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What Are Bankers Worth?

fluff

Monkey Turbo
Sep 8, 2001
5,673
2
Feeling the lag
Not much apparently. Cleaners give much better value, who'd have thunk?

http://news.bbc.co.uk/2/hi/business/8410489.stm

Hospital cleaners are worth more to society than bankers, a study suggests.

The research, carried out by think tank the New Economics Foundation, says hospital cleaners create £10 of value for every £1 they are paid.

It claims bankers are a drain on the country because of the damage they caused to the global economy.

They reportedly destroy £7 of value for every £1 they earn. Meanwhile, senior advertising executives are said to "create stress".

The study says they are responsible for campaigns which create dissatisfaction and misery, and encourage over-consumption.
 

4xBoy

Turbo Monkey
Jun 20, 2006
7,014
2,847
Minneapolis
I agree, the top is their to create a system that fails, and then asks/takes more money to try to further fix/destroy the system.
 

dan-o

Turbo Monkey
Jun 30, 2004
6,499
2,805
I don't know, Jokers in finance and he's provided RM with years of entertainment. That's gotta be worth something...
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
21,520
7,069
Colorado
Not by far. I've stated this before. I used to be a trader for a Private Wealth Mgmt team, I moved on and now sell financial software. My client based is something like 90% traders, 5% weatlh mgrs, 5% bankers. I barely ever see my banking clients.

Also, there are different levels of bankers. The guys writing CDO's, and packaging mortgages are the ones that got us where we currently are. The guys setting up IPO's and funding for small biotechs that are creating life changing technologies are not the problem.

Different types of bankers across the board. Very few are involved in the nasty stuff that blew up the economy. I'd be more upset at the advertising firms and media companies that promote gross overconsumption that led people to take out copious amounts of debt to "keep up with the Jones'". The bankers in this case just provided the funds; it was the decision of the debtor to spend the money and not pay their bills.
 

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
Not by far. I've stated this before. I used to be a trader for a Private Wealth Mgmt team, I moved on and now sell financial software. My client based is something like 90% traders, 5% weatlh mgrs, 5% bankers. I barely ever see my banking clients.

Also, there are different levels of bankers. The guys writing CDO's, and packaging mortgages are the ones that got us where we currently are. The guys setting up IPO's and funding for small biotechs that are creating life changing technologies are not the problem.

Different types of bankers across the board. Very few are involved in the nasty stuff that blew up the economy. I'd be more upset at the advertising firms and media companies that promote gross overconsumption that led people to take out copious amounts of debt to "keep up with the Jones'". The bankers in this case just provided the funds; it was the decision of the debtor to spend the money and not pay their bills.
The US is still currently shoveling vast sums of money at the worldwide banking institutions (in the form of ZIRP) in a desperate attempt to recapitalize them to make up for their disastrous loans, and somehow it's the borrowers fault? I highly doubt it was a borrower that came up with the Option-ARM mortgage or the CDO. Yes the borrower took on those loans, but the only reason they existed in the first place was some financial "wizard" figured out (incorrectly) that the performing loans would more than equal out the non-performing loans and the bank would be profitable. Banks made those loans *knowing* that a certain percentage of people would default. They just got the percentage (very, very, very, very) wrong.

Combine that with even more slick financial wizardry in that the companies insuring those CDOs had their own calculations as to what percentage of them would fail, and so didn't keep anywhere near enough in reserves for when it did (if at all). This was a a giant ponzi scheme of epic proportions, and it came crashing down on all of our heads. True, the US consumer is complicit for taking these loans when offered, but I'd place far greater blame on those who came up with these intricate loans and sold them to the public.
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
21,520
7,069
Colorado
Blame should fall 50-50. Those who offered the money and those who took it.

But also do not forget to place blame on those who allowed it to happen: SEC-for not regulating the financial institutions, Congress- for repealing Glass-Steagal, Clinton and Bush - for pushing the "everyone deserves a home" legislation, Fed - for keeping rates too low for too long, etc.

Blame does not fall solely on the Banks, and the current govt game of kick the can is not helping either. Hard decisions and painful choices need to be made, but nobody wants them to be made on their watch.

If we want to blame banks for taking the money, how about we blame the Congress, that we voted in, for approving it?
 

