Sunday, December 14, 2008

Banks and Your Information

As the United States Banking Industry continues to suck money from the Federal Treasury unrestricted they continue to farm out their back office operations to cheap labor in India, Pakistan and the Philippines. When these back office workers are assigned debt collecting duties for past due credit card bills they have access to American Citizen's personal financial information. Does any American feel safe knowing that this contingent of cheap labor has access to your Bank Account Numbers, Credit Card Numbers, Social Security Numbers, Phone Numbers, Addresses and income information?

Putting aside the fact that these Banks after accepting U.S. Taxpayer Money, continue their financial Ponzi schemes of leverage and trading exotic financial instruments that have no intrinsic value, why are they not hiring Americans in America at livable wages to conduct their business in the United States of America. The cause of the Financial Bailout was never explained to the American Public, there were teaser statements made that it was caused by 5% of the mortgages going into default. This can not possibly be true. Does any American believe that a mere 5% of mortgages going into default would cause the collapse of the entire Financial Industry in America and effect the entire world? The cause of the Financial Collapse and the necessary Bailout with U.S. Taxpayers dollars has its roots in the leverage and schemes that these Financial Institutions traded. They created Financial Instruments and leveraged them, sold them to each other and everyone took a piece. Their yearly profits looked good on paper, so they rewarded themselves with multi-million dollar bonuses at the end of each fiscal cycle. Just as Mr. Madoff's Scheme has recently unraveled, so too did the schemes of these Financial Institutions.

AIG is an Insurance Company. An Insurance Company collects premiums based on the risk that they would be exposed to should they have to pay the claim. The collected premiums is always enough to pay the yearly claims unless their is a catastrophe that would force them to pay a large percentage of claims. AIG was not in the position of paying an excessive amount of claims, so where did their go? Their money went into leveraged Credit Default Swaps that had no intrinsic value, as these instruments continued to be traded with each buyer and seller taking a percentage the assigned value was less and less, until there is no value left and someone is stuck paying the face value. Of course no institution could pay the face value of these instruments because no single institution ever received the face value of these instruments, each trader traded them on a 10% leverage and clipped a percent for themselves, how many times could these instruments be traded before someone is stuck holding the bag? Obviously, AIG, Lehman Brothers Citi Group and the like got stuck holding empty bags that did not contain any real assets that they needed to continue their operations. Mr. Madoff's Ponzi Scheme pales in comparison to the game these Banks were playing. Now they come to the Bush Administration with a story of woe, and being the good Republicans that they are, the Bush Administration decides that millionaires can not be forced in Bankruptcy, that is only for the Working Class, The Middle Class and the small businesses of America, so they provide these banks and millionaire executives with over 2 Trillion Dollars of assistance without any pre-conditions.

It would only be fair that if the United States Taxpayers who have worked their entire lives and payed into the collective that is the United States of America that these Banks and Financial Institutions would be required to use the money they are taking to rebuild the foundations of the AMERICAN financial system and hire AMERICANS and not ship the money they took from AMERICA off to India, Pakistan and the Philippines. These Financial Institutions are able to borrow money from the FEDS at less than 1% interest separate from the FREE money that they were given in the TARP program, they then turn around and charge AMERICANS upwards of 43.99% on Credit Card Debt, making a spread of over 42.99%. This is inherently wrong. These Banks are taking money from working tax payers for a song and charging them in sweat and blood. No One can expect the Bush Administration to face up to this problem and correct it, but everyone should expect the incoming Obama Administration to reveal the truth to the American People and require that these financial institutions put this money back into circulation in the AMERICAN Economy by hiring AMERICANS in AMERICA, and by providing, households and business with loans that are no more than than 5% above what they borrow it for from our Treasury.

As Americans who are at the bottom of this Ponzi Scheme perpetuated by the Financial Industry and condoned by the Republican Policies of the Republican Congress and the Republican Bush Administration with the silence of the Congressional Democratic Leadership, we should expect no less than a complete and truthful disclosure from the new Democratic Obama Administration and mandates that require the Institutions that accepted the Federal Money to hire Americans, put the money back into the Economy at reasonable rates, and to stop these schemes that benefit only their multi-million dollar salaries.

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