coincidental.

But what I was saying was that these long hours (and the fact that there is no time you're ever not at work or required to think about work, even when you're not at the office) ultimately mean that you don't ever get to spend the money on anything but momentary hits of pleasure.

I'm going to put it out there that these people are intelligent and do in fact notice this. I've been in the fortunate position of watching people who've been in the industry for 20+ years (the boss of my department made US$4.5m last year), people who are doing the hard yards right now (not that he isn't, he routinely approves deals at 2am) and us, a bunch of idealistic interns. And most of us aren't your stock-standard "normal" kid. Most of us don't do fashion, pop music and even partying. Several of us are seriously struggling with trying to tie their work now together with what they believed about life, "commercialism" and the shallowness of it all. I'm lucky in that respect because of my own beliefs and attitudes, but even I have changed a lot in just a few weeks on the job (and the nights after work). Now, the same thing probably happens at any job to some degree, but in this case it is extreme. So as I try to figure out what keeps me going, and what would keep these guys going, and then finding the "Leveraged Sellout" site (and articles like this (http://www.leveragedsellout.com/2007/09/thank-you-for-quitting/)) which treats essentially the same topic with the blackest satire (out of which, to me, comes a sense of melancholic seriousness), I realised the need for some sort of discussion.

I now see the bile coming in our general direction. And it makes me wonder: do people actually ever think about the person they're being angry at? Does the character or the experiences of the bankers play a role in why they're so unpopular?

The reason bankers get paid a lot of money is because they produce a lot of money by virtue of moving it to the places it is needed. Exactly how much this is can sometimes be measured fairly easily (or so it was thought). That this also involves long hours is coincidental.

But what I was saying was that these long hours (and the fact that there is no time you're ever not at work or required to think about work, even when you're not at the office) ultimately mean that you don't ever get to spend the money on anything but momentary hits of pleasure.

I now see the bile coming in our general direction. And it makes me wonder: do people actually ever think about the person they're being angry at? Does the character or the experiences of the bankers play a role in why they're so unpopular?

Think but probably don't know. But anyone on a low paying job looks at the sort of salaries people in that sector and laugh when you talk about "what keeps you going" in a job like that. And complaining about how hard it is when your ideals are affected doesn't even nearly cut it with them.

But I really think it comes down to people hearing time after time before, often from bankers and economists that it's necessary for the economy for factories to go overseas or companies to go to the wall rather than be saved. Except when it's the banks the government steps in and throws incomprehensibly huge amounts of money to keep them in business.

Nobody likes the people getting special treatment.

*snip*
In regards to your point about money isn't what they are after since they don't get to spend it, let me ask you this then, would you do your job for my salary (around 30k a year)? I also have to think about my job around the clock. I take my work home with me and God help me if I meet a student in the store or outside of school. I think what I'm getting at is that for every time I hear 'It isn't the money' it's seeing the bonuses, it's seeing the status symbols, it's seeing the waste and I gotta say my reaction is, 'yeah, right. Pull the other one, it's got bells on'.

As for your actual question, probably not. But then again, how often do you think about the people your numbers affect? To people in banking, they are numbers and money, to the folks they affect, it's a foreclosed house. It's a job that's suddenly gone. It works both ways.

Why do I have scorn for bankers? As it has been stated their motivation is nothing but money.

In no particular order.

I applied for a house loan. I had Zero Debt. No credit cards, nothing. I had a down payment. I wanted a fixed loan. They wouldn't give me the full loan. I had to take a second for 75000 with a variable interest rate. Now: If I took an ARM, they would fund the whole loan.

Shall I mention fees? Fees for late, overlimit. Fees for covering checks. Fees for transferring money from savings to cover checks. Fees for ATM usage.

How about the fact, we can't cancel draft protection? In the old days if you went to use an ATM and you didn't have the funds you were declined. Of course that was bad business because they could allow it and charge you $35 every time you went over.

Predatory lending. 35% interest if you miss a payment? You have to wait 6 months for it to return to normal. Why does an 18 year old need a visa with a couple thousand limit?

Credit rating system geared more about charging higher rates versus credit worthiness. Good information falls off within a year. Bad information stays on for 7 years and they want it set to 10 years. How about knocking the credit score for going over 1/2 of your limit?

What about the fact I can't redo my mortgage because I am a good customer? I want the lower rate and they told me no.

Bank exec salaries. The institution is dying and yet they deserve 18 billion in bonuses and obscene salaries? (one guy was making 87 million a year in base salary). Argument "if we don't pay this we can't attract and retain talent" Yet of the workforce that argument is dismissed since it's a global market and we have to keep salaries low in order to remain competitive.

Somebody mentioned banks sponsoring events. Is that motivated by trying to give to the community or is more motivated by advertising?

How about a time where the bank screwed up a deposit and charged me 44 fees for checks bouncing etc. They argued the fees were justified.

How about ignoring state laws on harassment over debt collection?


They are only motivated by money.

I think you are more mad at the system rather than the individuals working it. Bankers don't make the rules, they simply are trained to play with them and make sure they are followed financially.

Personally I view bankers as very smart people. Just like police, they may not agree with the foundations of what they do, but are willing to fulfill them for the simple financial gain, which drives every form of work a person can do.

I think why people really hate bankers is that the gain of money is involved with work, which is the discomfort of life and most people hate and do little as possible, which as a banker does a lot of work and get paid for it, people get jealous.

In regards to your point about money isn't what they are after since they don't get to spend it, let me ask you this then, would you do your job for my salary (around 30k a year)?
I reckon I actually would, because I actually think it's the most interesting form of work out there. But I also don't see why I should, given that there are people who are willing to pay me a lot more than that.

I think what I'm getting at is that for every time I hear 'It isn't the money' it's seeing the bonuses, it's seeing the status symbols, it's seeing the waste and I gotta say my reaction is, 'yeah, right. Pull the other one, it's got bells on'.
Well, do you think a 4000 dollar suit motivates someone? Is a suit that expensive really that much better than the one I got for 120 at the cheap store?

I actually think the need to point out the fact that you earn so much money is just covering up something else. Don't get me wrong, once I can afford it I'm out there buying myself a GT3 Porsche with the best of them, but you know I'm not doing it to show off, but because I actually get that much more pleasure out of driving and looking at it.

But expensive suits surely aren't anyone's passion in life.

As for your actual question, probably not. But then again, how often do you think about the people your numbers affect? To people in banking, they are numbers and money, to the folks they affect, it's a foreclosed house. It's a job that's suddenly gone. It works both ways.
Granted, but we don't do these things for the sake of being malicious or wishing you harm. Bankers don't go out destroying companies because they don't like them or what they stand for (cue someone finding an example of someone acting to the contrary). But the sort of thing that is being advocated now has nothing to do with earning a return or being a pragmatic solution to a problem - it's purely taking pleasure in seeing people we've been taught to hate suffer.

