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Bank of America CEO: We Have a "Right to Make a Profit"

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posted on Oct, 7 2011 @ 01:55 PM
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Originally posted by consciousgod

Originally posted by GringoViejo
I don't see anything wrong with what he said. Whether we like it or not, its true. I'm not saying banks are our friends, but the point of starting a company is to make money.


Banks make money by charging interest on loans. When a bank refuses to loan money, the bank loses its revenue source and has to find other ways to make money.

The fact that BA is losing billions with the FrankDodd bill indicates BA has be doing unethical operations.

It's time for natural selection (people choose to leave BA) to drive BA evolution. Those with debit cards should bank elsewhere.

I fired BA and you should too. It's easy. Don't waste your time occupying Wall Street. Pull your money out now and send a message that you will not stand for banker corruption.
edit on 7-10-2011 by consciousgod because: (no reason given)


*Gasp!*

Then don't use Bank of America. No one is forcing anyone to use the bank, or any bank for that matter.




posted on Oct, 7 2011 @ 02:51 PM
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I think everyone's missing the elephant in the room here.

Banks are operating like a casino, they've become nothing more than that these past decades. (Of course we know it as "investing", "derivatives", "hedge funds", etc.) Plain and simply put, the only type of business that continuously profits from gambling is an actual casino.

So if you operate your business like a casino, gambling with its revenues, then you're guaranteed to take losses more times than not... that's statistical fact.

Now looking at it from that perspective, are there any businesses out there that you know of where if they gamble and lose their revenues resulting in a net loss year after year, the public purse steps in and rescues them from its stupidity, incurring economic hardship and meltdown for all ?!

Nope.

So for this CEO to sit there and speak of banks as though they're some sort of standard run-of-the-mill type of business entity that falls under the same accounting principles and operations... All I can say to that is "Oh please !".


The fact of the matter is, they need to implement higher fees for their services only because of their immoral business practices. So it's a bold faced lie for any of these banksters to point their finger and lay blame on so-called fascist "rules and regulations". In fact, the banks around the world have never had so much freedom with others' money in all of history since their conception !

So are these banks truly justified in their implemention of these current service fees ?
I don't know... you tell me.

Smoke and mirrors, folks, smoke and mirrors.
edit on 7-10-2011 by CranialSponge because: (no reason given)



posted on Oct, 7 2011 @ 03:07 PM
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reply to post by Skorpiogurl
[more)

what about those of us who found our mortgages had been transferred over to countrywide.....

just wondering here.....



posted on Oct, 7 2011 @ 05:30 PM
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reply to post by dawnstar
 


Our mortgage was also transfered to countrywide actually before countrywide it was transfer two times other mortgage companies that I don't even remember the names.

Now is under BofA.



posted on Oct, 7 2011 @ 05:44 PM
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reply to post by lifeform11
 


It all comes down to competition. The one with the most competitive prices or fees usually gets the business, but not always. Sometimes customer service and the product are worth the extra money. I've already heard a radio commerical from a local bank here saying if you aren't down with the "other" bank charging to use their debit card, come join us.



posted on Oct, 7 2011 @ 06:42 PM
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I think it's laughable when he said we have a right to fleece people because we need profit for shareholders. Paraphrase obviously before any of you who have your pedantic pants on say anything


Bank of America Corp. gave Chief Executive Officer Brian T. Moynihan a $9.05 million bonus for his first year as leader.

Thomas K. Montag, who leads global banking and markets, got $14.3 million in restricted stock and $900,000 in cash awards.

24 million 250,000 dollars, which means that 4 million 850000 chequing account customers are needed just to pay those two peoples bonuses.

