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By Jason Werner

A full-fledged crash in global stock and credit markets in the next three months was
warned by Royal Bank of Scotland (RBS), owner of Charter One in the Ohio area. RBS
is one of the largest banks in the world.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's
credit strategist, in an article in last week’s U.K. Telegraph.

http://www.telegraph.co.uk/money/main.jhtml?
view=DETAILS&grid=A1YourView&xml=/money/2008/06/18/cnrbs118.xml

I’ve been working in financial services since 1999. I have never studied financial
institutions more than I have in the past year, especially the past three months. America
has never known or seen what has been happening in the financial services industry in
the past two years, and more specifically the past six months.

Fraud is at an all-time high in financial services. But many do not realize that fraud is the
foundation upon which America’s and much of the world’s financial services is
founded. Financial institutions (mostly banks) have tried to control the people through
an oligarchy by seeping lies into governments. And here we are today amidst its crash
and likely collapse.

I constantly go to the Office of the Treasury regarding things that happened at offices
where I worked and issues of which I have heard from employees of different
companies to expose filthy business practices.  The various agencies under the Office
of the Treasury seemingly ignore most of the complaints.

To be fair, I have been learning from candid representatives that they do not have the
manpower nor the money to prosecute accordingly. My argument is: What is the point of
even having regulations?

.Jim Petro’s (former Ohio AG) administration ignored me as well as Marc Dann’s
administration regarding corrupt mortgage brokerages. Funny thing is, I actually spoke
directly with Jim Petro privately about this issue while at a Republican event (I was once
very involved with the Republican Party).  He did say that I had some serious claims,
and that he would look into it.  I followed up with his office, but never heard from anyone.
To be fair with Marc Dann, his representatives’ excuse was, “I’ve got a pile of more than
200 of them [dirty mortgage brokerages] on my desk.”

Do you want to know what’s really happening at our financial institutions in America?

Do you want to know how you’re getting ripped off?

Do you want to know why our entire market is on the verge of a complete collapse? Do
you want to know how much more serious this collapse is than a little recession or a
little “Great Depression”?

Banks are absolutely desperate right now. They are trying to liquidate every way
possible. Retirement plans are being cut, bonuses are being cut, dividends are being
cut, notes are being called due, credit cards balances are being more forcibly argued
through their own collection departments and third-parties, and much more. They know
their end is near.

Many do not believe me. Take a look for yourself at the stock price (the company’s best
indicator of value) decreases on a 52-week range for the following (in no particular
order:

Citigroup: 65%
JPMorgan Chase: 25%
Bank of America: 50%
Barclays (U.K.): 60%
Banco Itau (Spain): Up +20%
Royal Bank of Scotland (Charter One, Citizens): 66%
Mizuho (Japan): 30%
Wells Fargo: 38%
Wachovia: 67%
Banco Bilbao Vizcaya (Spain): 16%
Washington Mutual: 86%
U.S. Bank (my former employer): 18%
National City: 85%
Key: 60%
Fifth Third: 80%
Huntington: 80%
First Merit: 17%
Third Federal (although it’s mostly private): 10%
Countrywide: 90%
IndyMac: 97%
SunTrust: 60%
BB&T: 45%
State Street: 25%
Merrill Lynch: 60%
Morgan Stanley: 60%
UBS: 66%
HSBC: 20%
Deutche: 40%
Goldman Sachs: 27%
Lehman Bros.: 70%
Axa: 38%
ING: 28%
Legg Mason (my former employer): 51%
Credit Suisse: 35%
Comerica: 50%
Regions: 67%
First Horizon: 82%
Sovereign: 59%
Capital One Financial: 50%
Fannie Fae: 67%
Freddie Mac: 60%

All data for the above is as of June 23, 2008

We are seeing our banking industry on a major downfall in America, but I fear a
possible and likely collapse very soon is nothing like what we are seeing now. The
liberal media really has no clue what has been happening. It was reported that there
was a subprime crisis. Then it was reported that there was a mortgage crisis. And most
recently, it’s been reported that we’re in a credit crisis. I’ll explain later what our real
crisis is, but first I’m going to expose some of my former employers and competitors of
my former employers, and explain how banks hide what they hide and how they rip off
everyone.

