Corrupt regulators fight to restore criminal mortgages

The corrupt Treasury is hard at it, openly trying to restore criminal banking:

Treasury secretary Philip Gaetjens has warned that a key risk to Australia’s strong economy is banks cutting their lending too much in response to the Royal Commission into financial services and tougher credit rules imposed by the prudential regulator.

Amid complaints from small business and home buyers that they are finding it harder to attain finance, Mr Gaetjens said a tightening of credit conditions could constrain household consumption and business investment.

“There is also some evidence of a modest tightening in lending standards by banks which could be limiting access to credit for some borrowers who may previously been able to borrow,” he told a Senate estimates hearing in Canberra on Wednesday.

As we know, the corrupt RBA is also on board:

The Reserve Bank of Australia and Treasury have privately cautioned the Morrison government that any regulatory response to the financial services Royal Commission must be careful to avoid putting the brakes on lending to home buyers and business.

What preposterous Orwellian clap trap. The crisis is the corruption of the banks and their distortion of the economy. Which immoral and illegal banking are the regulators hoping to restore?

Is it charging dead people:

  • In April the commission revealed the sordid details in which planners from Commonwealth Bank subsidiary Count Financial profited for years from dead customers’ fees.
  • In the worst case revealed, a planner knew a client had died in January 2004, but was still taking almost $1000 a year in fees until December, 2015.
  • By August it was also revealed how National Australia Bank superannuation services whacked fees on the accounts of more than 4000 dead customers.
  • A month later, in September, it was the turn of AMP to be caught out charging life insurance to dead people on their superannuation accounts.

Bullying, stalking and abusing the disabled and infirm:

  • The call revealed a salesman bombarding the young man with information, with the 26-year-old offering hesitant, one word answers. Mr Stewart said his son not understand what was happening.
  • When he pleads: “I need to go”, the salesman pressures him for bank details to set up direct debit.
  • In September the commission heard how aggressive case managers at insurance giant TAL who hounded a nurse with an anxiety disorder for six years — including using a private detective to film her at a swimming pool — went unpunished.
  • Insurance giant TAL hired a private detective to spy on the nurse. Picture: Stock image
  • The commission heard how CommInsure rejected a woman’s claim after she was treated for breast cancer because her surgery wasn’t “radical” enough.
  • In March, the commission heard from a man who told the Commonwealth Bank “I’m a gambler, I’ve got a gambling problem” as he pleaded to escape a credit card debt spiral. Instead he was offered more credit.
  • Youth-focused insurer Youi provided service that was anything but “awesome”, leaving victims of natural disasters displaced from their homes for more than a year.

Rapacious incentives:

  • The commission saw evidence of how Freedom Insurance — the company which pressure sold to a man with Down syndrome — rewarded the best salespeople with Vespa scooters and trips to Bali.
  • But it was revealed funeral insurer Let’s Insure did similar incentives, offering top sales people trips to Las Vegas to stay at a “glitzy hotel”.
  • In yet another case a BankWest manager was awarded a trip to Hayman Island and hailed as a “regional champion” before his dodgy lending practices contributed to a struggling farmer losing his property.
  • In one case, the royal commission blasted Aussie Home Loans for keeping tearful victims of a shonky mortgage broker in the dark about his fraud, all the while continuing to collect trailing commissions on the $70 million of loans he wrote.
  • In one case a victim was kept in the dark even after she called Aussie in tears after being accused by her bank of presenting faked loan documents.

Evil planners and predatory lending:

  • In April we heard of rogue National Australia Bank staff who falsified documents to secure mortgages for customers in return for cash bribes paid across the counter, the banking royal commission has heard.
  • In another case — a high-flying Westpac executive said the bank was too busy to tell the corporate cop about a shonky financial planner, even though it had secretly started paying back the planner’s victims.
  • One of the scariest things in the whole commission were questions over how safe our mortgage market actually is.
  • The commission posed serious questions about the Household Expenditure Measure (HEM) — the benchmark used to assess a customer’s debts and liabilities — which was heavily criticised in the interim report.
  • The commission said lenders did not diligently analyse a customer’s household expenses which could restrict or prohibit their ability to take out a loan.

The corruption is already seeping back at the margins, via the AFR:

There has been an 85 per cent, or $9 billion, increase in loans approved by lenders that fall outside their own tough new lending criteria, with the major banks the biggest offenders, according to analysis by the prudential regulator.

The value of loans approved outside serviceability criteria, which is a benchmark of the borrowers’ capacity to repay within the loan term, has topped $19 billion for the year ending June, the Australian Prudential Regulation Authority analysis shows.

According to the analysis, major lenders, which include the big four banks, nearly doubled the proportion of loans approved outside serviceability to about 6 per cent. By contrast, credit unions and building societies more than halved the percentage of loans outside serviceability standards.

