Write-Downs Exhibit the Level of Exploitation by Financial Institutions
19 November 2007, 22:31
There was a heated argument about five years ago, which still persists regarding ATM fees, as well as other services such as returning canceled checks to customers that have been retired, claiming that the banks don’t work for free. It’s remarkable to see so many middle class people making that argument without knowing just how much financial institutions have sucked out of the public’s collective purse with outrageous usery (18% minimum rate on credit cards compounded), fees for maintaining "savings" accounts that have been idle, Adjustable Rate Mortgages that hike rates beyond the capacity of new home owners’s ability to pay, etc. And then there are the new financial instruments - the CDO, the SIV, the derivative, the hedge fund - based on capitalizing on debt as opposed to fueling projects that are productive.
When this subprime story is over, and it’s far from being over, let’s hope that the public gets a good look at exactly how their financial institutions have been at odds with social interests for at least 10, if not 20 years. More precisely, these enormous write-downs, as well as the standard practice of huge end-of-the-year bonuses for brokers and others who not only sell stocks and bonds but shift debt from one column to another soley for the sake of maximizing their own profits, prove that higher ATM fees, not sending out canceled checks, unethically high rates of interest, much of it hidden in small print, prove that despite the current difficulties experineced by the banks, they are, like the oil companies, remarkably successful.
That doesn’t mean the system isn’t imperiled and couldn’t fall. It could. And if things don’t change, particularly in DC, then they probably will. In the meantime, however, the captains of industry and finance have their hands in your pocket, much more deeply than the government does (especially because they’ve got their hands in the government’s pockets as well), and you’re allowing it to happen. How?
You keep voting for the same people, e.g., Liberman, Hillary, not to mention the shameless Republicans who have openly protected these sectors. You keep voting for the same party (they’re both equally bad at this point). You don’t write enough letters. You don’t register enough formal complaints. You don’t rebel. You just keep taking it. And so do they.
There was a heated argument about five years ago, which still persists regarding ATM fees, as well as other services such as returning canceled checks to customers that have been retired, claiming that the banks don’t work for free. It’s remarkable to see so many middle class people making that argument without knowing just how much financial institutions have sucked out of the public’s collective purse with outrageous usery (18% minimum rate on credit cards compounded), fees for maintaining "savings" accounts that have been idle, Adjustable Rate Mortgages that hike rates beyond the capacity of new home owners’s ability to pay, etc. And then there are the new financial instruments - the CDO, the SIV, the derivative, the hedge fund - based on capitalizing on debt as opposed to fueling projects that are productive.
When this subprime story is over, and it’s far from being over, let’s hope that the public gets a good look at exactly how their financial institutions have been at odds with social interests for at least 10, if not 20 years. More precisely, these enormous write-downs, as well as the standard practice of huge end-of-the-year bonuses for brokers and others who not only sell stocks and bonds but shift debt from one column to another soley for the sake of maximizing their own profits, prove that higher ATM fees, not sending out canceled checks, unethically high rates of interest, much of it hidden in small print, prove that despite the current difficulties experineced by the banks, they are, like the oil companies, remarkably successful.
That doesn’t mean the system isn’t imperiled and couldn’t fall. It could. And if things don’t change, particularly in DC, then they probably will. In the meantime, however, the captains of industry and finance have their hands in your pocket, much more deeply than the government does (especially because they’ve got their hands in the government’s pockets as well), and you’re allowing it to happen. How?
You keep voting for the same people, e.g., Liberman, Hillary, not to mention the shameless Republicans who have openly protected these sectors. You keep voting for the same party (they’re both equally bad at this point). You don’t write enough letters. You don’t register enough formal complaints. You don’t rebel. You just keep taking it. And so do they.