I reckon I actually would, because I actually think it's the most interesting form of work out there. But I also don't see why I should, given that there are people who are willing to pay me a lot more than that.
Part of the problem being that the people willing to pay you are bankers themselves. It's like Congress giving itself a raise.

Well, do you think a 4000 dollar suit motivates someone? Is a suit that expensive really that much better than the one I got for 120 at the cheap store?

I actually think the need to point out the fact that you earn so much money is just covering up something else. Don't get me wrong, once I can afford it I'm out there buying myself a GT3 Porsche with the best of them, but you know I'm not doing it to show off, but because I actually get that much more pleasure out of driving and looking at it.

But expensive suits surely aren't anyone's passion in life.
How much of a factor for you was the lifestyle that those in high finance get to enjoy for you to choose the profession though? Still, my point was not that people get to enjoy the money, but that when folks complain about these high salaries we are piously told that the money doesn't matter, and THEN we see the $4,000 suit.

Granted, but we don't do these things for the sake of being malicious or wishing you harm. Bankers don't go out destroying companies because they don't like them or what they stand for (cue someone finding an example of someone acting to the contrary). But the sort of thing that is being advocated now has nothing to do with earning a return or being a pragmatic solution to a problem - it's purely taking pleasure in seeing people we've been taught to hate suffer.
Who was worse then? The Nazis who exterminated the Jews and others to whom they were just numbers to be dealt with or the Japanese who did the same to the Chinese out of a sense of actual hatred?

The analogy of course is very crude, but the point is that while the public at large can admit that the banker is not the same as the evil villain of two bit movies who will foreclose on Miss Daisy's house out of a sense of cruelty, the actions STILL cause major issues in people's lives. Even worse is the fact that it WASN'T done out of a sense of harm or hatred. Hatred is at least somewhat personal, today you're just a number to be crunched, a cog to be replaced. It's even worse to realize that the decision was made by someone who just drew a line and cut you off, regardless of what would happen to you for money.

And you ask why people are happy to see such people get their comeuppance? It's a matter of saying, 'now you know how it feels, don't ya?'

So people hate bankers now?

Dude, where have you been for the past 6 years?

And that is as far back as I can remember, people (and by that I mean those that take Today Tonight to be balanced and true news) and the media have always ragged on bankers and the banking industry for various reasons.

I never particularly liked or disliked any banker; and I've yet to really know any so I have no opinion on Bankers in general. Let alone hate them.

But I don't think simply being rich is a reason to hate someone. If they're rich, and fucking up the economy, I can understand that. But not every banker and bank exec is doing that.

Agreed. That's why I targeted CEOs.

My opinion might be best summarized here (http://www.inlander.com/content/newscommentary_robert_herold_fire_ceos).

Or by this response to that column:

Why stray so far from home for material! According to a report in the CDA[Coeur D'Alene, Idaho]Press.com, in 2006, Avista's CEO, Gary Ely, pocketed a total of $3.3 million. Actually, it is reported that he "earned" it. Malyn Malqust, his vice president and CFO “earned” $1.1 million. Jessie Wuerst, a spokesperson for Avista, indicated that what might otherwise appear to be blatently high incomes should be seen in light of the fact that their recipients get no perks. As he put it, "No personal use of corporate aircraft, no country club memberships." Since then, Scott Morris has become the CEO at $1.16 million in 2007. Reports indicate that between 2000 and 2006, Avista workers saw their salaries increase by 18%, while that of the CEO increased by 40%. Clearly, were it not for increases in executive salaries, Avista leadership would have disappeared. It was not reported why the “workers” stayed.

Then there are the university presidents. Good thing we pay them so well or they, too, would depart. Fortunately, Dr. Elson Floyd was granted a pay increase by the WSU board of regents from $600,000 to $725,000 so that he could donate $100,000 back as a response to the state’s hard times — leaving him with an increase of only $25,000. That’s what it takes to attract top notch leadership who can handle things like hiring a provost. At UW, they are very serious about keeping their president, if Dr. Mark Emmert’s “compensation package” of $905,000 is any indication. In 2006, the average faculty salary at WSU was $72,000 and at UW $86,000. Keeping good executives requires paying them well. Keeping essential people is less costly.

Of course, the present economic times tend to recall the Great Depression. And we are coming up on the 75th anniversary of Bonnie and Clyde being brought to justice. As for poor Willie Sutton, he robbed banks because he thought that is where the money is. Sutton commented that he carried a gun because, You can't rob a bank on charm and personality." Turns out you can. These folks just just didn't know how to do it. Instead of shooting their way into banks they should have become CEOs.

Granted, but we don't do these things for the sake of being malicious or wishing you harm. Bankers don't go out destroying companies because they don't like them or what they stand for (cue someone finding an example of someone acting to the contrary. But the sort of thing that is being advocated now has nothing to do with earning a return or being a pragmatic solution to a problem - it's purely taking pleasure in seeing people we've been taught to hate suffer.
So you don't take pleasure in it, you just do it for profit. You think people care? There's a certain amount of schadenfreude about it, and a certain amount of resentment at bankers apparently getting special treatment.

I think you are more mad at the system rather than the individuals working it. Bankers don't make the rules, they simply are trained to play with them and make sure they are followed financially.
Bankers do make the individual rules many of which TBF gave examples of. Here in the UK banks in recent years have made a habit of breaking laws regarding certain fees they can charge based on the principle that most customers won't understand or won't have the time/money/etc available to sue for the fees back.

So you don't take pleasure in it, you just do it for profit. You think people care?
Actually, banks don't foreclose on a house to make a profit. They do it because someone took their money and isn't giving it back. It's a way of cutting losses that are the result of...well...theft.

Actually, banks don't foreclose on a house to make a profit. They do it because someone took their money and isn't giving it back. It's a way of cutting losses that are the result of...well...theft.

Sometimes banks do use predatory lending practices to get a home. especially if they can get it after 33% to 50% is paid off. but those are considerably rare.

Actually, banks don't foreclose on a house to make a profit. They do it because someone took their money and isn't giving it back. It's a way of cutting losses that are the result of...well...theft.
Well, some bankers seem to be giving themselves a party with TARP funds. Is that too not theft?

Well, some bankers seem to be giving themselves a party with TARP funds. Is that too not theft?
That depends on what the terms were under which that money was given. Fact of the matter is that the Wells Fargo party for example was a recognition event for people who had done an outstanding job over the year. Not good PR, but not exactly as malicious as you try to make it look either.

