So, the foreclosure and short sale scandals are still going on in the housing industry and people are being put out of their homes, but the banks are having big profits? The banks continue to borrow from the Fed at less than 1% interest even though banks have jacked up mortgage rates.  IS THERE AN AMENDMENT IN SOME BILL GIVING BANKS AMNESTY ALSO?



The financial industry is on the verge of becoming the largest sector in the S&P 500 Index, the latest indicator that the banking and trading business has recovered quickly and fully from the economic collapse it caused in 2008.

Bloomberg reports that financial companies now comprise 16.8 percent of the index, nearly twice the industry’s post-crisis share of the list. That means the industry has recovered trillions of dollars in losses from late 2008 and 2009 that had knocked finance companies out of the top spot, which it last held four months before Lehman Brothers declared bankruptcy.

Profits are up 27 percent for banks on the index, which lists 500 of the largest public companies in the country as selected by the ratings company Standard & Poor’s. The industry has also concentrated as it’s rebounded: 95 percent of bank holding company trading in cash and derivatives goes through just five firms.

While the financial sector has gone from requiring a federal rescue to dominating the stock market in just a few years, most individual Americans haven’t enjoyed a similar turnaround. Income inequality has expanded, with the top 1 percent of Americans capturing 121 percent of income gains from 2009-2011. The first quarter of 2013 marked the largest drop in wages in the 65-year history of the statistic despite increased worker productivity. The U.S. tax code continues to advantage the wealthy and give preferential treatment to investment activity, which both feeds economic inequality and encourages the sort of stock market surge that’s benefitted the financial world while doing little for Americans who aren’t already rich.

Furthermore, banks are continuing to violate homeowner and consumer rights on a widespread level. The official overseeing the 2012 foreclosure fraud settlement says his office received 60,000 separate complaints in six months about violations of the settlement by the country’s biggest banks. After a lawsuit and multiple investigations into abusive and potentially fraudulent credit card collection practices, JP Morgan Chase suspended its debt collection business in 2011. Bank of America whistleblower affidavits say the company told employees to lie to homeowners and paid bonuses for mass foreclosures.

Scandals involving the manipulation of markets to manufacture profits have become common. And a recent survey on Wall Street ethics found a high willingness to break the law for profit, labeling the industry a “ticking economic time bomb.”


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