Bankers and Their Victims

Day two of the Showdown in Chicago, a three-day-long protest against big banks, began a bit dismally for The Nation. An email from American Bankers Association spokesman John Hall informed us that our press credentials had been revoked. The reason? Because we'd arrived early to cover a protest outside the ABA's annual meeting at the Sheraton Hotel the night before, he told us, ABA officials believed us to be "moles for the protesters."

Alas. That meant I wouldn't have the chance to hear how there's a silver lining to every recession -- I'm sorry, recovery -- through such workshops as "Strategies for Acquiring Troubled Banks" (this is, after all, the first year since 1992 when more than a hundred have failed in a single year) and "NonInterest Income," no doubt rich with tips on how to increase revenue through hiking fees on checking accounts, credit cards, and overdraft protection. Nor could I learn how to roll back socialism in "Unwinding Government Intervention," or sort through the puzzling link between record unemployment and depressed spending in "The Impact of the Recession on Consumer Preferences and Behavior." Worst of all, I'd miss Newt Gingrich's keynote speech in which, it was promised, he would "strike an optimistic tone."

It turns out Newt didn't exactly have his finger on the pulse, anyway.

At 10:30 a.m., hundreds of protesters from across the Midwest and the East Coast clambered down from buses in front of the Chicago headquarters of Goldman Sachs, one of the Wall Street firms that profited most from the complex derivatives that crashed the economy, and their mood was a shade darker than Newt's. "[Goldman] helped create the market for the subprime mortgages in creating mortgage-backed securities," economist Dean Baker, who came to Chicago for the protests, explained to me. "No one is knowingly going to issue a bad mortgage, or a mortgage that they have good reasons to think will go bad, unless they could dump it on someone else." The crowd was peppered with people who'd experienced the blowback of all that packaging and dumping, whether in lost homes, lost jobs, or collapsed pensions.

Take Trenda Kennedy, of Springfield, Illinois, and her partner, Brandy Hensley. Between them, they have six kids, and their home, Kennedy said, "has been a haven for teenage boys." But last year Kennedy lost her job as an office worker; soon, Hensley, a fire fighter for ten years, was laid off too. Suddenly, they desperately needed a mortgage modification to save their home. They saw two different HUD-certified counselors; Kennedy spent hours being lectured by a Hope Now representative about how to manage her finances. But no one actually helped them get a modification. On their own, the couple submitted paperwork three times to their lender, Bank of America, and battled to get Hensley's income from her new job in food services included in the math. (The bank had insisted that only spousal income counted, not that of domestic partners.) Last Friday, Kennedy called BofA one more time, only to get an automated message. "Your modification has been canceled," Kennedy recalls hearing. "Your financials do not support a workout. Your house is currently in foreclosure." That same day they left for Chicago for the first protest of their lives.

As the marchers rounded the corner to Wells Fargo, I met Leah Fried, the UE organizer at the center of the Republic Doors and Windows occupation. That company had shut its doors because bailout recipient BofA had refused to extend it credit. Now it was happening again. At her side was Keith Scribner, president of UE Local 1174, who until last month had worked for 19 years at Quad City Die Casting, a factory in Moline, Illinois, which made metal parts for such manufacturers as John Deere and Kawasaki. Just as with Republic, this basically profitable company needed additional credit, and its bailout recipient creditor, Wells Fargo, refused, throwing the company into foreclosure. Potential buyers couldn't even get calls to Wells Fargo returned in order to make a bid. Efforts by Illinois state officials to broker a deal were met with silence. Meanwhile, Wells Fargo kept on Quad City's a hundred workers to churn out parts for four months as the company was "unwound," but canceled their health insurance and vacation days. The workers wracked up $45,000 in out-of-pocket health care expenses and ended up jobless on September 4, stiffed for more than $100,000 in unpaid vacation time. With unemployment now at 10 percent in Moline, not one of them has found a new job yet.

It was a morning of stories like these: congregants in foreclosure, daughters and sisters who lost jobs, and anger. Lots of it. Anger at Wells Fargo. Anger at Bank of America. Anger at Goldman Sachs.

The billions of dollars in bonuses announced by Goldman CEO Lloyd Blankfein on October 15 rankled bitterly.

"One of the main culprits behind the collapse of our financial system last year is Goldman Sachs," Charlotte Dott, of Bloomington, Indiana, shouted into a megaphone to the security guards blocking their office doors. "They're planning to give $20 billion in bonuses to some of its employees. No!"