Look, what was done by some bank CEOs was borderline criminal and certainly not ethical. I can understand that people are angry at them. I can't understand however how these people fail to distinguish these people from an entire industry and everyone who works in it.

In the grand scheme of things, the banks didn't make the economy implode. The banks facilitated the essentially bubble-like good time the US has had over the past decade or so, and no one was complaining then. Now the bubble has burst, and because naturally it happened within the finance industry first as the conduit of money and economic activity everyone blames runaway banks for it all. Banks didn't cause household debt to explode, they were just the means through which it was possible. Of course the banks made mistakes, huge ones and huge numbers of them. But that doesn't equate to the banks bringing everything down - it was defaults of everyday people rising first, the banks falling later.

But that's beside the point again, because the topic is bankers and not banks.

Look, what was done by some bank CEOs was borderline criminal and certainly not ethical. I can understand that people are angry at them. I can't understand however how these people fail to distinguish these people from an entire industry and everyone who works in it.
Let me see here. We have a situation caused by extreme greed on the part of banks more or less redoing mistakes that they should have already learned to avoid. We also have a credit crunch because said banks are now scared (Note the scared bit, this sounds less like logical actions and more like a feeling, a withholding of money just because, even though it means peoples' jobs). We have a group of people who, as you noted, WOULD foreclose on someone's house, and God help you if you asked for leniency, help, or understanding from the bank while that was going on turning around and SCREAMING for leniency, help, and understanding and THEN proceeding to spend money on over-the-top bonuses and pricey junkets and ask for even MORE money to bail them out when the average Joe can't get a new loan to save his family's house and you honestly wonder why bankers are not getting good vibes right now?!

That depends on what the terms were under which that money was given. Fact of the matter is that the Wells Fargo party for example was a recognition event for people who had done an outstanding job over the year. Not good PR, but not exactly as malicious as you try to make it look either.

Look, what was done by some bank CEOs was borderline criminal and certainly not ethical. I can understand that people are angry at them. I can't understand however how these people fail to distinguish these people from an entire industry and everyone who works in it.

In the grand scheme of things, the banks didn't make the economy implode. The banks facilitated the essentially bubble-like good time the US has had over the past decade or so, and no one was complaining then. Now the bubble has burst, and because naturally it happened within the finance industry first as the conduit of money and economic activity everyone blames runaway banks for it all. Banks didn't cause household debt to explode, they were just the means through which it was possible. Of course the banks made mistakes, huge ones and huge numbers of them. But that doesn't equate to the banks bringing everything down - it was defaults of everyday people rising first, the banks falling later.

But that's beside the point again, because the topic is bankers and not banks.

rubbish we are resurrecting Andrew Jackson and sending him to tear up all bank charters and order the militia to transport all money back to the government for storage.

Let me see here. We have a situation caused by extreme greed on the part of banks more or less redoing mistakes that they should have already learned to avoid.
Alas, their shareholders didn't think so. Look, they were idiots, they destroyed enormous amounts of wealth as a result. But "greed" doesn't capture it, it just doesn't. It's not like you sit there when investing and think "maybe I'll make a little bit less than I could". The banks didn't see the risks where they were, that was the mistake, that's what changed their risk-return balance. Greed just doesn't feature.

We also have a credit crunch because said banks are now scared (Note the scared bit, this sounds less like logical actions and more like a feeling, a withholding of money just because, even though it means peoples' jobs).
You have absolutely no idea what's going on, do you. It's not about fear, it's about the cost of funds and the need to restock a balance sheet that's been decimated (rightly so) by mark-to-market accounting, and it's about the fact that lending to people in a recession is just not as good an idea as lending to people in good times.

At work we don't give a lot of new finance to copper miners right now. There are those in the media who accuse us of "starving" the industry. But at $1.50 a pound for copper, the fact of the matter is that copper mining is not a good business to be in and we shouldn't be lending money into it. It's not because we're scared, and it's because you seem to want to reduce it to fear that it's that much harder to judge what a bank rescue is good for and, more importantly, what distinguishes a good rescue plan from a bad one. Which is in turn why the US taxpayer is being stomped on by his politicians right now.

...and you honestly wonder why bankers are not getting good vibes right now?!
No, I know why they get bad vibes. That doesn't make it any less stupid.

The question is, is there anything else, do they ever bother thinking about the people, or is it really just empty ignorance?

The question is, is there anything else, do they ever bother thinking about the people, or is it really just empty ignorance?

It's the sheer arrogance in statements such as this that is why you'll never understand this backlash. Banks and bankers and especially you take pride in withholding education on what it is you do, and then you're surprised when the uneducated masses react negatively? Your haughty attitude and the projection of assumed superiority are why people don't like you and your profession, NL, not "empty ignorance". Spare us your martyrdom, please; no one is interested in feeling bad for the bad guys.

You have absolutely no idea what's going on, do you. It's not about fear, it's about the cost of funds and the need to restock a balance sheet that's been decimated (rightly so) by mark-to-market accounting, and it's about the fact that lending to people in a recession is just not as good an idea as lending to people in good times.
Speaking for the UK at least, the money was given to the banks from the government on the understanding it would keep them lending. Money which they took and then didn't keep lending.

If I understand correctly the banks didn't really understand what they were selling. That doesn't sit well with people. They think of a bank's money as their deposits, so they don't like the idea of banks playing fast and loose with their cash.

No, I know why they get bad vibes. That doesn't make it any less stupid.

The question is, is there anything else, do they ever bother thinking about the people, or is it really just empty ignorance?

Look, this isn't just limited to the credit crunch. Here at least everyone knows the banks make the system and the banks game the system to screw people for profit. Here in the UK for example the banks routinely overcharge people on overdraft fees etc knowing that not everybody will have the time or knowhow to sue to get back.

NL, you obviously know a shedload more about this than I do, but you're also seem fairly biased. Saying banks weren't responsible for household debt exploding, who was giving these loans if not banks, are banks not responsible for ensuring they loan responsibly?

Actually, banks don't foreclose on a house to make a profit. They do it because someone took their money and isn't giving it back. It's a way of cutting losses that are the result of...well...theft.

So is stealing from a thief wrong?

That depends on what the terms were under which that money was given. Fact of the matter is that the Wells Fargo party for example was a recognition event for people who had done an outstanding job over the year. Not good PR, but not exactly as malicious as you try to make it look either.

Your "free" marketness is showing.

I love how we hear free the markets as there is too much regulation and laws. Then they turn around offer and argument of "Hey there was no law or regulation which said we couldn't do that"

It doesn't matter that the event was planned. Their losses would have been less if it canceled. The fact they had to be bailed out; events such as that had to be canceled. Companies all over are cutting back on perks. Bankers seem to have a sense of entitlement.

