The Revolving Door of the Banking Industry

Most bankers and executive management should be fired for the debacle they had brought upon the US. Oh, yes, I know, there's plenty of blame to go around, but let's not kid ourselves, for years people who were undeserving of credit never got a loan simply because banks did their job and turned these people down. But since banks threw assessing and ascertaining risk out of the window (which was their primary freaking job) and decided to loan money to everybody because they could score on some commission checks, it should be no surprise the financial system melted down, "necessitating" a taxpayer bailout all the while forcing the economy down the toilet.

Now one would think that the heads of these banks would be fired and then banished from banking altogether, soon to be replaced with more talented, moralled and skilled youthful counterparts.

One would think.

And there you go again "thinking." "Thinking" somehow "logic" and "sanity" rule this talentless, worthless industry headed up by parasites and charlatans.

For the truth is yes, the majority of the banks I've worked at and worked with have purged their executive and senior managements since this debacle occurred, but what nobody is pointing out, and what the dirty little secret is...

they simply go to and work for the bank next door.

So let me tell you some tales about a couple people I know, names of course shan't be mentioned, who by all practical measures should never be allowed to set foot into a bank again, but because the system is so hopelessly corrupted, they are now gainfully employed, some with promotions, steering completely new banks into completely new ice bergs.

My favorite I would have to say was "Pat." Pat was a president of a commercial lending division. No skill, no game, no experience. Well at least not experience in banking. Pat was previously a gas station manager.

Now, one would ask "How does a gas station attendant become president of commercial lending?"

And that is an excellent question to ask, for you see, while Pat may not have had any experience in commercial lending, he was married to someone who did. A vice president of one of the holding companies that owned the firm Pat worked for. Surprise, surprise, surprise, Pat becomes a president of an entire division within a subsidiary.

The results were only those that can be achieved by nepotism:

Pat was so bad at managing risk and making good loans even before I got on board they had made a loan to a real estate development that was already being investigated by the FBI in 2005. I should have taken that as a bad sign, but opted instead to keep working at this particular establishment. Over the course of the next 2 years I worked on loans that I knew were never going to be paid back, only to see Pat override my objections and approve the loans anyway. In the end Pat left the bank he was working at, but not without having 1 in every 2 loans go into default!

Now, one would think with a 50% default rate, it would be impossible for Pat to find a job ever again in the banking industry. Later I came to find out Pat didn't get fired, but quit so he could go and work for another bank where he'd start, again, as a president of commercial lending. I asked my contact "How in ef's name did he get a job there?"

"I think he has family there."

Ah, nepotism. It's more important to employ familial losers and screw over society than to have a stable financial system.

There was also Jessica. I had interviewed with Jessica at a bank a while ago, but didn't get the job. It wasn't until a year later I received a call from that same bank asking if I was interested in becoming a senior analyst there. I went in and interviewed thinking it would be that same Jessica person again, but she was replaced by Sven, the new head of commercial lending. Apparently Jessica had left for greener pastures.

Of course not without leave me her manure to deal with.

Never had I seen a portfolio of such outright sh!tty deals. You literally could not believe what loans had been approved and were now starting to fall apart. It was almost as if Jessica had purposely undermined the bank by making such horrendously bad loans and now it was time to start cleaning them up. The real estate developer who somehow failed to notice the 500 other town homes going up in the same town he was planning on putting 20 of his (the town of course had a population of 350, but that's aside the point). The guy who had a credit score of 500 and we still gave him an unsecured (meaning no collateral) line. And worthless financial deadbeat trailer trash after worthless financial deadbeat trailer trash contractor who if he could just show up sober for once he might have actually gotten a contract to roof a house or sheetrock a building. But no, sober contractors were too high-end client for Jessica, we'd go after the deadbeats.

Sure enough, I wanted to hunt Jessica down and I did track her down. Why, she was president of commercial lending at a bank literally just down the road.

I wanted to go to their CEO and say, "WTF!? Are you kidding me? Did you bother to look at the bank's financial statements where she worked previously? Are you all a bunch of morons?"

Of course, that was Jessica, her replacement was just as inconceivably stupid.

