# Looting Main Street



## UncleJoe (Jan 11, 2009)

Here's a story from Looting Main Street : Rolling Stone that really shows the greed of the "Too Big To Fail Banks" 
It's rather long and contains some questionable language, but it tells the story of how mega-financial corporations reek havoc on their "customers" with a little help from corrupt local officials. Here's a little snipit :

And here's the kicker. Last year, when Jefferson County, staggered by the weight of its penalties, was unable to make its swap payments to JP Morgan, the bank canceled the deal. That triggered one-time "termination fees" of - yes, you read this right - $647 million. That was money the county would owe no matter what happened with the rest of its debt, even if bondholders decided to forgive and forget every dime the county had borrowed. It was like the herpes simplex of loans - debt that does not go away, ever, for as long as you live. On a sewer project that was originally supposed to cost $250 million, the county now owed a total of $1.28 billion *just in interest and fees on the debt.* Imagine paying $250,000 a year on a car you purchased for $50,000, and that's roughly where Jefferson County stood at the end of last year.


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## mosquitomountainman (Jan 25, 2010)

Please...Don't get me started on banks and credit card companies..........


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## pdx210 (Jan 8, 2010)

Most of the time banks don't screw people people screw them selves.
example, I have an employee that purchased a used car and paying 30% interest on it.

Predatory lending exists because many people are not financially smart, plan their expenses and most importantly many people don't understand the difference between a want and a need


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## UncleJoe (Jan 11, 2009)

pdx210 said:


> I have an employee that purchased a used car and paying 30% interest on it.


30% on a car loan?


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## Vertigo (Aug 6, 2009)

pdx210 said:


> Most of the time banks don't screw people people screw them selves.
> example, I have an employee that purchased a used car and paying 30% interest on it.
> 
> Predatory lending exists because many people are not financially smart, plan their expenses and most importantly many people don't understand the difference between a want and a need


Thank you for saying this pdx. It is my opinion as well, that people need to get themselves educated on what they buy, and what the attached strings are.

It just keeps on amazing me, how people who do not even know the difference between a credit card company and a bank, continue getting themselves new credit cards (without ever bothering to read how much interest there is on it).

If the people in general, would grow up, educate themselves on what 10% interest for 10 years means, the financial world would no longer provide those rediculous financial instruments.

V.


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## mosquitomountainman (Jan 25, 2010)

pdx210 said:


> Most of the time banks don't screw people people screw them selves.
> example, I have an employee that purchased a used car and paying 30% interest on it.
> 
> Predatory lending exists because many people are not financially smart, plan their expenses and most importantly many people don't understand the difference between a want and a need


I agree and disagree. Many people are not smart when it comes to financial dealings. We can blame the gov't. all we want for the current financial crisis but if people hadn't taken up the offers of the financial institutions the loans wouldn't have been made.

But when it comes to banks there are some problems there too. I remember years ago in Kansas when land prices skyrocketed and crops were bringing in record prices. Bankers actually called on farmers there encouraging them to take out loans using their paid off land for collateral for new loans to buy new equipment and buy more land before the prices got even higher. About three years later land and crop prices had gone back down and the bankers foreclosed on most of those properties. Who was to blame? Both parties to an extent but those with the loans got no slack from the banks. It was a very personal tragedy to some as they lost farms that had been in their families for years. It impacted mainly those in the 30 to 50 year-old age bracket. The older folks knew enough about banks and bankers to distrust them and they usually were looking at retirement soon and didn't want to take the risk.

Banks/bankers have no mercy. When they say to get with them and work something out it's a lie. They just threaten foreclosure if you don't pay up. My family wasn't affected but other's I knew were. It wasn't the bankers who lost their homes and careers.

Credit cards are even worse. The ''fine" print is so small on a card application that old eyes can't read it and so incredibly convuluted that only a lawyer could figure out what it means. I got caught once by a bank that used their card for overdraft protection. What they didn't tell me and I didn't catch in the fine print was that when I used it that no payments would be made on the "cash advance" until the other balance was paid off. The interest rate was also higher on the cash advance. The only reason I used it was to avoid having to drive to the bank (70 miles each way) and deposit cash. When I talked to the bank about it they just shrugged and said it was all spelled out clearly in the card agreement. I paid the thing off and switched banks.

I've got lots of other examples and no, no one told them to borrow on credit cards but the card companies print the terms up in such fine print with such obfuscation that they know people aren't going to wade through the "contract." They aren't any better than loan sharks and in my opinion should be lined up and shot - or fed to the lions. (I told you not to get me started on this subject.) They prey on the weaknesses of others like a child molester picking his next victim. Then when they get in trouble they want the rest of us to bail them out EVEN AS THEY FORECLOSE ON THE PEOPLE WHO'LL BE FOOTING THE BILL TO BAIL THEM OUT!!!!! (Thank you Obummer and your demorat majority who so carefully watch out for the little guy.)

We can debate all we want about needs verses wants but the banks and businesses advertise to create desire so that people will purchase on credit then have the nerve to blame the consumer. Can you imagine what a banker from the 50's would say about practices of modern lending institutions? If it wasn't for the FDIC the people would have lynched a lot of bankers for defrauding them of their money. But because the funds are "insured" it isn't money out of our pocket so we don't get upset about it. But the truth is that it IS money out of our pocket because we are the ones paying off the bad loans and bailing out the failed banks.

On second thought, shooting them is too easy. Lets go with feeding them to the lions.
:rantoff:


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## Vertigo (Aug 6, 2009)

mosquitomountainman said:


> What you said above


I will not disagree with your statement that there are things that ought to be changed. In my opinion, banks need to become 'boring' again. It's the higher risk taking and trying to provide services to everyone that got us into this mess to begin with.