Look, what was done by some bank CEOs was borderline criminal and certainly not ethical. I can understand that people are angry at them. I can't understand however how these people fail to distinguish these people from an entire industry and everyone who works in it.

Ok the ball is in your court. Why not show us some examples of banks doing the "right" thing?

In the grand scheme of things, the banks didn't make the economy implode. The banks facilitated the essentially bubble-like good time the US has had over the past decade or so, and no one was complaining then.

Bull. They helped it along just as much as they saw the money potential.

Now the bubble has burst, and because naturally it happened within the finance industry first as the conduit of money and economic activity everyone blames runaway banks for it all.

Yes. There are banks that didn't get into credit default swapping. Sorry a majority of banks are not blameless as much as you like to believe.

Banks didn't cause household debt to explode, they were just the means through which it was possible.

Bullshit. They were involved just as much. High interest rates for a late payment. Fees. Lowering credit limits inorder to keep a person at the limits of their credit.

They didn't cause it but they were a major player in it.

How much money did they make with all the fees and interest rates?

Of course the banks made mistakes, huge ones and huge numbers of them. But that doesn't equate to the banks bringing everything down - it was defaults of everyday people rising first, the banks falling later.


:D ahh why is it you free market types hold business blameless? Many many banks leaped at the money aspects.

But that's beside the point again, because the topic is bankers and not banks.

Yes and bankers made the decisions to chase the money.

Alas, their shareholders didn't think so. Look, they were idiots, they destroyed enormous amounts of wealth as a result.


Ahh the shareholders arguement. They always appear in times like this. "hey it wasn't us, the shareholders made us do this!"

But "greed" doesn't capture it, it just doesn't. It's not like you sit there when investing and think "maybe I'll make a little bit less than I could". The banks didn't see the risks where they were, that was the mistake, that's what changed their risk-return balance. Greed just doesn't feature.


Sorry not every bank leaped into this mess. So greed was a factor.


You have absolutely no idea what's going on, do you. It's not about fear, it's about the cost of funds and the need to restock a balance sheet that's been decimated (rightly so) by mark-to-market accounting, and it's about the fact that lending to people in a recession is just not as good an idea as lending to people in good times.

Sure we understand. 18 billion in bonuses, exorbitant salaries, parties, penis enlargement activities such as getting your name on a stadium. It does cost money.

Ahh the shareholders arguement. They always appear in times like this. "hey it wasn't us, the shareholders made us do this!"

Made even WORSE by corporate governance structures that keep Shareholders from having a real say in how the company is run. (Check out the Icahn Report)

I like bankers. The only bad thing that I can say about them is that they are notorious around here for being bad tippers.

For completeness' sake, I think it's worth pointing out that the bankers themselves didn't create most of the debts that ultimately brought the system down. It's not like people haven't been saying that the US (and many other countries) have been living off borrowed money and time for years now, with household debts rising and current account deficits blowing out. The banking system facilitated this process, but it didn't cause it. In a way, the good decade we had with low unemployment and strong growth for the most part was made possible by bankers who had the tools to enable everyone to cover up the problems.


that is a fair point, but i suppose the issue boils down to one of trust. people want to trust their banks, where they put their money, and while much of the last 10+ years prosperity in the consumer economy has been funded by credit, the trust has turned sour after many banks overstepped the boundaries of responsible banking. that's not to say economies fuelled by consumer debt is necessarily responsible either, but arguably some banks went a step too far in the persuits of profits this time. and when the loss of trust is joined with people's livelihoods being on the line, it can turn to anger.

no, its probably not all the banks fault: industry, shareholders, quarterly reports, consumer debt, government actions, all probably helped create a problem, to name a few. but, from how i see it, its the banks that ultimately took the plunge into bad debt, and its the banks, being so core to western economies, that are causing so much of the mess.

i hope there'll be more guidelines on responsible lending after all of this


Man, don't act like you have it so tough. A full day in the office on a Saturday is nothing. Try 15 hour days, 7 days a week for a month and a half for a thesis. Try an average of 60-70 hour work weeks when there isn't a deadline.

Try doing this while getting paid very little without prospects of getting paid much more for quite a while... and even then, the joke (well, it's really the truth, but we laugh at it) is that if we don't make it in our chosen career (academia) we're punished with a pay raise. Don't give me some "oh poor bankers, we don't get paid much and work hard". Everyone works hard if they want to get somewhere.

A side note: most physicists could do a better job with the economy than people trained in business.

i agree. try working 7 days a week, 12+ hours a day for the better part of 20 years, and still being in fucking debt to the bloody banks thanks to the last recession :mad:

it doesn't help when similar banks fucked up the pensions market in the UK a few years back, and my folks lost their pensions... which was (thanks to their bank's advice) linked to their mortgage, meaning they went from nearly paying it off to owing 100% of the mortgage (whatever % that is) all over again. thanks banks... hope you made a nice profit out of that.

Nobody can be as brutally efficient as us. If we need to cut expenses, a team of us will go line-by-line to weed out every unnecessary expenditure... we're the jackals of the business world, gnawing every last bit of meat off of the corporate carcass. If there's money that needs to be saved, let loose the audit hounds and we'll clean up what's out there.

Plus, accounting is an alphabet soup that's just plain fun. Everything can be compressed to an acronym.
imho, too many businesses these days are all-but run by accountants. i'd expand on that, but its 1am and i need sleep

Again though, this applies to pretty much all execs, not just bank execs.

yup, and i don't like that either. but more than that, other company execs aren't funding their bonuses off the back of the taxpayer while their actions are putting taxpayers out of jobs


The CEO options is part of it. They are the figureheads of the banking industry and they're still getting shedloads and that affects the perception.



very important point, that.
personally, i'm not about to go into a branch of HSBC and start yelling at the clerks. nothing to do with them. but go to the City in London and yell at some people there? yup, that sounds ok to me.

I've always hated bankers, lawyers, and anyone else who makes ridiculous profits from society while adding nothing other than the bureaucratic movement of goods and services.


yay!

So is stealing from a thief wrong?

technically its the banks property until it is paid off. so not stealing just kicking out someone who didn't pay their bills.

technically its the banks property until it is paid off. so not stealing just kicking out someone who didn't pay their bills.

A matter of semantics. For example; his comment about people being unable to pay where thieves....

But the thing that is scaring the bankers is the growing squatter movement. Technically you have to show the papers that you own the land. Well since they sell the loan who sells the loan......somebody said it could take them a year to produce the papers.

A matter of semantics. For example; his comment about people being unable to pay where thieves....

