bankdecay

How An E-Invoicing Company Could Disrupt The Banking Industry

Wed, 23 May 2012 00:51:54 -0400

How An E-Invoicing Company Could Disrupt The Banking Industry:

Its most potentially disruptive idea is Instant Payments, a service which allows suppliers to get paid immediately once a customer accepts an invoice on the Tradeshift system, instead of having to wait the usual 30, 60, or 90 days.

The money still comes with an interest rate, but the size of that rate gets determined based on the buyer’s credit rating, not the supplier’s. Which is good news for small- and medium-sized suppliers, which often get hit with higher rates because they are perceived to be riskier bets.

Large companies, however, often have better credit ratings. And when you combine that with the fact that Tradeshift can see that a buyer has accepted an invoice (thereby declaring that they do intend to pay the bill), the risk for Tradeshift (and its financing partners) plummets.

“We can do real-time credit assessments,” CEO and cofounder Christian Lanng tells Fast Company.

» via Fast Company

Photo

Sat, 12 May 2012 21:26:57 -0400

The Callus: What Synthetic Credit Actually Is

Thu, 10 May 2012 23:53:17 -0400

The Callus: What Synthetic Credit Actually Is:

thecallus:

So okay, you have a bond. You will pay $1000 at maturity and a 5% coupon in quarterly installments. Or better yet, pretend you’re Nike - you have a shoe, and it cost you $10 to make the shoe.

Imagine you’re a bank. You make a market in bonds - you buy and sell bonds without any real interest in…

Vatican Bank Account Closed At JP Morgan http://t.co/4OPGGjt1

Fri, 30 Mar 2012 09:38:16 -0400

Vatican Bank Account Closed At JP Morgan http://t.co/4OPGGjt1:

swanksalot:

Vatican Bank Account Closed At JP Morgan http://t.co/4OPGGjt1

Madrid escorts declare sex war against bankers

Mon, 26 Mar 2012 15:01:44 -0400

Madrid escorts declare sex war against bankers:

Spanish banks have come under fire recently for many reasons, including foreclosures on thousands of homes. Madrid’s high-class escorts are getting revenge.

The ladies have taken it on themselves to regulate the Spanish banking sector by withholding sexual favours from bank employees.
RT reports that in the Spanish capital, Madrid, the largest trade association for luxury escorts has started an indefinite strike. They say that until bankers return to providing credits to Spanish families and also small- and medium-sized businesses, there will be no sexual pleasures for their employees.

whitewhine: We should start a relief fund for this guy.

Wed, 21 Mar 2012 14:39:00 -0400

whitewhine:

We should start a relief fund for this guy.

thecallus: squashed: thecallus: Absolutely nothing could have...

Wed, 21 Mar 2012 14:30:48 -0400

thecallus:

squashed:

thecallus:

Absolutely nothing could have been done prior to distress and foreclosure! But moreover, how the hell does this borrower have the ability to re-purchase any home at any price immediately following a foreclosure after squatting in it, payment-free? Because of our insane, state-financed, self-contradicting mortgage system.

I can get a 3%-down FHA loan, take a loss, stop paying my mortgage for a while, transfer my loss as well as lost payments to the lender, and (if you get your way) re-purchase the home without ever having to so much as move my stuff out of the place.

In the end, I’m glad we have Libertarians

Yes, I’ve disagree with them on a lot of things. But when it comes to blowing the whistle on the abuse of power by public entities or assaults on civil liberties, the libertarians are willing to cross the aisle and do the right thing.

Today is one of those

That’s not at all how it went down. (For anybody who missed my earlier post, I’m hoping you can all help me get a Freddie Mac policy changed.)

In this case, you can actually piece a pretty good narrative together from press accounts and public records. The house was purchased in 2003. Bank of America¹ appears to have given and then refinanced a string of mortgages on the property adding thousands of dollars in fees each time to culminate in 2007 mortgage for over twice what the home was sold for in 2003. Each of these transactions would have added a few thousand dollars to the mortgage. Most likely that final mortgage relied on a highly dubious appraisal.