Here it was, late 2006 and the housing market was already starting to suffer. Showing my boss report after report showing the housing market to be oversupplied with a glut of housing, I was amazed to see this latest "leader" tell me straight to my face "21 months supply is about right." 5 months supply is when a market is deemed to be "balanced." 5 months supply is where it would take 5 months to sell out of the current level of housing and neither buyers nor sellers have a particular advantage. But there, right in front of him was a chart showing 21 months supply and he looked at me and said, "Well, 21 is about right." He was delusional.

Now I've written about this moron in my book (which of course you should buy), and naturally his stupidity cost the bank millions of dollars (to the point they have now applied for TARP money-hurray, you're bailing out these morons), but no matter how inept heads in the banking industry were, I could have sworn there could not possibly be a job for this moron. That there was no way any bank, after doing even the slightest bit of background check and research into this guy would give him a job.

Sure enough he got a job. But not just any job. A job I applied for (at least I was being considered a viable candidate for the same level of work, and at least I was starting to gain ground on these incompetent middle age managers).

But if you want to talk about sheer, jaw-dropping, unbelievable stupidity, Mike is your man.

Mike ran a bank into the ground. No, he really did. He made so many bad loans as a VP there that the bank was not only approaching insolvency, but earned itself a nice little cease and desist order by the FDIC. As in "cease and desist" you're costing the taxpayer way too much money you morons. I had the "honor" of contracting for this bank to help it deal with its cease and desist order and you could not believe the utter garbage that would pass for a loan. Real estate developer after real estate developer with no absorption study conducted to finance 20,000 condos in a market that already had 32 years supply of condos. The son of the father who was going to buy his uncle's house, but needed his dad to co-sign the loan because the son's wife had a spending problem and tanked their credit score, etc. etc. And of course, horses. Ah yes, horses. A never-ending line of horse wives who don't do a damn thing in their lives, live off their surgeon husbands, but because the husband is now broke paying for her horse hobby (and jewelry and riding lessons for her daughters - each one from a different marriage of course, and lexuses and spa treatments, etc.), he needs to borrow money AGAINST THE HORSE. Yes, these were the high quality and caliber loans Mike made and the Feds did not like it.

Now, certainly, CERTAINLY, of all the people in the world, you would not hire a guy who was responsible for bringing a cease and desist order upon his previous employer. You know, that there might be something "bad" about this guy. That maybe he wasn't too bright. That maybe he was a bit amoral. That maybe not only was he amoral and not too bright, but matter of fact a full blown, galactically stupid retard.

Oh, but you know how this story is going to end. Yes, you do. For a bank did hire him and put him in charge of CREDIT. And in a bit of irony, was the same bank I used to work for (the one now apply for TARP funds).

Now, I could go on and on and on, but what it simply boils down to is that the banking system in the US is corrupt. Not because of the banks themselves, or the institutions or laws we have in place, but because of the culture banking has.

Above all else, it is more important to be nice than right in the banking industry. It is no surprise that when an executive so horribly manages a bank that they are forced to leave, that you don't see in the newspapers, "Freaking moron who ran bank into the ground and cost Minnesota taxpayers $40,000,000 leaves for another bank." You see "Long time executive who served local community well WILLINGLY resigns from post to spend more time with family." And the reason why is that in banking it has to be superfriendlyMinnesota nice all the time.

Nothing can go wrong in the banking industry.

Nothing can be impolite in the banking industry.

That we never turn people down. We never lose money. We never fire people. We never do bad things. We're the superhappyfriendlynicepeoplebanks and birds and chirping and everybody's happy.

The problem is this is not based in reality. Reality is much harsher. Reality is much more brutal, as evidenced by the spectacular financial crisis we're having. But when they put on a face like the Bonfire of the Vanities, to make it seem like the perfect-happy suburbanite couple, it seems nobody knows (or perhaps, nobody cares) about all the chaos and fire left in the wake of the applicant now applying to be their new president. The collapse, the losses, and federal investigations seem to magically not matter when this new applicant applies to become chief of credit.

Of course until that changes, then the banks will never change as they are still being headed up by the same morons that got us here in the first place. And until that real change takes place it's still OK in my opinion to loathe bankers, at minimum tell these morons at the ABA to shut the ef up ( I love how he tries to pin it on investment banks).

In the meantime, enjoy bailing out these deadbeats.