Thankfully other banks are still tightening. Suncorp has spooked mortgage brokers with this little turn:

2. Four months statements required for transaction and credit accounts
To better gather insights on customers living expenses, we now require customers to provide four months of statements for their primary transaction account, credit cards and store cards.

UBS weighed in as well on the unanswered questions:

Key discussion points and ongoing drivers
The focus of this reporting season Q&A is likely to be on sector specific issues rather than bank specific issues: Will the banks move ahead of the Royal Commission Final Report by abandoning the HEM benchmark and moving to full expense verification? Will the RC recommend the removal of remuneration targets tied to sales/profit for Executives as well as front line staff? What are the banks’ internal limits for “very high” DTI above 6x? What magnitude of customer remediation charges can we expect in FY19/20? Will these elevated charges impact the ability to pay dividends?

The crisis is systemic illegal and immoral banking. The notion that more of the same is the solution to itself is some kind of lunatic control fraud in which every public asset must be thrown to the wolves to protect the perps.

Paul Volker waned us yesterday where this ends:

Respect for government, respect for the Supreme Court, respect for the president, it’s all gone,” he said. “Even respect for the Federal Reserve.

“And it’s really bad. At least the military still has all the respect. But I don’t know, how can you run a democracy when nobody believes in the leadership of the country?”

David Llewellyn-Smith

Comments

  1. Even if they get away with it, the resilience of the banks to international events is that much reduced.

    Exactly why i ripped most of my money out.

    As the $AUS drops or deflates in buying power, i profit, and wave tata to the banks, ponzi economy, and all parasitic persons and industries attached thereof, falling below me 😉

      • reusachtigeMEMBER

        Yeah me too! I use the money of the suckers who put it in the bank actually. Property investment is THE only way to riches.

      • Jumping jack flash

        +1 Reusa!!

        Harvesting other people’s debt is the only way to accumulate incredible riches, the fastest way possible.

    • @Al
      Exactly ! Gold in A$ is now higher than it has ever been at $1747 (currently)
      What an asset — it protects when currency is falling & if not bought with credit is far & away the best investment for now.

  2. The headline is accurate and proportionate. Treasury, can you see how bankrupt your stance is – to simply fail conventionally.

    Treasury has more options than just steering the ship directly onto the rocks. Find them. Be prepared to experiment.

    • A shame that no-one in the RBA has studied ‘The Odyssey’:

      https://en.wikipedia.org/wiki/Siren_(mythology)

      “They approach the island of the lovely Sirens (FIRE sector spin doctors), and Odysseus, as instructed by Circe (Royal Commissioner), plugs his men’s (debt slaves) ears with beeswax and has them bind him to the mast of the ship. He alone hears their song flowing forth from the island, promising to reveal the future (of real estate to the moon).”

      But in the RBA and corporate regulator’s version of Homer’s classic, after the reason for all the dead sailors and wrecked ships is discovered to be The Sirens, beeswax is mandated for about two months. Yet upon appeal from the Sirens, that beeswax will ruin the Greek shipbuilding economy, beeswax will be strictly regulated.

      After all, what are the souls of sailors worth in comparison to the wealth created by Sirens and shipbuilders? A shame about the collateral damage (tut, tut), but business is business…..

      • Yep! bit that way isn’t it.
        That’s why I keep posting that real change is real difficult
        So much of our current economy depends on us (all of us) continuing to do what we do (and have been doing), It’s disaster for all if any of us discovers that our “work” really isn’t necessary (and may even be harmful).
        Real change is real hard because it requires that we develop (and fully integrate into our economy) new ways earn the global capital stream we need AND new ways to integrate/distribute these earnings across the broader economy.
        Compare this with:
        F’it lets just keep doing what we’ve been doing with a little tidy up around the edges. after all Sirens have rights too, you know!

      • fisho – yep, those poor Sirens. They are a new minority group subjected to unreasonable expectations. After all, they are just doing what comes naturally; using good marketing, advertising and greed to make a coin. Luckily, the Gods of regulation have always seen the mortal consumer as cattle for slaughter.

      • ErmingtonPlumbingMEMBER

        But but bur, Global Coporate Plutocracy and Neoliberalism is supposed to be all about protecting Consumers,…not slaughtering them!
        As for what really needs to be slaughtered,…id say that Parliment of the “global capital stream”, fisho is on about above, would be a good place to start.

