More Bank B.S. — and $5.6B MORE in Fines! How it Affects You …
Mike Larson | Thursday, May 21, 2015 at 4:30 pm
“If you ain’t cheating, you ain’t trying.”
That’s a direct quote from a Barclays PLC vice president, as cited in a Financial Times article about the global foreign exchange rigging settlement announced this week.
The Justice Department obtained guilty pleas on several federal crimes, forcing Barclays, Citigroup, JPMorgan Chase and Royal Bank of Scotland to cough up $5.6 billion in fines.
Several banks already paid $4.25 billion to regulators late last year. And of course, as I’ve chronicled in Money and Markets, major global banks have faced several more billions of dollars in penalties for fixing the key LIBOR interest rate and the commodities markets.
Bloomberg also chronicled today how banks rigged the interest-rate swaps market, too. That’s a huge $381 trillion market for financial derivatives – one in which everyone from banks to hedge funds to corporations to pension managers speculate and invest in, or sue to hedge their interest rate exposure on outstanding debts.
Banks have agreed to pay billions in fines.
From an investment standpoint, these ongoing mega-fines and charges are a key reason why some of the largest global banks look unattractive for more than a quick trade here and there. I’d rather focus on smaller, regional and super-regional banks domestically — or select foreign institutions not swept up in the investigations.
But there’s a much bigger issue here. An unbelievable amount of B.S. has been going on at the world’s biggest banks! These are the very same institutions that brought the financial world to its knees during the credit crisis. They’re the very same institutions that taxpayers like you and I … and the Federal Reserve … then spent years bailing out, to the tune of hundreds of billions of dollars. If that doesn’t make you fighting mad, I don’t know what will!
You know what’s better than getting mad, though? Getting even!
You see, the latest settlements come on the heels of others showing how hopelessly conflicted the stock ratings and research that major banks and brokers publish are. It’s clear they’re spending most of their time figuring out how to rip you and other investors off, rather than helping you build wealth in today’s market.
“You know what’s better than getting mad, though? Getting even!”
So now more than ever, you need independent guidance … conflict-of-interest-free ratings … and the expertise that comes from decades spent analyzing the financial markets — with a contrarian, skeptical, B.S.-detecting approach.
With that said, what do you think about the latest mega-settlements? Why do banks keep ripping investors off, and keep racking up billion-dollar-plus bills for doing so? Is there something more that regulators or the Justice Department can or should do to put a stop to this B.S.? What would you do if you were “king for a day?” Let me know over at the Money and Markets website.
Poster Comment:
More bankster B.S. is right. Gimme some money!