Add all of the bonuses paid out together, and its no wonder Bank Of America need to fleece the poorest of their customers to keep their ceos and shareholders in the manner they are accustomed to.



posted on Oct, 7 2011 @ 09:41 PM
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Bank of America Corp. gave Chief Executive Officer Brian T. Moynihan a $9.05 million bonus for his first year as leader. Thomas K. Montag, who leads global banking and markets, got $14.3 million in restricted stock and $900,000 in cash awards. 24 million 250,000 dollars, which means that 4 million 850000 chequing account customers are needed just to pay those two peoples bonuses.

First, profits don't come from deposits. Deposits are technically liabilities on the bank's balance sheet. Banks earn interest and fee income, and that is how its employees get paid.

And Bank of America isn't just a retail bank. It's not even just a residential mortgage bank. This is a $3.2 Trillion bank with its hands in every facet of financial services, from investment banking on Wall Street, to international finance, to commercial and industrial lending, to consumer finance.

This is a behemoth of an organization, with around 300,000 employees worldwide, and one of the largest companies in the country, if not the world.

Guys like Moynihan and Montag are no slouches. They didn't just bump their heads one day and volunteer to be in senior management at a huge multi-national bank. You don't earn the kind of money these guys earn without paying some serious dues. These guys work around the clock 24 hours a day, 7 days a week, and have done so for most of their working lives in corporate banking. Moynihan in particular is well-known for his drive and work ethic, and well-respected among his colleagues.



The fact of the matter is, they need to implement higher fees for their services only because of their immoral business practices.

No, they have to implement the debit card fee because of the Durbin Amendment, that stripped banks from as much as $36 Billion in fee income by some estimates. Banks like Bank of America are giving consumer the choice: If you like your debit card, pay as you go. If not, pay cash. This is no different from the $100 annual fee paid for most credit cards - And charging a fee for debit card usage has been a common fee by many regional banks in the Southeast for quite some time now, so this is nothing new.

edit on 7-10-2011 by CookieMonster09 because: additional info



posted on Oct, 8 2011 @ 02:13 PM
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I've already heard a radio commerical from a local bank here saying if you aren't down with the "other" bank charging to use their debit card, come join us.
reply to post by wardk28
 


well yes other banks will use that to their advantage to gain customers, but you can guarentee it will not be long before ALL banks charge that fee and people can no longer escape it or have a choice about it other than how much they have to pay.



posted on Oct, 8 2011 @ 05:07 PM
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reply to post by CookieMonster09
 


Well I guess thats ok then as long as they keep corporate money they stole seperate from fleeced from customers money then
, and talking of the liabilities of deposits, silly me I thought the deposits were the capital they could leverage infinately to rob even more, I really am dumb sometimes.


edit on 8-10-2011 by JustXeno because: (no reason given)



posted on Oct, 8 2011 @ 07:49 PM
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Well I guess thats ok then as long as they keep corporate money they stole seperate from fleeced from customers money then , and talking of the liabilities of deposits, silly me I thought the deposits were the capital they could leverage infinately to rob even more, I really am dumb sometimes.

What corporate money did they steal exactly? Are you referring to TARP funds that Bank of America repaid with interest in full several years ago, which were literally forced down the throat of the 20 largest bank at the height of the financial crisis for the purpose of stopping the panic in the financial markets? Most of these banks didn't need the money then, and don't need the money now.

Funny enough, Bank of America donates hundreds of millions of dollars in philanthropic and charitable donations in the very communities they serve - many in some of the most distressed parts of the country. In Detroit, for example, CEO Moynihan gave Mayor Dave Bing a check to cover the costs of tearing down about 100 abandoned and dilapidated houses, and even donated free housing for police officers that work in the city. You never hear about that in the media, now do you?

You never read in the press about these donations, or even the hundreds of thousands of hours of community service of their employees. Unfortunately, due to the media frenzy and populist politics, the banks are always painted as the "bad guys" without a more balanced approach to reporting.

Most employees at these big banks don't make big bucks. Many of these employees earn a rather low to moderate wage, with only senior managers and upper management earning significant incomes.