U.S. Bank
I worked at U.S. Bank as a manager of a branch in Cleveland, Ohio in 2004, which was
technically located in District 7 for them. The company’s stock is only down an
astounding 18 percent year-over-year, which makes them one of the strongest banks
comparatively. I argue that USB has nowhere to go but down because Chairman,
President, and Chief Executive Officer Richard Davis knows how to distort earnings.

My district manager taught us how to essentially force credit cards on customers. The
operating system we used, Wizard, enabled us to know if a customer was already
approved for a credit card. The system knew the customer had a 670 FICO score or
better. When entering the customer’s information on the system, a box would pop up to
ask the customer if he/she wanted a credit card. Usually, the customer said no, but our
district manager told us to click yes. Then, we were to enter their salary of $27,000 and
rent of $500, which were completely made up. At this point, the customer would receive
a credit card in the mail. We were told to call the customer to ask in a follow up call if the
customer received the card and to encourage the customer to use it. At U.S. Bank,
customers are charged an annual fee if the card was opened, but not used. Therefore,
the customer basically had to use the card to avoid the fees. I was often castigated by
my DM for my branch’s credit card sales being low even though the other manager went
through many applications without the customer’s consent.

Regarding these credit cards, we employees never read the actual credit card
agreement or explained the terms to the customer. We were encouraged to encourage
the customer to essentially ignore it. We were merely trained to sell it. And this goes
with every single financial product we sold.

And then we have the issue with overdrafts. Banks would not make (I should say
“show”) the kind of profit they do without bogus overdraft fees. One of the ways for
managers to make a measly bonus was to hit the mark for quarterly fees generated by
the branch. We rarely waived fees, especially me. It truly was the customer’s fault most
of the time.

There was a time about 15 years ago when a check could not even be processed if
there were no funds in the drafted account. Therefore, there would be no overdraft fees
piling up one after another. We need to return to that. Floating checks is fraud, yet our
government has allowed it.

And when fees are reversed, the bank writes off that fee as an expense. Look, that fee
can be hid by the CFO in the general and administrative expense section of his ledger.
That fee should not have existed in the first place. These executives know how to twist
numbers. These manipulated numbers have recently come to light though. Analysts
and shareholders are picking up on it.

Home equity lines of credit at my bank were bogus and still are. They have advantages
and I support them, but they are sold very deceptively. Customers do not understand
them, however they are designed in such a way that the customer is not supposed to
understand them. We never read the terms nor did we explain the real terms to the
customers. And the terms on those things are subject to the bank’s own desires. You
are at the mercy of the bank, period. HELOCs are very low risk for the bank too. They’re
giving you a credit card and using your house as collateral. Many banks do not show on
the statements when the line of credit is to be paid in full. Some of them require 15
years or even five years. Unexpectedly, a customer will receive a letter a month before a
HELOC is due (all the time, they’ve been paying interest only), and literally have one
month to pay it off or it goes into default. When it’s in default, you’re at the mercy of the
bank, an attorney, and possibly a court. And guess who pays the attorney and court fees
(until recently with some banks being exposed). Look, HELOCs are great products, but
banks need to be scrutinized.

And now we come to auto loans. Oh man. Such a scam for not only the banker, but the
dealership and the customer as well. I was actually one of the motivated employees,
who went out and got business. I got a dealership on Lorain Road, the entire company.
So now, every single application comes into our branch and we can actually get credit
for these things. Within a week, the account is taken from us. Some other department
snatches these things from the branches. I had no idea why they would do that when
that dealership actually has a relationship with me and my branch. For crying out loud,
not only did I bring in their business account, as they closed their National City account
and brought it to my U.S. Bank branch, but they brought all their future employees (we
had good deals for DDAs for employees of businesses who had their accounts with
us). So anyway, the relationship was destroyed. Relationship means nothing to a bank
like U.S. Bank.