Fortuitously, "Blankfein" rhymes with "resign." The protesters made the most of it.

Read more of Esther's reporting from the Showdown in Chicago here and here.

Comments (38)

1. "hundreds of protesters", and on the other thread thousand, next will be 10s of thousands and on and on....

   Sooner or later the dim lightbulbs might (I doubt it) come on and they will realize that the Obamanation and Demoncrats are their real enemy wishing to enslave all with their programs, but I give them years before they figure it out if they ever do!

   Posted by BigPasture at 10/26/2009 @ 11:10pm

2. bigpasture,

   being a "conservative," i'm certain you were opposed to the bank bailouts, no?

   so, why would you mock protestors who feel likewise?

   why is this a de facto "liberal" protest, and not what you might call "populist outrage" vis a vis the townhall meetings?

   oh, i know why: because it took place in chicago, a den of sin and liberalism and pornography and blues music and drugs and......obama.....no!!!

   Posted by darladoon at 10/27/2009 @ 12:46am

3. How does BigPasture manage to forget the 8 years of George Bush while mindlessly blaming everything on Obama? This person is a case study in selective amnesia.

   The big damage to our nation started during those years. Now, as a beleaguered and frustrated Obama tries to hold a burning building upright, fools like this stick matches in his shoes and light them, chanting "Socialist, Marxist, Hitler, communist..."

   Yes, Obama is flawed, as almost every politician this country has elected has been. But as Darla rightly observes, this cynical shrieking about the liberals protesting something which really could be assigned to populist outrage, something that could serve to bind us in a common cause seems to escape the feeble confines of BigPasture's brain. Without someone to ridicule, life, for him, isn't worth living.

   The only one who is 'enslaved' is this person called BigPasture, a slave to the high fashion of hatred and bitter recrimination.

   Posted by ficheye at 10/27/2009 @ 03:20am

4. oblahma

   bu$$h

   clinkton

   bu$h

   raidgun...........

   two sides of a one-sided coin.

   Posted by frosty zoom at 10/27/2009 @ 06:49am

5. end the fed.

   end fractional reserve banking.

   end rubber money.

   Posted by frosty zoom at 10/27/2009 @ 06:49am

6. Posted by ficheye at 10/27/2009 @ 03:20am

   Again, keep in mind with Rio/Big Posture....it's about one thing and one thing only...hating the Democrats.

   All else expands outwards from that core....all "thought", all "reasoning", all "logic". Bernie Sanders could save a toddler from drowning after Jim Inhofe pushed it in a lake and R/BP would find a way to talk about how evil Sanders was for "interfering in that youngster's right to learn about water safety."

   All ye know, all ye need to know...about Rio.

   Posted by Mask at 10/27/2009 @ 07:10am

7. Barney Frank and Chris Dodd show up? Somehow I bet NOT, just blow up dolls of them were probably all there was to show.

   How did all the several hundreds of little banks of the AMA not among the 106 that have now been closed feel about being blamed for congresses and the Obamanation , Bush admin. failures to handle the collapse of Big Bank high risk excess that was "bailed out"?

   Posted by BigPasture at 10/27/2009 @ 08:15am

8. Posted by BigPasture at 10/27/2009 @ 08:15am |

   I think you meant ABA, Rio...the only doctors they resemble are Mengele.

   And they're pretty pissed that their FDIC ante is going to be huge to compensate for the 'too big to succeed' crowd.

   Posted by snowball777 at 10/27/2009 @ 08:41am

9. Posted by snowball777 at 10/27/2009 @ 08:41am

   Give credit to Rio...yesterday he had Barney Frank and LOU DOBBS blamed!

   heheh

   Posted by Mask at 10/27/2009 @ 08:45am

10. After the savings and loan debacle our local bank's bill for FDIC deposit insurance rose from $10,000 annually to $40,000. annually which has NOT decreased, and we know who paid for that! Multipy that percentage of increase by the number of small banks, S & Ls, Credit Unions in the U.S.A. and you will get some idea of just how much this has already cost us in the past and do it again for this round of congressional and Presidential failure!

    Posted by BigPasture at 10/27/2009 @ 08:57am

11. Give credit to Rio...yesterday he had Barney Frank and LOU DOBBS blamed!

    heheh

    Posted by Mask at 10/27/2009 @ 08:45am | ignore this person | warn this person

    No, it was "Barney Frank and Dobbs"!

