my question: why don't we imprison bank CEOs when their bank crashes? we could bail out regular people, but let everyone else (the greedy board of directors, especially) sink into the quagmire of their own avarice. further, this imprison-the-CEOs is the strategy followed by Iceland, and their economy is one of the strongest worldwide after the 2008 meltdown, as the IMF noted here:
Only if they caused it. Even bank presidents are presumed innocent until proven guilty beyond a reasonable doubt.
We have a plethora of statutes and regulations that apply.
I do believe that the failures that occurred in 2008 were not fully investigated and that the legislation that was implemented, i.e. Dodd Frank, was not as broad as it should have been. As I told you previously, we heard Sarbanes Oxley Dodd Frank cases and some of the whistleblowers were bank officers.
I remember that well, Daniel. I lost some money during the Saving and Loan crisis due to unwise investments by my pension fund. A guy named Keating did go to jail BUT all his assets had been transferred to his wife and children prior to the failure. All the heads and leadership knew well in advance the Savings and Loans were going under, and all did similar actions with their funds. This has led me to believe jail time is useless in dealing with the ultra rich. They don't care about a few months of rest in a "country club prison" Their entire wealth is waiting for them on release. If we truly want to end this vicious cycle we need to strip them AND their family of most of that wealth, leaving them sufficient funds to live modestly IF they go to work. This makes them the laughingstock instead of the martyr and other ultra wealthy people will either turn honest or be more crafty in hiding their misdeeds. This is not an original idea, King Henry VII employed it with much success in the late 15th Century.
You're right, Fay. The only thing that matters to these people is their money. If the funds had been transferred to a wife, or children, then they should still be fair game in an imposed penalty, one that should be severe as you state. It will only deter the behavior in others if the consequences are severe enough. And they must be. It is clear that they cannot be trusted to do the right thing without incentives or the threat of losing the bulk of their wealth.
Thank you Celeste. When an elderly person applies for any kind of public assistance they can have no more than $2000 is disposable assets and they cannot have transferred any assets in the last 24 months but wealthy criminals face no such restraints
Charles Keating. His bother had been a Republican congressman from Cincinnati. Among the people he bribed was John McCain. He was only one of many convicted. MC Cain was not prosecuted.
Daniel my friend, why don’t we enforce the laws we have? Laws are no good if we don’t equally enforce them. My problem with the legal system is that laws are not equally enforced. They become spears targeted at random people for differing power reasons.
DOJ does a pretty good job. Not perfect. I personally do not like Garland but in the field there are thousands of prosecutions. I previously linked the fraud section.
And it’s disgraceful that we do not apply laws, in place now, to punish the most serious crimes committed by the worst traitorous politicians we have seen in this country.
GrrlScientist I love your idea. Consequences change behavior, but for some reason we’re more willing to apply consequences to petty crime than national crisis!
When we do this, we could spread the BILLIONS these evil CEOs hoarded to their workers that ACTUALLY DO WORK and increase those that CAN afford to live in this god-forsaken countryty! [sic]
Although not a direct answer, I've been saying there's no effective political left here for awhile, and although I can't say what the fallout will be from the current banking debacle, I can offer this for your consideration: https://youtu.be/6LPuKVG1teQ
With regard to the poll, the answer is 'all of the above' and ever repeating cycles. And that because, in answer to your obviously rhetorical question in the title, the banking system is anything but safe. Volatility is, frankly, built into what's been gamblified (did I just invent a word?) by the investment banking world. Volatility is great, cycles are great, bet on any- and everything, hedge any which way. This system will definitely not want to change.
Regulation needs to be put back in place. We need, as was the case once upon a time, a clear separation between traditional banking and all forms of investment banking (aka gambling with other people's money). Who will, once in power, have the guts to do that? There's Warren and Sanders among the rare few - but the powers that be will never allow them at the helm. I think it'll take a collapse far worse than 2007/2008 for a system change, for an actual rebuild of the system.
Daniel Martin Eckhart ; I believe you are right about the resistance in Congress and those who 'hedge their bets'. I wonder what will have to happen before they join in an effort to find a real remedy?
Banks need a review board that looks into the investments made by the various institutions in an attempt to bolster their assets. Banks would be graded according to the stability of those choices. Unless we want to go back to money stuffed mattresses or cans filled with a family's wealth burred in some random location in the back yard. Banks are the corner stones of our economic health, there has to be a way to ensure their financial security, both for the general publics piece of mind and to give a sloid foundation to our society's general well being.