      • Yeah even HnH and LVO like to get in on the act and kick our successful startups like Atlassian, for me it’s like FFS what have these guys got to do to please you, this is the future that you preach day-in day-out, Aussie Human capital being sold onto the global market…what’s not to love about that…Yet let me count the ways they get ripped into for not Employing good Aussie programmers (that for some reason they don’t want to employ), or not paying taxes in a country where they’re not domicile.
        It’s a whole new world order yet our belief about what’s right and whats “fair” is often formed under entirely different circumstances.
        There’s a huge difference between a company that’s exploiting Australia’s natural resources or leveraging some sort of monopoly/duopoly they enjoy in the domestic market AND a global software startup that’s earning their money in the real external economy. The two need to be treated differently if for no other reason than the fact that one can easily change it’s domicile whereas the other is rusted onto the Australian economy. Rules / mores /codes of behavior that make complete sense for one company are complete nonsense for the other …that’s where the hard change becomes all but impossible because it’s not a select group of talented engineers that need to adapt but rather it’s us the other 99.9% of the Aussie population. Our expectations need to change, our way of sharing in their wealth (that which flows from their imitative) needs to fit their needs…not the other way around
        That’s real change …that’s real difficult stuff.
        So in the mean time lets just sit back and enjoy the Sirens song

      • Thankyou ThePensum, I don’t comment much anymore because frankly I’m a little sick of being told just how wrong I am.
        Good to hear that I’m not completing wasting my time.

      • ErmingtonPlumbingMEMBER

        “it’s not a select group of talented engineers that need to adapt but rather it’s us the other 99.9% of the Aussie population. Our expectations need to change, ”

        So 99.9% of the population needs to change their “expectations” to suit the 0.1%.
        Doesn’t really sound like an out come someone would expect to see coming out of a Democracy, Hank Rearden.

      • @EP If today’s system is working for you than you don’t need to change…more to the point you wouldn’t want to change, However,If it’s not working for you than maybe change is not a bad thing, who cares where the initial leadership and direction really comes from. As far as I’m concerned I’d love to be a part of an Australia where every Australian identified that part of themselves that was truly unique and fully developed that particular talent ….an economy where 100% of us are finding our 0.1% niche and profiting from it would be perfection.

        When I was a much younger man I ate the best tomato that I’ve ever had at a small pension on the Greek island of Kea. My wife and myself had just been swimming at a beautiful beach when we came back she decided to bake some fresh bread the old guy running the place couldn’t resist the aroma and decided he’d share some of fruits of his vege gardens along with some fantastic home made olive oil and some marinated olives we had the cheese and fresh bread ….what a lunch to remember …fanbloodytastic.

        My wife is really talented with her baked goods and bread but his tomatoes were to die for (see what I’m saying about finding that 0.1% thingy and doing it) …I’m not sure why the two of them let me share but I’m sure glad that they did.

    • Of course. You didn’t expect them to not go down fighting, did you?

      I have promised you the kitchen sink will be used and we WILL see the kitchen sink.

  3. proofreadersMEMBER

    “The notion that more of the same is the solution to itself is some kind of lunatic control fraud.”

    Desperate people will do anything.

  4. reusachtigeMEMBER

    No one cares what is legal and what is not but they all want their loan approved, ya commies!

    • DefinitelyNotTheHorribleScottMorrisonPM

      Yes, this is exactly what aspiring young rentvestors want. But the Marxists on here want to destroy the great Aussie dream of owning someone else’s home.

    • This is so true. People where I work, have talked about the Royal Commission in disparaging terms. As if the RC are simply a bunch of do-gooders and they’ll be happy when it’s back to business as usual. I am starting to think that the RC will take the blame for any significant falls or crash that happens.

      Who wants the massive ponzi scheme that they are benefiting from to be exposed?

  5. DefinitelyNotTheHorribleScottMorrisonPM

    You’re clutching at straws. You’re always the ones talking about reversion to mean. In this case that means a reversion to mean lending practices.

    • He thought they would be bad for just a little while. But they’re going to be bad for good.

      Good bankers go to heaven, bad bankers go everywhere.

      (With apologies to Jim)

      • Sorry peach, but, banks are nowhere near the scope of the shadow sector and banks in and of themselves do not dictate all outcomes e.g. seems the problem has a more central vector which then incentivizes behavior across a broad range of activities. I think trying to pin the entire output of the period in question on one sector leaves quite a bit of data edited out. Not to mention the progression of events throughout a period decades in the making, say post WWII till currant.

        Think Blacks observations on the flows between the banking and shadow sector, Warrens works on contracts, Hudson on think tanks [funding skewing agendas], Plaza [capital allocation and oversight], Tax Haven status [see Hudson again], weakening of democracy through corporatist machinations, et al, short list.

        Look it just seems wonky to ignore all the data and only focus on one dynamic, like it has the agency to influence all outcomes, because it conforms to some environmental bias.

      • What does the big 4/shadow finance distinction matter one iota when the shadow sector gets their funding from the big 4?

      • lignje….

        Who told you that, please read up on Plaza, not to mention equities as money, lest we forget say mortgage originators. Yes banks are a piece of the larger scope of things, but that does not automatically transfer all the agency to them, they have a share of it. Missing that leaves all the others off the hook imo.

      • “..banks are nowhere near the scope of the shadow sector and banks in and of themselves do not dictate all outcomes..”

