How the Banks Never Lose

2008 ,    »  -   41 Comments
Ratings: 7.45/10 from 11 users.

How the Banks Never LoseAs the credit crunch continues to leave Britain cash-strapped and high street banks report huge losses, Dispatches investigates who is responsible for the current crisis.

Reckless lending and risky investments have been blamed for directly driving up mortgage rates and increasing the numbers of people losing their homes.

Dispatches investigates how the bank chiefs allowed this to happen and if lessons have been learn from the Northern Rock crisis.

Former investment banker James Max tracks down the banking bosses who have presided over the colossal losses to see if they will be held to account.

He examines the billion pound bonus culture and lifestyle of the City's wide boys and investigates how the banks are now seeking to make back the money they lost before the credit boom hit the buffers.

Featuring the results of an exclusive survey of bank lending rates, and how much money banks are re-claiming through them, the film also offers expert advice on how to cope with higher interest rates and shows how customers can take banking into their own hands.

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41 Comments / User Reviews

  1. Ramus

    The banks and the economy that has built up around them will cause global class wars. Soon it will be time to lynch the greedy fockers.

  2. acovenientpoliticalscam

    well, we have all been indoctrinated into this paradigm. "Money makes the world go round" so until somebody says "NO damn it!" We will continue to work and breed and die and sweat and vacation all because we do or don't have money. And at the top they have it all. And don't believe anyone when they tell you that it flows back down.

  3. Irishkev

    I'm with you guys.

  4. Aerun

    I am Julian Assange


  5. Anthony

    Lets just see how many Economics students try to justify it....

    I can spot an economics student from 400 yards their nose is always at +45 degrees from the horizontal.

    All i can say is that with mortages taxes and utility's the way they are in the uk right now lots of people are stewin.

  6. Voice of Treason

    Anyone else using a PS3 and getting just a black screen? Not even a play button or anything... Its doing it with loads of docs recently, never used to though. Me and Amanda are getting fair upset.

  7. Zatarra

    Morally bankrupt money changers waiting for jesus to swoop down and flip over their loan tables of corruption. Cant really blame them for being greedy if the goverment's basicly are asking them to gamble with the public/worlds wealth. At least mankind has found a way to make all the people forget about this banking theft and fix all these problems.... war time soon. I wonder if the goverment is going to give the soldiers bonus to fight like they let these morally bankrupt bankers steal out of the bank bailout for bonus's and pay bumps. I doubt it...

  8. Zatarra

    @ voice of treason Try plugging it in to the power supply if that fails make sure u payed last months power bill. Hope that helps with your problem.

  9. Voice of Treason

    @ Zatarra No, no, no, the internet works ok, i'm on it now, its the video, its just a blank rectangle. i cant be the only one...

  10. phreakerx

    @Voice of Treason - you are not alone, must be the videos host. “What is one Degree?” is the same.

  11. Waldo

    BORING!!! Not to mention all these docs seem to harp on the banks, and trust me I hate them as much as anyone else, but no one is talking about all the people that took loans they could not pay back and did not understand. The banks will always have their best interest at heart, it is up to us to be our own advocate in the equation. If more people understood exponential functions, which is the heart of compound interest, I don't think we would be in this mess. Well, I would at least like to believe we wouldn't. There is a simple equation for compound interest, but it involves exponents and I can not express it in this format. Here I'll try.

    A=P(1+r/n) raised to nt

    where A is the total amount to be paid back, and P is the principle or beginning amount you borrowed, and R is the interest rate in decimal form, and N is the number of compoundings in a year, and T is the total number of years to pay it back.

    I guess though if more people understood exponential growth we would be in much more of a panic about population increase and the oil crisis. If most people heard that the population was increasing by 3.5 percent anually (made up number to make a point) they would think thats not much at all. In reality that would mean our population would double in only about twenty years. Since most people live to at least sixty that would mean it would triple in just their life time. Exponential growth is tricky, a very small percentage compounded anually over several years can add up to a lot. For a better understanding of exponential growth I advise everyone to check out a vid on you tube called The Most Important Video You'll ever See, catchy title huh. It really is worth a watch though.

  12. Atrophy

    The ^ symbol is the raised to the power of marker last I checked. I think X-cell and Open Office use it too.

  13. Vlatko

    @Voice of Treason and @phreakerx, this video is fine and the other one you've mentioned is fine also. Also YT is fine.

