Rebel Traders – Analysis Without The Hype

Bill Maher PSA & Bank of America (BAC) enters wrong home.

Comedian Bill Maher has joined the bandwagon calling for all to end their abusive relationships.

And while talking about the banks how about this from Galveston, Texas:

GALVESTON — A West End property owner is suing Bank of America Corp., asserting its agents mistakenly seized a vacation house he owns free and clear, then changed the locks and shut the power off, resulting in the smelly spoiling of about 75 pounds of salmon and halibut from an Alaska fishing trip and other damages.

Dr. Alan Schroit filed the lawsuit Monday in the 122nd State District Court in Galveston against the bank with which he has neither a relationship nor a mortgage.

Schroit, a retired professor at M.D. Anderson Cancer Center in Houston, is suing for wrongful invasion of his house in the 4100 block of Green Heron Drive in the Pointe West subdivision.
He filed the lawsuit after he and Bank of America were unable to agree on a settlement, attorney Barry A. Brown said.

Bank of America officials on Friday said they had not had an opportunity to review the lawsuit and typically decline to comment on pending litigation. But the bank is familiar with the case. (Source: Galveston County News)

That is what Senator Bryon Dorgan said on this very day 10 years ago. It was on this day, November 12, 1999 that then President Clinton signed into law the Financial Modernization Act. Contained within that act was the dismantling of the Glass-Steagall Act. The very law that kept “Too Big To Fail” in check was signed away and exactly 10 years later our Government is trying to finds ways to regulate the financial industry after it unleashed a monster just 10 years ago today.

This video from November 1999:

I have written several times in the past about that day in 1999 when Glass-Steagall was wiped off the books. That law prevented banks and investment companies from crossing the line into each others business. But with the destruction of Glass-Steagall came the seeds and fertilizer for what we have on Wall Street today, financial institutions the size of Godzilla and it has taken over Manhattan.

Now that our Government created this monster; which has wiped out trillions of dollars in savings accounts, pension funds, sovereign wealth funds, and the life savings of numerous retired individuals all over this nation the monster is doing everything in its power to keep ‘business as usual’.

The financial regulatory reform draft recently introduced by Senator Chris Dodd is a massive document (1,100 pages) that discusses everything from creating new regulatory departments, increasing accountability, new bank division regulators for the small banks, and lots of mumbo jumbo about how the financial system can be fixed with this draft bill and the problems will never happen again.

<pull my finger>

As Senator Bryon Dorgan so eloquently said on this day ten years ago; “we will look back and say we should have not done this“. He was so right, Washington forgot the lessons of the Great Depression and with the destruction of Glass-Steagall we can clearly and without hesitation say that “they should have never done it”.

When the bill passed the Congress and subsequently signed into law by the President it was not the people of the nation that they were saying how good it would be for, it was how great it would be for the Wall Street firms who would go on to create the biggest financial institutions on the planet who then had the power, the capability, the will, and the desire to suck every dollar from as many people as they can. All the while never worrying about the risks associated with it because the same people they stole from will be the very same ones who will rescue them for they are the tax payers.

Chris Dodd’s financial reform draft is all words with no meat. It was probably written in part by Wall Street themselves and Chris Dodd is simply carrying the torch to show the world that he will reform the system. In actuality nothing significant is in the draft that I can find. The 1,110 page document could easily be reduced to about 20 or 30 pages by simply creating an executive order to reverse the 1999 Financial Modernization Act. But we know that can never happen because you and I don’t have a voice in Washington, D.C. any longer. The only voice they hear is their bosses on Wall Street and they run and control the financial laws of the land.

Just today the Federal Reserve announced new rules on ATM overdraft fees without your knowledge.

The Federal Reserve Board on Thursday announced final rules that prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.

A big problem however is that the banks would not be required to comply until July 1, 2010. This gives them plenty of time to come up with new ways to add fees to make up for the overdraft fees they will lose. Why wait until July 1, 2010 instead of making effective within a matter of weeks? Because the lobbyists from Wall Street and  K street in Washington hammered the Feds to ‘give them time’. The banks claim that the new rule will take many months of re-programming the systems to adjust for the overdraft fee rules.

<pull my finger>

The only reason is to allow the banks enough time to create new debit fees that will offset the loss in overdraft fees. Similar to the current credit card fiasco that has customers now unable to pay their credit card bills because the banks jacked their interest rates up to 29.99% in many cases. The banks are front running the rules to gauge as many people as they can and in the fastest amount of time possible.

Do you really think Washington listens to the people anymore? Unless your name is Ken Lewis, Vikram Pandit, Lyodd (Lord aka God) Blankfein, or Jamie (the weasel) Dimon then you have not a chance in hell to have your elected officials listen to you. If you want to offer $1,000,000 to his next campaign fund well then he or she will make time for you, but only enough time to verify the check is good and then you will be out the door.

The only financial reform that will work is the breaking up of the banks and financial institutions again. Build a fence between the two and go back to the days when a bank was a bank, nothing more. And investment firms only handled investments and never dabbled into banking. But these institutions are so big now that just the threat of breaking them up will bring a reaction from them that if they go down then the nation will go down. Remember Lloyd Blankfein (Goldman Sachs CEO) said just this past weekend in an interview that Goldman Sachs “was doing Gods work“. I guess no one would dare interfere with God, now would they.

Lloyd Blankfein…. come closer, closer still…  PULL MY FINGER

The CEO’s of Citgroup, Bank of America, and JP Morgan have all chimed in on the recent action to curtail bonuses at companies that are operating with tax payer funds.

Vikram Pandit, Citigroup CEO

Vikram Pandit (CEO, Citigroup) and Ken Lewis (CEO, Bank of America) issued memos to their employees today stating that the recent bill passed by Congress will make it hard for them to ‘retain their talent‘.

I am very tired of hearing about bonuses being needed in order to retain their employees. The CEO’s of these institutions are living in a world that is far removed

Ken Lewis, Bank of America CEO

from ‘Main Street USA’. They continue to operate with funding provided by the U.S. tax payers, they have contributed to the mess this nation is now in, and yet they continue to feel they are worthy of outrageous bonuses.

Under normal circumstances these CEO’s and their employees are free to make as much money as they want. But, when they are responsible for contributing to the financial chaos we are now facing and they require tax payer money in order to keep alive then there is a ‘line in the sand’ that must be respected. And these CEO’s and financial institutions keep crossing the ‘ethical’ line in the sand.

Vikram Pandit writes in his employee memo:

[...]The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees.[...]

Ken Lewis writes:

[...]I am concerned about our ability to retain some of out most valuable employees. None of you (employees) deserve to have even more compensation taken away[...]

Cry me a river… if the employees don’t like the base salary they receive, which is already very healthy, then let them walk. Let them stand in line with their fellow Americans at the unemployment lines who they helped to put there in the first place.

Jamie Dimon, JPMorgan CEO

Jamie Dimon CEO, JP Morgan reassured his top 200 staff members that he “was actively engaging Washington on the matter“. Hey there Jamie.. must be nice to have friends in such high places of the Government that allow you to ‘actively engage’ them for your benefit. Ask the Americans on the unemployment lines how they feel about your bonuses.

The arrogance of these CEO’s is beyond any form of measurement. If these companies cannot operate without tax payer funds being injected into them then the only answer is for them to be left to their own devices. And if that means failure then so be it.