    Who is Lou Dobbs? Is that someone on cable , dish, or talk radio?

    Posted by BigPasture at 10/27/2009 @ 09:09am

12. Posted by BigPasture at 10/27/2009 @ 09:09am |

    CNN Anchor-wart...you'd love him...he's as big a xenophobe as you are.

    Posted by snowball777 at 10/27/2009 @ 09:18am

13. Posted by BigPasture at 10/27/2009 @ 08:57am |

    So why DID you vote for Dubya then?

    Posted by snowball777 at 10/27/2009 @ 09:20am

14. Posted by BigPasture at 10/27/2009 @ 08:57am | So why DID you vote for Dubya then?

    Posted by snowball777 at 10/27/2009 @ 09:20am

    It's possible that his Mom told him to "go out and trim the brush".

    He thought she said "go out and vote for Bush".

    Posted by ficheye at 10/27/2009 @ 11:01am

15. Posted by ficheye at 10/27/2009 @ 11:01am |

    I shudder to think that our country was driven asunder by waxy build-up.

    Posted by snowball777 at 10/27/2009 @ 11:09am

16. Posted by snowball777 at 10/27/2009 @ 09:18am

    Oh, I forgot to mention....Rio LIES as well.

    Claims he knows "nothing" about Fox News (or any cable TV), AM radio, or conservative websites on the Internet. "Never heard of them."

    Just a "remarkable coincidence" that his talking points all sound exactly like Limbaugh, Beck, or from the Drudge Report.

    Posted by Mask at 10/27/2009 @ 11:13am

17. Posted by Mask at 10/27/2009 @ 11:13am |

    Maybe you've confused the cart with the horse and Rio is providing THEIR talking points!

    Posted by snowball777 at 10/27/2009 @ 11:43am

18. Release Date: March 4, 2009

    For immediate release

    The Federal Reserve Board on Wednesday announced its approval of the application by ICE US Trust LLC, New York, New York (ICE Trust), to become a member of the Federal Reserve System. ICE Trust intends to provide central counterparty services for certain credit default swap contracts.

    ICE Trust is one of several industry proposals that could satisfy the goals of the President's Working Group on Financial Markets regarding the formation of central counterparties for credit default swaps. In November 2008, the President's Working Group called for the successful implementation of central counterparty services with a view toward reducing systemic risk associated with counterparty credit exposures, facilitating greater market transparency, and encouraging a more competitive trading environment.

    Posted by OneVote at 10/27/2009 @ 11:54am

19. We would not be in this mess had George W. Bush not repealed the Glass Stegal act or saved Lehman Bros.

    Posted by jfair at 10/27/2009 @ 12:00pm

20. 'IntercontinentalExchange(R) (NYSE: ICE), the operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, has announced that The Royal Bank of Scotland plc (RBS) has been approved as a clearing member by the Board of ICE Trust(TM), the clearing house for credit default swaps (CDS). Operational as of May 18, RBS joins 10 initial clearing members of ICE Trust, and is the first new member since the clearing house launched in March.

    Dirk Pruis, President of ICE Trust, said: "ICE Trust was designed as an open platform, with membership available to qualified market participants who meet the clearing house's rigorous financial, operating and risk management criteria. We welcome RBS in our continued efforts to bring transparency and stability to the vital CDS markets, and we look forward to working with new dealer and buy-side participants."

    ICE Trust is currently expanding its services to include buy-side clearing, which will provide for margin segregation and account portability to firms who are not direct clearing members. ICE Trust expects to make these enhanced risk protections available in the coming weeks.'

    Note BNP Paribas was granted approval to join the fun in Sept. 2009.

    Posted by OneVote at 10/27/2009 @ 12:04pm

21. ICE Members as per ICE website:

    ADM Investor Services, Inc. Advantage Futures LLC Banc of America Securities, LLC Barclays Capital Inc. BNP Paribas Commodity Futures, Inc. Citigroup Global Markets, Inc. Credit Suisse Securities (USA) LLC Deutsche Bank Securities, Inc. Dorman Trading, LLC F.C. Stone, L.L.C. Fortis Clearing Americas, LLC Goldman Sachs & Company Goldman Sachs Execution and Clearing J.P. Morgan Futures, Inc. Jump Trading LLC MBF Clearing Corporation Merrill Lynch, Pierce, Fenner & Smith, Inc MF Global Inc. Morgan Stanley & Company Newedge USA, LLC Prudential Bache Commodities, LLC Rand Financial Services, Inc. RBC Capital Markets Corporation RBS Securities Inc. R.J. O'Brien & Associates, LLC. Rosenthal Collins Group, L.L.C. SMW Trading Company, Inc. Sterling Commodities Corporation Term Commodities, Incorporated Triland USA Inc. UBS Securities, L.L.C. Vision Financial Markets LLC

    Your Federal Reserve & Government at work.

