Bank of America heiress: Idiots are running the bank

[bhaktajan]

Bank of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com<st1:place w:st="on">America</st1:place></st1:country-region> heiress says 'idiots' are running the bank

Say "banking heiress" to me and I envision a spoiled brat. But that doesn't mean that she's wrong when she complains about the executives who are destroying her fortune. This comes to mind while reading the comments of Virginia Hammerness, a big stockholder in Bank of America (BAC) and heiress to founder A.P. Giannini's family fortune. She recently complained, "What idiots, what kind of idiots are running that bank?" and described the current state of the bank as "totally repulsive."

I feel sympathy for Hammerness because her criticisms are spot on. She pointed out that CEO Ken Lewis should pay for his decision to acquire the near-bankrupt Merill Lynch, even after learning that huge bonuses were paid out to Merill employees right after the deal was announced. Her grandfather would not have accepted such huge bonuses, she said, but would have instead put the money into helping customers.

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A.P. Giannini was famous for helping his customers after <st1:City w:st="on"><st1:place w:st="on">San Francisco</st1:place></st1:City>'s 1906 earthquake. His bank had burned down so he set up a wooden plank on two barrels along the street and made loans on a handshake. Giannini later said that each of those loans was repaid. The best thing about Hammerness is that her memories of how her grandfather ran Bank of America reflect exactly the kind of banking principles to which we need to return.

Too bad there is no way she is going to see her fortune return to where it was before Ken Lewis got his hands on it.

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Comments by readers:

A primary "unanswered question" is: Why are CEOs who orchestrated and perpetuated the frauds of the pyramid and Ponzi schemes, the "derivative" frauds, and other FRAUDS, STILL in the positions of being CEOs running the corporations that they "managed" into financial failures.These CEOs have ALREADY received TENS and HUNDREDS of MILLIONS of dollars . . . they got their obscene and unwarranted "profits" LONG AGO while they were perpetuating these frauds.

These CEOs certainly cannot honestly proclaim that they did not know what they were doing . . . they were paid of of that obscene compensations because they, above all others, were supposed to know what they were doing.

The CEOs were the ones who "influenced" (sic. "paid off") the vast majority of Congress to relax the existing regulations, to let other regulations expire, and to vehemently VOTE AGAINST any NEW REGULATIONS. Then Congress tacitly pressured the regulatory agencies to relax what their oversights of these FIs and corporations, esp. for the "off-the-books" (sic. virtually worthless) 'assets'. This has all been a highly executed con job and blatant fraud. In my opinion, these CEOs ARE CRIMINALS; there simply is no other way to categorize what they have done.

Congress is the lynchpin in all of this FRAUD. If Congress had diligently performed their fiduciary duties, then virtually NONE of these FRAUDS would have occurred. It is the likes of Barney Frank (D-MA) who previously fehemently fought against regulations, and who is presenting himself as a champion and leader of economic recovery who are the hypocritical INEPT, INCOMPETENT and/or TOTALLY "CORRUPT" Congressmen who have succeeded in destroying our economy . . . and yet the people of MA continue to re-elect this guy . . .. I find that amazing, and demonstrative of how utterly STUPID the people can be. And the same applies to all of the other consituents who continue to re-elect their CORRUPT Congressmen.

These Congressmen are so complicit in what has happened, the same that occurred in the Saving and Loan scandals f the 1970 -80s, that they cannot or will not take actions against these CORRUPT CEOs. We must purge both Congress and our business enterprises of these CORRUPT "leaders" who have undermined our economy .. . . And who have substantially increased their personal fortunes at the expense of detstroying our economy.

Only a FOOL would re-elect these CORRUPT Congressmen.

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B <st1:place w:st="on">Harrison</st1:place>. Who are you and how do we get you to run for Congress? Do you have a crew of like minded associates that you can take with you?

It seems that some CEO's have made decisions based on the immediate financial benefit to themselves, which in fact have then contributed to the destruction of their companies.

Virginia Hammerness' quote of "What idiots, what kind of idiots are running that bank?" is exactly what I thought when I read that Bank of America was "acquiring" Merill Lynch. It makes absolutely no sense based on any type of a moral principal; it benefits the few and corrupts the original concept of stock ownership, to contribute to the development of a company. That ownership was then rewarded with dividends, based on the success, or lack of, a company. Why would you want to acquire a company with such a tremendous debt?