Progwoman & Donald Hodgins. All the stuff you mention is already in place. Banks are under constant audits. There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor's opinion which is included in the audit report.
According to some services, currently, there are no AAA rated banks in North America, there are some European banks with triple-A rating. Credit ratings may be revised or withdrawn at any time by the respective rating agency.
According to Robert, it is only the big banks that are regulated. However, Andrew Yang said the bank administrators have been fired, their stock tanked and those people lost money, and only the depositors have been helped. BTW treasury bonds were supposed to be very safe, backed by government etc.
Cynthia-- I think any bank that has extensive holdings in anything to do with cryptocurrency should be looked at in a questionable light. Raising interest rates isn't helping either. Nobody wants to take out loans with rates as high as they currently are, banks make their lifeblood from loans and because of the elevated rates they aren't happening. Catch how many 22's.
Because boys will be boys and figure out ways to beat the system. In bankruptcy, a judge can act as a hypothetical lien creditor and set aside the short selling that probably led to the run on the banks. Believe me, bank officers and employees are acutely aware that they are closely scrutinized. I live in the fraud capitol of America and we have prosecutions involving the financial sector every day. https://www.justice.gov/criminal-fraud
If you saw what I posted the last couple of days, it could be that foreigners like Russia and China and even Saudis want this to happen, that actors like Peter Thiel may/may not have run on the bank because he has an ulterior motive.
BTW, when you "invest" you are actually betting, and unbeknown to you there are actors betting for you to lose.
I’m listening to this thinking that it makes sense to separate the commercial from investment banking, again, even if you start with baby steps. If you look at the mess China is in with their local government debt, we must head that off here. What role do munies play in this? I believe climate risk needs to be factored in fully, which is probably another story. Maybe the reinsurance industry can be wedged in there to mandatorily protect an earlier risk level before the riskier banks get access to “bailouts”, whether private or public. What conditions did the big banks place in exchange for their $33 B yesterday?
Of course, all that takes willing parties. We need a definitive election in 2024.
And meanwhile, we have to educate the public on what has been positively done since 2021 to right this ship. America.
M curious why so many believe the Fed will raise rates next week. I would think that in view of slowing inflation growth (no, prices won’t come back down as long as most markets are near monopolies), jay Powell might just pause. The banking industry and stock market is spooked. Sit a bit and wait, would be what I’d expect from the Fed. A month won’t matter.
If rates increase I would suspect plain stubbornness to be the reason. But that’s just me.
Jerome Powell (absurdly) said that rate increases will most likely continue.
It's the Fed's only tool, and they charged with maintaining a stable economy. So they can either raise or lower rates in this dicey situation. Powell still fears high inflation more than unemployment. (He's between a rock and a hard place.)
I’m not sure what new political catastrophe will happen next week. What I do know and understand is that political history tends to repeat itself over and over and that we’re not a nation of people who rely upon or prepare to avoid repeating historical mistakes, regardless of the information provided to us or through our actions and experiences. It’s one of the reasons we ended up with trump and company. And the banks are about as safe as our democracy.
Examined deeply, they may be one and the same - as accumulation of resources is likely thought by the accumulators to make themselves more attractive. As in, 'when you are rich and famous you can just do anything you want'.
I pretty much believed this already, but in listening to the conversation, it becomes crystal clear why so many in the Middle and Lower classes back Trump. Blatant examples like this one indicate that our political/economic system has come to work for and coddle those at the top, while stringing along the masses with tepid gestures and empty promises. (I’ve been part of the Single-Payer healthcare movement for three decades, and if we’ve moved much beyond square one I’m not aware of it.)
When people become hopeless and angry, some just want someone like a Trump who can burn the whole system down — and his personal foibles are irrelevant.
You’d think “wise” leaders would see this and start shifting the focus at least to some degree. But unfortunately, today’s leaders seem to be on a short money-leash to the plutocratic donor class.
My thoughts on the banking crisis? First we'll see the usual collapse of smaller banks, Americans earning less than $400,000 per year will lose their savings, some older Americans will lose their pension funds, politicians will wring their hands, a scattering of bills will materialize to rectify some of the grossest criminal behavior of banks, a few bills may even pass. The economy will improve briefly, then people will reelect repugnants, who will roll back the regulations setting the field to repeat. This has happened so cyclically in America since the nineteenth Century and we - the ordinary people never learn.
First, congratulations on our anniversary. Thank you for starting this great Saturday morning get-together and keeping it going.
