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However, over the last 3 months, small business loan approval has increased
so you're just using short-term fluctuations, and attempting to extrapolate that into a longer trend?
Here's some relevant information from that article:
Quote:
As of July 2012, big banks (that’s defined as any bank with more than $10 billion in assets) have approved 11.3 percent of small business loan applications, according to Biz2Credit Small Business Lending Index. That’s an abysmally low percentage, though, as discussed below, it actually shows some improvement.
Speaking to Crain’s New York, Rohit Arora, the CEO of Biz2Credit, said that the percentage should be between 30 and 38 percent. 20 percent is a huge difference when we’re talking about loans that could very well put the economy back on track to success.
tell me, who do you think has the preferred position in this food chain? :
People are easily swayed. They aren't very well informed.
-I wonder why payday lenders don't come under more scrutiny. They charge far higher interest rates than banks. 90-300%?
Traditional banks (Chase, Wells Fargo), whether you like them or not, they seem much more customer friendly, tighter regulated. Banks are like the big oil companies. Everyone loves to hate them.
-Maybe they are hated because they're so big and faceless. I don't think small time, community banks from 20-30 years ago were as hated. Maybe its a backlash against big businesses in general (like Walmart).
I think banks, like Chase, Bank of America, could do a much better job of putting a face to your branch visit. Do you know the manager? Do you know anyone there, or are they all kind of nameless? There are no relationships anymore.
Plus all the fees (where did free checking go?). I think the business model of the last 20 years has made it customer unfriendly.
The US department of justice (DoJ) detailed how HSBC, Britain's biggest bank, allowed drug traffickers to launder billions of dollars in the US and billions more to be moved across borders to countries facing sanctions, such as Burma, Cuba and Libya.
The department spared HSBC a criminal prosecution only because it considered the bank too big to prosecute. Listing a catalogue of mistakes by HSBC over almost a decade, the DoJ admitted that "collateral consequences" were a factor in its decision not to pursue criminal charges. Those consequences, it said, could have included a ban on doing business in the US, resulting in huge job losses.
Money laundering. Perhaps we should drop the term banksters and refer to them as we did in the old days... gangsters.
To date: Mortgage meltdown, LIBOR fixing, and money laundering. Too big to go to jail. I can't wait for the next revelation.
EscortRider, what was your question?
I did read the article to which you linked, Lenora, and I have read about the same issue in the Los Angeles Times as well. My disgust with the conduct of HSBC is total. One cannot defend allowing drug cartels to launder money. However, as far as I know, that particular heinous allegation has not been made against any U.S. bank. And I acknowledged in the OP that the U.S. banks have plenty of guilt among them for other things.
There is a logical fallacy in pointing to HSBC and saying, "Look at how the big banks operate, look at what they do". It is what one big bank in Britain did. That is a tricky point to make because I can be made to look as if I am whitewashing all the big banks, and that is not what I am doing. In fact, I appreciate the link and the post, Lenora; your post is relevant to the thread and the conduct it describes is beyond the pale.
If there is one very slight positive take-away in this dismal and dreary scene, and that is that HSBC did not get away with its conduct entirely; the fine levied by the U.S. is almost two billion dollars. Again, I am making a tricky point; I am not saying that the punishment is adequate to the crime. But I am saying that the punishment is more than negligible.
I did read the article to which you linked, Lenora, and I have read about the same issue in the Los Angeles Times as well. My disgust with the conduct of HSBC is total. One cannot defend allowing drug cartels to launder money. However, as far as I know, that particular heinous allegation has not been made against any U.S. bank. And I acknowledged in the OP that the U.S. banks have plenty of guilt among them for other things.
Not good enough. HSBC is one of the largest banks operating in the U.S. with at least 10 wholly owned subsidiaries in the U.S. Ask any homeowner who lost their home to HSBC whether they give a rip that HSBC's "parent" is located in GB.