        This message was proudly brought to you by the Seppo Branch of Australian Bank Apologists.

        “We work hard to ensure that Australia stays safe for private banking”

      • Thanks for your information filled opinion pft.

        Something that might interest you that has a bit more gravitas than name calling –

        ChrisAtRU
        October 23, 2018 at 7:19 pm

        Joe B. is part of AMI (American Monetary Institute). This installment from NEP should sort you out.

        #MMT v #AMI/#PositiveMoney
        Reply ↓

        Yves Smith
        October 23, 2018 at 9:43 pm

        The AMI people are a real problem, and the worst is that they use enough lingo that sounds MMT-like that they confuse people about MMT. They are also presumptuous as hell. I was part of an Occupy Wall Street group, Alternative Banking. Every week, a group came and kept trying to hijack the discussion to be about Positive Money. They got air time because that’s Occupy but everyone else regarded them as an annoyance.

        One Sunday, the president of AMI showed up in a suit, uninvited, and expected to be able to take over the group and lecture. The rules were everyone on stack got only 2 or 3 minutes each (I forget how long) and then had to cede the floor. Since everyone else was too polite, I was the one who had to shut him up by blowing up at him and telling him he was totally out of line and had no business abusing the group’s rules. That is the only time in my WASPy life I have carried on like that in a public setting. Broke up the meeting, which reconvened only after he left.

        Reply ↓
        ChrisAtRU
        October 24, 2018 at 12:22 pm

        #Yikes … I learned early on to avoid the #PositiveMoney trap, and this anecdote should convince others of the same.

        https://www.nakedcapitalism.com/2018/10/200pm-water-cooler-10-23-2018.html#comment-3045235

        Why do I find this condition to be pathological wrt this group, you know, bad faith argumentation, a self awarded sense of superiority, penchant for attempting to steal all the oxygen in a room, reductive simplification of complex issues to meaninglessness to suit bias conformation, connections to various ideological groups, et al, and would reference Holly Seeliger here in the interview of Joe Bongiovanni, and her personal baggage which kicked things off.

      • Skippy,

        “….you know, bad faith argumentation, a self awarded sense of superiority, penchant for attempting to steal all the oxygen in a room, reductive simplification of complex issues to meaninglessness to suit bias conformation, connections to various ideological groups, …”

        As that is a perfect description of your style, at least you are now showing some self awareness.

        That is the first step on the path to recovery.

        Hang in there.

      • Thank you for confirmation of the above pft. Anyone with a functional memory can easily discern your tactics towards anyone not in agreement with your groups perspective and its not just an individual by individual case. Btw totally enjoy the ploy by where one lowers themselves to the dialectal level, thrown at them, and if replied in kind then point at it, like all the sudden they have moral superiority.

        Lest we just look up thread to see your special plea about bank apologist being the only aspect you can bring to bare – without anything else to back it up. This also relates to past a conversation about Bill Black or your personal feelings toward Mosler, because of past work experiences pre moralizing his entire record e.g. I don’t care how squeaky clean he is, he worked in banking”.

        This is all part of the greater theft meme wrt money, yet these same sorts completely white wash all their enabling of rampant corruption, across a wide spectrum of on going concerns, due to ideological preferences. Probably why you only stick to banks and don’t venture out beyond it e.g. could expose to many troublesome inquiries.

      • Skippy,

        Hmmm – looks like you are having a major relapse.

        The objective of the recovery program is to stop doing the following

        “…you know, bad faith argumentation, a self awarded sense of superiority, penchant for attempting to steal all the oxygen in a room, reductive simplification of complex issues to meaninglessness to suit bias conformation, connections to various ideological groups, …”

        Hang in there……little steps.

        Here you go .. some non banking/money stuff for you to froth and thrash around about.

        https://www.macrobusiness.com.au/2018/10/specufestor-funeral-rites-set-for-july-1-2020/#comment-3211369

      • Not confused at all pft, and yet you haven’t been able to support your claim, I did.

        My point about banks is there are deeper aspects to all of this and making banks the scapegoat is bad methodology. I would point to Lars for a deeper introspection.

        You seem fine in obscuring any discovery to that end. Hay its not like I used to forward Chicago school preferences.

      • Skippy,

        “…making banks the scapegoat…”

        That is just another of your very transparent banker apologist rhetorical techniques.

        Cast any criticism of the role of banks as being a “sole and single cause theory” and as a “sole and single cause theory” is absurd therefore the criticism of the role of banks must be absurd.

        High school level stuff (Junior high at that) as is your blatant and continuing lying that banking is the only topic I comment on.

        Both can be filed under bad faith argumentation in your very accurate self diagnosis.

        “…you know, bad faith argumentation, a self awarded sense of superiority, penchant for attempting to steal all the oxygen in a room, reductive simplification of complex issues to meaninglessness to suit bias conformation, connections to various ideological groups, …”

        The funny thing is that you consider it to be insulting to be described as defending the role of private banks in the monetary system.