    Lately some of the videos are embedded through "iframe" method, so the folks that are using iPhones and iPads can watch the docs. "iframe" method is now the default at YT. Using it allows the host to "recognize" what kind of stream the viewer's machine "prefers". iPhones and iPads do not support flash, so with this method they can watch the videos too.

    Anyways, probably you're using something "unconventional" since you're seeing just black screen. Clear the cache and the cookies, try using a different browser, etc.

  14. pammy

    To borrow 4 times your annual income is complete madness.

  15. Psinet

    So your average daft Joe is to be blamed for over-borrowing? Aren't the banks supposed to be the financial experts?

    I suppose you think loan sharks are ok too?

    What about robbery? "Not having a guard dog is madness.." pfft

    The person who makes the loan - their life is ruined. But the banks? No problemo.

  16. Psinet

    But yeah - boring documentary - no new info.

    "Bankers are fat pigs with no social conscience or regulation."

    Yeah. We know.

  17. Wizard

    Squid you don't work for a bank in London do you lol by the name of Citi ;-)

  18. MrMajestik

    Well at least it isn’t just Americans who are fiscally r3tarded =)))) I thought we had a monopoly on stup!d!

  19. Maddogmargetts

    great documentary but what are we going to do about it? Carry on being so polite? Do you really think they have any morals which you will tweek? These bankers dont give a toss. Violence is the only way they will be stopped.

  20. Douglas Fenech

    James Max was a semi-finalist on the first English series of The Apprentice back in 2005. Somehow, he was much less annoying on that. Seems like a decent enough guy but I don't think documentary making is for him.

  21. Douglas Fenech

    No more anonymous posting then, huh?

  22. Cool E Beans

    I don't know what a pound note looks like or what it says on it but all American money only exists by being borrowed as it says on the front of each bill "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE". Even banks borrow their reserve monies from the Federal Reserve. A bank which cooperates with the Federal Reserve is allowed to borrow money in order to maintain its required reserve amount of 10% of outstanding loans so that they can remain solvent. This borrowing is necessary when more money flows out of a bank than remains in one due to its account holders spending instead of saving. The money lent by a bank doesn't exist until the borrower signs loan papers which causes the 'credit money' to be available as long as the bank also maintains sufficient reserve funds.

    Realize that since banks don't lend real money, they extend credit, there is no real risk as the borrowers default results in the bank retaining the pledged asset (after some of the money has already been paid back). The only real problems banks have gotten into is that the housing assets they now hold aren't worth what they were when they were appraised and all this is forgetting one important thing...when you are paying a 6% interest rate on a borrowed 100,000 dollars/pounds/fin/euro loan, and the 'credit' was created out of thin air from your signature on the loan papers and all the bank has to keep in its vaults is 10% reserve, or 10,000 dollars/pounds/fin/euros, they are actually receiving a 60% return on money they still have in their vault.

    It is no wonder that the execs claim huge bonuses. I had a 6.75% loan of $50,000 for 360 months (30 years) and would have fully paid $50,266.50 at payment 155 of 360 still owing $66,481.50 for the remainder of the loan period. Remember, all the bank needs to do for this loan is keep $5,000 in reserve. As payments are made, the portion that is principle no longer exsists as it was only exended credit in the first place but this imitation money would have netted the bank $66,820.00 in pure profits over the duration of the loan minus any cost to them of borrowing (at a lesser interest rate) any monies necessary to maintain their required reserve amounts($5,000).

    I no longer have a loan as I paid it off after only 5 years. I also have removed all savings from all banks and only keep a checking account active for monthly bills removing any excess as it builds up. Removing savings takes reserve monies out of the hands of the bankers. If enough people do this, the banking system should collapse and the reserve banks with it as they are the orchestrators of the entire world economic system we all are now engaged in.

    Governments have the right and ability to create their own money instead of borrowing it from any reserve bank. As all money is borrowed, the only money available in the economy of any country is the principle. The only way you can pay back your loan of principle plus interest is by taking somebody elses principle away from them, unless somebody keeps an ever growing interest only loan going (hmmm...the US national debt is about 12 trillion and it is an interest only loan) as well as some people in this economy going bankrupt while others garner massive incomes.

  23. bb

    great article!

  24. Guest

    cool eye!

  25. danielmcd3

    very insightful.

