Some seriously clever people?

"We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe's-Home Depot did to their industry. And I think if we've done our job, five years from now you're not going to call us a bank."

This from Kerry Killinger, chief executive of Washington Mutual, in 2003.

Yes well, what can I say? Between 2001 and 2007, Killinger received compensation of $88 million, according to the Corporate Library, a research firm. During Killinger's tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers' incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients. WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank's executives. WaMu pressed appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors. "It was the Wild West," said Steven Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson that did business with WaMu until 2007. "If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan."

The above seems to sum up what has gone wrong. Far be it for mere ordinary folk such as you and me to try to figure out how this has been allowed to happen. What is now sure is that 2008 will go down in history as the year of the great reckoning. I believe it could well be the beginning of the end of the great age of mediocrity. As more scandals are uncovered it is becoming apparent to anyone who is interested that there were many in positions of authority who really did not have any good reason for being there. They had but one thing they could, and did, contribute, unabridged greed. The numbers are quite staggering, too large to condense into one article. The list of shame continues to grow by the week and 2009 is shaping up to be just as dire.

In the UK, the Government looks to ever more desperate ways to avoid the oncoming Routemasters. Now I know you are saying, “But they have already collided!” Yes, I agree. You know that, I know that, just about everyone else knows that, but the UK Government, and many across Europe for that matter, are still trying to avoid the reality of the situation, and the reality is that pain is coming. This latest idea, rolled out during the UK Chancellor’s pre-budget statement, gives Businesses who qualify, more time to pay their various taxes. H M Revenue and Customs have already received in excess of 22,000 calls from those businesses requesting time extensions on paying.

On a lighter note, and apropos absolutely nothing to do with the Finance Industry, well maybe just a bit as it does reflect these more straightened times. I read a disturbing tale from Citadel Google. Pity those poor employees at that giant. Whatever did they think when the season bonuses were issued to staff. Now remember, they normally receive a nice $1000 present, but this year the powers that be decided to give them something special. Imagine the excitement as they unwrapped their bundles thinking that maybe this year they were receiving a ‘fat wad’ (yes we know, they don’t unwrap them, but just for fun….) Lo and behold, they each received a version of the G1, Google’s mobile phone released this year to compete with Apples iPhone. Internal emails thanked everyone for their hard work and talked of a ‘Dream phone’. This mobile which runs on Google’s network, Android, was recently described by The Register, a tech website, as ‘an unattractive and uninspiring piece of plastic’. Pity those poor Google employees, first they find evening openings of campus restaurants across the world are being cut, now this!

Looks like it’s not only the bankers who are having a froogle Christmas.