21st CENTURY BANKING, RAPE, PILLAGE & PLUNDER
by Greg Forest
excerpted from the June 2011 issue of Hill Country Happenings
May 26, 2011

With the arrest of Dominique Strauss-Kahn, head of the International Money Fund (IMF), another criminal is dragged screaming into the media spotlight for a sexual peccadillo. This is just another example of how we, the “little” people, just don’t show up on the radar of these captains of banking and industry. “Captains” might not be the right word to use as these skippers have run our ships aground on the shoals of greed, malfeasance and fraud.

Looking at both domestic and international banking, we can see that things are not really getting better in terms of oversight. Even though the greatest financial crimes of history have been perpetrated, we find the banking industry thumbing their noses at the public and government. In typical Orwellian New Speak, when the wealthy and banks speak of “shared sacrifice,” they mean someone else. Congress may call for a hearing to bitch slap the bankers in front of cameras for the gullible rubes back home but, when all is said and done, these guys go back to what they were doing entirely unapologetic. As an example, to Goldman-Sachs the protocol for a Congressional inquiry is the same as an inquiry from a concerned investor – you lie. And the penalty for blatantly lying to Congress? None. The fix is in.

Whether you are robbing folks and sipping your Cristal in New York or Strasbourg, it makes no difference. We now live in a global economy. It was setup that way to assure the largest compliance of nations to global larceny. When taking a look at both U.S. Banks and Strauss-Kahn’s IMF, patterns emerge.

Laying the Stage – Bribery and Oversight

The first thing needed to exploit both the national and global economy are legislative assets (aka elected officials) that can be easily bought off and guided to bring about a regulatory environment so toothless and devoid of oversight that any chance of reigning in bad policy is all but impossible. As the recent Citizens United case underlines, the easiest way for banking cartels to deal with bribery is to legalize it. Political contributions to super PACs have no limit on size and, blessed be to the Supreme Court, entirely secretive with no public disclosure necessary, even from foreign sources. The secrecy part is important. Making huge donations in secret to candidates and parties that keep their lips sealed is important – it underlines the difference between a campaign contribution and bribery. Contributions are made aboveboard in daylight and bribes, by their dark nature, aren’t.

In domestic banking, to get what you are looking for you bribe legislators. In international banking, you bribe either the country’s dictator or the ruling party. Bribes are paid and concessions are made. Bankers view bribes as investments. They expect huge returns and get them.

Our Congress gets their bribes in the form of campaign support and sweetheart jobs after retirement from public life. Leaving Congress is much easier to bear when you can go right from the legislating to lobbying or serving as a “board member” of a large corporation. There are perks a plenty for the compliant retired Congressperson.

Define the Collateral or Property

In domestic banking in the last fifteen years or so, the golden goose has been the real estate market. Both the Right and Left were happily fueling the housing bubble. The Left because it gave them the patina of trying to put people in homes and from the Right because there were billions to be made in these risky mortgages. Why would banks want to underwrite bad loans? Because they won’t be the ones holding the toxic assets at the end of the day. They sign up the home buyer and faster than you can say, “outa here,” they bundle the mortgage into a larger portfolio and pass it downstream to the gullible investors managing your retirement fund. They make their fees, dump the loan and move on to the next sucker. They certainly aren’t going to be left holding the bag when the crap hits the fan.

The IMF works in the same way. If you have a Third World country with a natural resource you would like to own, you convince the leader of that country that those resources need to be exploited to the benefit of the targeted nation. While making your public argument, you make your bribe under the table. The IMF will make a lot of noise in the media about bringing the little nation into the family of “grown up” countries. If you want a nation’s bauxite for example, you tell the target nation that to maximize their exploitation of the resources, for the benefit of the people of course, infrastructure must be put in place. Rail lines, roads and shipping hubs must be created and cell towers raised. For access to the resource to global corporations, the IMF will make loans to fund the infrastructure necessary to dig every gram of bauxite from the land and ship it out.

Make Loans That Cannot Be Repaid

When a loan goes into default it is not the borrower who is empowered but the lender. The best way to get paid is early and in full. Make your fees up front and let other people downstream pick up the tab and mess. You got yours and everybody else can suck eggs. The people investing in these toxic mortgage portfolios and losing their shirts are not an issue. They are not even on the radar. You just sell short the portfolios and watch your profits go way up while screwing the folks you advised to buy this tripe.

The IMF follows the same protocol. Make loans to the Third World you know will default and when the note comes due and a default appears, you get to repossess the resources. Our tiny nation now has great roads from the bauxite mines to the coast for the almost exclusive use of the foreign exploiters. They are now saddled with debt and can no longer use the resources of their own land, having sold all the rights to the IMF and their buddies. When the people of our tiny nation get up in arms about it, the leader of the nation grabs his ill begotten bribes, banks them in Switzerland and moves to Paris to become the toast of the town. Thankfully the “little guys” are getting wise to this trick – a case in point being Mubarak getting his Egyptian assets frozen faster than he could get his Gulfstream out of Dodge.

Charge Fees and Commissions and Leverage Debt

The new banking powerhouses rarely make what we used to know as equity loans. They don’t want to be involved in managing equity portfolios. It is much easier to cut the deal, make your fees and commissions and walk away. There is no long term interest by the banks in the deal. The deal gets packaged up and sold off to other investors/suckers and the bank can wash their hands of the matter and get the junk off their books. Most of the recent mortgage crisis revolves around the banks covering their asses when they noticed their collateral was not even near the value of of the loan. As the banks are all in on it, they can’t sell this crap to each other so they have to go to where the suckers are – private investors and the government.

Blame the Victim

When called out on their shenanigans, the banks go to their playbook again blaming those who took out the loan. Nothing is ever mentioned about the fact that when the loan was originated, the bank knew the borrower would default before the ink was dry on the mortgage. So, who is to blame? The people who took out the loans and were promised that refinancing would be a breeze if the weight of the loan became unbearable.

The IMF works the same way. When an already impoverished nation defaults on the loan, they turn to the international bankers who gave them the loans. The bank looks at the nation’s assets and, having nothing left after the corporate strip mining of the country, declines to refinance. Another nation becomes insolvent and millions go hungry.

A fly on the courtroom wall during Dominique Strauss-Kahn’s trial might hear something like this.

“Your Honor, this “maid” was in my client’s hotel room uninvited and unannounced. When my client came out of the bathroom nude and saw this slut wearing a provocative uniform-type outfit with its hemline well above the ankles, he naturally assumed that this was a gift from the hotel management. This little trollop claims she protested my client’s advances and tried to fight him off. Well she protested in Spanish Your Honor. My client does not speak Spanish. In America we speak English. Is my client to be punished for not knowing the Spanish word for, “no?” These specious charges need to be dismissed immediately.”

When studying psychology and the pathology of mental health, you find there is a word for this kind of person, sociopath. Never have more people behaved as and aspired to be categorized as mentally ill. Learning to turn your back on your neighbors and society must be in the curriculum at Harvard Business and Wharton. Ethics certainly doesn’t appear to be.

But if the bankers appear to be pathologically evil, what does that say about the mental health of those of us who enable them? Why does a birth certificate seem more important than being robbed? It brings to mind the chorus of a song by Kristian Fjelstad,

We stood and watched the world, spin out of our frame of reference

And turn from vibrant color into black and white

We put faith in our machines, we put sawdust in our temples

But we never lie. I don’t think we ever lie.

The bankers beget the deception, we buy into it and it becomes standard procedure. The world becomes even darker than the place we witnessed before we put on our blinders. But we never lie.