3 replies to this topic

[dasein]

Janet Tavekoli explains the obvious in case you havent noticed the statue of limitations are closing - sad indeed.


http://finance.yahoo...-165332251.html



great line: "banks best investment ...Campaign contributions"

[viccarter]

Janet Tavekoli explains the obvious in case you havent noticed the statue of limitations are closing - sad indeed.


http://finance.yahoo...-165332251.html



great line: "banks best investment ...Campaign contributions"

Thanks for the link, Karen it is sad indeed when you have pillars of business conducting themselves in such a fraudulent and ill-advised manner totally void of common sense. What irks me about the bank, is that they were never forced to reckon with the consequences of their actions.

I will give you two examples: Enron and CHK. The Enron story is well known, and it brought the company down and left some executives in jail. CHK (NOTE: I think that CHK currently is on the upswing stock wise) is a less well known story. CHK basically paid 20K/per acre bonuses back in 2008 to landowners in NW Louisiana for lease rentals back when natural gas prices were above $12. For a guy who liked to play NYMEX futures while being CEO, McLendon was not very good at predicting the future of prices. CHK routinely did business this way and had for years, paying outrageous sums for lease rentals and driving up the prices. He called 25K/acre "chump change". The wells did turn out good in some places, but a 9million dollar well doesn't make much sense at $4 gas. And that was just the beginning of it. I can tell you actual examples of waste that would blow your mind. One particular case that I am familiar with, CHK ended up losing an $80 million lawsuit against this one family over a totally basic and preventable contract error. They had several hundred contract agents on the ground (numerous lawyers among them) and numerous employees supervising those agents, and not one of them able to prevent making a basic error any oil and gas paralegal could have seen in 5minutes. They thing is, they paid for their bad business judgment.

The banks OTOH, are sacred cows and have not been forced to pay. In any other market, when you buy something at inflated prices, and then the market turns around and says prices are not as high as you thought they were, like CHK, what ends up happening is you have to get rid of assets at much lower prices. Lets look at the bank and the people behind the mortgage crisis. First off, no disrespect to anyone, but real estate agents and mortgage brokers are not exactly the smartest people in the world in my experience. These two professions were overrun during the boom years with dumbs from every crevice of the universe. Their only financial interest was in seeing more deals done, and the banks didn't care because they were making even more money off it. Then it all went bust.

What you would think would have happened is that the bank would have to cut a lot of the inventory they were holding when the foreclosures started and savers would have picked up some great values. But even though you saw some of this in AZ or Las Vegas, or FL where things were really over built, you generally didn't see too much because the ones that were holding all that worthless paper didn't HAVE to dump it back into the market at marked to market prices. Why? They were so flush with free money they didn't have to.

That's why you have to hate them. I don't do business with any of them.

Edited by viccarter, 12 August 2013 - 12:47 PM.

[SemiBizz]

You guys are looking at this all wrong. Looking at what's going down in Europe... Cyprus. Whatever they did in the last 10 years is small time. Compared to the Central Bankers... The biggest swindles of all time are still ahead of us.

[dasein]

Thanks Vic - I follow CHK and had no idea about the leases - thanks for that. Thanks Semi - my view says you are right about the future, but it does not excuse the past - IMO the future is being built on the past.