Banks Hit Worldwide by US Fraud

Nicola Horlick "I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they have fallen down on the job. This is the biggest financial scandal, probably in the history of the markets - $50bn is a huge amount of money," she said.

Here's the scandal..

BBC

http://news.bbc.co.uk/1/hi/business/7783236.stm

Fox

http://www.foxnews.com/story/0,2933,466564,00.html

CNN

http://edition.cnn.com/2008/BUSINESS/12/15/madoff.arrest.exposure/?iref=mpstoryview

MSNBC

http://www.msnbc.msn.com/id/28226910/

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cisco_trooper

When are we going to wake up? In some countries if you steal you lose a hand or an arm, and so people don't steal. In this country if you steal you MIGHT go to prison. If you've stolen enough you can buy your way out. Take him out back, put 9 grams of lead in his head, liquidate any of his "assets" and give as much of it back as possible. Make sure camera crews are there for his execution and make an example of him.

The same goes for all this mortgage crap. I'm sick of paying for stupid people. I make a decent salary and am STILL broke because of these idiots.

skrpune

Ahhhh, yes, the Ponzi scheme...amazing that this kind of stuff:
a. is still being done &
b. took this long to get caught.

And people ask me why I'm not more invested in the stock market?...sigh. We've got a 403b from my husband's previous employer, but it's lost ALL the earnings it's gained over the last few years and now has dipped into the negative & is eating up some of the original contributions. Thankfully, there wasn't a lot of money in there to begin with so it's more of a percentage loss for us (it's down to about 60% of its highest value), but I feel really bad for those who had more in there...they've lost thousands upon thousands, and crap like this doesn't help.

Right now, the only other investment we have is an ING Direct savings account, which at about 3% interest is doing better than just about anything else out there!! Once we get a little more fluid financially (i.e., once I get a job!), we'll start putting money into IRAs, and that's about as risky as I'm willing to get with the way the economy is right now. Thankfully, retirement is a couple decades off for us...wow, I never thought I'd say that I'm glad I have to work for about 30 more years!

briangl

skrpune wrote:

Ahhhh, yes, the Ponzi scheme...

Like "Social Security"

liven

cisco_trooper wrote:

When are we going to wake up? In some countries if you steal you lose a hand or an arm, and so people don't steal. In this country if you steal you MIGHT go to prison. If you've stolen enough you can buy your way out. Take him out back, put 9 grams of lead in his head, liquidate any of his "assets" and give as much of it back as possible. Make sure camera crews are there for his execution and make an example of him.

The same goes for all this mortgage crap. I'm sick of paying for stupid people. I make a decent salary and am STILL broke because of these idiots.

I hear you! While I hold banks and crooked lenders responsible, I also hold a portion of the public responsible. For example my wife watches some real estate show on cable. This younger girl, a dentist assistant making 30k wanted to buy a house. Bank approved her for 200k!!!! Mind you she was driving what looked like a new car so the note had to be around 300<->500$.... Between the car and the house there is no way should would have a dime left over.... And I promise you there are TONS of people out there living like this. How could this girl even begin to believe that she would be able to afford a house like that? Nothing against dental assistants, but I doubt she will be getting large raises in salary any time soon. What if any thing goes wrong? Even the most normal of home ownership repairs and she will be hopelessly behind in debit, with no way to catch up. The real estate agent helping this girl showed her several houses that were tens of thousands lower than the 200k the bank would loan her, but NO that was not good enough for her. To be honest I don't really feel bad for someone like that who looses their home.

Sorry to rant, but it frustrates me. I am living well inside my means, yet I have lost money and opportunities because of countless others greed.

LBC90805

liven wrote:

cisco_trooper wrote:

When are we going to wake up? In some countries if you steal you lose a hand or an arm, and so people don't steal. In this country if you steal you MIGHT go to prison. If you've stolen enough you can buy your way out. Take him out back, put 9 grams of lead in his head, liquidate any of his "assets" and give as much of it back as possible. Make sure camera crews are there for his execution and make an example of him.

The same goes for all this mortgage crap. I'm sick of paying for stupid people. I make a decent salary and am STILL broke because of these idiots.