But the thing that is scaring the bankers is the growing squatter movement. Technically you have to show the papers that you own the land. Well since they sell the loan who sells the loan......somebody said it could take them a year to produce the papers.

in which case i endorse the squatters besides if they are able to get a job and start making payments again the bank might cut a deal.

The whole argument about it not being the fault of bankers, but rather the people who borrowed the money, is completely disingenuous.

The banks knew, or should have known, that they were making loans that would never be paid back (a certain amount of default is inevitable of course, but you should ordinarily try to minimize it). This had all sorts of secondary effects, the results of which were completely predictable.

Banks did this because it wasn't their money in the first place, they felt they could package this stuff and jam it out of the door, and if worst came to worse, hey, property always goes up in price, so we are covered by the value of the underlying collateral. It was a combination of stupidity and fraud on an epic scale.

Now, you can say it is all the fault of the idiots who took the loans in the first place. But that supposes that the average joe six pack knows as much about loans as the banks, so it doesn't matter which party decides who gets the loan (the bank or the borrower). Obviously this is not true. The average person probably only takes 3-4 mortgages over the course of their lifetime - another scam BTW, but that would be a huge digression - whereas the banks make millions of these things every year. Clearly one party is in possession of superior experience and knowledge about these matters, so the onus on whether or not a loan should be made lies clearly there.

Bottom line, if you could fog a mirror however, the bank would give you hundreds of thousands, if not millions of dollars, with little thought as to when or if it would be paid back. This is particularly irksome because the banks weren't even lending their own money. Everyone - I assume - is aware that the money they put in the bank is subsequently loaned out to other people, but there is an underlying assumption that some care is taken as to who actually gets these loans. This did not happen.

So, the upshot is, bankers have ripped off their shareholders, risked - and in some cases ripped off - their depositors and bond holders, and bilked the taxpayer. All because they couldn't be bothered to do their job - take at least a modicum of care as to who actually got loans - in the first place.

Now they turn around and say things like: "It's not our fault, it's the fault of the people who didn't pay the loan back". Really? But who gave these loans in the first place? If you hand out money to deadbeats, you can't in all honesty expect to get it back. (And it wasn't just mortgages, there is all sorts of toxic shit floating out there).

It's just another pathetic excuse.

Oh, and everybody has suffered from this credit expansion in one way or another. The idea that it gave us a decade of prosperity is bullshit too. It was a fucking credit bubble, there are no winners except for the fuckers who skimmed off the top. Plus, we'll be paying for it for decades.

(I don't suggest that people who took these loans should keep their houses they they couldn't afford of course. That would be wrong too. But the idea that most of the blame lies there is just wrong.)

And if the bankers now want to say that they are just as shocked by this turn of events - the defaults - as everyone else, then I have to ask, what fucking purpose are they serving? Hard money hasn't had these problems, so obviously the wrong people are in these jobs.

its kind of hard to both love capitolism and hate bankers, but if the same people who let the bankers get away with murder in the first place can't figgure that out either, well i can't really say as i'll very much miss both of them.

and no, i'm NOT advocating any love for procustianism either. just maybe a little TINEY bit of social and environmental RESPONSIBILITY?

and no, i'm NOT advocating any love for procustianism either. just maybe a little TINEY bit of social and environmental RESPONSIBILITY?

NO. banks and industry make money not happiness and clean air. let the hippies handle that stuff in their communes.

NO. banks and industry make money not happiness and clean air. let the hippies handle that stuff in their communes.

unfortunately its the same air. so people can breathe money now? this sounds suspiciously like "let them eat cake".

(and this "money" (that is increasingly not worth the paper its printed on as more and more of it gets printed to bail out the banks) gratifies what? emotional attachment to lying to ourselves?)

the first REAL hippies, before media and government came up with all that drug nonsense to discredit them, were the only people of THEIR era who had any sense. most of the people today who imagine themselves to be imitating them haven't a clue.

NO. banks and industry make money not happiness and clean air. let the hippies handle that stuff in their communes.

True, we should eliminate safety laws and allow things like dumping chemicals in the ground, water, and air. After all the chemical companies are about making money and not happiness or a clean environment.

unfortunately its the same air. so people can breathe money now? this sounds suspiciously like "let them eat cake".

(and this "money" (that is increasingly not worth the paper its printed on as more and more of it gets printed to bail out the banks) gratifies what? emotional attachment to lying to ourselves?)

the first REAL hippies, before media and government came up with all that drug nonsense to discredit them, were the only people of THEIR era who had any sense. most of the people today who imagine themselves to be imitating them haven't a clue.

money can buy you clean purified air and a oxygen mask. Not my fault the hippies invested in smelling bad and living in the woods.

apparently there remain some quarters in with emotional attachment to self deception remains alive and well. perhaps when the inevitable famines and epidemics arising from global climate change start hitting previously resource fortunate dominant sovereignties, good sense may yet again become somewhat more 'sexy'. that or humanity will have only its combined premeditated ignorance to blame.

apparently there remain some quarters in with emotional attachment to self deception remains alive and well. perhaps when the inevitable famines and epidemics arising from global climate change start hitting previously resource fortunate dominant sovereignties, good sense may yet again become somewhat more 'sexy'. that or humanity will have only its combined premeditated ignorance to blame.

not my concern. my concern will be how will you pay for this handful of rice i offer for sale ? I am thinking your 1st born daughter looks like a good trade.

A lot of those stinky hippies went on to work in the finance industry. Doesn't anyone remember the 80s. (Not that I would blame anyone who didn't, it was pretty crap).

A lot of those stinky hippies went on to work in the finance industry. Doesn't anyone remember the 80s. (Not that I would blame anyone who didn't, it was pretty crap).

the only thing good about the 80s was science fiction conventions, electronic music, and the beginning of everybody being able to have computers.

i certain DO remember the factor mentioned as well. one of the several factors i generally make a concerted effort not to.
(the media gave them (those that sold out and did) a new paint job, called them yuppies, and fed them disco)

in the first few years of the 80s porn was allowed to remain reasonably decent too, presumably as a distraction from how seriously raygun was premeditatedly screwing up everything else.

It doesn't matter that the event was planned. Their losses would have been less if it canceled. The fact they had to be bailed out; events such as that had to be canceled. Companies all over are cutting back on perks. Bankers seem to have a sense of entitlement.
I don't think I said they should have been doing it. I said that it was an employee recognition event, which isn't in itself a bad thing. The timing was unfortunate though.

Ok the ball is in your court. Why not show us some examples of banks doing the "right" thing?
Well, what is the right thing? Not getting hammered by losses? Not giving out loans to people with poor credit records? Giving lots to charities?

I don't know what people expect banks and bankers to be doing, so how can I tell you whether we do?

