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It takes a special talent to waste $14 billion

June 29, 2011
  • Rowland
Rowland

Back in the middle of the last decade, I owned a few shares of Bank of America.

So when can I expert my check?

This week the monolithic financial institution agreed to pay up to $14 billion to settle investor claims that banks loaned money to clods of topsoil and then represented these “toxic securities” as high-quality investments and sold them to the E-Trade baby.

No, that’s wrong. The E-Trade baby would have had more sense. In fact, the securities were sold to a vast collection of the stupidest asset managers on Wall Street who, coincidentally, happened to have the fate of the entire global economy in their hands.

Of course, the major question now among executives at Bank of America, Chase, Wells Fargo and others is: “How will this affect our year-end bonuses?”

Yes, it’s a shame about the financial meltdown,  subsequent recession and the explosion of the national debt and all, but a bank chief executive officer’s first obligation is to put bread on the table for his family — and that can hardly be done for less than $20 million every second week in December.

Besides, they earned it. Seriously, even if we tried our absolute hardest and spent 23 hours a day at the office, do you think that you or I could have caused $14 billion worth of damage?

I wouldn’t have even known where to start. Even if I’d bought the nation of Cambodia and based its economy on the sale of root-beer flavored snow cones, I couldn’t have frittered away that much cash.

You couldn’t even physically burn $14 billion, if you had a flame thrower and a filling-station’s worth of gasoline. (And that’s just what the settlement was, which is a fraction of what they actually lost.)

So I agree that it took a special kind of talent, an ignorance rarely seen in today’s modern world, to blow through so much money in so short a period of time. These guys need to be compensated for that.

Here’s how screwed up Wall Street is. The stock market greeted the write-off as GOOD news, and Bank of America stock in early trading was UP.

“What, you only did $14 billion worth of damage? Cool. Have some more capital on us.” In what other field could you announce the loss of that much money and be applauded for it?

Funny thing is, I know a few bankers around here, and I flat out guarantee you that if any one of them had been cloned and put in charge of all the nation’s major banks, we would not be in the world of financial hurt that we are today.

They have some pretty crazy ideas, I admit. For example, you would only be eligible for a loan if you had something known in the financial world as “income.”

And this makes me curious: What is it about the world of finance that allows for advancement based on stupidity? It’s the opposite of any other business paradigm I can think of, with the possible exception of the Los Angeles Dodgers.

If you’re not a complete monetary crackpot in the financial world, forget about making vice president. But if you’re smart, responsible and prudent? Have fun being branch manager in Cascade.

Ah well, I guess there’s nothing I can do about it other than wait for my check.

Tim Rowland is a Herald-Mail columnist. He can be reached at 301-733-5131, ext. 6997, or via email at timr@herald-mail.com. Tune in to the Rowland Rant at www.herald-mail.com, on www.antpod.com or on Antietam Cable’s WCL-TV Channel 30 at 6:30 p.m. New episodes are released every Wednesday.

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