        The funnier thing is that you don’t actually offer any real defence for the role. All you do is spray dust in the air and insist we need to bang on and on about ‘the real problems’ first.

      • “That is just another of your very transparent banker apologist rhetorical techniques.”

        Your just confirming what I pointed out to start with again pft, totally subjective moralizing to frame the topic.

        “High school level stuff (Junior high at that) as is your blatant and continuing lying that banking is the only topic I comment on.”

        Hand waving away the multidimensional problem set, many openly discuss, is not lying or adolescent, contra to your level of reportorial special pleas above. I did mention Lars.

        “Both can be filed under bad faith argumentation in your very accurate self diagnosis.”

        How many logical fallacy’s can one commit and still keep banging on/

        “The funny thing is that you consider defending the role of private banks in the monetary system is an insult.”

        Never defended banks, quite to contrary my affiliation with Black and Yves should put that to rest. Don’t know what your going on about insults or anything else wrt the monetary system. Government is the sole legal owner of its money and does not have to borrow anything as it spends first. Now if you want to talk about how – any lender – has been allowed to operate during the neoliberal period then you might be engaging in an informed conversation.

        Again banks did not force the Chicago boys to brush off Born unleashing the risk tool of derivatives, nor was Hudson approached by banks when talking about funding concerns wrt certain state objectives, nor did banks start neoliberalism with the help of certain ethically challenged economists, same goes for corporatism, or Third way – Washington consensus duopoly.

        Banks are just the result of neoliberalism dominance and not the inception of it, that has roots in special interest groups and their ideological preferences.

        I only know of two things you bang on about banks and RE and you have no means to quantify how you arrive at your conclusions on just those two. We went through all this stuff in the past and now you can only repeat the same ex ante dogma pft…..

      • Skippy,

        Now we are back to familiar territory – the Skippy Song Cycle

        1. Greedy people have been trying to take over the world

        2. They have succeeded especially in the area of banking and finance

        3. No action can be taken to fix any of the manifestations of their takeover (especially banking) until we understand 1 and 2.

        4. A true understanding of 1 and 2 reveals that no action is possible.

        Defeatist dribble dressed up with

        “…you know, bad faith argumentation, a self awarded sense of superiority, penchant for attempting to steal all the oxygen in a room, reductive simplification of complex issues to meaninglessness to suit bias conformation, connections to various ideological groups, …”

        It is just a complete coincidence that the world according to Skippy means no reform of the role of private banks in the monetary system anytime soon.

        Private bank apologia

      • 1. “Greedy people have been trying to take over the world”

        Please do provide evidence to support your claim, never made any such proclamation. I have referred to the architects of neoliberalism with sources like Philip Mirowski and NC posts. How you mangle that into a throw away accusation would seem to again vindicate my original comments thrust.

        2. “They have succeeded especially in the area of banking and finance”

        Incorrect again, I clearly stated above thread that its pervasive, banking and finance are just subsets of a much larger problem. What – ???? – you think wages adjusted post divergence with productivity is a banking issue or one of dominate economic agency [Rubinomics]. This also fails the acid test wrt Bush Jr ignoring reports by the FBI on rampant mortgage fruad. Not to mention Blacks works again noted above.

        3. “No action can be taken to fix any of the manifestations of their takeover (especially banking) until we understand 1 and 2.”

        Again completely false. I have noted many times what policies could be used to remedy the outcomes of neoliberalism via the groups I’m affiliated with. Something you would have knowlage of, so your conjecture is quite spurious.

        4. “A true understanding of 1 and 2 reveals that no action is possible.”

        Don’t know what you mean by – true – to start with and then how that leads to your personal opinion on the latter. The MMT PK groups thoughts on these matters are at complete odds with your opinion.

        “Defeatist dribble dressed up with”

        Again you use unsupported conjecture as holy word and then utilize it to avoid be taken to task over your AMI position and attendant ideological preferences. This is supported by other on this blog yesterday and by others in the link I provided to Yves et al experience.

      • 2. “They have succeeded especially in the area of banking and finance”

        Need to expand on that a bit more. I have posted more that once and from a long time ago the fundamentals behind the FIRE sector template and its origins. Long before you or most around here even understood it, to busy on a lost patrol over supply and demand theories.

        Then you have the cheek to take exception to my pointing out your low ethical standards.

      • here let me refresh your memory pft and for the benefit of the readers.

        What is Neoliberalism?

        “Neo-liberalism” is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer.

        “Liberalism” can refer to political, economic, or even religious ideas. In the U.S. political liberalism has been a strategy to prevent social conflict. It is presented to poor and working people as progressive compared to conservative or Rightwing. Economic liberalism is different. Conservative politicians who say they hate “liberals” — meaning the political type — have no real problem with economic liberalism, including neoliberalism.