Bull. They helped it along just as much as they saw the money potential.
Obviously. It is capitalism, after all.

Yes. There are banks that didn't get into credit default swapping. Sorry a majority of banks are not blameless as much as you like to believe.
What's wrong with CDS contracts? It's a means of counterbalancing the exposures you have to various counterparties first and foremost. It's not the concept of the CDS that was a problem, it was the fact that because there was no central clearing one party getting itself into shit with these contracts could wipe out the portfolio of huge numbers of other participants.

Bullshit. They were involved just as much. High interest rates for a late payment. Fees. Lowering credit limits inorder to keep a person at the limits of their credit.

They didn't cause it but they were a major player in it.

How much money did they make with all the fees and interest rates?
Plenty. Would you prefer it if they didn't make the loans instead? In retrospect, it sounds like a better idea, but few of the people in charge, in banks and otherwise, saw it that way at the time.

At any rate, before banks can start lending again, according to strict standards that will keep people with poor credit appropriately homeless (;)) they need to work through the bad loans they made already. Hence why they're taking it particularly easy with the lending for the time being.

:D ahh why is it you free market types hold business blameless? Many many banks leaped at the money aspects.
Blameless? I assign blame where it is due, and the fact of the matter is that financial crises, regardless of what sets them off, are nothing more but the violent and sudden bursting to the surface of systemic imbalances and unsound fundamentals. Yes, the banks contributed more than their fair share. But they didn't suddenly make the levels of debt Americans were taking on sustainable and trouble-free. Their mistake was that they thought that they did, apparently.

Sorry not every bank leaped into this mess. So greed was a factor.
My employer didn't. But that's not exactly because we're not trying to maximise our returns, it was because at the time we didn't have the resources to be a major player, nor the stomach to take on the sorts of reliance on external ratings that participation there implied. That doesn't mean we don't have CDS contracts or holdings in selected SIVs or CDOs.

It's risk v return, not greed.

Sure we understand. 18 billion in bonuses, exorbitant salaries, parties, penis enlargement activities such as getting your name on a stadium. It does cost money.
As annoying as you may find this, it's small fries compared to the actual problem. Banks could cut their perks, charitable contributions and so on to zero, and it wouldn't make a dent in their troubles. It would be good PR for a bit, but it wouldn't allow them to start lending out money into a recession again.

The whole argument about it not being the fault of bankers, but rather the people who borrowed the money, is completely disingenuous.
It's not the argument I was making though.

The point I was making is that the sort of systemic lopsidedness we've had is not the result of one side forcing anything on the other. It takes two to tango.

I don't know what causes the sort of situation in which a financial crisis follows. It's something economists need to spend much more time on than they have in the past (How many macroeconomic models do a good job of including endogenous real estate busts? None, basically). But "Bear Stearns caused the credit crunch" or even "bankers caused the credit crunch" is too simplistic an answer.

I don't think I said they should have been doing it. I said that it was an employee recognition event, which isn't in itself a bad thing. The timing was unfortunate though.
Companies cancel expensive events all the time and offer other things. There are lessor costly events that would have served just fine.

Well, what is the right thing? Not getting hammered by losses? Not giving out loans to people with poor credit records? Giving lots to charities?
You are the ones saying they aren't evil. Offer me what they do as good.

You do know they aren't giving loans to people with excellent ratings right?

I don't know what people expect banks and bankers to be doing, so how can I tell you whether we do?

I didn't ask you what people expected them to do. You are complaining about the criticism. What exactly are they doing that is good?

Obviously. It is capitalism, after all.

Good you admit bankers are equally at fault.

What's wrong with CDS contracts? It's a means of counterbalancing the exposures you have to various counterparties first and foremost. It's not the concept of the CDS that was a problem, it was the fact that because there was no central clearing one party getting itself into shit with these contracts could wipe out the portfolio of huge numbers of other participants.

What should have been arguments are not valid or at best in a what should have been done thread.

But I will take this as Bankers screwed up the approach.

Plenty. Would you prefer it if they didn't make the loans instead? In retrospect, it sounds like a better idea, but few of the people in charge, in banks and otherwise, saw it that way at the time.

Of course predatory lending came into play. Again why would they cover my housing loan if I took a bad arm loan vs a "responsible" thirty year fixed with a second loan that would have killed me if I didn't manage to get rid of it? Who put out the "if you don't get a home now you may never get one" ads? What happened to paying for the expertise of the loan officials to help guide you to a "proper" loan? It seems these day that providers now think you are supposed to know as much as them?

Oh and you know they aren't giving out loans now right?

At any rate, before banks can start lending again, according to strict standards that will keep people with poor credit appropriately homeless (;)) they need to work through the bad loans they made already. Hence why they're taking it particularly easy with the lending for the time being.

Strict my ass. They simply need to follow what was in place before they decided to throw caution to the wind. Think about it. The system worked fine for years and then simply fell apart? Why arms and default swaps.

Even now bankers are adding more problems by denying people with great credit histories. They punish people with good payment histories on the mortgages by not letting them get the lower rates.

Blameless? I assign blame where it is due, and the fact of the matter is that financial crises, regardless of what sets them off, are nothing more but the violent and sudden bursting to the surface of systemic imbalances and unsound fundamentals. Yes, the banks contributed more than their fair share. But they didn't suddenly make the levels of debt Americans were taking on sustainable and trouble-free. Their mistake was that they thought that they did, apparently.

Exactly greed.

My employer didn't. But that's not exactly because we're not trying to maximise our returns, it was because at the time we didn't have the resources to be a major player, nor the stomach to take on the sorts of reliance on external ratings that participation there implied. That doesn't mean we don't have CDS contracts or holdings in selected SIVs or CDOs.


Your employer wasn't greedy. There are small instituations that got into this garbage.

It's risk v return, not greed.
When risk measurement is thrown out; it's greed. When the system works to exacerbate the situation, it's greed.

As annoying as you may find this, it's small fries compared to the actual problem. Banks could cut their perks, charitable contributions and so on to zero, and it wouldn't make a dent in their troubles. It would be good PR for a bit, but it wouldn't allow them to start lending out money into a recession again.


You overlook that it's points out the sense of entitlement.


It's not the argument I was making though.

The point I was making is that the sort of systemic lopsidedness we've had is not the result of one side forcing anything on the other. It takes two to tango.

I don't know what causes the sort of situation in which a financial crisis follows. It's something economists need to spend much more time on than they have in the past (How many macroeconomic models do a good job of including endogenous real estate busts? None, basically). But "Bear Stearns caused the credit crunch" or even "bankers caused the credit crunch" is too simplistic an answer.