OTOH, students (or other people) going into serious credit card debt, while not having a job, purchasing tv's, cars, consumer appliances, drinks at the bar,... is also completely insane.

And, concerning those farmers who did not read their contracts, I am just stunned... Most farmers I know are of the most suspicious people concerning money I know and it is in my opinion still their fault for not reading the fine print. I have learned from my parents from the day I could write, that any piece of paper I sign, should have to be read from top to bottom, both sides and from the fine print to any attachments. No matter who is offering you that piece of paper. I will even check a piece of paper my parents will give me. (Not that I do not trust them to keep my best interests at their heart, but it is good practice)

If you are unable to understand what this or that contract is about. Then go ahead and ENLIGHTEN yourself. By researching it on the internet, by calling a consultant/lawyer (for big contracts) or just plainly asking someone of your family or friends to check it for you. You are bound to have at least someone you know who can be considered a wiser/smarter person than you. I have many who are smarter/wiser than me for that matter.

Best regards,

V.


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## mosquitomountainman (Jan 25, 2010)

Vertigo said:


> OTOH, students (or other people) going into serious credit card debt, while not having a job, purchasing tv's, cars, consumer appliances, drinks at the bar,... is also completely insane.
> 
> And, concerning those farmers who did not read their contracts, I am just stunned... Most farmers I know are of the most suspicious people concerning money I know and it is in my opinion still their fault for not reading the fine print. I have learned from my parents from the day I could write, that any piece of paper I sign, should have to be read from top to bottom, both sides and from the fine print to any attachments. No matter who is offering you that piece of paper. I will even check a piece of paper my parents will give me. (Not that I do not trust them to keep my best interests at their heart, but it is good practice)


First, any loan oficer or lending institution that would lend money to anyone without a job or collateral should go bankrupt (and maybe be tarred and feathered as well).

Second, the farmers I used as an example made the mistake of listening to the "financial experts" who told them that land prices would continue to rise and they needed to invest now to take advantage of it. They carefully drew up proposals based on the continuing upward trend foreseen for crop prices, land and machinery.

The problem was not in misunderstanding the contractual terms of the loan. It was in listening to faulty financial advice from the banks. And what happened when the financial advice proved to be wrong? The banks took the land and farms.

It was a business move on the banks' part. They saw the chance to make big bucks on the loans they wrote and turned to aggressive marketing to enhance their fortunes. They gave the advice they probably truly believed was right but still, the consequences to the banks for being wrong was far less than the consequences to the farmers who swallowed their line of bull. And their advice was motivated by greed.

It did hurt some of the banks too and some investors lost a great deal of money in the bank failures. (Have you ever tried to sell farm equipment when all of the other farmers were in the same financial squeeze as those going broke? It won't bring much.) But the real losers were the people who lost their farms and the taxpayers who had to bail out the depositors.

Do you realize that bailout money was used to give bonuses to the people who sought the high risk loans? They should have been fired along with their CEO's.

There's plenty of blame to go around but the credit card companies are like child molestors patrolling the playgrounds looking for their next victim.

Of course, that's just my opinion. (I said I should never have gotten started on this issue.)


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## drhwest (Aug 7, 2009)

The main point of the article is about corruption, not about people defaulting on credit cards or reading fine print. If you rack up debt on credit cards buying frivolous things or purchasing a used car that you essentially can't afford, that is on you. What we are looking at here is corporate greed. People lost their jobs, not because credit cards or loans, but because of corrupt politicians and bankers that were willing to make a profit off of others with no regards to their continued welfare. 
I have heard people on here rant against regulating banks and businesses and saying things like "a free market will correct itself", but what does that all mean? If a free market correcting itself entails destroying the livelihood of millions, where's the good in it? I personally think the government should stay out of our personal business as much as possible, but I believe that it should guarantee that corporate greed does not infringe on anyone's personal well being. If you look at what ENRON did to the state of California, it was a tragedy. A tragedy spawned from the deregulation of power companies and unchecked and fraudulent banking practices.
I have worked with criminals and nut jobs for almost twenty years now and I feel that I can say with some authority that greed is a motivator that needs to be kept in check. I never hear anyone crying foul when a scumbag breaks into their home and steals their television. People love the laws that prosecute those guys. It's a different story when a pharmaceutical company jacks up the price of a drug by 200% for profit gain alone or some other price gouging ploy. That's just business. I say it's high time we hold everyone accountable for their actions. From the lowly ******* who doesn't care about balancing his checkbook to the CEOs of fortune 500 companies who get multi-million dollar bonuses from tax payer bailouts.


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## GreyWolf (Mar 17, 2010)

Having worked in the "Trust Department" for one of the largest banks in the U.S. IMHO everyone shares the blame. In the 1990's politicians pushed for "Affordable Housing" and required banks and mortgage copanies to lower the qualifications for mortgages and even provided credits for first time home owners (which is still being offered today). While banks and mortgage companies had to comply or face lawsuits they took advantage of the situation and turned it into increased profits by awarding non-qualifying loans to people they knew could not afford it. People took out mortgages with no understanding of points, adjustable rate mortgages and often without reading the pages of contracts they wre signing jsut as they have done with credit cards with their introductory rates and their twisted means of calculating interests rates. 

Good old common sense goes a long way - You are the only one who knows your situation and really cares about your well being so never take the advice of anyone who stands to make money out of a deal, even a banker. Remember banker's don't have a heart, they have thumping gizzards.


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