Germany’s No-Fee Cash Machine Withdrawls

Banks may be crashing in the US and shaky in Switzerland, but in Germany bank business in booming. Literally, because thieves are blowing  up ATMs (aka cashpoints, cash machines, automatic teller machines). There have been more than 450 incidents so far this year where explosives and incendiary devices were used to blast open German ATMs for unauthorized withdrawls. German authorities just arrested 42 suspects in the robberies, many of them Dutch, presumably because banks in the Netherlands have already closed down ATMs due to these kinds of attacks.

More:

“German police nab 42 suspects over ATM explosions,” Richard Connor, DW News

Update:

“Germans fret over exploding ATMs as cross-border crime wave hits,” Tom Sims and Nette Noestlinger, Reuters

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ATMs

After you insert your bank card and enter your PIN, how does the ATM know how to give you the right number of bills?

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Why Banks Fail

Former Bank of England Governor Mervyn King explains why and how banks fail.

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Flamenco Flash Mobs Strike Spain’s Banks

Financial institutions across Andalusia are under percussive attack from Flamenco Flash Mobs. Guerilla performances of these indignados flamencos are political demonstrations, expressions of anger and frustration at the Spanish economic crisis. Like this performance in a branch of Bankia, they’re choreographed by the anti-capitalist group Flo6x8. 

More:

“Los “indignados flamencos” Flo6x8 arrasan en Internet con su bulería contra Bankia,” Vertele.com

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JPMorgan Chase: Banking as Betting

JPMorgan Chase & Co. had an awkward moment recently when it bet its hedges instead of hedging its bets. This resulted in a $2 Billion loss, some management changes, and loss of CEO Jamie Dimon’s ability to lobby against Wall Street reform with a straight face.

Goldie for President!

“Goldman Sachs, the global investment bank and financial services firm, announced Friday morning that it is running for president of the United States.”

“… the conglomerate will forgo donations altogether and instead finance the campaign with a portion of the $10 billion in taxpayer-funded bailout money the investment bank received in 2009. “

— “Goldman Sachs announces presidential run,” K.M. Breay, Salon

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Banker Quotes Karl Marx

“Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx.”

“The wily philosopher’s analysis of capitalism had a lot of flaws, but today’s global economy bears some uncanny resemblances to the conditions he foresaw.”

“As he wrote in ‘Das Kapital,’ companies’ pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an ‘industrial reserve army’ of the poor and unemployed: ‘Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.’

The process he describes is visible throughout the developed world, particularly in the U.S. Companies’ efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant.

U.S. income inequality, meanwhile, is by some measures close to its highest level since the 1920s. Before 2008, the income disparity was obscured by factors such as easy credit, which allowed poor households to enjoy a more affluent lifestyle. Now the problem is coming home to roost.”

Who wrote that? The Senior Economic Adviser at UBS, the Swiss bank. Read it all:

“Give Karl Marx a Chance to Save the World Economy,” George Magnus, Bloomberg

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Teaching Kids to Consume

PNC Bank and public TV’s Sesame Street say they are teaming up to teach kids about money. David Sirota explains it another way:  “A bailed-out financial institution teams up with PBS to teach our kids how to spend money on useless crap.”

“‘Sesame Street’: Brought to you by PNC Bank,” David Sirota, Salon

“PNC” logo and the Sesame Street logo element and creature are property of their respective trademark owners and used here under the “Parody” provisions of the “Fair Use” doctrine.  Hey, if PNC hasn’t paid back all that Federal bailout money, taxpayers probably own some rights in their stuff anyway.

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Wall Street’s Bailout Bonuses

 

Kenneth Feinberg, Special Master on Compensation Reform, cited 17 financial firms for “ill-advised” excessive payments to their executives while taxpayers were bailing their companies out with TARP funds. He called this “bad judgement.” Total of the bonuses and other executive payouts: $1.6 billion.

SEC Asks Banks About Accounting Dodge

The Securities and Exchange Commission (SEC) has sent a letter to a score of bank CFOs asking if they used the same maneuver as Lehman Brothers to cook the books during quarterly reporting periods. In the trick, called Repo 105, a  bank uses a short-term contract (a Repurchase Agreement) to exchanges assets for cash, agreeing to buy them back later at 105 percent of their value, but the firm reports the resulting cash as if it were a straight sale. This gives the temporary illusion of bank soundness and profitability.

More:

“SEC: Did others use Lehman accounting gimmick?” AP via Salon.

“SEC to Banks: Who Else Used Repo 105?” Marian Wang, ProPublica.

“Do other firms use Lehman’s accounting ‘drug’?” Alistair Barr, MarketWatch.

 

Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com

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