Kind of like "Bear Stearns and bankers didn't cause the credit crunch"

But then again. Who was a major force in allowing the investment branch to merge with the consumer branch of banking again?

Well, before all this mess, bankers wouldn't give poor people loans, because their credit scores sucked, and they didn't have verifiable income that would qualify.

This was called "discriminatory", and Fannie Mae and Freddie Mac, along with ACORN, took great pains (called lawsuits) to force banks to stop using credit scores and income verification.

Once all these poor people who really couldn't afford mortgages were given mortgages, this was called "predatory lending" and the banks were blamed for what they were pushed into.

Some banks (largely credit unions) refused to go along with this, and were sued nonetheless. The credit union I belong to has never been involved in securities, never written a mortgage without credit score and income verification, and is good and stable in terms of liquidity without any government help.

Had they gone along with what the Feds and ACORN wanted, my credit union would have failed.

Blame the bankers? Not me.

Well, before all this mess, bankers wouldn't give poor people loans, because their credit scores sucked, and they didn't have verifiable income that would qualify.

This was called "discriminatory", and Fannie Mae and Freddie Mac, along with ACORN, took great pains (called lawsuits) to force banks to stop using credit scores and income verification.

Once all these poor people who really couldn't afford mortgages were given mortgages, this was called "predatory lending" and the banks were blamed for what they were pushed into.

Some banks (largely credit unions) refused to go along with this, and were sued nonetheless. The credit union I belong to has never been involved in securities, never written a mortgage without credit score and income verification, and is good and stable in terms of liquidity without any government help.

Had they gone along with what the Feds and ACORN wanted, my credit union would have failed.

Blame the bankers? Not me.

Do you have any evidence at all for this?

Do you have any evidence at all for this?

Rush Limbaugh told him so.

Do you have any evidence at all for this?

Yes, it's old news.
http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm

WHAT exactly does a "community organizer" do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.

In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.

THE seeds of today's financial meltdown lie in the Commu nity Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in "subprime" loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America's financial institutions.

Banks already overexposed by these shaky loans were pushed still further in the wrong direction when government-sponsored Fannie Mae and Freddie Mac began buying up their bad loans and offering them for sale on world markets.

Fannie and Freddie acted in response to Clinton administration pressure to boost homeownership rates among minorities and the poor. However compassionate the motive, the result of this systematic disregard for normal credit standards has been financial disaster.

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.

Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

I'd post the YouTube of Barney Frank saying that there's nothing wrong with the subprime market, and that anyone who says there's a problem is a racist - but you might vomit. It's worse than watching 2 girls 1 cup.

Yes, it's old news.
http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm



I'd post the YouTube of Barney Frank saying that there's nothing wrong with the subprime market, and that anyone who says there's a problem is a racist - but you might vomit. It's worse than watching 2 girls 1 cup.

That's an editorial.

An editorial that repeats your claims but provides no evidence for them. Try again. This time, post an article instead of an editorial.

Thanks.

Barney Frank saying that there's nothing wrong with the subprime market.

IIRC Barney Frank tried to ban sub prime loaning as early as 1994.

That's an editorial.

An editorial that repeats your claims but provides no evidence for them. Try again. This time, post an article instead of an editorial.

Thanks.

Sorry, it's been done so many times...

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Try that

Sorry, it's been done so many times...

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Try that

I don't have a sound card.

Meh. The acorn thing, while annoying, is a very small part of it.

Neu Leonstein is right. There are no simplistic answers as to why the instant credit crunch occurred (though something like it would have happened anyway). It really took lots of factors spanning over about three decades to mature into its current form. There is no one ultimate cause that you can point to and say: "There it is, this is why we are in this mess".

That said, a lot of those factors were put into play by bankers themselves. Politicians also share a good chunk of the blame (for being corrupt, both parties).

And there is an extent to which you can blame the general public. Not in the creation of bad loans, but in a broader sense of entitlement. After the 1980s recessions, it became politically almost impossible to sit back and let natural recessions happen. Monetary and fiscal policy slanted towards defeating the economic cycle, because the whole thing became politicized.

I mean, it is unimaginable today for a politician to show some nutsack and demand that bubbles get popped in their early stages, because he or she would effectively be causing unemployment, reduced wages and economic contraction. Nobody gets re-elected after that. The sheeple wouldn't stand for it, even though it would be in the long term benefit.

I'd guess it comes down to the fact that both politicians and bankers are irresponsible, because there is a conflict of interest with the people they are allegedly serving, so they can't be trusted to watch over each other about these things. And the general public is too stupid.

But all this has happened before - in one form or another - and it will all happen again. Probably about 60-70 years from now, when we are all dead.

http://articles.latimes.com/1999/oct/01/business/fi-17403

I don't have a sound card.

that's your problem. that you tube was obviously concrete proof and now i lead a mob to burn Acorn headquarters as we speak.

The current economic collapse is due almost entirely to our debt-based economy and the structure of the modern-day banking system. I have no hatred for the managers of the local branches, but I despise the corporate leaders of the megabanks. They are using the bailout money (a bad idea to begin with, IMHO) to line their pockets while continuing to screw their customers. Meanwhile the businesses that depend on loans to operate their day-to-day expense machine are unable to transact their usual business and people are mosing jobs, leading to a greater spiral of debt issues everywhere.

http://articles.latimes.com/1999/oct/01/business/fi-17403

That article doesn't actually provide any evidence for your claims.

That article doesn't actually provide any evidence for your claims.

It's the first of many links, and yes, it does support the claim that people who are not credit worthy were given loans on the advice and under pressure from Fannie Mae.

People who obviously under any real examination of creditworthiness would never be allowed a loan.

It's the first of many links, and yes, it does support the claim that people who are not credit worthy were given loans on the advice and under pressure from Fannie Mae.

People who obviously under any real examination of creditworthiness would never be allowed a loan.

No. It does not say that Fannie Mae pressured the banks into doing this. It also points out that the amount of money involved in these transactions would only be a miniscule portion of the housing mraket. i.e. not enough to cause this crisis.

No. It does not say that Fannie Mae pressured the banks into doing this. It also points out that the amount of money involved in these transactions would only be a miniscule portion of the housing mraket. i.e. not enough to cause this crisis.

It's not the only place they did it.

There was an extensive write up in the Wall Street Journal on the whole thing.

I'm still googling for the exact article.

Well, before all this mess, bankers wouldn't give poor people loans, because their credit scores sucked, and they didn't have verifiable income that would qualify.

This was called "discriminatory"....

Okay. This is your first claim.

It is wrong. When I looked up discriminatory lending practices, I got this:

Mortgage discrimination or mortgage lending discrimination is the practice of banks, governments or other lending institutions denying loans to one or more groups of people primarily on the basis of race, ethnic origin, sex or religion.