  26. serenit_y

    During the final interview, Seeing the lady's reply to he's question of
    'The buck stops at the top, shouldn't the chief executives resign' with

    'We want the most experienced people at the helm'...-smile-
    whilst He, knowing the facts, simply lets her off with a smile, instead of 'No, These are the guys who irredeemably failed at their duty'

    I do believe that when the next recession comes, which it will, as certainly and periodically as it has over the past 100 years, each more severe, and quicker in succession than the last, The people will have finally had enough,
    and the witty banners of protesters in the streets will be replaced with petrol bombs and burning skyscrapers, and the 'Government Hearings' with Court cases, either of the bankers finally being brought to justice for their crimes, or of Vigilantes who've finally lost all faith.

  27. Ross Baradoy

    did they give you the promissory note back... if you knew the law you would still be in your home... to bad you found a job... and never learned what you needed to know

    In Bauer v. Bank of Montreal (1980), 33 C.B.R. 291 (S.C.C.; Ritchie,
    Dickson, Estey, McIntyre and Chouinard JJ.), the Court held at

    The duty of a creditor holding security for the performance of the
    obligations of a debtor or a surety is clearly established. The
    creditor, in the absence of agreement to the contrary with the debtor
    or the surety, must protect and preserve the security and be in a
    position, unless excused by other agreement, to return or reassign the
    security to the debtor or surety on repayment of the debt.

    Bank of Montreal v. Fennell, 1991 CanLII 874 (BC SC)

  28. Rainmaker

    Totally agree. I also couldn't believe he just let her get away with such rediculous reply! As if making criminal mistakes and crashing the entire financial system do not assume ANY responsibility whatsoever, and even result in huge bonuses!! I wonder what would he reply to a similar comment made by a CEO of one of those 5 banks, in case he did meet any of them! Probably also sitting and nodding the same way... Stopping half the way isn't cool. They should have let Michal Moore do the interviewing!

    And, yes, the next resession will be inevitable in the near future, and it will hit SO hard, that the world economy will be nearly crushed... Only then the banks will get what they desrve, BUT it'd be too late for all of us, even for the banks that won't exist in a collapsted economy. They understand this well, but still go for easy short-term profits and holding the govenments by the balls.

  29. Rocky Racoon

    The problem is that the Banks and the Rating Agencies KNOWING passed off these sub prime mortgages with a Triple A rating when they were junk. How on earth does the taxpayer get the rap for this crime and why do we have to pay for it? Moreover, those who have gotten bailed out are now sitting on the money demanding austerity so that they can buy up all the social capital and they are doing it with OUR money....IF that is not highway robbery I don't know what is!
    The time has long since passed when these parasites should have been kicked to the curb with their useless paper and all of their assests seized just like any other ill gotten gains that a criminal would have confiscated. Making money off of a crime is a crime for the average citizen...Not for these con artists however-not only do they get to keep their ill gotten gains but they are allowed to continue to make more money with the money that they stole. The Mafia has more scruples than these people. The need a jail cell for life.

  30. Rocky Racoon

    Our productive capacity is only operating at 70% globally that means we could produce 30% more without blinking an eye. The best way to control population is to eliminate poverty and the "family" economy where children have to collect firewood to help the family to survive instead of going to school. And these NO TAX corporations that go into a country usually after the CIA and the Marines have blazed a train do not pay for any infrastructure such as schools and hospitals and roads.....Just arm some appointed dictator with a military budget to wreak havoc on the domestic population.....hell if the rich paid in taxes what they pay in security there would be no problem.
    $230,000 for a guard dog....insanity.

  31. jj

    can anyone tell me,when this crisis first hit ,whith all those people up on capitol hill with princton,and yale and harvard degreees,whty the government dint tell the banks we will bail you out when u renagociate home owners loans to there true value and at set payments they can afford and then will bail out the difference,banks will be on the phone with every homeowner,tying to make a deal,instead,they gave them the peoples money,and banks forclosed on the people kicking them out and recalling the property,wich also created an economicic crisis wich cost compants to go under and others loosing there jobs hence cant pay there morgage,another type of victim,everyone would of won,the banks ,the homeowner and the economy,but indtead the banks only one thats why they can give themselves big bonuses,see how politions get in to represent them selves and wheel and deal and forget the are there to represent the people.its not terorist we have to fear its big government and corporate entities,who use us to make them rich,who start wars to sell there big aquipment and make them rich,while we give are blood sweat and tears and then kick to the curb,we need also to have a complete overhaul and set a standard of ethics on all levels,and those who took part in selling predatory lending should be broufgt to justice,not because of just buyer beware loses but mbtcause it almost undid our economy and national security,ans all other countries that were effected...who do you think will become enemies to us,if there country colaspe because of our folly,you dont think that also effects our security in the world

  32. spACE

    Because he who controls the spice (money) controls the universe!

