Lol, you guys should get together and start your own bank. Run it like this thread suggests "The ATS Bank of Free"

What a load of rubbish. NEVER do business with anyone who spouts crap that its patriotic or duty as a citizen. Anytime they use either line people get shafted.. Let the banks fall theyve caused enough trouble with their greed.

Originally posted by CookieMonster09
Complaining about interest rates, eh? Hmmm. Interest rates are the lowest they have been in decades. They are at historical lows.

Are you aware that interest rates used to be determined by supply and demand? There was a time when a customer looking for a loan could shop around, and all the banks were in competition with each other. They couldn't charge too much interest, because they wouldn't get customers. They couldn't charge too little, because they wouldn't make as much profit.

You might say the situation is the same today, but don't forget. The FED sets the prime rate. Everything else is higher. So if the prime rate hits 10% then you'll never find a loan for less than that. It's artificial manipulation of the market, because the FED is a controlling monopoly on credit. There is only 1 kind of cash we're supposed to accept in this country, and it's the Federal Reserve Note.

Since the Fed creates this money out of thin air, and so do it's member banks, and so do the commercial banks, charging interest on something created out of nothing is an enormous profit. If costs of $100 of new money is only $10, then getting back $200 (when you include the interest) is a pretty good profit to make from ten bucks. Before all this artificial manipulation and fractional reserve system got so out of hand the bank actually got the interest you would expect on the loan. For example, if you had to pay them $105 because of a 5% interest on a $100 loan, the bank actually had to come up with 100 real dollars. Not so today.

Originally posted by CookieMonster09
I can also assure you that banks have significant assets - stocks, real estate, land, equipment, reserve cash, etc. They operate as a business, just like any other company. This whole notion that they "create money out of thin air" is total nonsense floating around the Internet in these goofy videos.

I looked it up in my university library. Book after book after book explained the procedure the same way.

The bank only has to have a small amount of money. They loan out much more than they have, usually at least by a factor of ten.

So 90% of what a bank loaned you in your mortgage came out of thin air. It's not goofy, it's not a lie, it's true and real. Banks are creating the money they loan.

Originally posted by CookieMonster09
If it costs Ford Motor Company $15,000 to manufacture a car, and it sells that same car for $20,000 to a consumer, did Ford Motor "create $5,000 out of thin air"? No, I didn't think so.

It's called profit. Banks are no different. If they lend you $200,000, they expect to earn interest on that money. Interest earned is profit to a bank for the risk that they are taken in the event you skip town and default, which is all too common nowadays.

Unlike the bank, Ford actually created something.

And this "profit" you speak of is simply the added value you get when you take raw materials and arrange them into an automobile. It's worth more that way, and so that's what people are paying for. The business might call it profit, but in reality it's an exchange for similar value

Originally posted by CookieMonster09
And, if you don't like the interest rate, go ahead and pay the loan off before its maturity date. Instead of taking 30 years to repay your mortgage, pay it off in 5 or even 10 years and save yourself all that interest. Your choice.

Most banks won't let you do that anymore. Somewhere in the fine print of your contract they have made sure that they're going to get all that interest from you in the long run.

Originally posted by CookieMonster09
And, what happens if you default? The bank has the oh so pleasant task of foreclosing on your house (a very costly and time-consuming process, and oh so terrific for public relations - NOT). In today's market, a house worth $200,000 5 years ago is not even worth $125,000 nowadays.

If it's so costly to take homes from people for the cost of printing up some paperwork, I'll take yours. I'm willing to "pay" for it.

Originally posted by CookieMonster09
The bank gets to take a $75,000 loss plus all of the ancillary expenses associated with foreclosure. The bank is left holding the bag.

Yeah, they're holding the bag alright. As if homes are such an awful thing to take possession of. Are you really serious trying to convine us that the bank doesn't gain in foreclosure? They've probably already been paid many thousands of dollars before the person who bought the home stopped paying. AND the bank gets the house too! I'd call that a deal.

How can you call that a loss, considering that the fractional reserve system let the bank create most of that money out of thin air in the first place?

You need to google or wikipedia fractional reserve.

But I think you already understand the system, because you argue for it like a banker would.

Take your collateral for the cost of computer hard drive space or a little ink. Foreclosure is theft, because the bank took very little risk creating that money for you. Why do they get to create money out of thin air, but we have to get money the hard way??

The bank took very little risk? How do you figure?

5 years ago, you buy a house for $200,000. The bank strokes a check at closing for $200,000 - a real, live check that can be converted to cash that has real purchasing power - to the seller of the property.

5 years later, you default. You lose your job, whatever. That house is now worth $125,000 based on current market conditions.

Yeah, that's some wonderful, terrific collateral you pledged. The bank lost $75,000 plus all the costs associated with foreclosure. And they now get to try to sell this piece of crap toxic real estate asset on the open market, probably for pennies on the dollar - since YOU trashed the house before you left, stripping all the copper pipes, removing all the fixtures, etc.

But wait...Can't the bank go after you for that $75,000? Why would they? You lied on your loan application when you really don't have any income or assets worth going after.

