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The Perfect Bank

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February 05, 2014 – Comments (6)

So i found this really interesting recording of some executives at Anglo Irish Bank. After I listened to the recordings I wondered what investment advisers were saying prior to the events discussed in the recording. I found this investment advice by Padraig O'Hannelly and reposted some of it here.

By Padraig O'Hannelly
May 10, 2006 

"Imagine, for a moment, that you wanted to design the perfect bank; what would it look like? For a start, you'd want to locate it in a country with strong economic growth. Within that economy, you'd want to give it plenty of exposure to the more profitable areas of banking, i.e. the business sector. And why burden yourself with an extensive network of branches in small towns?

For peace of mind, you might also want to secure a large proportion of the loans against property, and that would be particularly easy in a country where property prices were booming and construction accounted for 20% of GDP.

Well that's pretty much the formula that allowed Anglo Irish Bank (LSE: ANGL) to outperform its peers so comprehensively. Over the past six years, the shares have been an eleven-bagger (or a twelve-bagger, depending on how you count your bags) -- that is to say they are worth 12 times what you would have paid for them. Its EPS has grown at a compound rate of 35% per annum since 2001.

With performance like that, I wouldn't grudge the management a generous remuneration package. In fact Anglo's CEO is reported to receive the highest pay package of any Irish listed company -- €2.35m last year, most of it in the form of bonuses....

....Finding shares like this is so much easier with hindsight. To help find some of tomorrow's outperformers, why not check out Maynard Paton's Champion Shares service with a 30-day free trial. "

Here is the link to the whole article from The Motley Fool UK. As it turns out, avoiding shares like those is easier with hindsight too.

 http://news.fool.co.uk//news/comment/2006/c060510h.htm 

Here is the video; I beleive it is what the investigator says it is. Disgusting. Watch it soon - it has been taken down from some web sites already. This site where I watched it suggested I should share it with you.

   

 Here is a link in case the video does not embed.

 http://www.veoh.com/watch/yapi-8ZlbI1oKV9I 

In all truth, at this point I cannot see any reason that sane citizens should allow investment banks to exist and continue to steal. I cannot see any reason not to take the money they stole back. Granted this is just one player in Ireland, but I do not for one second believe JPM, Goldman, Bank of America, HSBC, UBS etc are any different, unless they are worse. They don't call it stealing anymore, they call it doing their job.

At this point I do not want to regulate private investment banks. This American wants them gone. 

I support State owned banking institutions, like the Bank of North Dakota and Ellen Brown, Candidate for California State Treasurer who would form a public bank in California. 

 http://www.opednews.com/articles/1/California-Dreamin---Why-by-Ellen-Brown-Budget_California-Fiscal-Crisis_California-Politics_Crisis-140116-360.html 

It won't be the perfect bank, but at least nobody gets paid a bonus for stealing. 

Best wishes,

Steven 

6 Comments – Post Your Own

#1) On February 06, 2014 at 8:39 AM, devoish (99.10) wrote:

Time is up, the video is gone.

Basically it was couple of  executives from Anglo Irish Bank talking about how they were going to scam Irelands taxpayers into footing the bill for the failed mortgage investments they sold investors.

They sold fear to the treasury department by threatening how many 100,000 euro account holders would be upset if Ireland di not bail them out.

The laughed about about getting a "bridge" loan they knew they would never pay back.

They discussed how the 7 billion Euro loan was only enough to get them to their year end reporting.

They mimicked and mocked the regulator who asked questions.

Then they described how they beleived the 7 billion loan would get the regulators "in" and then the regulators could be bled for more money afterward.

Just like Hank Paulson did to us here in the States.

Best wishes,

Steven 

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#2) On February 06, 2014 at 10:21 AM, Mega (99.95) wrote:

1. Anglo Irish wasn't an "investment bank". They were a commercial bank.

2. The shareholders were wiped out and the employees lost their jobs, so mission accomplished.

3. Perhaps management was a bit evil, but they were much more incompetent.

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#3) On February 07, 2014 at 3:05 PM, Valyooo (99.60) wrote:

Devoish, isn't your philosophy that interest is evil, therefore banks shouldn't exist?

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#4) On February 07, 2014 at 4:11 PM, devoish (99.10) wrote:

Mega,

1) Fair enough but that line has gotten smudged.

2) Should have happened in States too.

3) More than "a bit" evil. Hanging offenses back in the day, but at the very least management should be in the poorhouse with the shareholders, and governments they cheated. 

Valyoo,

A couple of things there. 

1) Banks do not have to charge interest to exist. A lending officer salaried at median wage could be paid with fees. It is not like you need a vault to electronic transfers.

2) I am not a hard liner, I could accept a State bank redistributing interest back to every citizen who paid for it in higher costs. It removes the destructive power of inflation on savings.

3) Private bankers paid to take money sure seem to find ways to cheat for it, eh? Salaried employees do not have such incentive to cheat.

Best wishes,

Steven 

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#5) On February 07, 2014 at 4:11 PM, devoish (99.10) wrote:

Mega,

1) Fair enough but that line has gotten smudged.

2) Should have happened in States too.

3) More than "a bit" evil. Hanging offenses back in the day, but at the very least management should be in the poorhouse with the shareholders, and governments they cheated. 

Valyoo,

A couple of things there. 

1) Banks do not have to charge interest to exist. A lending officer salaried at median wage could be paid with fees. It is not like you need a vault to electronic transfers.

2) I am not a hard liner, I could accept a State bank redistributing interest back to every citizen who paid for it in higher costs. It removes the destructive power of inflation on savings.

3) Private bankers paid to take money sure seem to find ways to cheat for it, eh? Salaried employees do not have such incentive to cheat.

Best wishes,

Steven 

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#6) On February 08, 2014 at 1:41 PM, awallejr (82.99) wrote:

Well Credit Unions do exist.  You can do business with the Baileys instead of the Potters of the world.  It is a sin how lightly we treat "white collar" crimes overall.  But I put the fault on Congress and the Executive branch. 

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