I hear you! While I hold banks and crooked lenders responsible, I also hold a portion of the public responsible. For example my wife watches some real estate show on cable. This younger girl, a dentist assistant making 30k wanted to buy a house. Bank approved her for 200k!!!! Mind you she was driving what looked like a new car so the note had to be around 300<->500$.... Between the car and the house there is no way should would have a dime left over.... And I promise you there are TONS of people out there living like this. How could this girl even begin to believe that she would be able to afford a house like that? Nothing against dental assistants, but I doubt she will be getting large raises in salary any time soon. What if any thing goes wrong? Even the most normal of home ownership repairs and she will be hopelessly behind in debit, with no way to catch up. The real estate agent helping this girl showed her several houses that were tens of thousands lower than the 200k the bank would loan her, but NO that was not good enough for her. To be honest I don't really feel bad for someone like that who looses their home.

Sorry to rant, but it frustrates me. I am living well inside my means, yet I have lost money and opportunities because of countless others greed.

Yup I'm glad I waited for the housing bubble to burst. Three years ago I never imagined I would be buying a house, but that is what is happening. I make about what that dental assistant is making and was recently approved for a $100k loan at 5.5%. My mortgage is $650 a month for three bedrooms and a decent sized lot in Bakersfield California. The house we are buying sold for $250k three years ago. The previous owners lost it on a repo. We are getting into it at $82k. SOrry for all the people who fell victim to predatory lending. Its good for me though since I'm getting a killer deal. There are about 5000 hours sitting empty here in Kern County.

liven

LBC90805 wrote:

liven wrote:

cisco_trooper wrote:

When are we going to wake up? In some countries if you steal you lose a hand or an arm, and so people don't steal. In this country if you steal you MIGHT go to prison. If you've stolen enough you can buy your way out. Take him out back, put 9 grams of lead in his head, liquidate any of his "assets" and give as much of it back as possible. Make sure camera crews are there for his execution and make an example of him.

The same goes for all this mortgage crap. I'm sick of paying for stupid people. I make a decent salary and am STILL broke because of these idiots.

I hear you! While I hold banks and crooked lenders responsible, I also hold a portion of the public responsible. For example my wife watches some real estate show on cable. This younger girl, a dentist assistant making 30k wanted to buy a house. Bank approved her for 200k!!!! Mind you she was driving what looked like a new car so the note had to be around 300<->500$.... Between the car and the house there is no way should would have a dime left over.... And I promise you there are TONS of people out there living like this. How could this girl even begin to believe that she would be able to afford a house like that? Nothing against dental assistants, but I doubt she will be getting large raises in salary any time soon. What if any thing goes wrong? Even the most normal of home ownership repairs and she will be hopelessly behind in debit, with no way to catch up. The real estate agent helping this girl showed her several houses that were tens of thousands lower than the 200k the bank would loan her, but NO that was not good enough for her. To be honest I don't really feel bad for someone like that who looses their home.

Sorry to rant, but it frustrates me. I am living well inside my means, yet I have lost money and opportunities because of countless others greed.

Yup I'm glad I waited for the housing bubble to burst. Three years ago I never imagined I would be buying a house, but that is what is happening. I make about what that dental assistant is making and was recently approved for a $100k loan at 5.5%. My mortgage is $650 a month for three bedrooms and a decent sized lot in Bakersfield California. The house we are buying sold for $250k three years ago. The previous owners lost it on a repo. We are getting into it at $82k. SOrry for all the people who fell victim to predatory lending. Its good for me though since I'm getting a killer deal. There are about 5000 hours sitting empty here in Kern County.

I am sorry for those that lost their homes as well. But you are being smart and buying a house you can afford. 650 is probably about the same as rent, at least it is in most places and now own a home. And chances are your pay will increase over time. Which means you shouldn't have to struggle to make ends, and your equity will go up.

As far as predatory lending... The saying goes if something looks to good to be true, it probably is.

HeroPsycho

liven wrote:

I am sorry for those that lost their homes as well. But you are being smart and buying a house you can afford. 650 is probably about the same as rent, at least it is in most places and now own a home. And chances are your pay will increase over time. Which means you shouldn't have to struggle to make ends, and your equity will go up.