  33. Tarquin Mahoney

    Its not about money per se, its about power...

  34. Devon Griffiths

    You're absolutely right about population control. When people think about population reduction, they generally imagine wars and killing. This actually achieves the exact opposite. While the population is temporarily reduced, wars are generally followed by massive population booms, and the more loss of life, the more huge the boom that follows. Basically the idea of using war to decrease the population is like using gasoline to put out a fire.

    Education and wealth, however, put populations into negative growth quite easily. The whole of the developed world - with the exception of the US - is now in negative domestic growth.

  35. mrwibble

    Democracy is broken. It's been irrevocably tainted by the relentless corruption of rapacious brigands. Nothing short of civil unrest is going to alter the status quo. When the people these guys have shafted finally turn up outside their gated communities with pitchforks and torches, then they'll reap the whirlwind, because they're thieving scum.

  36. bob jeffery

    watching this just makes me want to be a banker...rather than hating them for making so much money i want to join the ranks.

  37. Jchips

    Short on real content, avoiding difficult explanations in favour of easy and almost meaningless mudslinging. Unless you trust all financial institutions like a baby trusts its mummy, you are unlikely to find anything new in this film.

  38. just me

    Most mortgages and loans are illegal since the lender must have the capital to cover the loan and we all know any bank loan/mortgage is just numbers on a screen as far as the bank is concerned.Debt is created from nothing this is why they always win.It was nothing less than holding the country to ransom.I bet all their cash is hidden away in Switzerland.Thieving bastards still bot their bonuses ffs.

  39. claire sc

    why are we playing it safe always doing the right thing and economising while these CEO CRIMINALS GET RICH AND WE GET POOR

  40. DustUp

    Agree with the few above who saw this docu as a waste of time. No revealing info, nothing not already known. Just grandstanding... except maybe the bit about how your "friend" the govt who took over Northern Gravel is screwing those poor folks worse than the rest by a wide margin.

    As is the plan with Socialism, govt creates a problem, and the uninformed(usually by choice by limiting their input to bankster owned Media) look to govt to solve it. They should be booting corrupt govt out. Seeing to it the incorruptible are running for all offices from all parties in numbers, that are NOT beholden to the central nor other banksters. The retail and commercial banksters are just the minions of the central banksters. THAT would solve many more problems than just the banking crisis which is coming round again, on purpose.

    Clearly the central banksters know how to suck as much money out of the populace as possible via inflation, inflated housing prices, energy prices, etc. Then they will cause a depression where most assets will drop to pennies or dimes on the dollar and start the game over, since it reached a point where there was diminishing returns to suck out of the populace. The central and minion banksters never lose because it was never their money, none of it. They never loaned a dime.

    The supposed 10 percent cash on reserve of amounts loaned is a fairy tale. If a bank has to borrow to make that amount, it is borrowed not "reserves" regardless of their silly rules. Worse yet the banks bundled those worthless mortgages into a "security", sold them as income producing "assets" to banks and mutual funds all over the world who were ignorant enough to buy them, which were most, including many CREDIT UNIONS. I used to belong to a Credit Union that kept 50 percent reserves. No longer. They bought up a couple rotten credit unions and now are about as lousy financially as the average one. Getting back to the regular banks, what happens when they take those Mortgage Backed Securities (MBS) [look on for the percentage your bank holds] and use them as collateral to make other gambles with in the derivatives markets and they lose again just like in 2007-8? Just who do you think has been sending stock markets to new highs in the usa? For the most part it is a bankster circle jerk. Who will they be able to sell those over priced stock shares to when Congress pulls the plug on bailout loans to the banksters? It will be the same situation as the investment banksters who thought they would be able to dump all those MBS onto everyone else before the game was up. They were still holding the bag on plenty when the music stopped with no where to sit in 2008. Yet again, they aren't using their money to gamble with but future taxpayer obligations given to them as bailouts.

    Whose fault was that? Your problem creating friend the govt. The enabler of moral hazard (the repeat of the same "mistake") with no strings attached. And ultimately WHO allowed the govt to do this? YOU DID. Did you make a phone call or write your representatives and senators to prevent them from bailing out the banks repeatedly? Lest we forget there was TARP and QE1, 2, 3 and probably more in one form or another to the tune of 30 trln. You might think that ought to cover their losses and then some but not even close. They have gambled away some 300 trln, by some counts 1000 trln plus. So what is the result? At some point the house of cards will fail. That will happen when the banksters feel that they have nabbed all the cash from the populace that is practical. Economic collapse or close to it.

