Scared Monkeys Discussion Forum

I recall, and I didn't understand it all for years, that at one time, banks were not allowed to have any interest in insurance companies, mortgage brokers, and a lot of other industries.  For some reason, past generations consider that there were too many conflicting interests, too many opportunities for bad business.

Look at what happened when banks were allowed to venture into other financial services.

Mortgage companies wrote lots of bad business, and passed that business along.  They made lots of money, lots of fees...

Big banks and other investment entities, packaged that bad business, and sold off pieces, making lots of money and fees.

Why didn't anyone notice that all this business was bad?  Didn't anyone have accountants?  File reports to someone?  How is it possible that no one noticed.

"Freddie and Fannie are sound...you just don't want poor people to have homes (mortgages)" - Era of the liar/fraud/no income loans...

Anyone go to jail?  Was the purpose of TARP to keep American bankers out of foreign jails?  Criminal cases?  Where is the upside for Main Street?  I'm still waiting. 

Has the TARP money returned and earned been used to pay down the national debt?  Where'd all that money disappear?  Down a rabbit hole?

Over the past few years, it seems like big Wall St. banks & big international businesses have gotten billions from the Fed.

What have I read they invested in? 

Insurance brokers.  With the recent return of the estate tax, I imagine lots of folks will be buying life insurance for a number of reason.  I recall one bank saying they got all the upside from their association with the broker and none of the risk.

What happens when the broker (think like mortgage broker) writes bad life insurance business?  The left often complains about the trillions life insurance companies have on the books.  That's money to pay claims - when people die.

What happens when trillions in bad life insurance policies are written?  Over insurance on sick individuals?  Insurance on folks with one foot in the grave and another on a banana peel?  In the real world, prior to Obama and his many reforms, there was an underwriting process that provided for honest business.  If you're ten days from death, or have a limited life expectancy, you likely wouldn't get life insurance. 

Brokers sell other's policies.  I wonder how much bad business is being written?  How long before Washington's regulators say you must sell to sick/dying people?  It's only fair? 

How many years before insurance companies start failing?  Who'll bail them out?  In the real world, I recall that state taxpayers seem to provide the funds the bail out failed companies.  Sound companies may/often contribute to funds to help the insolvent among them. 

Is it fair for that sound business must subsidize the fraud?  Those that write bad business?

How long before no one can afford financial planning?  Life insurance? 

I think there is a big problem, any time folks gambling with taxpayer provided money (via the Federal Reserve) make loads of money and pass off the 'risk' to others.

Where's the upside for Main Street?

Who's looking out for the Enron accounting?  Failure?  Early warning system?

Why does it seem like there is a relationship between yacht sales and the debt ceiling?

Since Obama has expanded the debt at sonic speeds, Christmas sales of yachts were booming?  Expensive jewelery sales?

What is wrong with this picture?

Now, they want to expand the debt ceiling again?

Every time the debt ceiling rises, Wall Street bankers get a big bonus?