        “Neo” means we are talking about a new kind of liberalism. So what was the old kind? The liberal school of economics became famous in Europe when Adam Smith, an Scottish economist, published a book in 1776 called THE WEALTH OF NATIONS. He and others advocated the abolition of government intervention in economic matters. No restrictions on manufacturing, no barriers to commerce, no tariffs, he said; free trade was the best way for a nation’s economy to develop. Such ideas were “liberal” in the sense of no controls. This application of individualism encouraged “free” enterprise,” “free” competition — which came to mean, free for the capitalists to make huge profits as they wished.

        Economic liberalism prevailed in the United States through the 1800s and early 1900s. Then the Great Depression of the 1930s led an economist named John Maynard Keynes to a theory that challenged liberalism as the best policy for capitalists. He said, in essence, that full employment is necessary for capitalism to grow and it can be achieved only if governments and central banks intervene to increase employment. These ideas had much influence on President Roosevelt’s New Deal — which did improve life for many people. The belief that government should advance the common good became widely accepted.

        The main points of neo-liberalism include:

        THE RULE OF THE MARKET. Liberating “free” enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers’ rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say “an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone.” It’s like Reagan’s “supply-side” and “trickle-down” economics — but somehow the wealth didn’t trickle down very much.

        CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water supply — again in the name of reducing government’s role. Of course, they don’t oppose government subsidies and tax benefits for business.

        DEREGULATION. Reduce government regulation of everything that could diminsh profits, including protecting the environmentand safety on the job.

        PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.

        ELIMINATING THE CONCEPT OF “THE PUBLIC GOOD” or “COMMUNITY” and replacing it with “individual responsibility.” Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves — then blaming them, if they fail, as “lazy.”

        Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank. It is raging all over Latin America. The first clear example of neo-liberalism at work came in Chile (with thanks to University of Chicago economist Milton Friedman), after the CIA-supported coup against the popularly elected Allende regime in 1973. Other countries followed, with some of the worst effects in Mexico where wages declined 40 to 50% in the first year of NAFTA while the cost of living rose by 80%. Over 20,000 small and medium businesses have failed and more than 1,000 state-owned enterprises have been privatized in Mexico. As one scholar said, “Neoliberalism means the neo-colonization of Latin America.”

        In the United States neo-liberalism is destroying welfare programs;
        attacking the rights of labor (including all immigrant workers); and
        cutbacking social programs. The Republican “Contract” on America is pure
        neo-liberalism. Its supporters are working hard to deny protection to
        children, youth, women, the planet itself — and trying to trick us into
        acceptance by saying this will “get government off my back.” The
        beneficiaries of neo-liberalism are a minority of the world’s people. For
        the vast majority it brings even more suffering than before: suffering
        without the small, hard-won gains of the last 60 years, suffering without
        end.

        The last was penned in 1997 so one can clearly see the progression. Yet you attempt to argue with me that all that is wrong is the monetary system and banks. I would suggest you consider they were tasked to enable the above by those that sought to impose this social template on society to achieve an ideological preference regardless of outcomes. Now your soaking in it.

        So before you start banging on about banks, how about you show how your theory resolves the issues above.

      • Skippy Says

        “….Yet you attempt to argue with me that all that is wrong is the monetary system and banks. I would suggest you consider they were tasked to enable the above by those that sought to impose this social template on society to achieve an ideological preference regardless of outcomes…..”

        I have never argued “..all that is wrong is the monetary system and banks..”

        That has always been your transparent projection to avoid responding to any criticism of the role of private banks in the public monetary system. You always dodge the specifics with your unoriginal “The answers are back in time” schtick.

        But it is good to see you are shifting your position

        “..they were tasked to enable the above by those that sought to impose this social template on society..”

        They were tasked?

        Who were tasked?.

        Banks were given tasks?

        By who?

        So according to Skippo the private banks were given tasks by the evil neoliberals to enable the neoliberal agenda.

        But Skippy still wants the private banks at the dead centre of the public monetary system.

        Why?.

        Clearly so one day Skippy and his merry men can reprogram them and free them from their bad ‘tasks’ ….and give them good ‘tasks’

        LOLOLO

        The only real mystery is why you huff and puff so much denying your apologia for the role of private banks at the centre of the monetary system.

        The private banking system is operating EXACTLY as intended.

        Save yourself the misery of concealing your agenda any longer and come out and admit that you love the role of private banks because it puts one of the biggest economic levers in the economy out of the reach of the public.

      • Very hard to discern what your attempting to say pft…. seems to only revolve around your camps [not that you have an original thought] desire to make money what you want it to be and not what it is. To these ends you promote an undemocratic administration of it by a group of ideologues and then let the market magic happen. For all the rhetorical spin theirs not much else to it. BTW banks are chartered by government law so it seems any dramas start with the state and whom informs it or has it captured and not something intrinsic to say banks.