There is a logical fallacy in pointing to HSBC and saying, "Look at how the big banks operate, look at what they do". It is what one big bank in Britain did. That is a tricky point to make because I can be made to look as if I am whitewashing all the big banks, and that is not what I am doing. In fact, I appreciate the link and the post, Lenora; your post is relevant to the thread and the conduct it describes is beyond the pale.
You are missing the forest for the trees. How many big banks are there? It would be nice if we could say, hey, it's a British thing. I don't think so. "U.S." big banks also engaged in the LIBOR rigging. And as we all know, LIBOR is a British thing. As noted in my earlier post, all of the big banks have tremendous power.
If there is one very slight positive take-away in this dismal and dreary scene, and that is that HSBC did not get away with its conduct entirely; the fine levied by the U.S. is almost two billion dollars. Again, I am making a tricky point; I am not saying that the punishment is adequate to the crime. But I am saying that the punishment is more than negligible.
Actually, the punishment is negligible. It amounts to less than 1.5% of HSBC's net assets as of Dec. 2011. (I'll take a chance here and predict that the fine will be 1% or less after the numbers come in.) This, my friend, is not enough to prevent any business from continuing to engage in nefarious or negligent conduct. To make matters worse, the criminal acts took place for nearly a decade. I suspect even Al Capone would say HSBC make an excellent return on its decision to launder the money.
Yes, I do get it that the greed and sleaziness of big banks were one factor in the economic meltdown of this country in 2007/2008. I, too, retain a bad taste in my mouth about that.
And yes, I also get it that people whose homes were foreclosed on would resent the banks who gave them their loans which shouldn't have been granted in the first place, in many cases.
And yes, I also get it that the resentment of the "too big to fail" banks and their federal bailouts is a natural thing even though the bailouts have been largely repaid, and I even share that resentment. Hundreds of smaller banks were allowed to fail, so where is the fairness?
Yes, I too have moved some of my banking business to locally owned banks and credit unions as a statement of my views.
However, having said all that, I have been brought up short time and time again by the virulence of the hatred of the big banks as expressed here on City-Data, both in the Economics main forum and in the Personal Finance sub-forum. I am talking about foaming-at-the-mouth, exaggerated, bitter anger. Who can help me explain it? Have some people who have lost their jobs and suffered greatly on a personal level focused on the big banks as a sole cause?
There must be something more that I am not taking into account.
You had answered your own question.
Hubris and now our reality of a two-tiered legal system is why. The more question you should ask is what we are prepared to do about it, just because you rise up and throw out a system, doesn't mean that will be good. Do we replace or reform it? Do you have enough compassion to give justice to those who were part of the former system? What PRECEDENT do we leave behind.
Those are the questions that need to be asked above all.
Real World People get Foreclosure -- from these same Bailed Out Banks.
Nothing New under the Sun in these 2000 + years . . . .
=========================
Therefore the Kingdom of Heaven is like a certain king, who wanted to reconcile accounts with his servants. When he had begun to reconcile, one was brought to him who owed him ten thousand talents. But because he couldn’t pay, his lord commanded him to be sold, with his wife, his children, and all that he had, and payment to be made. The servant therefore fell down and kneeled before him, saying, ‘Lord, have patience with me, and I will repay you all!’ The lord of that servant, being moved with compassion, released him, and forgave him the debt. "But that servant went out, and found one of his fellow servants, who owed him one hundred denarii, and he grabbed him, and took him by the throat, saying, ‘Pay me what you owe!’ "So his fellow servant fell down at his feet and begged him, saying, ‘Have patience with me, and I will repay you!’ He would not, but went and cast him into prison, until he should pay back that which was due. So when his fellow servants saw what was done, they were exceedingly sorry, and came and told to their lord all that was done. Then his lord called him in, and said to him, ‘You wicked servant! I forgave you all that debt, because you begged me. Shouldn’t you also have had mercy on your fellow servant, even as I had mercy on you?’