The economy crashed. (Not this homeowner’s fault. But maybe a bit the fault of the various mortgage holders here). In 2009 the homeowners had their hours at work cut. Fortunately, a national program to help people like these borrowers was put in place. They applied. They were told they qualified. They were told to start making lower payments. They did. Please keep in mind that at this point the mortgage was current. Of course something could have been done prior to the foreclosure. The borrowers did what they were supposed to do. But then ….

Bank of America asked for some paperwork for their own underwriting. They sent it. In my experience many of the lenders (including Bank of America) routinely lost or misplaced these documents. (Fifty attorney generals and $26,000,000,000 says I’m not just making that part up.) Bank of America asked for more paperwork a few times and either lost or ignored it each time. In July 2011, Bank of America started rejecting their payments.

So when you say that the homeowners were “squatting rent free,” you mean “Bank of America refused to accept their money and backed out of a modification it initiated because it couldn’t figure out how to sort out the documents that came out of its fax machine.” So how can the borrowers afford to re-purchase their home? They can afford it the same way they could afford to make the payments.

Is our mortgage system insane? Clearly. But why should we have policies that cost even more public money for the sole purpose of making an example of people who did everything they were supposed to?

Edit: And yes. You’re right that homelessness is a broad problem and involves a lot of people in significantly worse hardship than the person who just lost a home to foreclosure. And I’m sure that living on the streets in, say, Calcutta is even harder than living under a bridge in Western Massachusetts. But none of this is relevant. This is a case where we’ve got somebody living in a home that they owned and can afford to pay for and a policy designed to make an example of that person as part of a misguided social experiment. “Some people have it even harder” isn’t a reason not to change a dumb policy.

I know. I’m not trying to pick on you or BoA. It’s just, that’s the name that comes up here. ↩

Each refinancing was at the behest of the borrower and was completed to consolidate debt and / or withdraw equity. The borrower is not even a little innocent - they put themselves in a situation where they continually and consciously increased their financial risk.
It’s actually WORSE. This family has made a career of debt mismanagement for 9 years.
No comment on lost forms, for obvious reasons. That may have been the act that led to the actual default, but the groundwork was laid by borrowers - like so many Americans - who progressively used their home value increases to fund their lifestyles. The inability to survive an income disruption was the result of excessive leverage caused by repeated borrower-initiated refinancing requests.
Then they got to live for free in the house for a while after the mortgage got torn up. Time to leave. Rent, motherfucker; it isn’t the end of the world. Why do these irresponsible people deserve so much money and attention when people are starving and literally homeless?

Beyond Debt: An Economy of Gratitude

Wed, 14 Mar 2012 00:05:56 -0400

Beyond Debt: An Economy of Gratitude:

Debt: The First 5000 Years covers a vast sweep of history, anthropology, and political economy, arguing not so much for a single thesis as for a braid of complementary ideas. Among them are:

That money originated as “social currencies” used to rearrange relationships among human beings (marriage, funerals, blood money, and other social functions), and was not used to buy and sell things. Indeed, this kind of money is to be found even in societies without a significant division of labor. 

That the first money used for commerce took the form of credit: tallies of transactions and loans denominated in a common unit of account and periodically settled by delivery of various commodities. 

That the conflation of these two different kinds of money led to debt peonage, slavery, the demotion of women’s status, and other iniquities that one might expect to happen when human relationships are mediated by the same currency as commercial transactions. 

That much of the psychology and morality around money traces its origins to the violence and slavery that have been part of creditor-debtor relationships for thousands of years. War and slavery were crucial in creating the economy we know today, which should not be surprising, as our economic habits still encode the anxiety one might expect from such origins. As well, they perpetuate violence and, if not outright slavery, debt servitude to this day. 

That history has alternated between periods of credit money and coinage, with the latter corresponding to times of greater violence, social chaos, slavery, and the repression of women. So for example, the Middle Ages saw the virtual abolition of slavery and the flowering of complex credit relationships facilitating trade across the Indian Ocean and beyond. Coins were seldom used. Compared to the Axial Age that preceded it, it was a time of relative peace and prosperity, ending with the rise of Europe and the influx of vast amounts of silver from the New World. A new age of coinage began. 