But, you're right. In this scenario, it's the bank's fault. They didn't take any risk at all, right? Sure.

For those of you who are actually defending the banks and their practices, I recommend you check out the book The Creature from Jekyl Island to find out how the system really works and how the banks and the banksters have been stealing away the wealth of the American people through inflation since the inception of the Federal Reserve.

Read it. Bunch of bunk. Nevertheless, I would rather have our banking system than live in a Communist country.

What would you like to replace this system with, exactly? Someone mentioned credit unions. I don't have any problems with that idea at all.

No more compound interest.

Pay the loan off early, and you'll stop the bank from compounding interest. That was easy.

Better yet, don't borrow beyond your means. How's that for a concept?

Credit available publicly.

Sorry, I'd rather have my money in a bank that actually has a credit department and conducts due diligence on their borrowers, rather than doling out public funds to any Tom, Dick, and Harry with a pulse.

An end to the fractional reserve system. Banks creating money out of thin air, then using it to force you to give up your collateral is fraud and theft.

Kind of like Ford Motor company, right? I mean, when they manufacture a car that costs them $15,000 to build, and then sell it to the average man on the street for $20,000, they just created $5,000 out of thin air, right?

Ridiculous. As if businesses are allowed to have profits, but banks shouldn't. Why is that? What's wrong with profits?

You gotta love the spiel from the banks!

I'm in the UK but they all p*ss in the same pot

If "my savings are someone else's mortgage"......then why can't I have the same rate, or a more comparable rate of interest that they charge the people that borrow my money?

Of course the obvious answer is not to borrow money at all, just save for the things you want/need........It's not easy, but it is do'able!

Originally posted by davidgrouchy
Was that a church,
a town hall meeting,
or a commerce rally?


David Grouchy

It must be a town hall meeting.
If it were a church, surely Jesus would have strode in and flipped the table of those moneychangers.

The FED sets the prime rate. Everything else is higher. So if the prime rate hits 10% then you'll never find a loan for less than that. It's artificial manipulation of the market, because the FED is a controlling monopoly on credit.

Fine, go ahead and abolish the Fed. Your Congress has every right to do so.

Since the Fed creates this money out of thin air, and so do it's member banks, and so do the commercial banks, charging interest on something created out of nothing is an enormous profit.

Only the Federal Reserve prints money. Not the member banks.

If it's so profitable, then how do you explain the unprecedented number of bank failures the past couple of years?

The bank only has to have a small amount of money. They loan out much more than they have, usually at least by a factor of ten.

Baloney. Take the Balance Sheet of any well-run mid-sized bank. They have billions of dollars on deposit that they can lend against.

Take Comerica Bank as an example. Per their 2009 audited financial statements, they have $42.2 billion in outstanding loans out on the street. Total deposits? $40 billion. Investment securities for sale? $7.4 billion.

Hardly a factor of ten, pal. And this is your typical Main Street retail bank. Look it up yourself. They're publicly-traded.

You conspiracy guys always come up with this nonsense that banks lend money out of thin air. It's a complete fabrication. Banks have deposits. They also have assets, such as buildings, equipment, land, investments, cash, oftentimes to the tune of billions of dollars.

Banks don't operate in a make-believe fairy world of made up deposits. I can assure you, that when you close on a house, that the check cut at closing is a real live check with real live purchasing power.

And this "profit" you speak of is simply the added value you get when you take raw materials and arrange them into an automobile. It's worth more that way, and so that's what people are paying for. The business might call it profit, but in reality it's an exchange for similar value

So Ford is permitted to make a profit, but a bank is not allowed to make a profit for taking a risk on a loan? What's wrong with this picture?

If I lend you $100, and you agree in writing to pay me back in 6 months, am I entitled to any interest? Yes or no. You tell me.

No one is putting a gun to your head to force you to borrow. If you don't like the terms of the loan, then don't borrow money. Can't do it? Baloney. Ask any debt-free Dave Ramsey fan if it can be done. It can. Millions of families live debt-free if they only take control of their spending habits.

Most banks won't let you do that anymore. Somewhere in the fine print of your contract they have made sure that they're going to get all that interest from you in the long run.

Nonsense. Most mortgages do NOT have pre-payment penalties. You can pay off your loan at any time without a penalty.

Quit spreading distortions and misinformation.

Are you really serious trying to convine us that the bank doesn't gain in foreclosure?

You're kidding me, right? Most of these residential real estate loans were speculative real estate loans, not owner-occupied loans. That means that a house flipper, a real estate speculator, or a builder had the loan. The house sat vacant - No one ever lived in the house.

The bank got royally screwed. The borrowers default, and the bank takes the losses. The borrower skips town, and never repaid the principal balance owed, let alone the interest that was owed.

And, you might want to remember, we have an epidemic of mortgage fraud in this country. The banks were defrauded - Big time. Anyone familiar with these matters knows this to be true - Mortgage fraud was rampant, and banks were the losers. Hence, bank failures at a record pace. Why? Fraud. Banks got ripped off by sub-prime mortgage brokers and borrowers.

How can you call that a loss, considering that the fractional reserve system let the bank create most of that money out of thin air in the first place?