Not to critique you, in many cases you're right, but a couple of caveats there.

- Do NOT count bonuses or commission as income when determining what you can afford. NEVER NEVER NEVER do that, no matter how sure they may be. For one, they can change in economic downtime, etc. Also, if your employer becomes strapped, bonuses are usually the first thing to go out the window. Use bonuses to build up money for things like a down payment that reduce the monthly payment that lasts the life of the loan. If you're counting on these things for the money to make monthly payments, you're screwed if times get tough and you don't get it anymore.

This happened to someone I know. The person was a salesman and got a salary plus commission. He figured his commissions would always come in or go up because they had year after year for the last ten years. He bought a much bigger house about a year ago (even had 20% down, etc.), but the bottom fell out of the economy, and his commissions went to crap. Now he can't afford the house and has to sell it for less than he bought it for.

- Watch out for ARM loans. If the interest rate goes up, you may not be able to afford the monthly payments any longer.

As for whom to blame for all of this, remember that there will always be stupid people. There will always be bankers who will give out loans when they shouldn't if there's no accountability or oversight. I'm a free market guy except when the market proves it must be regulated. Banking must be regulated, and it simply hasn't been regulated effectively for the last 25-30 years in the US, plain and simple.

dtlokee

One of the big issues with the mortagage industry is they would use "no doc" loans to qualify people who would otherwise not qualify for a loan.

I bet it would have been different if they mortagage lenders were lending their own money instead of someone else's money

RussS

You are right there dtlokee.

Then again, it is just like most things in our capatilist free market society. Those that play with money seem to all too easily forget about integrity and find convenient ways to justify their short-cuts. Bankers, Stock Brokers, Financiers, CEOs, they are all very similar it is sad to say.

It has been proven that communisim is a failure - unfortunately free market capitalism is not that much more successful. Both ideals have their good points, but unfortunately the one thing that brings them down is the human being. We are it seems, to be dishonest and unreliable as a species - at least watching Animal Planet seems to show that other species are more consistant in their behaviour

motogpman

I think that CEO's should be held accountable the same as Doctor's and Lawyers, at least at that level. If they help make a company tank or commit fraud, then fry their asses! Instead, they still get their big fat bonuses, payouts, and/or perks while the workers get screwed. Trust me, I live in Enron city.

I am all for them making a killing if they are legit, but like in the case of the BIG 3, I have no pity on them. They make **** vehicles, overall, and the last 3 I have bought have been made from them. I will no longer buy from them, went down last week and bought a Tundra. They are built in Texas and I just read an article where Toyota is still paying the plant employees their benefits/pay, doing beautification projects in San Antonio, until the plant starts back up. How many US manufacturers would do that for their employees?

If the BIG 3 ends up getting that bailout, who is next in line? The airline industry should be more pissed at the BIG 3 than anything. Scheming bastards!

I hate to see them tank, but they have done it to themselves. Stop making inferior vehicles, especially 30 different models, or at least the models they do make, make then better. I hate thieves! What about the Exxon exec that got a bonus in the hundreds of millions while the US was getting the shaft with $4-$6 gas? Who in their right mind, as a CEO, is worth that friggen much? Funny how we all of a sudden went into a "recession" after they made handfulls of money.

OK, rant over!

RussS

I couldn't agree more motogpman - if they can't make a decent, reliable, economical product they shouldn't be in business. I will say that a good counter-point as to why they are unprofitable is because the UAW has had them over a barrell for years. Cripes, those guys get to buy at near cost but you & me pay for it - Big Time.

skrpune

briangl wrote:

skrpune wrote:

Ahhhh, yes, the Ponzi scheme...

Like "Social Security"

Good point. I'm pretty sure that social security's not going to be around when I retire - it's just not mathematically possible to keep borrowing against it, keep putting in less, keep taking out more, and still have something left over in a couple decades.

As far as the mortgage/housing stuff...ugh. I am a human and I feel bad for people who are losing their homes, but I also realize that there's a reason I didn't buy a house until this year - because I was realistic and couldn't afford one!! The mortgage/housing crisis isn't one group's fault. Many different people came together to make a cluster-**** this bad. Mortgage companies were very very greedy, and lots of people were incredibly unrealistic about what they could afford and what exactly an ARM means. But it's a "buyer beware" and "bank be bailed out" fiscal society though.

royal

skrpune wrote:

briangl wrote:

skrpune wrote:

Ahhhh, yes, the Ponzi scheme...

