Having worked at an executive level at one of the largest banks in the country, I can tell you that people who actually run the banks concern themselves with profitability, credit quality, soundness, sales, safety and security, growth, the current economy, and whatever glimpse of the coming environment their execs and specialists can pro…
Having worked at an executive level at one of the largest banks in the country, I can tell you that people who actually run the banks concern themselves with profitability, credit quality, soundness, sales, safety and security, growth, the current economy, and whatever glimpse of the coming environment their execs and specialists can provide. There is never any discussion of the confusing gobbledy-gook word salad you mention, something that I’m sure sounded fine when you made it up.
As I suppose the rest of your list originated as personal fever dreams.
I have an acquaintance who promotes standardized testing and has done so for years, sincerely believing, as many do, that it has benefits. He may be wrong, I don’t know.
But the silly, badly motivated conspiratorial spin you try to put on everything is misleading (because it’s made up), distracting, and useless.
Congratulations on your success in banking, Tom. I also had a career in banking. While the capital markets had many innovations in products and trading during my time in them, my concern was that such innovations rarely, if ever, produced something.
The overwhelming pressures for profits; shifting and, at times, skewed micro-incentive structures; corruption of market practices; as well as, the demise of the what remained of the Glass-Steagall Act led to the melt-down of 2007-08.
By then I was with the State Department in Iraq. After the dust settled from the dot-bomb correction in 2000, I sensed that something larger was coming; that the cap-marts would blow. That dislocation was later, deeper, and broader than I could have imagined.
So, Phil is not spewing a conspiracy theory as the revolving door between N.Y.C. and D.C. has locked in a financial and harmful symbiosis between bankers and politicians. The draw-back is that, like all of us, bankers are subject to tunnel-vision foreclosing creative fix-its.
I didn’t mean to imply that banks always do the right thing. Banks regularly try stupid things that are meant to make money while either oblivious to or ignoring larger social damage.
Make no mistake, the investment bankers instigated the Real Estate Recession, with the venal acquiescence of rating agencies, commercial bankers, real estate brokers and millions of (gullible and greedy) customers.
Bankers stumble into things, often because they consider themselves the smartest people in the room (they never are). But they don’t plot secret control of all debt or control of all levers of power. That’s more the stuff of fantastic—and sometimes anti-semitic—bad novels.
On the other hand, the bank I worked for once dropped its Sales Finance operation rather than give in to rate subvention with large, multi-location mega auto dealers as we understood that such a practice is always to the customers’ financial detriment.
Agreed 100%. When, as a risk nerd, I could not reconcile M.B.I.A.'s nary-a-loss claim with events, that was the first clue. When ratings agency and bond insurance fees were commoditized, requiring multiples of volume to make the same money, that was the second clue.
When credit derivatives were booked with long-term confirms only -- often unexplainable to me (meaning future contract disputes being likely), --that was the third clue. When gain-on-sale accounting applied to booking credit derivatives, creating thirty basis points today on fifteen year trades for 100% non-cash income, that was the fourth clue. The killer was that, when a colleague actually used a credit derivative as insurance and claimed under it, he was vilified as 'unethical'.
It took a while for me to understand the role of repealing Glass-Stegall; I had opposed it mainly because it had worked. I did not make the moral hazard connection with deposit insurance contemporaneously. Basically, investment bankers saw a lot of dormant capital in the commercial banks and smacked their lips. That made sense, for liquidity was value back then and Glass-Steagall was viewed as retarding U.S. banks, threatening N.Y.C.'s supremacy as a global financial center.
The mistake with repealing Glass-Steagall was that commercial banks were more like public utilities and traditionally built up redundant capital as a precaution. The real estate M.B.O.s and C.D.O.s were getting big when I left in 2002. So, there were several BIGgamundo dots I was not connecting. If you endured this tome, Tom, you are a better man than I.
On the bankers thinking they are the smartest people in the room, I found that to be the case, too. Some, of course, were truly brilliant. But most, like me, were seduced by being quick with numbers. Kudos to your bank. Sounds like Wells Fargo or (if I remember correctly) U.S. Bank or Morgan Gty or P.N.C.