So, these laws that ended discriminatory lending practices in the USA were laws that forbade banks from denying loans based on factors that have nothing to do with what you claim.

EDIT: http://en.wikipedia.org/wiki/Mortgage_Discrimination

It's the first of many links, and yes, it does support the claim that people who are not credit worthy were given loans on the advice and under pressure from Fannie Mae.

People who obviously under any real examination of creditworthiness would never be allowed a loan.

The really, really, really shitty loans aren't subprime. You vastly overestimate the impact of that particular event.

In fact, fannie/freddie subprime vastly outperforms ALT-A.

The really, really, really shitty loans aren't subprime. You vastly overestimate the impact of that particular event.

In fact, fannie/freddie subprime vastly outperforms ALT-A.

Right, I just read about Alt-A mortgages in The Economist, seems the next to go belly up and then we head into prime mortgage territory.

Much of my problem with this entire affair is that I just start to lose a grip on the numbers. A billion, a trillion, it all starts to become a blur of numbers that lose any relevant meaning, what does it mean anymore?

I remember reading Rogue Trader where Leeson* says the same, the debts just start to become a whirl of numbers distinct from the reality of impact....and this is where I do blame bankers and politicians because I'm not expected to understand this, but they are.

I feel like we all took our cars to an accredited mechanic only to find he's a complete crook and has shipped our cars to China and that somehow this is our fault... for not checking enough!

*Half that book was a crock of shit but I do somewhat believe his description of how he just ignored the inevitable in the faint hope that it might go away, or he could bet his way out of it, and I feel that's what both bankers and politicians have done. He blames the losses on an earthquake in Kobe, hey, how could he have foreseen that?

Heard that line before, if he wasn't in such tremendous debt, it wouldn't have mattered quite so much.

EDIT: 'ignored the inevitable' is probably a bit much, he was very mindful and tried hard to turn it around, 'did not own up to the problem and thus drove himself deeper' is probably a better description.

Well, before all this mess, bankers wouldn't give poor people loans, because their credit scores sucked, and they didn't have verifiable income that would qualify.

This was called "discriminatory", and Fannie Mae and Freddie Mac, along with ACORN, took great pains (called lawsuits) to force banks to stop using credit scores and income verification.

Once all these poor people who really couldn't afford mortgages were given mortgages, this was called "predatory lending" and the banks were blamed for what they were pushed into.

Some banks (largely credit unions) refused to go along with this, and were sued nonetheless. The credit union I belong to has never been involved in securities, never written a mortgage without credit score and income verification, and is good and stable in terms of liquidity without any government help.

Had they gone along with what the Feds and ACORN wanted, my credit union would have failed.

Blame the bankers? Not me.

What a pretty tinfoil hat. :wink:

This is a thread about bankers as people, and perceptions about them. I've been noticing over the past weeks that the language here, in news sources from the US and even here in Oz has become more vitriolic. And though some of you will surely try to stay balanced and blame some bankers and not others (in fact, hold the vast, vast majority of them blameless), overall the picture painted of the actual people and their characters is not a pleasant one. No doubt a big part of the reason is the fact that the fall-out from the collapse is reaching more and more people personally.

But then, were bankers particularly popular before then? If someone had come to you and told you they were a private equity analyst or derivatives trader, would you have thought of them as extremely hard-working, intelligent, driven and successful people? Or would there have been more negative connotations with it?

What do you think motivates someone to put themselves into one of the most demanding jobs out there, to enter a career that quite literally consumes your entire life (I was in the office all day today - a Saturday - and I'm an intern) and that leaves you with lots of money to spend but nothing to spend it on but alcohol and other random fancies of the moment? What does this choice say about them?

If you have some time to spend, have a browse through the articles and stories on this website: http://www.leveragedsellout.com/

It's satire and black humour, of course, but extremely close to reality and to the point where I quite literally recall situations that feature in these stories. The people who write on the site are bankers or were at some point, and the overall message of who these people are, who they want to be and how they deal with the fact that they find it so hard to bridge the gap I think adds another dimension to the discussion that has so far been lost in the political rhetoric and occasional voice of reason mentioning economics that has dominated our treatment of the crisis.
We should seriously cut bankers slack, even in the midst of failure they still serve society by producing refreshing and nutritious CREDIT CRUNCH (c) (http://www.weebls-stuff.com/toons/Credit+Crunch/)

Much of my problem with this entire affair is that I just start to lose a grip on the numbers. A billion, a trillion, it all starts to become a blur of numbers that lose any relevant meaning, what does it mean anymore?

Though it wasn't a rogue trade type thing in this case, it was a whole bunch of people thinking that they could skim there own little bit and get away with it. They never stopped to add it all up I guess.

And in reality the whole thing is a bit of a non-linear wibbly-wobbly mess. You know, as the underwriter of a loan acted improperly on the market, well then the market changed, thus moving underwriting standards and so forth.

.and this is where I do blame bankers and politicians because I'm not expected to understand this, but they are.

I feel like we all took our cars to an accredited mechanic only to find he's a complete crook and has shipped our cars to China and that somehow this is our fault... for not checking enough!

Well quite. They are supposed to be the guys that are the killjoys. Hence the stereotype of the sober banker and such.

Problem is, there is a conflict of interest these days and we suffer from regulatory capture. Look at all the flapping about saving the banks via FED and FDIC mechanisms. They were never put in place to save banks, only to save depositors. (I will save my sniff).

EDIT: 'ignored the inevitable' is probably a bit much, he was very mindful and tried hard to turn it around, 'did not own up to the problem and thus drove himself deeper' is probably a better description.

I'd ignore leeson basically. He never understood what was going on in Asia. I don't pretend to either. But at least I know I don't know.

i really don't see why or how, it should be construed as hatred, to want to stop criminals, however baselessly exulted their position in society, instead of encouraging them to continue their cycles of blatantly criminal activity.

Bankers, parking officers, dog catchers..... They're not very respected however useful they can be.

"Ethical banker" sounds like an oxymoron to me. Aussie bankers, in particular have w-a-a-y too muchpower. In 1948 the bankers gave all their employees the day off to demonstrate against the Labor Party's bank nationalisation bill. Needless to say, it helped get the banker-friendly Menzies governmnet elected.
Then various governmnets legislated to ensure that everyone's wages had to be paid directly into an account. This meant that the big banks suddenly had a monopoly over people's deposits. They worked as a cartel and screwed the general public. Excessive fees were the order of the day.
In Britain where there is more competition there are few bank charges.

What's worse than Socialism? Plenty of things! Fascism and monopoly capitalism are two.

What do you call 500 bankers chained together at the bottom of theocean?
A good start!