Deposits, by traditional accounting standards, are liabilities on the books of the banks, not assets. Banks lend money using signed, legal contracts. No lender puts a gun to the head of the borrower to force them to sign a mortgage note.

As I have said in previous posts about this issue, it is really ironic that no one ever places the blame on the deceitful, speculative borrower that lied on their mortgage credit application about their assets and income, and lied about their ability to repay their mortgage. When the house gets foreclosed, it is oftentimes worth as much as 30-50% less than the original funding amount, and the bank takes the loss. Somehow, people have this rather strange concept that banks are making out like bandits on the foreclosure process. Nothing could be further from the truth. But I digress. This is yet another issue unrelated to the original post.



posted on Oct, 9 2011 @ 07:17 AM
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reply to post by CookieMonster09
 


A valiant effort indeed to protect your boss. But the masses are not fools nor easily fooled.

1. If the bank CEO, whom you laud to the skies as an honestsweat soaked labourer, working 24/7, a successful experienced living banking genius whom is responsible for all and do no wrong, deserving of his millions STOLEN, then WHY are banks in such a sorry state today?


2. Regardless of liabilities or losses definations on deposits, the fact remains that the money IS ALREADY held by the bank, no matter how you parse it. If they had no such deposits, they would not even be called a bank in the first place. And it had been the money that had allowed them to loan to others to make a profit.


3. Bankers give hundreds of millions to philanthropic organisations? Ever wonder why such philantrophy was needed in the first place, of having to beg pittances from the robbers whom for the sake of public relations, they drop a few miserly coins into boxes?

If the bankers had been more socially responsible with honest products and services, and shared wealth rationally, not hoard wealth and cease lending, everyone would have a sustainable job and need no charity from anyone, and would have been even able to contribute far larger in taxes for social expenditure than the pittance your bankers immodestly and loudly proclaim to the world of their supposed charity.

As for donated to the police force, a gov service, it is just another corruptive bribe by any other name with a better protection agenda in mind. I certainly dont see them donating tents and food to those that they had foreclose homes upon.


4. Most employees, such as clerks, tellers, guards, receptionist, and the tea lady certainly DONT earn big bucks despite the obscene profits. It all went to those who could figure out how to rob the masses blind further, as the recent 2 financial crises had proven.



5. When a property get's foreclosed, how often does the bank loses? Either the bank only loans 80%, thus when foreclosed, it is the owner who lost everything, NOT the banks. Greed taught bankers well on how to survive by robbing others first before they would even consider loaning a dime.

And even if the property market is down, they have the holding power to either rent it out or wait a few months when the markets pick up and profit far more handsomely. I certainly dont see the banks give such profits to the lenders who had to foreclose at a loss.


6. Of course we are drifting out of topic, thanks to your love of bankers to exonerate them of any wrong doings, even today when more are awakened to the depridations of what they had been doing.

Your banking idol is right to say he has a right to profit. Only he didnt add - to profit unconscionably as well. You also best remind him that he have a right to make a loss and be fully responsible for it, instead of forcing the masses to pay through the collaboration of the puppet governments.

Wake up! The bankers gravy train aint gonna last forever.
edit on 9-10-2011 by SeekerofTruth101 because: (no reason given)



posted on Oct, 9 2011 @ 12:27 PM
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If the bank CEO, whom you laud to the skies as an honestsweat soaked labourer, working 24/7, a successful experienced living banking genius whom is responsible for all and do no wrong, deserving of his millions STOLEN, then WHY are banks in such a sorry state today?

Because when borrowers default, the bank takes a loss. Are you not aware of the record unemployment, record foreclosures, and the catastrophic state of the economy these past few years? When borrowers cannot pay their loans, banks take the loss.

Banks are businesses, not non-profit social service organizations. Banks - like all businesses - are designed for the purpose of providing products and service that generate profits. This is the very heart of what a business is designed to do: generate profits for shareholders. Moynihan is right in his analysis of the situation.



.....everyone would have a sustainable job and need no charity from anyone...