That markets have never been “free” in the sense of being separate from government, but, to the contrary, were created by governments to facilitate their acquisition of various goods (especially for their armies). They have been intertwined ever since. 

That all major world religions grew in response to money, whether informed by the beliefs of people living in a money economy, or in reaction to its evils. 

That the origin of capitalism as we know it today is “the story of how an economy of credit was converted into an economy of interest.” Debt, he says, is the primary instrument of colonization whether internal or abroad – keeping in mind that behind the man with the ledger is a man with a gun. Moreover, the enforcement of debts is key to maintaining the political power relationships the prevail today. 

That the invasion of market relations into every sphere of life has always been accompanied by violence. War, debt, and the market are inextricably linked. Even today, our money system is based mainly on the monetization of government war debts. If there is one persistent theme to this book, it is that our association of debt repayment with morality is false; that, indeed, the debt relations that hold today are rooted in a history of violence; that debt and money itself are social creations and not unalterable facts of nature; that our understanding of human nature is deeply colored by the market-based, debt-based world we live in. The world could be different. We are right to want it to be different.

ShortFormBlog: Wells Fargo to begin charging for "free checking" in six states

Thu, 08 Mar 2012 14:26:17 -0500

ShortFormBlog: Wells Fargo to begin charging for "free checking" in six states:

shortformblog:

$7 monthly fee to use “free checking” below a certain balance source

» After a trial in California and other Western states, the company plans to expand the policy to six more states — states it has not named yet. The rules: To avoid the fee, you must have a balance over $1500 monthly…

fastcompany: How Wall Street Bankers Use Seamless To Feast On...

Mon, 05 Mar 2012 09:08:35 -0500

fastcompany:

How Wall Street Bankers Use Seamless To Feast On Free Lobster, Steak, And Beer

jonathan-cunningham: bankruptingamerica: Rolling Stone...

Thu, 01 Mar 2012 17:21:39 -0500

jonathan-cunningham:

bankruptingamerica:

Rolling Stone journalist Matt Taibbi — he who coined the immortal phrase about Goldman Sachs being a “bloodsucking vampire” — spoke at an Occupy Wall Street rally today. Via Taibbi’s blog:

Occupy Wall Street is kicking off a new series of actions today, and as part of the campaign, I’m going to be speaking at Bryant Park at 11 a.m., through about noon, when a march will begin.

The topic is Too-Big-To-Fail banks, and Bank of America in particular.

The Twitters were abuzz with reports from his speech. We’re going to post a few of Taibbi’s thoughts about Bank of America via Twitter.

I’m going to transfer my money out of BoA and into another account soon; I think I’ll document the process as I do it.

Squashed: To catch a predatory lenderTo catch a predatory lender.

Wed, 22 Feb 2012 15:44:11 -0500

Squashed: To catch a predatory lenderTo catch a predatory lender. :

thecallus:

squashed:

So housing prices are low. But credit is tight. When people can’t get financing from a reputable source, they sometimes turn to less conventional—and generally predatory—options.

A lot of the scuzzy mortgage brokers turned into foreclosure rescue scammers, but now that game is running dry too….

Auto lending

When Debt Is More Important Than People, The System Is Evil

Tue, 21 Feb 2012 10:12:00 -0500

When Debt Is More Important Than People, The System Is Evil

Let's stop blaming the victims of predatory lending

Tue, 14 Feb 2012 13:27:13 -0500

squashed:

This is important.

The primary cause of the subprime collapse—which heralded in the Great Recession was bad loans not bad borrowers. At the peak of the subprime boom lenders structured loans in a way that virtually guaranteed that those loans would fail because it was profitable. Borrowers—particularly minority borrowers—were steered toward these designed-to-fail loans even when they would have qualified for a prime loan. It doesn’t matter how good your credit is or how high your income is. I can write you a loan with terms so bad that I know you won’t be able to pay it back. I’m afraid this post may require tossing around some numbers—but please bear with me. Even if correcting the banks efforts to shift blame isn’t sufficient, this stuff is worth knowing if you plan on someday getting a home loan.