I finally learned why corporate pull the auto loan accounts from the branches. Branches
are merely for show. They are cost centers. Truly, they are only there to try to make the
bank look good while the bank writes it off as an expense. Auto loans are very dirty.
Corporate does not want the employees of the bank to know what is happening with
auto loans. It gets very nasty back there. Corporate can hide behind a telephone instead
of the customer working with an actual person. Some states have issued “brick-and-
mortar” laws, which laws try to keep relationships personal. The law requires branches
to actually be in the state where a loan is originated and serviced. But companies can
get around this by merely having a branch in the state, but hiding behind a telephone. I’
ve seen and heard of horror stories of auto repossessions in not only Ohio, but other
states as well, In most states, it’s legal to stalk a customer if the customer is a day late
on the auto loan. That is disgusting. That causes nothing but a total breach of the peace
and is a form of terrorism. Banks – in a predatory manner – try to inflict fear on their
customers. But what do legislators do about it? It’s quite simple: Get in bed with big
money guys. Scratch my back and I’ll scratch yours is the attitude. Trust me, I know. I’ve
been a candidate and I’ve been campaigning for other candidates for more than five
years, which isn’t even a long time yet. These banks try to control people.

What happened when a customer was turned down for a home equity line of credit or
auto loan? The computer system would say, “Turndown recommended.” Then, a
person would call our branch from a different company. He asked if he could call the
customer. Evidently, U.S. Bank had some kind of relationship with a company called
IndyMac Bank, F.S.B. That company would oftentimes be able to obtain a second
mortgage for the customer at a very high interest rate though because of the bad credit
or difficult-to-prove income. I did not realize the details of how all that worked at the time.
I later learned that the customer would have been in a better situation if he/she
refinanced both the first mortgage and subsequent second mortgage into one
mortgage with a much lower interest rate than what was charged on the subprime
second mortgage note. I also later learned that U.S. Bank was not stupid. In other
words, they would not dare refer the customer to another bank to do a better refinance
of both the first and subsequent second mortgage note. Why? Duh, they were the first
mortgage. They don’t want to lose that mortgage. So are you sure that your bank really
has your best interests in mind? Seriously. I’ve been referred to other places for
business materials or car problems many times merely because the place where I
went in the first place was not the expert. And don’t get me wrong, many people will try
to get out of their niche just to make a buck. But this is exactly what U.S. Bank
specifically does, which is common throughout the industry. It is disastrous as the bank
is supposed to be a responsible fiduciary. Do you like that phrase Ohio Attorney
General and United States Department of Justice: Responsible fiduciary. Get ‘em.

There’s an ethics department at USB, which supposedly handles ethical issues in the
Bank. I notified them of the credit card problems. I have to admit I was not bold about it,
but either way, nothing was done about it. That sorry excuse for an ethics department
seems to be more of a place where executives can vent whistleblowers.

And our corporate security department, I actually met with our region’s director at his
office on the corner of East 14th and Euclid to discuss the problems (the office is now
located in Bedford from what I’ve learned). He took me very seriously. And I know for a
fact that he takes his job seriously. I really liked him and the stories he told employees
during corporate meetings – he talked about fraud, told us stories of robberies,
interesting stuff. Guess what though, I know for a fact that this fraud is still occurring at
USB. He did tell me at the end of our meeting that his hands were often tied when I told
Richard Davis (you’ll learn more about him later) about the problems

Oh, and then we have the issue of customers opening an account even though they’re
in ChexSystems. Our computer screen would turn red if the customer was in
ChexSystems, but we were often encouraged to open an account for that customer if
they were in ChexSystems. I don’t remember ever opening an account for someone if
they were in ChexSystems. I actually cared about the Bank. I knew that the Bank would
probably lose money if that account was opened because that customer usually
becomes a fraud, which is what they were in the first place unless they can prove
otherwise. I eventually learned that the Bank – Charter One was notorious for this
before they got bought by Royal Bank of Scotland – did this as a way to acquire more
customers and fees. Look, all these numbers are total lies. I went through a program
called SAR (Suspicious Activity Reports) on the computer, which is what we managers
were required to do per our own audits and compliance and I found tons of fraud. There
were upwards of 70 overdrafts per day in the year 2004 when I worked there nearer
Cleveland. We should not be having overdrafted accounts. We should not be opening
bogus accounts. We should not be cashing bogus checks. Why are you Mr. Eastsider
over here on the Westside of Cleveland trying to cash a check when there’s hardly any
money in your account in the first place? That check is not negotiable. There is no law
that says all checks must be cashed. It’s a piece of paper for crying out loud. Banks do
a lousy job of deterring fraud. They almost encourage it. The best way to prevent fraud
and bank robberies is to know your customer. Banks may act like they know you, but
they really do not. I eventually learned that banks do not care about this kind of fraud
because they can write it off. Hey, they’re backed by the Federal Reserve, right? They’re
fine. And the Federal Bureau of Investigation is quickly able to jump on very bad fraud,
so the bank is fine. Well, that’s coming to an end.