Entrepreneurs create jobs, not banks. Banks facilitate job creation by providing capital to entrepreneurs.



I certainly dont see them donating tents and food to those that they had foreclose homes upon.

Of course you don't, because the media doesn't report on the philanthropic activities of banks. You have to actually read an Annual Report or do some of your own personal research to learn about these charitable corporate activities.

Ever hear of the charitable organization, United Way? How about Habitat for Humanity, which builds houses for the homeless? Mega-banks like Bank of America are some of the largest sponsors of these programs:

www.bankofamerica.com...
www.bankofamerica.com...



When a property get's foreclosed, how often does the bank loses? Either the bank only loans 80%, thus when foreclosed, it is the owner who lost everything, NOT the banks.

Regretfully, you are incorrect. Many of these sub-prime mortgages were given with Zero Money down, and the houses have plummeted in value by as much as 30-50% or more in many parts of the country.

To make matters worse, when the bank finally does regain ownership of the physical property itself, oftentimes there is tens of thousands of dollars in damage to the property from the prior owner stripping copper, electrical wires, and generally damaging the property to be practically uninhabitable. The bank loses big-time.

And, really, your argument doesn't make sense. One one hand, you complain that the banks are failing, and in financial straits, and then in the same breath you say that they are making out like bandits. Which is it? It cannot be both. You cannot have your cake and eat it, too.



And even if the property market is down, they have the holding power to either rent it out or wait a few months when the markets pick up and profit far more handsomely.

A few months? Try many, many years. We won't see houses start to appreciate in value for another decade or more by some estimates.



Of course we are drifting out of topic, thanks to your love of bankers to exonerate them of any wrong doings, even today when more are awakened to the depridations of what they had been doing.


No, just calling a spade a spade, and countering the liberal media's bias against free enterprise and capitalism, when they clearly prefer to pander to populist fears and class warfare.



posted on Oct, 9 2011 @ 12:59 PM
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many of those mortgages were sold very soon after the loan was made and turned into investment securities (poker chips), and gambled with on wall street (they were betting on weather or not we would pay our bills!!!)..
my point is the bank that originally loaned the money WAS paid back!!! They made their money back...then, well they were also playing poker with these securities, making more money!!! then, when the people start having trouble, because, the terms were unrealistic on the mortgages, because, it was destined that they weren't gonna be able pay it back to begin with but who cared since well, they weren't gonna hold the note anyways, it was just another chip for them to play with! because the economy is crap and the people were laid off well they come and take the house, and sell it, and they make more money!!! then since they didn't get the amount of the loan, they come back and sue the person for the difference.....more money!!!! then add the bailouts......the one we know about, the ones that aren't so well know made by the fed, well.......
if they are lost money on this thing it is only because fraud and negligence was proven to be prevalent throughout the whole process and now all those securities are finding their way home to the original lenders for them to buy back!!!

I am no economist, I only have two years of college, I am just a lowly skilled working in a outdated field...
and I know that you don't shred a note!!!
what was their problem? or, were they just having a shredding part to ensure that when the chips started to crumble, there'd be such a mess that the pieces just couldn't get put back together????

and, yes, the real estate market is on topic with this, since well, bank of america, wells fargo and the rest of them are looking at some pretty stiff legal fees, legal settlements, as well as fines and such from the gov't.....
well, they shouldn't be taking this cost off of the backs of their account holders. they should be taking it out on any of their employees that were involved in this scam, or sending it down the line and getting it off the originators of the securities that they are holding. someone, some businesses, have made a killing on this....and they should be the ones paying...
not the account holders....or the stockholders..or the ones who got stuck with the not so AAA securities!!!



posted on Oct, 9 2011 @ 01:44 PM
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reply to post by CookieMonster09
 


I would have wanted to counter your every reply, point by point, as well as those that you gloss over with one liner excuses or simply skipped, but I will not.