Read More

Photo

Fri, 10 Feb 2012 12:10:29 -0500

Stevie NYC: Dear Fucker from Kansas that tried using my Debit Card today,

Thu, 09 Feb 2012 15:27:17 -0500

Stevie NYC: Dear Fucker from Kansas that tried using my Debit Card today,:

stevienyc:

I WILL FUCKING DESTROY YOU.

I had my card declined today while trying to get lunch and was confused because for once in my life I actually have money in my account. I don’t carry cash with me because I’m a NYer and this is 2012, so I wasn’t able to get my lunch. Now I am hungry AND angry.

Did…

youngmegadethite: OFFICIAL POSITION EVERYDAY

Tue, 31 Jan 2012 10:46:07 -0500

youngmegadethite:

OFFICIAL POSITION EVERYDAY

The siren call of austerity

Sat, 28 Jan 2012 15:29:39 -0500

The siren call of austerity:

The United States government, which has a monopoly on its currency, is $15.2 trillion in debt, roughly the same as the entire output of the economy for a year.

That figure has been sung in a refrain about massive debt threatening to bring down the economy and cause inflation. Facts, however, show otherwise.

The country was much deeper in debt, relative to the size of the economy, in 1946 than it is today and yet what followed was decades of prosperity. The 1946 debt remains and, after six decades of growth, it is inconsequential.

In Japan, government debt is roughly twice annual economic output and yet the country continues to function because real interest rates are at or below zero.

To be sure, conditions can change and interest rates can rise sharply, though central banks have ways to limit that. But that is not the problem today. The problem today is shrinking incomes due to shrinking spending.

Austerity budgets, by reducing government spending, will only make incomes fall more. The only way to make incomes rise is to make spending rise, which in the short run means more borrowing by governments to enable more public sector spending.

"Some banks have gone in the seemingly wrong direction. For example, Bank of America caused outrage..."

Wed, 04 Jan 2012 14:06:23 -0500

“Some banks have gone in the seemingly wrong direction. For example, Bank of America caused outrage recently when it announced it would be charging monthly fees for customers to withdraw or use their own money in checking accounts with debit cards. This attempt to generate profits led to a mass exodus from customers, who instead opened banks with smaller financial institutions. It wasn’t long before BofA announced a cancellation of the plan.”

- Banks on Facebook: Any Hope to Build Trust? | Pronet Advertising

mohandasgandhi: STUNNING Facts On Income Inequality and Bank...

Mon, 26 Dec 2011 17:44:43 -0500

mohandasgandhi:

STUNNING Facts On Income Inequality and Bank Bonuses

Stunning facts about bank bonuses on Wall Street, average compensation and homeless kids are shared by The Young Turks host Cenk Uygur.

From ThinkProgress:

In the United States, the top 1 percent controls roughly 40 percent of the nation’s wealth. According to the study, which examined Roman ledgers, previous estimates, imperial edicts, and Biblical passages, Rome’s top 1 percent controlled less than half that at the height of its economic power, as Tim De Chant notes at Per Square Mile:

Their target was the state of the economy when the empire was at its population zenith, around 150 C.E. Schiedel and Friesen estimate that the top 1 percent of Roman society controlled 16 percent of the wealth, less than half of what America’s top 1 percent control.

Of course, the millions of Romans at the bottom of the empire’s class structure — the conquered and enslaved, the poorest Romans, and the women who had little civic or economic empowerment — would probably disagree with the study’s conclusion. Still, it serves as yet another highlight of how large the income gap in the United States has become over the last three decades.

Still, it’s unbelievable that the wealth of the bottom 60% in the U.S. is less than the Forbes 400 richest and that the 6 heirs to the Walmart franchise have the combined wealth equal to the bottom 30% in this country. Give the bankers their record bonuses anyway. They’re doing a fantastic job.