But whose money are we talking about here? There is a misconception that Wall Street is composed of rich people gambling with other rich people’s money, but this couldn’t be further from the truth. The secret that Wall Street doesn’t want anyone to know is that hedge funds comprise less than 5% of assets in the stock market. The real big players in the market are individual households and the pension funds, mutual funds, university endowments, charities and foundations that are entrusted with your savings, donations, retirement funds and 401(k)s. They are the owners of trillions and trillions of dollars invested with Wall Street banks. So, in effect, you are the big player in the market. And when a Wall Street bank overcharges a teacher’s retirement fund or a charity on a complex product, or misprices the Facebook IPO, causing billions of dollars of wealth destruction, or helps the governments of Greece and Italy cover up their debt, or rigs interest rates affecting trillions of dollars of loans, it ultimately affects you directly and comes out of your pocket.
But how does Wall Street make so much money anyway? Surely there are times when it must lose? Actually, not as often as you might think. Consider this: There are certain quarters when a Wall Street bank makes money every single day of that quarter in its trading business. Yes: 90 days in a row. One hundred percent of the time, it generates a profit. Bank of America has pulled off this amazing feat. That is like batting 1.000. A perfect record. How is this even possible?
Two words: asymmetric information. The playing field is not even. The bank can see what every investor in the marketplace is doing and therefore knows more than everyone else. If the casino could always see your cards and sometimes even decide what cards to give you, would you expect it ever to lose?
Here’s how it happens: Because Wall Street is facilitating business for the smartest hedge funds, mutual funds, pension funds, sovereign wealth funds and corporations in the world, it knows who is on every side of countless trades. It can effectively see everyone’s cards. Therefore, it can bet smarter with its own money. Worse, if Wall Street can persuade you to trade a custom-made and impossible-to-understand structured product that serves the firm’s needs, it is as if your cards have been predetermined. There is little risk that the casino will lose in this scenario.
Also consider where the gambling takes place. In a real casino, it is on a casino floor with cameras all over the place. Even if you don’t like Las Vegas gambling, it is regulated. On Wall Street, by contrast, the gambling can be moved to a darkened room where nothing is recorded, observed or tracked. With opaque unregulated derivatives, there are no cameras. In this smoke-filled room, there is maximum temptation to try to exploit unsophisticated investors and conflicts of interest. And this temptation and lack of transparency are what led to the global financial crisis in 2008.
Finally, think about the dealer. Your banker might seem objective — like a friendly casino dealer who jokes around and is on your side — but there are times when he or she might be trying to steer you toward the thing that makes the casino the most money. If you were playing blackjack and you had 19, would the dealer ever tell you to hit? Sometimes, on Wall Street, he urges you to take another card.
With all these advantages, how can Wall Street ever lose? Even real casinos don’t make money every single day of the quarter.
My disgust with the conduct of HSBC is total. One cannot defend allowing drug cartels to launder money. However, as far as I know, that particular heinous allegation has not been made against any U.S. bank.
I did read the article to which you linked, Lenora, and I have read about the same issue in the Los Angeles Times as well. My disgust with the conduct of HSBC is total. One cannot defend allowing drug cartels to launder money. However, as far as I know, that particular heinous allegation has not been made against any U.S. bank. And I acknowledged in the OP that the U.S. banks have plenty of guilt among them for other things.
There is a logical fallacy in pointing to HSBC and saying, "Look at how the big banks operate, look at what they do". It is what one big bank in Britain did. That is a tricky point to make because I can be made to look as if I am whitewashing all the big banks, and that is not what I am doing. In fact, I appreciate the link and the post, Lenora; your post is relevant to the thread and the conduct it describes is beyond the pale.
If there is one very slight positive take-away in this dismal and dreary scene, and that is that HSBC did not get away with its conduct entirely; the fine levied by the U.S. is almost two billion dollars. Again, I am making a tricky point; I am not saying that the punishment is adequate to the crime. But I am saying that the punishment is more than negligible.
As usual, I respect your balanced and pragmatic view! Although, I find it doubtful any large banking entity is not involved in money laundering on some level, due to the vast amounts of money involved.
Last edited by shaker281; 12-20-2012 at 12:44 AM..
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