    Posted by OneVote at 10/27/2009 @ 12:08pm

22. Posted by snowball777 at 10/27/2009 @ 11:43am

    Oh, that COULD be it. They all hoof it over to Broken Bow, Oklahoma...search out a cranky old coot and then get his take on everything and then say on it the EIB Network, post it on RedState, or Glenn Beck does a "hour long special" on it.

    Sure, within the realm of the possible!

    heheh

    Posted by Mask at 10/27/2009 @ 1:11pm

23. October 27, 2009 Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm By MARY WILLIAMS WALSH NY Times - Excerpt

    'Maurice R. Greenberg, who built the American International Group into an insurance behemoth with an impenetrable maze of on- and offshore companies, is at it again.

    Even as he has been lambasting the government for its handling of A.I.G. after its near collapse, Mr. Greenberg has been quietly building up a family of insurance companies that could compete with A.I.G. To fill the ranks of his venture, C.V. Starr & Company, he has been hiring some people he once employed.

    Now, Mr. Greenberg may have received some unintended assistance from the United States Treasury. Just last week, the Treasury severely limited pay at A.I.G. and other companies that were bailed out by taxpayers. That may hasten the exodus of A.I.G.'s talent, sending more refugees into Mr. Greenberg's arms, since C. V. Starr is free to pay whatever it wants.

    "Basically, he's just starting ‘A.I.G. Two' and raiding people out of ‘A.I.G. One,' " said Douglas A. Love, an insurance executive who has also hired A.I.G. talent for his company, Investors Guaranty Fund of Pembroke, Bermuda.

    While America generally loves stories of entrepreneurs making a comeback, Mr. Greenberg's success may be at the expense of taxpayers. People who work in the industry say that if he is already luring A.I.G.'s people, he may soon be siphoning off its business and, therefore, its means to repay its debt to the government.

    "To me, it's just going to be a matter of time before the valuation of what he's building is greater than the valuation of A.I.G.," said Andrew J. Barile, an insurance consultant in Rancho Santa Fe, Calif.'

    84 years old and still scamming the system......amazing

    Posted by OneVote at 10/27/2009 @ 1:33pm

24. Money always wins, period! The more, the easier the victory.

    Posted by sickoftheright at 10/27/2009 @ 1:44pm

25. All the revolving credit held by Bank of America and other bailed out institutions should be transferred to other creditors, even the federal government, at much lower rates.

    Posted by Buddy33 at 10/27/2009 @ 1:48pm

26. Claims he knows "nothing" about Fox News (or any cable TV), AM radio, or conservative websites on the Internet. "Never heard of them."

    Just a "remarkable coincidence" that his talking points all sound exactly like Limbaugh, Beck, or from the Drudge Report.

    Posted by Mask at 10/27/2009 @ 11:13am | ignore this person | warn this person

    Unlike you I don't need to LIE and make it up as I go along. Surely you can tell me how I do it without cable or dish or listening to radio! Ever heard of newspapers and internet news?

    Posted by BigPasture at 10/27/2009 @ 2:28pm

27. We would not be in this mess had George W. Bush not repealed the Glass Stegal act or saved Lehman Bros.

    Posted by jfair at 10/27/2009 @ 12:00pm | ignore this person | warn this person

    Oboy, another idiot Bush hater that knows nothing!

    The legislation was signed into law by President Bill Clinton on November 12, 1999.

    Posted by BigPasture at 10/27/2009 @ 2:34pm

28. Ever heard of newspapers and internet news?----Posted by BigPasture at 10/27/2009 @ 2:28pm

    "internet news"...but you've "never heard" of the Drudge Report?!?!??!?

    Posted by Mask at 10/27/2009 @ 2:38pm

29. end the fed.

    end fractional reserve banking.

    end rubber money.