        Glad to see the entire above comment went over your head or ignored because it does not fit your narrative sales pitch. See that’s the rub I keep talking about when you won’t tread outside your preferred framework. I think your quite good with all it save the ideological preference for monetary operations aka austerity. Your camp think all rational agent models are being manipulated by ev’bal forces [fighting for the side of light thingy] and then participants will magically become virtuous.

        BTW chiding me and then writing stuff like above is absurd.

        Not even your camps man Trump agrees with you.

      • Skippy,

        “…Very hard to discern what your attempting to say ….”

        No, you know exactly what I am talking about – as does everyone bothering to follow our exchanges.

        Its the same boring thing day in day out.

        You reckon big gummint is the righteous socialist solution but the right wing statists are just much better at it.

        Which is why you defend a state / private bank monetary cartel even though the righties have control at the moment.

        Which leaves you with a fundamental problem.

        How can the 1% beat the 99% and keep doing it for decades.

        And you have NO solutions.

        That of course doesnt stop you tipping a bucket of pig swill on anyone who disagrees with your arthritic ideas.

      • Pft….

        I’ve linked to a tremendous amount of information in regard to your rambling non sequiturs over some time, something you seem completely incapable of doing. Look its not my drama that you believe the stuff coming out of AMI and grind all your optics with that metaphysical rubbish. As originally noted this camp has some serious issues outside its theory which you constantly put on display, so that means there is a group dynamic affiliated with it.

        You personally are inconsequential to the whole this group presents, its to that I point out.

      • Skippy,

        “..I’ve linked to a tremendous amount of information ..”

        LOLOLO

        That is all you do.

        Pepper your incoherent ramblings with “claim to authority” links to op-ed “stuff” you think is ‘evidence’ but most of it is irrelevant to the point in question and none of it amounts to an argument beyond the 4 points set out above.

        No solutions, no ideas just a gibberish railing at the sky about how the 1% managed to “fool” the 99% despite the efforts of super smart Skippys to point out the error of their ways.

        Just as well your model involves no agency on the part of the public or you might have given up by now.

        All the while making hypocritical excuses for the role of private profit seeking banks at the centre of the public monetary system.

        No wonder you feel the need to troll other peoples comments week in week out with your pseudo intellectual posturing.

  6. Shame no way to go long banking lobby in Canberra. Results of their work obvious here. They surely are growing at the moment with a long pipeline of work coming in. Lobby companies should list publicly so ordinary Australians could also get ahead and feel part of their successes of shaping our democracy. /sarc

  7. Which all begs the question of why Grisham’s law became so dominate throughout an entire industry and its ancillaries, not to mention the public sector charged with oversight, especially considering the international aspects. I would also pose how people from a higher education level would deem such anti social activities reasonable from a short or long term perspective.

    Normally such broad social psychological conditions require some – impetus – in a core belief system, with the assistance of some key individuals or groups in disseminating it through established network architecture. A shorter version of this is the so called social narrative.

  8. It’s our monetary system that’s driven by debt. It’s what they do, and how ever expanding is good, and less demand for credit is bad. It’s why all parties are welded on neolib globalists as you need a constant flow of immigration to demand more debt and consumption. In farming a plot of land has a capacity and farmers know this well, but the neolibs would reject that and plunge the farm into a total wipe out eventually.

    • Well said, it’s very simple really when you come down to it. The political system is for sale to the highest bidders. Always. Guess what that leads to?

    • “It’s our monetary system that’s driven by debt.”

      I think you mix meanings here afund. It does not make a distinction between public and private debt, doesn’t distinguish between currency users and issuers. No distinction between stocks and flows. No discussion of capacity constraints, inflation. For instance –

      1) 30 yr treasury bond yields fell rapidly in the 1980s while deficits were exploding.
      2) 30 yr treasury bond yields rose in 2000, hitting 7% on the 30 yr at one point, when the government was running surpluses.
      3) Japan has a functional currency and economy with massive debts and deficits for many years.

      Conventional economics has NO explanation for the above phenomenon.

      This becomes acute when people conflate personal debt with soverign debt e.g. two completely different things e.g. soverign debt is the wealth of a nation depending on its social purpose and distribution. I would offer 450 billionaires in America is a factor of poor distribution and asset allocation more than some subjective use of the word debt.

  9. Another 2-3 years of royal Commission will sort all of this out. We are just at the end of the beginning.

  10. The banks seem to be acting as the market intended, regardless of what the RBA commands. Interest rates go up free of the RBA because the cost of money is going up. Lending standards are tightening (triggered by the RC) as the risk in the market is increasing. The RBA and Treasury can say all they want … the banks will operate in their own best interests.

