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Hey, FBI: The Bank Robbers Are Already in the Banks

Fill in your banker's picture
The FBI was undoubtedly happy to announce that the number of bank robberies in the second quarter had dropped 12 percent since 2010. Let there be great rejoicing.

Or not. According to a tally done by NYU professor of risk engineering Nassim Nicholas Taleb and hedge-fund manager Mark Spitznagel, bankers have pulled $2.2 trillion out of the economy in the last five years. That is money "directly transferred from the American economy to the personal accounts of bank executives and employees," and the amount will only go up. Maybe the FBI should start looking for the robbers already in the banks.

Tellers with BMWs
To put that $2.2 trillion into perspective, according to the American Banking Association, there were about 2.1 million full-time employees at banks in the first quarter of 2011. So, it works out to $209,523 per employee per year.

That includes every guard, teller, and janitor. Bet they didn't realize how much they were pulling down. And when the number doubles? If hiring doesn't increase (and Bank of America is doing its part to contain the number by laying off up to 40,000 workers), it means $410,000 per employee. On the average, that is. Somehow, you might expect that most of this money is packed up at the top.

You say robbery, I say business model
Maybe the problem is one of definition. According to Merriam-Webster, robbery is the "larceny from the person or presence of another by violence or threat." Bankers aren't brandishing weapons and demanding that people turn over their wealth. They don't have to:

Mainstream megabanks are puzzling in many respects. It is (now) no secret that they have operated so far as large sophisticated compensation schemes, masking probabilities of low-risk, high-impact "Black Swan" events and benefiting from the free backstop of implicit public guarantees. Excessive leverage, rather than skills, can be seen as the source of their resulting profits, which then flow disproportionately to employees, and of their sometimes-massive losses, which are borne by shareholders and taxpayers.
Then again, there is the threat of the collapse of the entire world's economy. "We've done something stupid. Again. We need to get bailed out. Again. If you don't, you are going to be more screwed than you ever thought could happen. Trust us on this."

Sounds like a variation of the guy who walks into a store and says, "Nice place you have here. It'd be a shame if something bad were to happen to it."

The FBI deals with small fries
More perspective: According to the FBI, the loot (yes, that's what they call it) taken in the first quarter was ... $7.8 million. At that rate, over five years, the bank robbers would take $156 million. Pikers.

Of that loot, 23 percent was recovered, versus none from the bankers. Did I say pikers? I meant amateurs.

Maybe the bankers have a potential new line of business: offering seminars for people who want to all those people who want to extract some profits from the banks. Here's a suggestion for a natural audience: Washington, D.C. Oh, wait, they already know. It's called campaign contributions.


Image: stock.xchng user theswedish, site standard license.
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