Outrageous – Brown/Darling still defending the old system- but that’s what they get paid for

I just heard two guys defending bonus payments for bankers (one being a banker – no surprise), one of them was chancellor Brown (UK – labour party – the whole thing is independent from parties since they all appreciate the fine life), although he reduced it by saying no cash bonus. I think that’s the least thing they (bankers) should think about is to get any bonus – having a job is in these times is enough bonus.

That is anyway a mistake in the whole assumption – no fancy ‘sophisticated’ banking is needed going forward. Also, when it comes down to bailing out the banks, at the end the taxpayer will own them fully, since a global nationalization of banks is inevitable.

People need just the basic functions that payments are made and new loans can be taken and plain vanilla financing functions are done beside banks servicing custodian functions for clients savings – doing simple brokerage functions. It’s a myth that they can manage your money better. Usually simple exchange traded funds do the trick, since 85% of all fund managers do not even match an index performance and in down markets are never ahead of the curve.

The current political establishment seems not to have learned the lesson but at the end of the day they were established/hired by the money power to help them to run the show. Their job now is to put sand in the eyes of their citizens, since they were involved in this huge operation of using investment banks as ATM’s for Ivy school graduates on a superficial level but, even more so, on the grand scheme, some powerful groups used to their raise power and wealth beyond any means. Taxpayers have now to finance all of the Porsche and Lamborghini driving “masters of disaster” but even more so to finance the wealth gap, which was created by phony inflation statistics. These statistics made it possible to transfer trillions of wealth from the regular citizen to the money establishment. This is, by the way, absolutely independent from the party to whom you may have given your vote.

The EU, US, Japanese (G7 nations) politicians are as greedy and corrupt as the people in the third world. In Germany, Congress members work as outside advisers for big corporations. They never have to shop around for work, since they are (to put it in nice terms) “lobbyists”. Democracy is at the brink of collapsing due to these shameless thieves but the people let them get away each and every time so they got more and more brave to join in on the sweet life. It’s not only the bankers – they had all the supervisors in their pockets (literally) and the politicians giving them the deregulations they needed. The regular industry is not any better – Mr. Schrempp, ex-CEO of Daimler, gambled away $30 bil. by buying a worthless Chrysler and walked away from it with $200 mil. in bonus and salary, just to name one example. One thing the regular stock owner should have never given up was his voting right. 80% of all investments are channeled through investment funds, which as a side effect, happen to be the ones in control of stockholder meetings and have never put any of the stupid and wreckless investments into question or the insane payments for bad performance. That was like having the wolf protect the sheep – all of the power was concentrated in the hands of Wall Street. By saying “Wall Street”, do not think of the hundreds of thousands of employees who made good money for themselves – instead, there is a little circle of people who are in control and these huge trading floors are just a distraction and the ordinary business.

I know a guy from Merrill who flew with friends on corporate jets regularly to places on weekends to blow away hundreds of thousands of dollars sipping champagne – why does the taxpayer have to pay for them? They were under the impression that since they worked so hard, they deserved it. Well, old-fashioned bank robberies are quicker. The system which was set up to rip off the banks by their employees (we can call it legalized bank robbery- all you need to be part is a ‘Harvard’ (always better to have the smartest ones on your side) MBA and, to be a reliable fellow of an Ivy league gangster, you need to be waterproof-acknowledged by some fraternity like “Sculls and Bones” to rise to the highest ranks.

Promotions in investment banks do not derive from your skills but more so whose interest you serve best for many reasons. Sure, they let skilled people rise to some degree and pay them so they stay – but the sweet spot is always with the insider gang (Managing Director is usually the rank) – in the ‘Sopranos’, they are called ‘Captains’. The moral is pretty much the same like in the Sopranos, they consider themselves in a ‘war hype’, which gives them the moral background to do what is necessary. The guy I mentioned earlier was at Merrill in charge of all the mortgage operations, basically of all trading and sales and it was amazing to see him climb to these ranks. Since he never stayed in any department longer than 1 year – hardly enough to gain expertise. I will not put his name up here but he definitely directly reported to Stan O’Neil and the scary thing is both were not qualified to take those kind of decisions due to their background of experience.

Stan O’Neil, as the first black CEO in Wall Street, had the funny attitude to gather his top executives only from ethnic minorities. Except for one, he had ‘almost’ no Jewish fellows as top-lieutenants but that did not save him, actually it might have made the whole thing even worse. He tried to avoid to be infiltrated by any Jewish top executives. That is exactly the problem in investment banks – I worked in a few myself and was amazed by the sheer incompetence of people who created internally a huge cover up system and played the who screws who games within but we all get out with fat bonus check. People in charge do not care about their stockholders, only about their own stock holdings. The culture created in these banks is not faithful and based on decency and prudence. There are hard working people in the lower paid areas like back office and skilled people in the front office (trader, salespeople) who work hard but the majority is about politics and about how do get a personal benefit.

In my general assumption, it’s like running a casino in Vegas, where the odds always favor the bank (that’s the attitude toward the clients). Banks do not make money because they are smart operators, otherwise we would not have a regular banking crisis (in 15-20 year terms)- they can just pull the legs of their clients much smarter coming up with fancy statistics. Like the favorite of previous years, since we had these perversely high earnings in 2000, they try to sell that earnings of 16 times are cheap and pull out statistics for the last 15 years. In the 30’s, we dropped to 5 times earnings for the ones who survived and that was without all the loopholes and tricks they use these days to cook balance sheets. Balance sheets have always been cooked somehow though – but through the advice of investment banks it has become an art.

I wrote about this already in a former blog but its worth seeing it again for the ones who missed it. The ‘second bank’ was the ancestor of the FED and was founded and controlled by Rothschild’s – the current FED is run by Goldman who is also in control of the Treasury – in both, top executives are from Goldman, this was established under president Clinton, who started the unprecedented rise of Goldman. Until the early 80’s, they were just a investment bank – with this smart web of people all over, they established the classic Rothschild strategy and they are basically an outlet of Rothschild, since it was already established through marriages 100 years ago (former blog posts refers to that).

Excerpt from


“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.” -Andrew Jackson, 7th US President

In 1836, Andrew Jackson forced the closing of the Second Bank of the U.S. by revoking its charter.

Interesting… now why is this so familiar?

“The Second Bank of the United States provided a convenient way for the government to handle its affairs. The bank was created when James Madison and Albert Gallatin found the government unable to finance the country in the aftermath of the War of 1812. The War of 1812 had put the United States in significant debt, and the First Bank of the United States had closed in 1811. The debt of the nation led to an increase in banknotes among the new private banks, and as a result, inflation increased greatly. As a result, Madison and Congress agreed to form the Second Bank of the United States.


~ by behindthematrix on October 13, 2008.

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