    • Think the banks are actually using the RC as an excuse to curtail lending, as there is a credit squeeze on the horizon (QT) increasing interest rates…….The US doing this into a bear market which may or may not cause a recession but in a few years explodes deficits anyway pressuring interest rates down…..yet again, with or without more rounds of QE.

  11. if banks start lending again in same way they did prior BC, prices will jump another 20%. However, at around those levels we will reach max borrowing capacity, where borrowers will not be able to repay IO loans. Without wages going up this is limited option that can buy another couple (18 months) years give 6 months more or less.
    Also, if banks start lending to everyone again that will push OS rates up due to rising risks.

    • ErmingtonPlumbingMEMBER

      If as a species, we can organise our selves to split and fuse the Atom, place men on the moon, read our own genetic code and send probes to the edge of the heliosphere, then we can sure as Fk organise ourselves to provide affordable housing to all,…especially those of us that work,…it just requires the Will to do so.
      Same goes for maintaining an affordable Wealfare state for those in need.
      All arguments against the posibility of achieving such out comes are simple (though often complex) regurgitations of philosophies written by toadies and sycophants of concentrated power.
      Just as made up and full of $hit, as the Monotheism so prefered by all the great empires of the last 2000 years where written text sanctioned and authorised the power over others.

      Fk all those sly Cnts,…I prefer direct democracy,…where we the people can choose whatever we want for ourselves inspite of what ever “Great Philosopher” or economist has to say about it.

      • The problem is, while some of the smart people did the things you list, other smart people are purely interested in advancing themselves at the expense of others.

      • And how does this direct democracy actually function in the real world contra to its proponents model outside the real world.

        I’ve discussed this in the past with Morris and never got a qualitative answer. Especially wrt the game theory component and administration.

      • ErmingtonPlumbingMEMBER

        Yes well,…im sure the Aristocrats in the UK grappled with similar Questions when “awarding” all land owners (less than 3% of the population) the “Right” to vote and sit in Parliment.

        Its not beyond us Skip to give the population a true voice and seat at the decision making table.

      • bjw678…

        Quite aware of what it is and have discussed this matter with Stephen more than on a few occasions, that still does not answer my question.

      • You clearly need some reading comprehension lessons then skip, cause how it works “in the real world” would be described by understanding the actual examples of it being used, or do you mean in a wanky, theoretical, sound smart while talking gibberish kind of way?

  12. The NAB CEO in front of the Senate Estimates committee acknowledged that 97% of staff were on incentive contracts. Just let that sink in for a while! 97%!

    Little Johnny would have been pleased.

  13. The banks can pump up their loans again, but what has come out in recent months is most certainly going to put a damper on things for a while.

  14. Jumping jack flash

    We already know that the lending can’t be stopped lest the economy crumbles. Everyone must be aware of it now. The banks admit it. The RBA admits it, the regulators admit it. It is plain as day all out in the open.

    So now the greatest danger of this whole RC is the damage caused to the reputation of our banks with their banks. Don’t forget that our banks didn’t lend their own money out to everyone to buy houses with. Hopefully our banks have simply pointed to the LVR and said that it is still all golden, and if it ever looks like falling they’ll simply seize all the assets the debt is attached to and freeze them to maintain it.

    Then they just wait for this thing to blow over. A couple of months, tops. Surely there’ll be another “crisis” in the parliament that can be breathlessly blanket reported by the media. Maybe someone will [email protected] on the floor of the lower house, or punch someone, (I’m looking at you, Katter!) instantly affecting millions of ordinary Australians trying to live their ordinary everyday lives, of course.

    No problems maaate, the crisis is contained.

    • “didn’t lend their own money out to everyone to buy houses with”
      Actually most of it they did, they only need to borrow the fractional reserve part, a mere fraction of the total.

      • Jumping jack flash

        60% of loan books lent from overseas banks on short terms.
        Unless that’s changed, recently.

      • From, https://en.wikipedia.org/wiki/Fractional-reserve_banking
        “Because banks hold reserves in amounts that are less than the amounts of their deposit liabilities, and because the deposit liabilities are considered money in their own right, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying base money originally created by the central bank.”
        So yes probably 60% of capital reserves are borrowed from OS on short terms, but the reality is for a 1,000,000 loan you probably only need 50,000 reserve, although the numbers are well hidden. So for every million lent, maybe 60% of 50,000 comes from offshore, 40% of 50,000 comes from onshore, and the bank pulls the rest from your orifice of choice.

    • Now that their future is dissolving before their eyes it’s amazing how honest they can be, isn’t it? This whole shit show is built on ponzi criminality. Don’t touch a thing or we all go down.

  15. Surely if the banks are fraudulently lending then they are open to compensation lawyers having a field day, you could take out a loan you can’t afford and then claim that because it was not serviceable you don’t have to pay it back !

    • See the American experience for a heads up, only BSD can utilize that route, the unwashed can pound sand.