I believe that the corruption of that principal or ideal, to be a stock holder in a company, started with the tremendous profits made on the dot coms. That was the beginning of "fake money" as it had no intrinsic value, it had not been "earned." The profits were so instantaneously huge, that people who held that money were far more likely to use it with abandon. It seems to me, that in the mid 90's, the stock market became nothing more or less than a location to place bets with your money. Because of the instantaneous response of computers, investors are able to pre set their buy and sell points. I once watched someone buy a stock on an initial offering of $12.00 when the market opened, and sell it instantaneously for $21.00 before noon. With a $100,000.00 investment, that person made an increase of 75% on their money by noon, or $75,000.00! I walked away shocked and dismayed with a fuller understanding that the stock market had truly turned into a casino.

I have said for several years, that when the stock market ZOOMED past 7,000, that it was all unrealistic. The intrinsic value of Disney, how does that continue to increase? Does the steel, or the property or the copyrights, somehow increase in value many times over, how is that possible? When the market went past 14,000 in the fall of 2007, my anxiety in terms of our 401K became unbearable. In January of 2008, I wanted to convert the stocks and bonds to just a plain old savings account type vehicle and was repeatedly told what a bad idea this was, that I needed to stay in for when it turned around, that I'd miss the "jump" when the stocks again went up. As the market was declining, I was told that it was not the time to sell, you don't sell "low," you buy low and sell high. I kept arguing that there was not going to be any more "highs," that look at a graph of the stock market for nearly the last hundred years. That this growth was unsustainable. That there had been sub prime adjustable rate mortgages made that had come due and were again coming due in the next few months. It was tremendously difficult to argue the point with all of the wizened advisors, but finally, I mustered the courage to basically defy them, and had the money put into a "safe" account. I was told that I had "lost" money, maybe 8 % at the time, and to not do it, but fortunately I did. It's not a whole lot of money, but at least it's not "lost" money. We are still feeling the downturn as many others, but at least that money remains. I am not degreed in Economics, and I gleaned impending doom simply by reading the local newspapers.

It is unthinkable to me, that mortgages were made without

20 percent down, which has been to my understanding the loaning standard, by which the banks, the lenders are protected. One would think that we should cry for regulations, but my sons have explained to me the error of that logic. These bad loans were made and then immediately flipped to Fannie Mae and Freddie Mac. The lenders didn't even go into their own "vaults" to get the money, the loan went immediately to FM/FM. If the government hadn't "backed" these loans, they never would have been made. The broker took all of the fees and none of the risk. If it had been the corner bank that had loaned the money, and had been liable for the money, we would not have this current and continuing crisis. If the government hadn't been in the mix in the first place with Fannie Mae and Freddie Mac, I don't think that it would have been possible for this to happen.

I have absolutely no solutions for this mess, other than to let itself shake out. I guess it's too late for that. I read that 91% of mortgage holders are current on their loans, why are we mortgaging the futures of our children, grand children and perhaps beyond, to remedy a situation that involves 9% of mortgage holders. I think that this is far greater than the Great Depression. The GD was a run up that crashed and corrected itself over a period of 12 years with some help from FDR but nothing of this magnitude. This crosses all markets and all countries.

This banking industry crash should have been easily seen by many but nothing was done to stop the lending. Certainly it must have been because it rewarded the few and yet, it destroyed the many. One would hope that a moral compass would return to all, or that at the very least, those with a moral compass would protest vociferously when these huge errors in judgement, and lapses in conscience occur.

When deals are made with large, abstract "companies" it seems that the opportunity for fraud abounds. I think it would help all of us to think of Mr. Giannini, on a board between two barrels, basing a loan on handshake deals that were honored. My father, Ira Mok, based his business on hand shake deals that were honored. I know that we're way beyond a handshake, but hopefully those with honor and principles will be able to rout out and overtake unscrupulous leaders, in both politics and industry.

I know it's a big order, but I have faith that it can be done. We have the privilege to live in a country in which anything that can be thought, can be achieved.

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BHarrison, I agree with your post in all ways and only wish that Americans had the backbone to organize into a force to be reconed with. We need a leadership group amoungst the "great unwashed" that will battle these officious bastards on their own turf. I see shadows of the French revolution, but we are without cake to feed them.

[AncientMariner]

I don't view them as idiots, more like government insiders. They are on the take. Handwriting was on the wall when Bank of America started giving credit cards to illegal aliens. They are being controlled by the government in its effort to bring about the North American Union of US, Mexico, and Canada.

