Eff The Banks !

Proverbs 22:7
"The Rich rules over the poor,
and the borrower is the slave of the lender."

In filing for Chapter 11 bankruptcy protection yesterday, Brian Tierney has failed to turn around the fortunes of the Philadelphia Inquirer and the Philadelphia Daily News. It seems that many newspapers are having trouble competing with other mediums for advertising dollars. Maybe we should give the publishing companies huge stimulus packages too.

Or is it that their old business models are flawed and outdated? Maybe some institutions need to go the way of the telegram.

I hate to be skeptical - but this latest bailout of the banks won't work either. Why? Well, there are many reasons - among them, the propping up the old banking system would just be flushing money down the drains of institutions that have outlived their usefulness (in their current form).

Who owns your mortgage? Tough question - but more than likely, the answer isn't 'your bank'. In most mortgages, there are several layers of ownership. You owe your bank, your bank owes a bigger bank, that bank owes some type of REIT (http://money.howstuffworks.com/personal-finance/real-estate/reit.htm ), and that REIT owes a larger foreign investor. Between each of these layers is a money manager, broker or firm who packages these loans into instruments to maximize banking profits. Add to all this the fact that each level charges the next highest level a fee in order to make a profit. So your $250k loan is floating around somewhere out there with a false $750k value. Is this your fault? Nope, the banks are just effed-up.

How did we give Citibank a $70 bn loan and the company now has a market cap of about $40 bn? How did we give Bank of America a $45 bn loan, and the company is now even worse off with a market cap of about $19 bn? The Layering Effect is the problem - and as long as this Layer Effect exists (and is subsidized by the Government (them) and paid for by tax payers (US)) we will never be out of debt. (This is why I favor giving the TARP money to Credit Unions - the ownership is local and the systems are more accurate and nimble.)

Leviticus 19:10 "And thou shalt not glean thy vineyard, neither shalt thou gather every grape of thy vineyard: thou shalt leave them for the poor and stranger..."

But the problems with the Housing Crisis are mostly due to the banks - not the borrowers. How? Take a look "Ethical Lenders" and their track record ( http://www.slate.com/id/2204583/pagenum/2 ) of being paid at a rate that is close to 98%... by the same "High Risk" borrowers. That these lenders are known as "Ethical" seems to imply that something is UNethical about the other banks. These Ethical Lenders provide the same types of people with good loans... and still make a profit!

If I robbed a bank... and while trying to escape, people stampeded and killed other people... I would be charged with some type of manslaughter. People like Madoff and Stanford should be charged with manslaughter charges as well. They should be given ten years in a maximum security prison for each dealth that resulted from their crimes. Let enough of these big time criminals learn to toss a few salads - that would be REAL banking reform.