    People without means are desperate for govt help. Bingo! That is what they wanted all along in order to usher in more Socialist enslavement.

    Reading comments from above it is plain to see plenty prefer to point the fingers at the banksters than to look in the mirror at their own part: Greed at wanting a home they could not afford. Laziness (or time greed) at not spending a few minutes to insist their representatives know they will be voted out if they allowed bailouts. They claimed financial collapse if no bailouts. What a joke, proven by the fact that they used the money to repeat everything thing they did to put them into that position. Not that there wouldn't have been a financial collapse but that they would prevent it by bailing them out. With twice in a row the central banksters can be assured the people having far fewer dollars will go for nationalization of the banks. The next step in total control over you. No one else to offer you a bank account without some implanted chip.

    If they get that far, Bitcoin will become wildly popular and be one of the few deterrents along with Goldmoney and a couple others, to total enslavement of the type: You want to eat, do what we tell you. Hopefully they won't get that far as people wake up?

    BUYER BEWARE is the rule. Now when I took out my first and only mortgage years ago, I wasn't that "aware" however, there were OTHER RULES as well. The bank could not lend to me unless my income was at twice that of the monthly payment and that was when there was some promotion by FNMA (federal national mortgage assn) to lower requirements for regular guys to that of veterans. Would I have been stupid enough to buy a house that was nearly my income at that young age? Possibly. However, one has to realize there is no way to pay a mortgage if it is more than your income minus food and costs to get to work. Whose fault is that? A mortgage buyer cannot blame the "lender" for signing such a contract. A mortgage "lender" cannot blame the buyer for offering such a contract that will cause them problems down the road. They BOTH are guilty as hell. Far more guilty is the govt. for not only REMOVING THE RULES to allow it but arm twisting the regular commercial banks to make the ridiculous worthless loans as part of a vote buying scheme. The less fortunate were encouraged by their community organizers to go in to buy a house. Others heard of that and went in as well. People should realize who their community organizer in chief is. And who received the most in campaign contributions from the pseudo govt mortgage agencies Fannie Mae and/or Freddie Mac (FNMA, FMCC). For those who don't, that would be obama, the puppet of the central banksters as is Hillary.

    If war occurs via the turmoil, all the better for the central banksters who own the defense suppliesrs and who then get to make loans to countries for armaments. And the wonderful part is, they do so with none of their own money. They simply do it by placing some electronic digits into an electronic account with NO real money on hand needed to loan. Yes they get real weapons paid for by electronic digits. The manufacturers pay their suppliers and workers with electronic digits. Albeit some is converted to cash by some to buy things but most use a scan or chip card these days. Ultimately when enough people doubt their bank, doubt the house of cards system, and decide it would be smarter to have some actual cash, the jig is up. That is when either the people will fall for being a chipped slave or kick the bums out. You can bet the central banksters will have their militaries pointing guns at their own populace to help them decide.

    What will you decide? When you will you decide? After it is too late? If you don't see to it the incorruptible are in office, it will be too late.

  41. DustUp

    Hopefully people should start to realize that socialism (that is what corrupt capitalism is, fascism and socialism on the rise) is not the answer, it is THE problem.

    Govt cannot protect you from a home invader. It cannot protect from a swindler if you are one of the many first. Even with gun control it cannot protect you from being shot by those who are criminals and could care less about the laws. So who is govt in the business of protecting, while PRETENDING to protect you by extracting "taxes" to do so?

    Those in govt do what they deem best for THEMSELVES and for those who buy them.

    Why does amerika have open borders for muslims and terrorists but denial to Christians who are being slaughtered in the Middle East? And you still believe govt is your friend, that govt is the answer? Delusion. Indoctrination. Brainwashing by the schools and media.

    Are the Swedes protected by their socialist govt? Did they depend on them to keep the rapists and cut throats out? Clearly the incorrectly depended on govt. who does NOT have the best interest of the populace at heart. And of the murders by the muslims new to the usa?

    Why is it so important for the western countries' leadership to import the muslims rather than making a safe zone for them in the middle east? What is gained by the new world o^dor elite?

    It is always to a nefarious govt's advantage to have different groups that clash. Easier to implement more socialist slavery whilst the populace is focused on each other than on what the govt is doing. If they can gin up a World War, all the better. They have determined a major reduction in population is desired... and might as well make money at it.

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