Finally, Richard Davis, the Chairman, President, and CEO, knows exactly what he is
doing. He was a teller at USB for seven years while going to college. He’s worked in
many different departments of USB according to my conversations with him. He was an
executive at Bank of America. He was a puppet of Jerry Grundhofer for a few years. He
knows the lingo. He knows how to talk to analysts and shareholders. While the
company is doing much stronger than most other banks in the country right now in the
midst of this crash, it has to have its end. Sooner or later, he is going to have to start
being honest with its stakeholders. Look, Lehman Brothers recently saw their own
company was going to have a substantial loss this quarter. What did they do a few
weeks ago: They announced it early so that their stakeholders (not just shareholders)
were aware of it ahead of time. That is the honest thing to do (cough cough Bear
Stearns). I believe many banks right now are purposely hiding their most recent losses
to drag this thing out as long as possible.

So here you go: My experience at U.S. Bank is exposed. I’ll be touching on specific
examples of competitors in future releases, but this explanation is a general theme for
my future releases, so I’ll merely append to other financial institutions’ lies what I
exposed in here.

More Commentary from me
In our country, banks are fed numbers through a system known as the Federal
Reserve; those numbers are referred to as dollars. It’s a central bank, which was
created by the federal government. Basically, it is operated by the federal government
and is the credit card for the United States federal government to try to control the
money system in America. The Internal Revenue Service (IRS) is the entity that pays the
monthly bills for the government’s credit card so-to-speak. This system is a pyramid
that has repeatedly failed. The pyramid is coming to an end. All pyramid schemes have
an end. In fact, the United States own agency, the Federal Trade Commission (FTC)
has warned of pyramids like the Federal Reserve System. This central banking system
is common throughout the world. It’s an oligarchy designed to promote the control of
government over the people. It is communism at its finest. And the government’s hope
is to take that communism to totalitarianism. We’ve printed this thing known as a dollar
by calling a piece of paper, “currency.” This is the government’s way to hopefully control
the people. The misled politicians have tried to maintain control of the people through
the people’s-own money system. This attitude has extended to public education,
government-run healthcare, gun control, environmentalism, mortgages, government-
created jobs, and more forms of communism.

In summary, the fraud perpetrated by bank executives (all the way down to the
salesmen and customers) has nowhere to go, but to a dead-end road. That road leads
to the same unmarked grave of famous failed communists. This crisis is a moral crisis;
it’s a political crisis; it’s a government crisis; it’s a people crisis, which has not and is
not only affecting credit, but the global economy as a whole.

We are now at a point where there is no possible way for the financial industry, as we
know it, to return to where it was even a year ago. We’re talking about an increase of
more than double; therefore there will need to be an increase of stock prices of at least
eight percent per year for the next ten years with absolutely no losses. It is highly
unlikely. And it would be more than miraculous for financial institutions to regain their
value as fast as they lost it: about a year.  Logically, we’re headed to a new kind of
financial system. We’re being forced into capitalism. Only the moral will separate
themselves, none of which are companies I mentioned above.

It’s argued: “Ok Werner, you just ran your mouth about fraud, communism, bad guys,
and all that, through thousands and thousands of words. What is your point? Where are
you going with this? We all know it will end anyway, so what’s the deal?”

My answer: We need to ensure that it does not happen again. We have a great
opportunity to not necessarily restore sound business, but to build a foundation for
sound business practices for everyone in the world to prosper. There will still be
pockets – many large pockets – where this banking system will try to hang on, but it will
keep collapsing. As for America, we need to grasp sound, ethical, and moral business
practices for our new banking system. No more CRA garbage or FHA or government
money. This new banking system must be founded upon the only system that works, a
system of what Christ teaches: Honesty, integrity, and love.

It’s time for us to realize – I’ve only recently learned this – that we Americans must use
our natural resources more effectively rather than creating a fake business through a
currency known as paper.


Disclaimer:
Past performance is not a guarantee of future results. You may lose value in your
investments. I am not a licensed Financial Advisor (FA) or Investment Representative
(IR) per law regulated by the United State SEC, NASD, or the state of Ohio Department
of Commerce Division of Financial Institutions, to recommend stock, bonds, options,
commodities, or anything traded publicly.