Crazy deranged fools

A direct lift of a title used by Hugh MacLeod to describe the kind of person:

…who has the temerity to aspire to work in a way that produces both joy, meaning and contribution for both them and others, while also paying the bills. It’s about creativity, it’s about finding meaning, but it’s also about living in the real world. That’s the reality I want to live in, and from the vast quantities of e-mails and comments I get from y’all, that seems to be your game plan, as well.

It’s a journey I embarked upon in 1993, thought I’d brought to fruition in 1997 when we moved offshore but needed to move here (see map on right) in order to get closer to the vision Hugh espouses. But CDF has another meaning. Check out the shenanigans in Washington over the 2007-9 period by the banking lobbyists.

These are supposed to be bright people who understand finance yet the shockingly insane behaviours exposed by Business Week beggars belief. Standing back, I get the sense of observing some crazed slow motion exercise in rolling rocks uphill. It’s like a nightmare scene out of One Flew Over The Cuckoo’s Nest. Since when did it make sense for instance to jack up payments to cash strapped mortgagees?

Federal banking regulators reported in December 2008 that fully 53% of consumers receiving loan modifications were again delinquent on their mortgages after six months. Alan M. White, a law professor at Valparaiso University, says the redefault rates are high because modifications often lead to higher rather than lower payments. An analysis White did of a sample of 21,219 largely subprime mortgages modified in November 2008 found that only 35% of the cases resulted in lower payments. In 18%, payments stayed the same; in the remaining 47%, they rose.

There’s more:

Senator Dick Durbin (D-Ill.), who since 2007 had led unsuccessful efforts in Congress to give bankruptcy judges authority to modify home loans, dispatched his senior economic policy adviser, Brad J. McConnell, to talk with lobbyists for JPMorgan Chase and Bank of America. “Each agreed to take [the idea] back to their folks to see what they could do,” says a person familiar with the talks. Citi’s concession, the imminent Obama inauguration, and intensifying public hostility toward big banks contributed to an atmosphere Democrats assumed would be conducive to compromise.

By the time McConnell talked to the JPMorgan and BofA representatives the next day, however, “they had gone on full defense mode and started to complain about how lousy a deal Citi had struck,” says the person familiar with the exchanges. Bank opposition, Durbin says, “was very shortsighted in light of the mess they have created in our economy.”

In other words: whatever happens, let’s ensure we profit. No wonder people hate banks. What’s not examined in all this is the role auditors did (or did not) take in hiding the extent of the banking problems. That’s for another day.

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Tagged as: Bank of America, Dick Durbin, Financial services, JPMorgan Chase