    Posted by frosty zoom at 10/27/2009 @ 06:49am

    Frosty is right. It is really that simple.

    Posted by freiheit1 at 10/27/2009 @ 2:39pm

30. first went gold coins and certificates, then silver certificates, now trillions of funny money later........

    Posted by BigPasture at 10/27/2009 @ 2:50pm

31. "internet news"...but you've "never heard" of the Drudge Report?!?!??!?

    Posted by Mask at 10/27/2009 @ 2:38pm | ignore this person | warn this person

    Heard of it, looked at it seven years ago, but never found it that intresting.

    Posted by BigPasture at 10/27/2009 @ 3:12pm

32. Credit based economy is extremely profitable. In the end it sucks up the economic base that feeds it. It was put in effect in foreign countries by the IMF in it's search for easy prey... those that needed financial assistance desperately enough to accept interests rates that would eventually eat them up... swallow them up whole! It was a fast buck scam. The trick is to take the money before the unsuspecting borrower knows its coming... after enough profit has been made to justify the original investment. It worked well outside the US cause plenty of offshore banks offered shelter from US taxation and bases of operation without any supervision. When foreign countries refused to fall prey to the "business as usual" dirty maneuvers of lenders with absolutely no scruples... these "investors" decided to take on the US. Plenty of opportunities here. There is a rule of thumb among gangsters... "... don't shit in your own backyard". They did. "They" later found they could get America to clean after them. Why not... It is they who decide who runs the country. It is they who pay lobbyists to tell our "leaders" what our priorities are. I am not sure that their belief that this country doesn't have a backbone will save them.

    Posted by Gustav at 10/27/2009 @ 3:38pm

33. Frosty is right. It is really that simple. Posted by freiheit1 at 10/27/2009 @ 2:39pm |

    You guys ever read about the bank panics of the 1890s?

    There's something to be said for having some elasticity to currency, but the Fed hasn't performed that role of monetary policy management properly for decades.

    Don't throw the baby out with the bathwater though...it's a matter of degree.

    Leave the Fed.

    Make it beholden to Congress for more than balance sheet increases.

    Enforce higher reserve levels.

    Force mark-to-market.

    Force off-balance-sheet assets back on.

    Put back Glass-Steagall.

    Regulate derivatives.

    As for how to make that happen here in the U$A...you'll need to figure out how to reverse Buckley vs Valeo first.

    Posted by snowball777 at 10/27/2009 @ 7:20pm

34. Posted by BigPasture at 10/27/2009 @ 08:57am

    That 400% increase had nothing to do with the bailouts. FDIC insured banks are now crashing because people don't have money to save or spend. The only credit available is to huge financial institutions - from the federal government.

    It would be funny if it wasn't so sick.

    Posted by Buddy33 at 10/27/2009 @ 7:24pm

35. An Alternative to Capitalism?

    The following link, takes you to a "utopian" article, entitled "Home of the Brave?" which I wrote and appeared in the Athenaeum Library of Philosophy:

    http://evans-experientialism.freewebspace.com/steinsvold.htm

    John Steinsvold

    Posted by John_Steinsvold at 10/27/2009 @ 7:36pm

36. I think we should all try to foreclose on Goldman Sachs et al using the same phoney (or missing) paperwork that banks are using to foreclose on homeowners.

    We need to force the legal system to require valid paperwork, and thereby cancel the foreclosures in process that do not have the proper paperwork. If the investment banks thought their books were bad when they had toxic assets, what do you think their books will look like if they don't have any assets on their books because they don't have the paperwork.

    The alternative has to be that any of us can foreclose on Goldman Sachs without proper documentation, just like they have been doing to homeowners. And I doubt that they'll give up their fancy offices.

    But they might have to give up their bonuses.

    Posted by nchamberlain at 10/28/2009 @ 12:31am

37. I know why the Banks are not giving out loans. They're too busy building more new banks. I've seen six in the past year alone go up in my neighborhood. What's even stranger? None have opened for business with the exception of BOA.

    Posted by sheila60 at 10/28/2009 @ 07:01am

38. Posted by Buddy33 at 10/27/2009 @ 7:24pm |

    I think Rio was talking about the S&L collapse in the 80s...Neil Bush's Silverado Savings and Loan, for example.

    Think of it as the precursor to the carnage from last year.

    Posted by snowball777 at 10/28/2009 @ 08:44am