It is not worth my time, for you here, an acknowledged banking partisan, is not important, nor am I, only an insignificant nobody. I would rather instead, let our points stand and be judged upon its own merits, for the readers, whom are the ones whom will make the necessary changes with better, true and informed information, are the ones whom will be the catalyst for the correction of errors created unconscionably by the banking class.



posted on Oct, 9 2011 @ 05:56 PM
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Originally posted by JewelFlip
It's twisted that these people can do this because it is their "right". Yet children can't have a damn lemonade stand. This world we live in is a strange one!


Yep, if someone wants a job, he/she doesn't have a right to a job. The tea party and their ilk accuse them of having an "entitlement mentality" while the rich have a 'right' to hoard all the wealth for themselves while the jobless go homeless and starve in the streets.



posted on Oct, 10 2011 @ 02:55 PM
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well they come and take the house, and sell it, and they make more money!!! then since they didn't get the amount of the loan, they come back and sue the person for the difference.....more money!!!!

A bank typically loses money when they foreclose, and does not make a profit. The bank takes a massive loss.

It's expensive for the bank to foreclose, as I have mentioned elsewhere - Collection costs, legal fees, title costs, etc. are all prohibitively expensive. Add on to the fact that the house value has oftentimes dropped by 30-50% or more, plus the costs of repairing the damage to the house, plus the costs of hiring a realtor to resell the property, and the math simply doesn't add up. Foreclosure is very, very expensive. Banks take losses, not profits, when they foreclose.

Take a $500,000 house in 2005, worth $350,000 today - a 30% drop in value which is very common nowadays. At the time of closing in 2005, the bank paid $500,000 to the seller at the closing table. Assuming no down payment, the borrower defaults in the first 3 years at Interest Only. The principal balance at foreclosure is still $500,000. But the property is now worth only $350,000 due to the severe decline in market values 3 years later in 2008. Over the next 3 years, the house sits vacant because the real estate market has dried up and no one wants to buy the house. The bank spends another $25,000 in cleaning up the damage to the house for resale, and another 6% or $21,000 ($350,000 x 6%) in real estate commissions to actually sell the house. Add collection costs and legal fees of another $20,000, and the bank recoups only $284,000 after costs. This doesn't include maintenance costs of keeping the grass mowed, hiring a title attorney to do transfer the title, etc., which only makes it that much more expensive:

$500,000 Funding Amount in 2005
- 150,000 Drop in Market Value
- 25,000 Clean-Up Costs
- 21,000 Real Estate Commission
- 20,000 Collection and Legal Fees
= $284,000 recouped by Bank after costs

The bank funded $500,000, and recouped $284,000. That's roughly a $216,000 loss. Even if you add back say $30,000 in interest that the borrower paid over 3 years, it's still a huge black hole. How exactly is this profitable?

Why do you think that so many banks have gone belly up and taken over by the FDIC? If foreclosures were so profitable, how do you explain the record number of bank closures? Your logic makes no sense, and neither does your simple arithmetic.

Typically, the bank has little success in pursuing the borrower after foreclosure. The bank takes the loss, and sells the paper to a collection attorney who can then try to collect. At that point, the bank is out of the picture entirely, and the fight is between the collection attorney and the borrower. Since the borrower is oftentimes already at or near bankruptcy, the collection attorney can do very little to collect.

For you to suggest that the foreclosure process is somehow a profitable enterprise for the lender is, with all due respect, laughable.

Goodness forbid that you point the finger at the Borrower that lied on their mortgage application and claimed that they made $100,000 a year, when they really made only $30,000. Or when the Borrower, in cahoots with the Mortgage Broker, doctored up their pay stub, or created a bogus bank statement showing a higher Net Worth than actuality. Or that the Mortgage Broker lied to the Borrower and assured him/her that the house would certainly appreciate in value over the next 3 years and he/she could "flip the house for a quick $50,000 profit."