Read above.

Again, if Ford manufactures a car and it costs them $15,000 to do so, and then sells the car for $20,000, did it create $5,000 out of thin air or not?

If a bank lends $15,000 to a borrower, and the bank conducted the credit investigation, analysis, appraisal, etc. to verify that the loan was a wise investment, and the borrower then repays to the bank $20,000 over the course of say 3-5 years, is the bank creating money out of thin air? Of course not. It's the profit for taking a risk. The borrower could have defaulted, and never repaid the $20,000.

....... ummm LOL!!!
I was waiting for the kid to say "Live from New York It's Saturday night!"
Agreed trashy move on their part.

Corporate media needs the big companies and banks for their advertising revenue. Hence, it is quite clear that these media companies (irrespective of whether they sell entertainment or news) would follow a predefined agenda that serves certain vested interests. For quite a long period of time, these media companies have indulged in propaganda that sheeple are ready for fall for. These ads are nothing but kool-aid for those sheeple who will fall for the "official" version of events.

Put your money in a credit union. There really should be an entire thread about THIS topic. I haven't dealt with a bank in years.

Banks willingly turned a blind eye to creditworthiness, and why not when they could bundle their toxic mortgages into exotic mortgage backed securities (derivatives) and dump 'em on the secondary market, and/or Fannie/Freddie...spreading the contagion to hedge funds, pension funds, municipalities, and retirement funds worldwide. In some cases they reaped huge profits by betting against the MBS they themselves created using additional complex derivatives...derivatives engineered by their own in-house quant jocks.

Who bailed-out Fannie/Freddie ? The taxpayer...$145 billion and growing.

The Fed monetized (purchased with newly created "money") a minimum of $1.30 trillion in toxic MBS dumped by the banks, and $200 billion in agency debt....a stealth tax on every American breathing.

Tarp funds were issued with a pile of regulatory red-tape including limits on executive bonuses, as a result, some recipients rushed to pay back that money just ahead of bonus season.....go figure ?

Pity the banks ?

Great point.

As a shareholder in a credit union, do you expect the credit union to give out interest-free loans, or do you expect the credit union to charge a fair rate of interest?

If the borrower from the credit union defaults, who should take the loss?

If the borrower commits fraud against the credit union by falsifying his loan application, should you as a shareholder in the credit union be penalized for this loss?

In some cases they reaped huge profits by betting against the MBS they themselves created using additional complex derivatives...derivatives engineered by their own in-house quant jocks.

A Wall Street investment bank is not the same thing as a retail, brick and mortar bank on Main Street.

Goldman Sachs carries no deposits. It originates no loans.

Your mom and pop local retail banks don't typically sell derivatives, unless they are a mammoth organization like Chase and Bank of America.

Don't confuse the two. A Wall Street investment bank is NOT a retail traditional bank.

These bad loans were originated by sub-prime mortgage brokers. Ameriquest. Rock Financial. Countrywide. Taylor, Bean, & Whitaker. You get the idea.

Mortgage brokers are NOT banks.

Who bailed-out Fannie/Freddie ? The taxpayer...$145 billion and growing.

Fannie and Freddie were buying paper from mortgage brokerages like the ones I mentioned above. Fannie and Freddie are government agencies, not banks.

The Fed monetized (purchased with newly created "money") a minimum of $1.30 trillion in toxic MBS dumped by the banks, and $200 billion in agency debt....a stealth tax on every American breathing.

Dumped by Wall Street banks, right? Agency debt meaning Fannie and Freddie.

The small town Main Street bank still isn't fitting into your picture, is it?

Tarp funds were issued with a pile of regulatory red-tape including limits on executive bonuses, as a result, some recipients rushed to pay back that money just ahead of bonus season.....go figure ?

TARP was repaid, with interest. Most banks have repaid TARP. The taxpayer was never defrauded, and actually profited from the arrangement.

TARP was a temporary emergency measure to stop the free fall and stop the panic. It was instituted by the Treasury - not a bank.

And why not back our banks in an unprecedented time of crisis?

Banks willingly turned a blind eye to creditworthiness,

No, sub-prime mortgage brokers turned a blind eye to creditworthiness. Some took it a step further and actually doctored up loan applications and falsified income.

There's no convincing someone whose mind is made up.

I guess all the information you can find in libraries or online amounts to nothing, even though those that do explain it state it simply: banks create money.

Bank failure is a way for larger banks to eat up smaller ones. It was done during the depression to consolidate banking power and push competitors out of the system.

How does a bank fail? Their lies become too obvious to continue the fraud. That's how.

Or, if you want to use technical parlance, they are unable to meet their reserve requirements. This can happen when people stop paying on their loans, but that doesn't mean the bank is out of anything of tangible value. Money itself is an idea. If you create money but it doesn't represent or correspond to value that was created, then its value dilutes the value of money already in existence.

Inflation is caused by banks creating credit. It increases the money supply. Where did you think all the new money in our world came from?

When my grandfather was a kid, he could get a cheeseburger, fries, and a milkshake for 25 cents.

Today it's more like 8 dollars. Because our currency has been devalued by the creation of more money.