I like the moments when we come to a sense of how profound the problems are, and we wonder how we even start to "fix" them.
This past week, I happened to come across a Fortune magazine article dated September 24, 2018, by Glenn Fleishman. The title reads: "Trump Rolls Back Train-Braking Rule Meant to Keep Oil Tankers from Exploding Near Communities."
As with the financial derailments, the problems were identified and foreseen -- and this makes things more frustrating than ever.
Congratulations Heather and Robert, on your one year anniversary of Coffee Klatch! I was able to have my coffee while listening to you this morning! Yay! Let us know if mugs with your 'mugshots' are available! BTW ; Happy Spring!
my question: why don't we imprison bank CEOs when their bank crashes? we could bail out regular people, but let everyone else (the greedy board of directors, especially) sink into the quagmire of their own avarice. further, this imprison-the-CEOs is the strategy followed by Iceland, and their economy is one of the strongest worldwide after the 2008 meltdown, as the IMF noted here:
https://www.imf.org/en/News/Articles/2015/09/28/04/53/socar031315a
Only if they caused it. Even bank presidents are presumed innocent until proven guilty beyond a reasonable doubt.
We have a plethora of statutes and regulations that apply.
I do believe that the failures that occurred in 2008 were not fully investigated and that the legislation that was implemented, i.e. Dodd Frank, was not as broad as it should have been. As I told you previously, we heard Sarbanes Oxley Dodd Frank cases and some of the whistleblowers were bank officers.
In the '80s many people went to jail during the Savings and Loan scandal. https://en.wikipedia.org/wiki/Savings_and_loan_crisis#:~:text=The%20chairman%2C%20Hal%20Greenwood%20Jr,failure%20cost%20taxpayers%20%241.2%20billion.
Here in Baghdad By the Sea, two of the partners in one our most famous law firms that represented savings and loans went to the top of the tallest building in Miami, and jumped off. Another... https://www.washingtonpost.com/archive/politics/1985/07/28/esm-scandal-extinguished-a-rising-star/53a8e67b-0c27-49e8-8146-c952f9de4a25/
I remember that well, Daniel. I lost some money during the Saving and Loan crisis due to unwise investments by my pension fund. A guy named Keating did go to jail BUT all his assets had been transferred to his wife and children prior to the failure. All the heads and leadership knew well in advance the Savings and Loans were going under, and all did similar actions with their funds. This has led me to believe jail time is useless in dealing with the ultra rich. They don't care about a few months of rest in a "country club prison" Their entire wealth is waiting for them on release. If we truly want to end this vicious cycle we need to strip them AND their family of most of that wealth, leaving them sufficient funds to live modestly IF they go to work. This makes them the laughingstock instead of the martyr and other ultra wealthy people will either turn honest or be more crafty in hiding their misdeeds. This is not an original idea, King Henry VII employed it with much success in the late 15th Century.
You're right, Fay. The only thing that matters to these people is their money. If the funds had been transferred to a wife, or children, then they should still be fair game in an imposed penalty, one that should be severe as you state. It will only deter the behavior in others if the consequences are severe enough. And they must be. It is clear that they cannot be trusted to do the right thing without incentives or the threat of losing the bulk of their wealth.
Thank you Celeste. When an elderly person applies for any kind of public assistance they can have no more than $2000 is disposable assets and they cannot have transferred any assets in the last 24 months but wealthy criminals face no such restraints
Spot on, Fay!
Charles Keating. His bother had been a Republican congressman from Cincinnati. Among the people he bribed was John McCain. He was only one of many convicted. MC Cain was not prosecuted.
Figures!
Daniel my friend, why don’t we enforce the laws we have? Laws are no good if we don’t equally enforce them. My problem with the legal system is that laws are not equally enforced. They become spears targeted at random people for differing power reasons.
DOJ does a pretty good job. Not perfect. I personally do not like Garland but in the field there are thousands of prosecutions. I previously linked the fraud section.
E.G. https://www.justice.gov/opa/pr/federal-court-approves-settlements-totaling-nearly-5-million-civil-lawsuit-enjoining
https://www.justice.gov/usao-sdfl/pr/former-south-florida-regional-bank-manager-sentenced-covid-19-relief-fraud
https://www.justice.gov/opa/pr/sterling-bancorp-inc-plead-guilty-69m-securities-fraud
https://www.justice.gov/usao-ndfl/pr/florida-state-representative-indicted-wire-fraud-money-laundering-and-making-false
https://www.justice.gov/opa/pr/justice-department-investigation-leads-takedown-darknet-cryptocurrency-mixer-processed-over-3
Stephen, that is a fact in the US of A
And it’s disgraceful that we do not apply laws, in place now, to punish the most serious crimes committed by the worst traitorous politicians we have seen in this country.