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
Blame for people who screwed up and got in over their heads is on an individual basis... and most of them have paid dearly in lost homes, destroyed credit, and massive amounts of money lost in fees and penalties. Blame for the banks is on an institutional basis, most of whom are still operating and suckling at the government teat. It must be nice to borrow at 0% interest from the fed and turn around and lend it at anywhere from 5% (auto loan) to 35% (credit cards). Or to lend for a mortgage at 5% and turn around and sell it to Fannie/Freddie at 4%. 1% profit for doing nothing and zero liability must be pretty nice these days.

TARP is nothing. It was a blip on the radar, and most banks have "paid back" the amount they got from the gov. How about the fact that the dollar is trashed while we're getting a measly 0.25% on our national savings accounts? Anyone getting massive quantities of fed-window cash at 0-.25% isn't interested in paying anything beyond that to get capital from the populace. Wells Fargo is offering 0.25% on a 12mo CD. Then they're turning around and lending that back to me at 13%. WTF?

Banks should be happy that there's not a national "Project Mayhem" going on, or maybe we should bring back the tarring and feathers. God I hope that Obama told Bankers today that if they don't start lending, that he's going to raise the fed funds rate to 4+%. Screw you dipsh!ts, if you're not going to lend the money we give you, we're not going to give it to you. Raise interest rates, create a stronger dollar, take our lumps and GET THIS COUNTRY BACK ON TRACK!

Either that or bring out the First National Bank of the USA. Lend money straight from the fed to anyone and everyone at 5%. Offer 4% return on 12mo personal savings bonds (non-transferrable). Allow this money at 5% to pay off any current debt (mmmmm, pay off $35,000 in credit card debt at 30+% interest with one at 5%?), mortgage debt, personal debt, etc. The only thing is (like student loan debt) the money you borrow can not be discharged under any circumstances. It'll follow you to the grave.

Presto, no more credit crunch.
 
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jonKranked

Detective Dookie
Nov 10, 2005
85,570
24,185
media blackout
There's an old adage (or one that I completely made up) that goes "most laws exist only to protect people from their own stupidity". In this case - the mortgage issue - that wasn't the case, people faced consequences for their dumbness! oh noez!

What kills me is that the teabaggers are up in arms trying to keep federal gov't from interfering in things too much. Correct me if I'm wrong, but isn't that how we got into this mess in the first place (lack of regulations on the banking and financial sector)?
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
21,520
7,069
Colorado
Not fully.
The big part was Glass-Stegall being removed. Once you could merge inv banks and commercial banks, you had massive capital flows for the inv banks to play with. This was essentially a lone law, that had been in place since 1933/34, that kept many of the potential problems in check. It would also fix many of the issues we are going through.
People's issues with govt interfering is supporting failing institutions. I am all for regulation that prevents the creation of systemic risks, I'm just for bailing out those who blew up. You are responsible to yourself, be you a person or corporation. If you blowup, you blowup; It's not my problem.
 

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
That, would be awesome.
Careful, what I outlined could be construed as soci@lism... You could be in danger of losing your standing at the local Young Conservatives Tea and Bridge Potluck Dinner Party. Quick, recant and claim that capitalism is the only true path to prosperity and be in favor of just handing banks billions of dollars and expect it to trickle down to the common man!! Remember, if we give banks *enough* money, then they'll turn around and give it to the rest of the population. Laffer, and all that stuff.

:p
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
21,520
7,069
Colorado
I don't disagree, but the fact is, until people can afford to pay the debt it will blow up everyone.

If there was a stipulation that you could not legally take out any more debt until your balances are paid off in full, AND you were placed onto a strict payment schedule that would force payment of say... 20% annual income, or some other measure that would allow payment in short time window (via wage garnishing) few people who had other options would use it. Force sale of personal property that is non-essential (ie no car >$20k, no flat screen tvs, no game systems, etc.) scaled to a value based on avg income for rolling 5 years (less taxes, and comperable food/housing costs in your region). That would force sale of items that were bought from sources not derived from income. I would back that.

Make it painful in the short term, but less painful than bankruptcy in the long term.
 

ohio

The Fresno Kid
Nov 26, 2001
6,649
23
SF, CA
You can't pretend the problem is just isolated to the current mortgage and credit crisis. Finance that is capitalizing producers is creating value, but once you get more than one step removed from that, the likelihood that you're creating a net positive value is virtually nill. I have a lot of respect for the brainpower that goes into it, but most of the finance industry is simply a leech that sucks off a portion every time it can convince blood to flow. Just like the legal industry, there are very important exceptions, but the environment engineered to be win/win for the middleman, so the incentive is simply to create work, not create value.