 

 

 

The government and the bankers intentionally ran the banks into the ground and created this crisis and now they will offer the solution of a new monetary system and new government power structure. Denver, Colorado will be the new Government regional center of the North American Union. They have Northcom in Colorado Springs so there will be seamless integration of the government military superstate.

[AncientMariner]

They get all the common schmucks to do all the heavy lifting building the infrastructure in society and get all these poor schmucks to go into debt buying boats, motorcycles etc. then they pull the rug out from under them when the bubble pops. This time things are different because the banks are in such a mess from derivatives that the system is completely blown out and they need to be put through bankruptcy but the government is trying to lay the blame and the burden on the taxpayers for the crimes and cronieism they themselves created and are responsible for. They are throwing the bailout money into the derivative black hole stringing the people along until the whole thing eventually breaks one way or another. Not sure how it is going to all end up. Should be interesting.

[suchandra]

 

This time things are different because the banks are in such a mess from derivatives that the system is completely blown out and they need to be put through bankruptcy but the government is trying to lay the blame and the burden on the taxpayers for the crimes and cronieism they themselves created and are responsible for. They are throwing the bailout money into the derivative black hole stringing the people along until the whole thing eventually breaks one way or another. Not sure how it is going to all end up. Should be interesting.

 

Guess there's nothing out of control but it is rather all planed by a couple of think tanks who consider this as only solution to stop overpopulation.

 

Russian Scholar Says U.S. Will Collapse Next Year

 

 

www.foxnews.com/story/0,2933,504384,00.html – March 4, 2009

 

 

If you're inclined to believe Igor Panarin, and the Kremlin wouldn't mind if you did, then President Barack Obama will order martial law this year, the U.S. will split into six rump-states before 2011, and Russia and China will become the backbones of a new world order.

 

Panarin might be easy to ignore but for the fact that he is a dean at the Foreign Ministry's school for future diplomats and a regular on Russia's state-guided TV channels. And his predictions fit into the anti-American story line of the Kremlin leadership.

 

"There is a high probability that the collapse of the United States will occur by 2010," Panarin told dozens of students, professors and diplomats Tuesday at the Diplomatic Academy — a lecture the ministry pointedly invited The Associated Press and other foreign media to attend.

 

The prediction from Panarin, a former spokesman for Russia's Federal Space Agency and reportedly an ex-KGB analyst, meshes with the negative view of the U.S. that has been flowing from the Kremlin in recent years, in particular from Vladimir Putin.

 

Putin, the former president who is now prime minister, has likened the United States to Nazi Germany's Third Reich and blames Washington for the global financial crisis that has pounded the Russian economy.

 

Panarin didn't give many specifics on what underlies his analysis, mostly citing newspapers, magazines and other open sources.

 

He also noted he had been predicting the demise of the world's wealthiest country for more than a decade now.

 

But he said the recent economic turmoil in the U.S. and other "social and cultural phenomena" led him to nail down a specific timeframe for "The End" — when the United States will break up into six autonomous regions and Alaska will revert to Russian control.

 

Panarin argued that Americans are in moral decline, saying their great psychological stress is evident from school shootings, the size of the prison population and the number of gay men.

 

Turning to economic woes, he cited the slide in major stock indexes, the decline in U.S. gross domestic product and Washington's bailout of banking giant Citigroup as evidence that American dominance of global markets has collapsed.

 

"I was there recently and things are far from good," he said. "What's happened is the collapse of the American dream."

 

Panarin insisted he didn't wish for a U.S. collapse, but he predicted Russia and China would emerge from the economic turmoil stronger and said the two nations should work together, even to create a new currency to replace the U.S. dollar.

 

Asked for comment on how the Foreign Ministry views Panarin's theories, a spokesman said all questions had to be submitted in writing and no answers were likely before Wednesday.

 

It wasn't clear how persuasive the 20-minute lecture was. One instructor asked Panarin whether his predictions more accurately describe Russia, which is undergoing its worst economic crisis in a decade as well as a demographic collapse that has led some scholars to predict the country's demise.

Panarin dismissed that idea: "The collapse of Russia will not occur."

 

But Alexei Malashenko, a scholar-in-residence at the Carnegie Moscow Center who did not attend the lecture, sided with the skeptical instructor, saying Russia is the country that is on the verge of disintegration.

 

"I can't imagine at all how the United States could ever fall apart," Malashenko told the AP.