GrrlScientist I love your idea. Consequences change behavior, but for some reason we’re more willing to apply consequences to petty crime than national crisis!
When we do this, we could spread the BILLIONS these evil CEOs hoarded to their workers that ACTUALLY DO WORK and increase those that CAN afford to live in this god-forsaken countryty! [sic]
Not relevant. Just a good comment worth a read:
- The GOP needs a new slogan:
https://www.msn.com/en-us/news/politics/the-gop-needs-a-new-slogan/ar-AA18M5di
For media rating: https://mediabiasfactcheck.com/?s=RAW+STORY
The party of death or the deadly Fascists fit the bill.
Although not a direct answer, I've been saying there's no effective political left here for awhile, and although I can't say what the fallout will be from the current banking debacle, I can offer this for your consideration: https://youtu.be/6LPuKVG1teQ
With regard to the poll, the answer is 'all of the above' and ever repeating cycles. And that because, in answer to your obviously rhetorical question in the title, the banking system is anything but safe. Volatility is, frankly, built into what's been gamblified (did I just invent a word?) by the investment banking world. Volatility is great, cycles are great, bet on any- and everything, hedge any which way. This system will definitely not want to change.
Regulation needs to be put back in place. We need, as was the case once upon a time, a clear separation between traditional banking and all forms of investment banking (aka gambling with other people's money). Who will, once in power, have the guts to do that? There's Warren and Sanders among the rare few - but the powers that be will never allow them at the helm. I think it'll take a collapse far worse than 2007/2008 for a system change, for an actual rebuild of the system.
Daniel Martin Eckhart ; I believe you are right about the resistance in Congress and those who 'hedge their bets'. I wonder what will have to happen before they join in an effort to find a real remedy?
Banks need a review board that looks into the investments made by the various institutions in an attempt to bolster their assets. Banks would be graded according to the stability of those choices. Unless we want to go back to money stuffed mattresses or cans filled with a family's wealth burred in some random location in the back yard. Banks are the corner stones of our economic health, there has to be a way to ensure their financial security, both for the general publics piece of mind and to give a sloid foundation to our society's general well being.
Progwoman--are you a Prog-nosticator?
Progwoman & Donald Hodgins. All the stuff you mention is already in place. Banks are under constant audits. There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor's opinion which is included in the audit report.
Banks are rated. https://commonsearches.net/index.php?rgid=352719&sub=gclid&zbulk=ratings%20of%20banks%20in%20usa&gclid=Cj0KCQjwwtWgBhDhARIsAEMcxeBILojrxXN34QjzzznK2so0hhgLrmjiWuaMjT5YON1jW9UVTpHENDcaAn8jEALw_wcB
According to some services, currently, there are no AAA rated banks in North America, there are some European banks with triple-A rating. Credit ratings may be revised or withdrawn at any time by the respective rating agency.
According to Robert, it is only the big banks that are regulated. However, Andrew Yang said the bank administrators have been fired, their stock tanked and those people lost money, and only the depositors have been helped. BTW treasury bonds were supposed to be very safe, backed by government etc.
Cynthia-- I think any bank that has extensive holdings in anything to do with cryptocurrency should be looked at in a questionable light. Raising interest rates isn't helping either. Nobody wants to take out loans with rates as high as they currently are, banks make their lifeblood from loans and because of the elevated rates they aren't happening. Catch how many 22's.
Danial--If that is the case why is there a problem?
Because boys will be boys and figure out ways to beat the system. In bankruptcy, a judge can act as a hypothetical lien creditor and set aside the short selling that probably led to the run on the banks. Believe me, bank officers and employees are acutely aware that they are closely scrutinized. I live in the fraud capitol of America and we have prosecutions involving the financial sector every day. https://www.justice.gov/criminal-fraud
If you saw what I posted the last couple of days, it could be that foreigners like Russia and China and even Saudis want this to happen, that actors like Peter Thiel may/may not have run on the bank because he has an ulterior motive.
BTW, when you "invest" you are actually betting, and unbeknown to you there are actors betting for you to lose.
Happy klatchaversery! what a great thing it’s been for us all!
