Wednesday, May 22, 2013

How to Exact Your Toll of Revenge on Bankers

Listening to the Bill Burr podcast, one of his common refrains is to rip on the bankers. He recently bought a house and realized that he more or less signed away his life for 30 years.  However, like most teens-50 somethings, he has a very simple understanding of economics and because of this defaults to blaming a handful of bogie men for the condition of the US economy, bankers being the most prominent.

Like blaming "big oil" or "evil corporations," he doesn't really know what he's talking about.  To figure it out would take too much time and effort, and since it makes simple logical sense in his world view of economics, his ire and hatred is directed towards bankers.  However, unlike "evil corporations," "corporate executives," and "big oil," Bill Burr, and every one who disproportionately blame bankers for the ills of our country...

are right.

Though accidentally right, I am here to tell you now, after working in banking for nearly 20 years,  Bill Burr and everybody else who blames bankers and the banking industry for our economic problems today are right.  Bankers are the verminous scum you suspected them to be and you should have every ounce of contempt, despisement and hatred for them.

Are there some good bankers?

Of course.

Are there some banking executives that truly are there to make good loans and grow the economy?


But in my experiences such quality people account for less than 15% of those employed in the banking industry.

For the most part, bankers and banker-eqsue types fall into two categories.

Dumb and evil (and sometimes both in a Venn Diagram sort of way).

Dumb bankers lack the intellect and mathematical skill to fully analyze and assess the quality and risk of loans they are making.  They have practically no knowledge of accounting or financial analysis and out themselves rather quickly by being the "rain maker" or "salesman" (or most commonly admitting to playing high school football).  They're always "in it for the deal" or "trying to find a way to get it done."  In reality they are simply that.  A knowledgeless salesman trying to get a commission on a product that is flawed to a person who is unlikely to pay them back.  They don't care about loan quality, they don't care about their clients, they don't care about them employer, and (since the banking industry is backed up by the FDIC and Fed) they don't care about the taxpayer.  They have no other skill and very much like other pure-sales jobs, quantity is quality because they get their commission.  Again, not because they're evil, but they're too stupid to connect the dots between a taxpayer bailing them out and the crappy loans they constantly bring to committee.

Evil bankers can be stupid as well, but typically know, or at least don't care, what they're doing.  They KNOW the client isn't going to pay them back.  They KNOW they're condemning the client to file for bankruptcy in the future.  They KNOW they're financially crippling their clients, their employer and the nation, but they just plain don't care.  They're going to get their commission regardless of morality and will sell anybody under the bus if it financially benefits them.  They view themselves better and more valuable than most people and is again why (I explain in "Worthless") most finance majors are finance majors because they are too lazy to  study calculus, but still want to make the salary of an engineer.    Worse still, in booming times when it's nearly impossible to NOT make money, they charter their success to their "intelligence" and not the massive macro-economic forces behind that success.  They buy luxury cars they can't afford, houses they can barely pay for, and trophy wives sure to learn the difference between debt and equity spending when they invariably divorce.

In short, it is not only perfectly normal, but it is your right to hate, loathe and wish the utmost of atrocities upon most bankers.

Of course "the utmost of atrocities" would largely fall under "illegal."  Much as I would like to hunt down bankers I personally know and release an unimaginable hell upon them, I can't for it is illegal.  However, that doesn't mean you, I or anybody else can't exact our toll of revenge from the banker scum, especially in a legal matter.  And that is what I intend to show you how to do today.

Understand that while you may think bankers are sitting up top some sky scraper, smoking cigars on a mahogany desk, that is the furthest thing from the truth.  The majority of bankers are not your "Goldman Sachs" types living it up and whooping it up with other people's money.  The vast majority of bankers are miserable people, who just like everybody else, has every day problems.  But worse for them (and this where your revenge comes in) is the fact they work in banking, and this makes their lives miserable.

First, the banking industry is different and unique from most other industries in that it constantly gets bailed out.  However, there is a negative consequence to that.  Recessions, much like your liver, filter out deadweight and underperforming companies and people.  If you can't provide a good product at a good price, booming or busting economy, you simply go away.  This "survival of the fittest" aspect of economics is not only a law, but ensures that only the most competent, efficient and productive people remain, getting rid of the losers.

However, in bailing out the banking industry this "purging" or "purification" process never takes place and crappy bankers, from crappy banks get bailed out and/or simply go down to the next crappy bank to start a new job.  In other words it would be like you eating some salmonella-infected food, which your body promptly vomits up, only for you to re-eat it, re-sickening yourself again, re-puking yourself again and so on and so forth.  Bankers, for the most part, are this regurgitated vomit constantly re-introduced and never-leaving the banking industry.

But ask yourself the question, how fun or productive is it constantly having to work with regurgitated vomit?  In other words, with such a low-quality and low-caliber class of people employed in the industry, can you imagine how painful it must be to work with such losers?  8 hours a day of dealing with inept co-workers, none of which are competent at the 8th grade math banking requires?  Egomaniacs who all think they're better than one another, and the politics, back-stabbing and corporate BS drama that ensues?  I've witnessed it and experienced it and it is PAINFUL.  It is veritable torture to go into work, day in and day out and deal with such ineptitude, egomaniasm and deceit.  It is this fact, that most bankers must suffer their own ilk, that should give you at least a couple of ounces of flesh.

