21:12

21:12 & Avarice 1c

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Gosh, where the heck do you start with the revelations of the financial institutions over the past couple of years? I suppose they all first came to infamy with Jesus overturning the tables of the Money Changers (Matthew 21:12) in a temple in Jerusalem, accusing them of turning the temple into a den of thieves. I am not sure their reputation has improved much, as the Money Changers became banks and stock markets, exchange rate gamblers and commodities exchangers. In 2000 years things haven’t changed so much.

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However, I have to concede that post WWI and then WWII there was a period where the Bank and its manager, was at the centre of many a community, a figure of sincerity and honesty, even revered as a shining example of scrupulous rectitude. In those days you had to go and see the Manager if you wanted a loan and had to have your Father or another long standing account holder vouch for you; even then you had to be approved. You started off a savings account, often with the Post Office, then when you had your first job you went with a senior member of your family to ask the Bank Manager if you could open a chequing account. Even with this account the Manager could refuse or ask for another long standing account holder to act as guarantor, boy have these days changed. Then the financial industries were freed from the shackles of Government restrictions, financial industry and stock markets worldwide became accessible to the masses under Thatcher and Regan (both sides of the ‘Pond’). What they didn’t know, and no one could have foreseen, was that these once proud bearers of the Queen’s Warrant were to tip the entire world into the deepest, darkest pit of recession, the like of which the world had never seen.

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There were more people to be affected by these organisations than were killed in all the wars since 1066. Billions of people across 6 continents, all feeling the cold, bitter winds of this seismic shockwave which would obliterate 100’s of thousands of businesses and millions of personal finances. As the world watched the financial institutions became global gamblers, rising to new heights of greed that had not been seen before – EVER! They became capable of breaking or making a Country and found ever more complex ways of making money from debt. We reached an era where borrowing money was so easy; it was almost forced on people through the post daily, based on commission for the sale of money to people via loans. However, there was no thought as to whether people could repay the money, whether they were a good risk, and gluttony for commission was the driving force. Even the financial institutions started to borrow huge amounts of money, BILLIONS, off each other to give more money to people in the form of loans and mortgages.

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The pyramid of cards was set, all it needed was for one large institution to have a large number of people defaulting on their loans/mortgages and then the institution would default on their loans. Then banks would collapse one after another and descend this world into a financial crisis the like of which had never been seen before. No one in these institutions believed that this would ever happen, the power of the banks would iron out any problem that could occur and they paraded as strutting peacocks resplendent in all their wealth/power. I personally don’t even think it occurred to any of them working in these houses of greed that anything could go wrong. They never even realised there was a limit to this wealth they were accruing, or should that be the debt they were amassing. Money had blinded them to what could happen, and we would all pay the price.

1o The first crack that occurred in this unshakable faith that the only thing possible was to make money was when the Northern Rock collapsed in 2008; this being a mere1s drop in the tsunami of debt that was about to crash on every continent in the world. Then across the ‘Pond’ Lehman Brothers imploded with debt by September 2008, and this was followed by every bank either closing or being supported by their Government, the cards not just collapsed but had been eradicated. The financial world was in chaos and totally, utterly changed for ever. But the real victims were the individuals and families who folded on mortgages and loans they should not have been granted in the first place. Then the wave took down businesses as banks called in loans and overdrafts, operating capital that was the life blood of commerce. Businesses were thrown to the wolves and bankrupted as banks went from one extreme to another, went from excessive lending to not lending at all. The daddy of recessions that eclipsed all previous recessions was born and ravaged the land like some unstoppable pestilence. Every economy in the world was affected to a greater or lesser degree:

1rNorth & South America

Europe and the Euro Zone

Russia and Africa

Parts of the Middle East

Large parts of Asia

Australia and the South Pacific countries

All were hit and had their economies devastated, which ironically allowed China and India to emerge as increasing productivity and positive balance economies that expanded, markets that had money to purchase. 1p

But as the economies around the world, which meant austerity for most in each country, threatened even the multifaceted market place of the Euro Zone as Greece, Spain, Cyprus and even Italy became unable to pay back their debt; more and more came out about the real dealings of the banks, the real greed they had: 1u

First was the miss-selling of pensions, by the million, pensions that would never give people the retirement income they had promised at the point of sale – again this dishonesty was fuelled by sales people being on commission only; 1v

Then there was the miss selling of loan insurance, again driven by commission based sales forces that cared not what they said or promised in the pursuit of money; 1w

Let’s not forget the fixing of LIBOR interest rates across the world as long as the banks benefited and their stock market representatives earned, AGAIN, more commission; 1w3

The miss selling of variable interest rate loans that devastated many a small business and continues to do so due to the small print conditions, again driven by a commission only sales force – are we noticing a theme here!; 1w2

But we must not forget that through all the devastation and chaos they caused, they continued to give themselves bonuses totalling  billions of pounds a year, include millions in golden handshakes when people were caught out by the media and resigned; 1x

None of the banks pay the corporation tax of ‘smaller’ companies, and in fact Barclays were paying just 1% in tax yet disclosing multi-billion pound profits; 1b

I have saved the best for last. When an individual is caught laundering drug money they go to prison for a very long time and have ALL their assets seized. When a bank is caught laundering drug money they get a fine that they can pay out of their reserves without an issue, they only have to increase their bank charges by a penny to recoup the money. But worst of all not a single person is charged, not a single executive brought up on charges; binary-options-news-caricature-hsbc-dirty-money-laundering-service

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The thing that really bugs me though is that the Government do nothing; they could easily make sure such practices are stopped but they know they need the donations the banks make to the political parties & elite echelon. The ruling political class tinker round the edges to give the impression of being tough but it is clear this is for show only, nothing has changed in reality. The nest thing the Government could do is to outlaw selling via commission led schemes when it relates to financial based products, and cap these obscene bonuses. This in some way would help reduce the chances of miss selling and greed becoming the main focus rather than the customer.

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But as we wait to see what else unfolds regarding the banks, I just know there is more to come. The 6 main UK energy companies are being investigated according to MP Caroline Lucas “for acting as a cartel and suspected of price fixing” (none of which is proven at the time of writing). But it draws into focus that we have moved into an era where corporations govern the world behind the scenes, they hold the real power. Perhaps it is not just the banks we need to keep an eye on as 2013 rolls out?!?!

1z

Yours

Jonathan Wade

Smiling Cat Ventures and Innovations Group

 

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