No, you are right, it's the bank's fault.



posted on Oct, 10 2011 @ 05:05 PM
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it would be bank of america going through the hassle of the foreclosure, the bank that loaned the money has already been paid, since the note has been transferred around a few times since it was made....bank of america was also loaning and selling also so well, there's notes out there that they have already gotten their money back on and someone else is having the headache of having to foreclose.

and well if it's so cost ineffective to foreclose on these houses why are the banks so eager to foreclose??
weather or not that are the legal owners of the notes, weather or not the mortgage had been paid, weather or not it's even the right address even!!!

heck, if there were concerned about being able to foreclose in the first place, they wouldn't have shredded the notes, they would have kept better records, they would be able to legally foreclose on these houses without the aide of robosigners and the like!

in most cases, the one's foreclosing is just servicing for another, and well, they are getting paid nicely for the task.
edit on 10-10-2011 by dawnstar because: (no reason given)



posted on Oct, 10 2011 @ 08:57 PM
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and well if it's so cost ineffective to foreclose on these houses why are the banks so eager to foreclose??

What makes you think that banks are so eager to foreclose? Haven't you heard all the stories about borrowers that have been in their homes for a year or more - sometimes 2-3 years - before they finally get evicted -- during which all of this time the borrower hasn't made a single payment?

You know, it really must be nice living in a house for a year or more without making a mortgage payment. Must be nice.



heck, if there were concerned about being able to foreclose in the first place, they wouldn't have shredded the notes, they would have kept better records,

In the case of the Countrywide Mortgage acquisition by Bank of America, who really knows what Countrywide was doing? Who knows where they put the mortgage notes? Most of these loans were fraudulent from day one because the borrower lied on their mortgage loan application, and the Countrywide Mortgage rep aided the borrower in the fraud by doctoring up bogus loan documents.

Bank of America is left to pick up the pieces on loans they never originated, never closed, and now have the fun task of trying to collect, let alone address lawsuits from every Tom, Dick, and Harry that now has a legal claim against Countrywide. Countrywide was one of the most fraudulent originators of loans in the history of this country, and everyone from Wall Street to the Federal Government was happy as a clam when Bank of America volunteered to try to clean up their mess.



posted on Oct, 10 2011 @ 09:27 PM
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Originally posted by dawnstar
and well if it's so cost ineffective to foreclose on these houses why are the banks so eager to foreclose??


The other poster said it, but I need to reiterate: I don't think you have any idea about what you are talking about. Foreclosure is a royal pain in the proverbial for the banks in cases involving questionable borrowers, i.e. in the relevant cases. It's not even too easy to foreclose, it must go through court procedure. Some son of a b!tch bought the house across the street years ago He was driving a posh Nissan Armada, had satellite TV and what not. He would buy deli sandwiches instead of fixing himself a goddamn dinner of fried eggs. In the end, he just left. Left the bank with a hanging loan. There is "lis pendens" on the house but still no foreclosure years down the road. It's rented to a bunch of ex-cons. Do I feel sorry for the "buyer"? I hope he burns in hell.



posted on Oct, 10 2011 @ 09:41 PM
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Originally posted by Skorpiogurl
The math: The old swipe fee was 44 cents per transaction and the new max fee is 24 per transaction making for a loss of 20 cents per transaction, per customer.


Thanks for the lucid post. I almost bought it line, hook and sinker, but then I looked at these numbers you quoted.

As a bit of background, I had a 6 year stint at an investment bank and took classes in finance.

Anyhow, pray tell: where are these fees coming from? In the age where information technology is as pervasive as herpes and costs next to nothing, what justifies charging one quarter of a hard cold dollar for an ephemeral equivalent of an SMS? What's up with 44 cents? I'm honestly curious.

I do feel that just like they overcharge you a factor of 1000 in SMS costs (because they really don't cost anything at all for the carriers, compared to usual data traffic), those "transaction fees" are purely artificial, and are a form of a shake-down. I would respect the logic in your post had it not been flawed in that regard.



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