Financial games

Borrowing money from the bank

Next time you visit your bank or a financial institution to borrow money for buying a house or a car you should consider following: “Who is giving money to whom?”
This is the reality of bank lending. You apply for a mortgage of $450,000 over 25 years term at 5% interest rate. You would think, the bank just gave you $450,000. At the current interest rate of 5% over 25 years you would pay (give) them back $789,196.56. This includes principal of $450,000 and interest of $339,196.56.

So, when you decide to buy that house, you could walk into a bank and say: “I would like to give you guys $339,196.56, how would you like that?” The bank needs you more than you need them. Just something to think about.

Money laundering civil penalty proceedings against CBA Commonwealth Bank of Australia

CBA ( Commonwealth Bank of Australia ) in the news again, this time for money laundering. Below are links to some other CBA business practices over the last few years. It does not look good.

The Financial Wisdom
http://www.smh.com.au/business/hearing-into-asics-failure-to-investigate-cbas-financial-wisdom-20140602-39ept.html

Storm
https://en.wikipedia.org/wiki/Storm_Financial

CommInsure
http://www.smh.com.au/business/banking-and-finance/cbas-insurance-arm-comminsure-told-to-reassess-rejected-heart-attack-claims-to-2012-20170322-gv4dif.html

Google for more information.

Apparently there are more then 50,000 offences committed in this latest debacle, and each offence carry a maximum penalty of $18 million.
CBA would have to pay close to a $1 trillion.

Let’s analyse a possible outcome.

First, CBA does not have that much money. It would have to apply for insolvency. That would result in a massive job loses, huge financial disturbance across various business sectors, mortgage industry, etc. Trust in our banking system would dramatically decrease and so on, and on, and on.

Or…

Business as usual. All that’s needed is a little bit of spin, place a blame on some external circumstances, drag the whole case for a while until nobody cares any more.

We’ll wait and see.