Second, the bankers are one thing, but the clients are another.  Matter of fact, they're equally low-class and low-quality as the bankers.  And not only do the bankers get to tolerate each other, they get to tolerate their miserable clientele as well.

At one bank I worked at the fattest, most disgusting woman (she looked like the gal in Raiders of the Lost Ark who was having the drinking contest with Mariam) traipsed her obese ass into the bank to cash a check.  The check was for $6,000, an amount this sow never saw in her life.  She was always overdrawn on her accounts, had well over $1,000 in fees, and was just a miserable, pathetic, excuse for a human being.  But what made this great was just how obvious it was she had printed this check off of a cheap ink-jet printer.

My solution was simple - call the cops and get this vermin arrested for passing fake checks.

But oh, no.  Not for the staff nor my boss.  How did we know it was fake?  How did we know she purposely printed this off?  Besides (and pay attention to this) we needed her late and overdraft fees because those (despite never being paid) made this a profitable account.

Another client came into my office wanting a loan.

A loan for what?

A loan for GAS MONEY.

Gas money for what?

Gas money for (and pay attention to this) visiting his new-born grandson in Denver that had to get heart surgery due to complications of the birth.

I didn't know what angered me more.  Him lying to my face with some BS story or the fact he was a 60 year old man resorting to make ends meet by requesting a BANK LOAN FOR GAS!!!

Regardless, I could go on with stories, but you get the point.  Most bankers are not dealing with quality clients, quality borrowers who intend on paying them back.  Most clients are cut from the exact same regurgitated vomit cloth as the bankers.  And this makes the bankers' lives miserable.

Third, along the line of crappy clients is the fact that the majority of work bankers do today is not developing new business or lending money to help expand some successful operation today.  It's dealing with problems from the past.  Specifically, "problem loans."

Problem loans are loans that are simply that.  Problems.  They're not getting paid back, the client is late, the client has split town, you name it, the bank isn't getting paid.  This then requires the banks to "resolve" these problem loans. However, here is where the banks and bankers shoot themselves in the foot.

Since the economy still sucks, there are no new or potentially profitable loans to make.  This puts the focus and onus of most banks today on saving EVERY SINGLE PENNY FROM THEIR PROBLEM LOANS.  In other words, since there is nobody banging down their door to borrow money, they instead focus on trying to save as much money as they can from bad loans.  This means around 90% of a banker's time is spent dealing with:

1.  Collateral that has deteriorated WAY below what is owed on the loan.
2.  Tracking down problem clients to hopefully, maybe, potentially getting them to make a payment.
3.  CONSTANTLY negotiating with their vomitesque clientele to refi, extend-and-pretend, short sell, restructure their loans
4.  CONSTANTLY hounding the clients to get 2009-2012's tax returns, balance sheets and financial statements
5.  Tracking down assets that had been stripped of the property and pledged as collateral

Ironically, however, a vicious spiral develops.  Since the only business most banks have are these problem loans, they are practically forced to constantly keep these losers afloat.  This chains most bankers to their loser clientele, making their jobs even more miserable and providing you an added ounce of flesh.

Fourth, Frank-Dodd.  Frank-Dodd is legislation that resulted from the financial crisis and housing bubble.  In short it is a MONSTER of a piece of regulation and I cannot emphasize just how detailed, invasive, and petty it is.  I was paid for two days to (and pay attention to this) change a cell in an Excel spreadsheet from reading "Sources of Repayment" to "Financial Capacity of Repayment" for all of our loans.  There rarely wasn't a day where our contacts at the OCC and FDIC weren't handing down some new and minor change our bank had to make.  And so petty and pointless were they, I was and still am to this day, convinced Frank-Dodd was nothing more than a means to punitively punish the banking industry.

Does such regulation hurt the economy?


Does such regulation prevent loanable dollars from getting out into the economy, harming economic growth.

You bet.

Does Frank-Dodd drive up the cost of banking for consumers and customer?

Darn tootin'.

But it is a NIGHTMARE for the bankers and banks to deal with and they deserve every second of it.

In the end, what you need to do is step back and look at what has become of the banking industry.  It is not this high-flying, romantic, booming and advancing field that it may have been.  It is not the "Mad Men" sort of martini's and golf Hollywood has painted it as.  And it certainly isn't a functional or sane segment of our economy exploiting you or other innocents.

It is hell.

It is
  • Arguably now the most regulated industry in the country (bar medicine)
  • Populated by the country's most incompetent and corrupt people
  • Serving, pampering and baby sitting the country's worst financial basket-cases
  • Whose only future prospects are cleaning up messes of the past with no economic growth to exploit in the future
And that same banker scum, that disproportionately caused the economic and financial problems we have today, are forever condemned to work in that industry because...


they have no other talents and no other industry would ever hire them.  They are stuck there with the regurgitated vomit both as coworkers and clients for the rest of their "professional" lives.

And knowing that is where you should get your full pound of flesh.

If you liked this post, consider buying Aaron's book "Behind the Housing Crash" where he chronicles his adventures and exploits in banking during the build up to the housing crash.

And if you REALLY want to piss off bankers, start buying your stuff via Captain Capitalism's Amazon affiliate program.  Nothing would irk his previous bank-employer scum than seeing him make millions on a business model purely based on ripping the banking industry a new one.

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