I’m listening to this thinking that it makes sense to separate the commercial from investment banking, again, even if you start with baby steps. If you look at the mess China is in with their local government debt, we must head that off here. What role do munies play in this? I believe climate risk needs to be factored in fully, which is probably another story. Maybe the reinsurance industry can be wedged in there to mandatorily protect an earlier risk level before the riskier banks get access to “bailouts”, whether private or public. What conditions did the big banks place in exchange for their $33 B yesterday?
Of course, all that takes willing parties. We need a definitive election in 2024.
And meanwhile, we have to educate the public on what has been positively done since 2021 to right this ship. America.
Simple answer: Re-enact Glass Steagall.
I answered "Other" because I don't have a single goddam clue what the fallout will be! LOL!
I did as well for the same reason!
Will the Extremists running Congress get the memo? Can Janet Yellin and President Biden do anything? We shall see!
M curious why so many believe the Fed will raise rates next week. I would think that in view of slowing inflation growth (no, prices won’t come back down as long as most markets are near monopolies), jay Powell might just pause. The banking industry and stock market is spooked. Sit a bit and wait, would be what I’d expect from the Fed. A month won’t matter.
If rates increase I would suspect plain stubbornness to be the reason. But that’s just me.
Jerome Powell (absurdly) said that rate increases will most likely continue.
It's the Fed's only tool, and they charged with maintaining a stable economy. So they can either raise or lower rates in this dicey situation. Powell still fears high inflation more than unemployment. (He's between a rock and a hard place.)
I agree he has but the one tool.
But do you not think he hates bank failures more?
No, I think he fears inflation more than death itself.
Okay, that IS funny.
I’m not sure what new political catastrophe will happen next week. What I do know and understand is that political history tends to repeat itself over and over and that we’re not a nation of people who rely upon or prepare to avoid repeating historical mistakes, regardless of the information provided to us or through our actions and experiences. It’s one of the reasons we ended up with trump and company. And the banks are about as safe as our democracy.
"The more things 'change,' the more they remain the same".
Greed is a powerful motivator...
Which is stronger greed or sex?
Talk about pandora’s box...
Examined deeply, they may be one and the same - as accumulation of resources is likely thought by the accumulators to make themselves more attractive. As in, 'when you are rich and famous you can just do anything you want'.
I think banks will 'stabilize' ; Too much is at stake, even for the greedheads.
I pretty much believed this already, but in listening to the conversation, it becomes crystal clear why so many in the Middle and Lower classes back Trump. Blatant examples like this one indicate that our political/economic system has come to work for and coddle those at the top, while stringing along the masses with tepid gestures and empty promises. (I’ve been part of the Single-Payer healthcare movement for three decades, and if we’ve moved much beyond square one I’m not aware of it.)
When people become hopeless and angry, some just want someone like a Trump who can burn the whole system down — and his personal foibles are irrelevant.
You’d think “wise” leaders would see this and start shifting the focus at least to some degree. But unfortunately, today’s leaders seem to be on a short money-leash to the plutocratic donor class.
So here we are.
My thoughts on the banking crisis? First we'll see the usual collapse of smaller banks, Americans earning less than $400,000 per year will lose their savings, some older Americans will lose their pension funds, politicians will wring their hands, a scattering of bills will materialize to rectify some of the grossest criminal behavior of banks, a few bills may even pass. The economy will improve briefly, then people will reelect repugnants, who will roll back the regulations setting the field to repeat. This has happened so cyclically in America since the nineteenth Century and we - the ordinary people never learn.
First, congratulations on our anniversary. Thank you for starting this great Saturday morning get-together and keeping it going.
I like the moments when we come to a sense of how profound the problems are, and we wonder how we even start to "fix" them.
This past week, I happened to come across a Fortune magazine article dated September 24, 2018, by Glenn Fleishman. The title reads: "Trump Rolls Back Train-Braking Rule Meant to Keep Oil Tankers from Exploding Near Communities."
As with the financial derailments, the problems were identified and foreseen -- and this makes things more frustrating than ever.
Banks should only be banks! Stop this universal banking system, where banks is in everything
The banking system is not currently safe.
Congratulations Heather and Robert, on your one year anniversary of Coffee Klatch! I was able to have my coffee while listening to you this morning! Yay! Let us know if mugs with your 'mugshots' are available! BTW ; Happy Spring!
Laurie- great fundraiser idea. I’d love to listen with my very own Coffee Klatch mug!