As if our faith in investment bankers and their institutions was not already standing on extremely shaky ground, if not actual quicksand, we now see yet another example of outrageous greed raising its ugly head, once more.
When I heard the amount of the record-breaking fine handed down to Barclays PLC of London, for rigging global interest rates on investments worth about $350 trillion, I knew we had to be talking about something super sleazy. Barclays was fined almost $500 million; that's half a billion dollars, people! Additionally, when you realize that such institutions and their senior executives appear to shrug it off without any action taken, you realize (a) how staggeringly rich they all are, and (b) that the culture of corporate greed in banking has not been diluted by the global financial disaster that began in late 2008.
The behavior of these money-making money-grabbing "professionals" is nauseating, and in many cases, even when caught and exposed, they escape with a slap on the wrist and their bonuses intact. It is disgusting. At least in this very high profile case, heads are rolling. Under mounting political pressure, CEO Bob Diamond (what an interesting surname!) was forced to resign, and he is even under scrutiny to follow through on his stated intent to hand back part or all of his $40-50 million bonus money, if necessary. When questioned on this by a parliamentary committee, he took the equivalent of the fifth, stating that "it would need to discussed by the board". Uh-huh.
In a move similar to Jamie Dimon of JPMorgan (on which I commented in a past blog), Diamond refused to take the blame, and hoped to ride the stormy waters then go back to his job and business as usual; but he was dreaming. He was followed by Barclays COO Jerry Del Missier on the same day. Speaking of Dimon (Dimon and Diamond, very intriguing!), his position is not that secure apparently, especially given that the actual trading loss that caused his firestorm has now quadrupled since. Some are saying that Dimon either outright lied to regulators and the public, or if he was so ignorant of it, then he is incompetent, and in both cases, he has to go. He's definitely a story to keep an eye on.
What continues to stun me is the bleating of some of these terminated executives who get a slap on the wrist, and get sent home with all their wealth and a recent bonus and a golden handshake intact. They should go home, lock the doors, count their money and then their blessings. Compared to Joe Public, they are in heaven. They are free, they are rich, they have a retirement mapped out. In my opinion, losing their jobs is not enough. There should be criminal charges that can be laid against the beast of out-and-out greed. Apparently, UK regulators are considering the possibility of filing criminal charges against Barclays, and I think it is necessary as a deterrent. These types care about money, then more money, then tons of money, then ten times more money, and they care not at all about the people whose money they are playing with and putting at risk.
The image of the banking business was bad enough, and recent scandals after the financial crash and the spotlight that it brought onto the big banks just underline the fact that nothing was learned, and that greed is still alive and well. The beast was double-headed, of course. The greed of bankers, coupled with the greed of "normal" people to live in houses that were four times bigger (and equally as expensive) than needed, with all the trimmings, when they could not afford it, was a major cause of the mess we are all now in. It is an ugly self-serving double-headed beast, and it gorged itself festively.
The introduction of new complex financial instruments was the red flag that was missed by almost everyone. They are not financial "instruments' in my opinion, they are weapons. They are trickery. Magic. New "tools" for attacking the enemy, other financial institutions, and raping them blind out of vast amounts of money. Don't even bring up "instruments" such as mortgage backed-securities and credit default swaps: they are simply trojan horses with the devastating power of an armored tank. They can literally bring gigantic financial institutions down to the ground, leaving only a pile of bricks and glass and metal sitting on top of the foundations. Even insiders admit that most of the people marketing and selling such complex "instruments" did not even understand them, themselves!
Shed no tears for Bob Diamond, and if Jamie Dimon gets forced out, ditto. Barclays? They are laughing all the way to the (their own) bank, and they could care less. Fire this CEO, bring in that one, do some blah-blah about tight regulation and watchdogs on the board, let the storms fade, then in a year or two when he or she is super cocky and equally rich, he or she will do some dodgy things to make us more money. We will roll with it, then when it comes out, we fire them next. Simple. Functional. Business as usual.
It is time, dear friends, for criminal charges with the threat of incarceration and loss of one's own wealth to be levied against these financial "criminals", in order for things to be cleaned up. Then again, Bernie Madoff was sent to jail, and nothing much seems to have changed. Money is an addictive drug for such types, methinks, and like a heroin addict, they will step over their best friend or their own mother to get their next fix. Nothing gets in the way, and definitely not emotion or morals. It is a clinical need, arising out of a clinical greed.
In an ironic return to earlier times, cash has once again become a key asset. All the risk and sleaze involved in placing one's money with immoral institutions leaves a bad taste in one's wallet, especially when you might have lost the majority of your retirement savings at the hands of them. This is unforgivable. Maybe it's time to start hiding our wealth where we used to put it: under the mattress?!
Hmm, all this talk about nasty old money has quite worn me out, I am afraid. I think I will turn over for a power nap, on my new memory foam mattress. It's the new one with the secret compartments for storing one's wealth. Trust me, you sleep so much deeper and way more comfortably knowing that your money is safely in your dreams with you, beneath you. Cash is a much softer cushion than some ever-changing numbers on a computer screen! - Kevin Mc
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