Like "Social Security"

Good point. I'm pretty sure that social security's not going to be around when I retire - it's just not mathematically possible to keep borrowing against it, keep putting in less, keep taking out more, and still have something left over in a couple decades.

As far as the mortgage/housing stuff...ugh. I am a human and I feel bad for people who are losing their homes, but I also realize that there's a reason I didn't buy a house until this year - because I was realistic and couldn't afford one!! The mortgage/housing crisis isn't one group's fault. Many different people came together to make a cluster-**** this bad. Mortgage companies were very very greedy, and lots of people were incredibly unrealistic about what they could afford and what exactly an ARM means. But it's a "buyer beware" and "bank be bailed out" fiscal society though.

Ya, when I figure what I want for retirement, I don't even take SS into consideration.

And ya, I was going to wait a few years to buy a home, but after seeing all the rates drop, etc.. I had to take advantage and bought in July.

It's unfortunate that other people's loss allow me to reap the rewards from their misfortune, but nothing I can do about that.

HeroPsycho

skrpune wrote:

Good point. I'm pretty sure that social security's not going to be around when I retire - it's just not mathematically possible to keep borrowing against it, keep putting in less, keep taking out more, and still have something left over in a couple decades.

What non-social security collecting people don't realize is Social Security benefits the young far more than the old. It creates demand for products and services the workers produce by consumers who are retired and therefore don't compete with those jobs to produce said them.

Poor idea to let Social Security go by the wayside.

HeroPsycho

royal wrote:

And ya, I was going to wait a few years to buy a home, but after seeing all the rates drop, etc.. I had to take advantage and bought in July.

It's unfortunate that other people's loss allow me to reap the rewards from their misfortune, but nothing I can do about that.

You're helping the economy, don't feel bad.

motogpman

As far as the SS issue, the baby boomers are the ones drying up the system. I did service work for the SS administration, hell, go into one of the office on a lunch break and tell me what you see. Even the employees told me on many occasions that they know people abuse the situation, that most of the people in there don't pay into the system, never have, CAN get a legitimate job but are too lazy, need interpretors, and know the loopholes. I usually would leave that office pissed off knowing that even thought world isn't perfect, we let this **** happen to us. In reality, being silent and not taking a stand/changing the laws is what is hurting everyone.

We have become a welfare country and everyone has their hand out instead of making people responsible for their own actions or welfare. I am all for helping people who really deserve or need it, but come on. Why someone would get an ARM for a home baffles the **** out of me. that tells me that in most cases, people were just trying to live outside their normal means, which has become the American way. Look at the people whom lived through the depression. We have had it good and it is catching up to us.

Vogon Poet

Turgon wrote:

Nicola Horlick "I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they have fallen down on the job.

Funny. Every 3-4 years another hedge fund fiasco happens (criminal or not). Hedge funds are a notoriously under-regulated asset management business. Everybody should know this by now. She should read up on that. Nonetheless the much over-used words of "transparency" and "due diligence" should be demanded in more situations other than political speeches. Don't expect to see more laws regulating hedge funds though. Won't happen.

HeroPsycho

motogpman wrote:

Why someone would get an ARM for a home baffles the **** out of me. that tells me that in most cases, people were just trying to live outside their normal means, which has become the American way. Look at the people whom lived through the depression. We have had it good and it is catching up to us.

There are people who simply don't understand the implications of an ARM loan. They just want to own a house. Smarter people who are offering these loans should be held accountable, too. People who lived well beyond their means are getting punished by losing their homes in these situations. What about the lenders who encouraged giving these loans out? We gave them a big phat gov't bailout, and the system still isn't reformed to stop practices that provided 0 accountability to the lenders.

That's the systemic problem we're facing.

To be honest, I'm not so interested in anyone "getting what they deserve". I'm interested in fixing the economy and preventing it from happening again. We need measures to hold people accountable strictly as a deterrent from them and others doing it in the future.