Having worked at an executive level at one of the largest banks in the country, I can tell you that people who actually run the banks concern themselves with profitability, credit quality, soundness, sales, safety and security, growth, the current economy, and whatever glimpse of the coming environment their execs and specialists can provide. There is never any discussion of the confusing gobbledy-gook word salad you mention, something that I’m sure sounded fine when you made it up.
As I suppose the rest of your list originated as personal fever dreams.
I have an acquaintance who promotes standardized testing and has done so for years, sincerely believing, as many do, that it has benefits. He may be wrong, I don’t know.
But the silly, badly motivated conspiratorial spin you try to put on everything is misleading (because it’s made up), distracting, and useless.
Why not spend some time learning a few facts?
Congratulations on your success in banking, Tom. I also had a career in banking. While the capital markets had many innovations in products and trading during my time in them, my concern was that such innovations rarely, if ever, produced something.
The overwhelming pressures for profits; shifting and, at times, skewed micro-incentive structures; corruption of market practices; as well as, the demise of the what remained of the Glass-Steagall Act led to the melt-down of 2007-08.
By then I was with the State Department in Iraq. After the dust settled from the dot-bomb correction in 2000, I sensed that something larger was coming; that the cap-marts would blow. That dislocation was later, deeper, and broader than I could have imagined.
So, Phil is not spewing a conspiracy theory as the revolving door between N.Y.C. and D.C. has locked in a financial and harmful symbiosis between bankers and politicians. The draw-back is that, like all of us, bankers are subject to tunnel-vision foreclosing creative fix-its.
I didn’t mean to imply that banks always do the right thing. Banks regularly try stupid things that are meant to make money while either oblivious to or ignoring larger social damage.
Make no mistake, the investment bankers instigated the Real Estate Recession, with the venal acquiescence of rating agencies, commercial bankers, real estate brokers and millions of (gullible and greedy) customers.
Bankers stumble into things, often because they consider themselves the smartest people in the room (they never are). But they don’t plot secret control of all debt or control of all levers of power. That’s more the stuff of fantastic—and sometimes anti-semitic—bad novels.
On the other hand, the bank I worked for once dropped its Sales Finance operation rather than give in to rate subvention with large, multi-location mega auto dealers as we understood that such a practice is always to the customers’ financial detriment.
Agreed 100%. When, as a risk nerd, I could not reconcile M.B.I.A.'s nary-a-loss claim with events, that was the first clue. When ratings agency and bond insurance fees were commoditized, requiring multiples of volume to make the same money, that was the second clue.
When credit derivatives were booked with long-term confirms only -- often unexplainable to me (meaning future contract disputes being likely), --that was the third clue. When gain-on-sale accounting applied to booking credit derivatives, creating thirty basis points today on fifteen year trades for 100% non-cash income, that was the fourth clue. The killer was that, when a colleague actually used a credit derivative as insurance and claimed under it, he was vilified as 'unethical'.
It took a while for me to understand the role of repealing Glass-Stegall; I had opposed it mainly because it had worked. I did not make the moral hazard connection with deposit insurance contemporaneously. Basically, investment bankers saw a lot of dormant capital in the commercial banks and smacked their lips. That made sense, for liquidity was value back then and Glass-Steagall was viewed as retarding U.S. banks, threatening N.Y.C.'s supremacy as a global financial center.
The mistake with repealing Glass-Steagall was that commercial banks were more like public utilities and traditionally built up redundant capital as a precaution. The real estate M.B.O.s and C.D.O.s were getting big when I left in 2002. So, there were several BIGgamundo dots I was not connecting. If you endured this tome, Tom, you are a better man than I.
Were you in Investment Banking or Commercial Banking?
On the bankers thinking they are the smartest people in the room, I found that to be the case, too. Some, of course, were truly brilliant. But most, like me, were seduced by being quick with numbers. Kudos to your bank. Sounds like Wells Fargo or (if I remember correctly) U.S. Bank or Morgan Gty or P.N.C.
Commercial banking in risk management. Neither great nor bad; I was an investment banking wannabe.