Bankers, *ankers

A while back I was driving home from work, and onto the radio came some banker. This guy was giving a long and impassioned plea for understanding of bankers, and seeking to justify the huge salaries and the bonus structure of investment bankers of recent years.

The main thrust of his argument:

“Investment Bankers deserve bonuses and being paid lots of ¬†money, because it encourages innovation, and we NEED innovation in banking and finance.”

Riiiiiiight.

The same innovation in banking and finance gave us:

  • Bankers loaning more than a house is worth to people who can’t meet the paymeants (> 100% of valuation; insufficient income)
  • Bankers packaging mortages and selling them as investments – thus getting the loans off the banks books (called “securitisation” in case you were wondering what that was)
  • Bankers dressing up those packaged mortages by slicing, dicing, and mixing the good, the bad and the ugly to magically make lousy grade investments into high grade investments. Silk purses from sows ears, anyone?
  • Bankers paying themselves bonuses of millions of dollars – to blow it on cocaine, expensive Champagne, and call-girls.
  • Bankers putting in place exciting things like interest-rate swaps, credit-default swaps, and things that supposedly spread risk – and therefore shift the resulting contagion to everyone.
  • Bankers devising such things as Contracts for Difference so you don’t have to buy and sell shares, you can buy and sell pretend shares. The options you have when not having options. Push them to the Mum’s and Dad’s! Yay!
  • Bankers getting into, or pushing companies into, the futures markets with hedging arrangements that periodically send companies broke (think Pasminco, Zinifex, and many many others)
  • Bankers pushing along the trade in options and other derivaties which reached the terrifying levels whereby the VALUE of the underlying securities of the outstanding options exceeded the entire national gross domestic product AND capital values!

These guys created the house of cards.

It fell down.

We all suffer.

Many of these guys lost their jobs last year. Well boo-bloody-hoo. With the salaries you lot got paid, if you had any left that you didn’t snort up your noses, you’ll be on easy street forever. You might not be able to call yourself a *anker any more but if you had any sense at all you’ll be an extremely well-off unemployed.

The rest of us suffer thanks to the actions of “Innovative” Bankers.

Don’t expect any sympathy, and don’t try to justify your bonuses. And don’t try and tell us we need more innovation in banking.

We need banking to be dull, boring, and peopled by guys in cardigans. We don’t need more innovation by a bunch of fast-talking spivs. That’s what got us into this mess in the first place.

And politicians who came from banking backgrounds** should be slinking off into very small dark spaces, and shutting their stupid gobs.

—–

** Our current Leader of Her Majesties Opposition, the Hon Mr Turnbull is an ex-Merchant Banker. Trustworthiness factor = 0.

3 Comments

Not just bankers Wally, there’s the fund managers, investment managers that over capitalised (the M Bank comes to mind)Strangely, just as my St George card was about to max, I was still offered an extra $10,000 credit! Will they/we never learn!

Comment by Baino | May 27th, 2009 7:57 am | Permalink

Thanks for the post. Bankers are all evil.

Comment by L Oliver | July 1st, 2009 12:55 am | Permalink

[...] Back in 2008 when the financial systems of the Western World started falling apart, we had much wailing from the WBankers claiming that the world NEEDED clever, innovative, bankers who could…. [...]

Leave a Comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Live Comment Preview

Comment by Somebody

Powered by WordPress 2.8    Rendered in 29 queries and 0.525 seconds.    CleanBreeze Theme