Frauds in Financial industry - Part 2

After briefing the some of the factors, let us go in deep one by one and then we will try to come out to some conclusion, and how can we remedise these issues.

1) Money of PEP:

One of the big nusciance, every country faces, whether developed/developing/un-developed. Starting with the very generic statements, PEP's are nothing but many HNI who are politically exposed and have very high degree of risk and even after that they put a considerable portion of amount in the financial sector and indirectly through various money generating business and then putting them in financial instruments.

What I want to say is that, these PEP's ate money out of the public coffers, it is pretty much evident from the existing factors to believe that even in the so called developed contries there are kickbacks and indirect corruption, and then put in some financial instruments. For banks , they want to grow their business and when they have got such a powerful person, why they would say no to them. There are large donations made to these so called democrats and republicans , and you think they are charitying, no , they are paying to get some international deals that some time runs in billion of dollars.

Secondly these PEP for their profits, increase the prices, and let the every penny got from the sales come to them and then get into the financial instruments. The best example is from Saudi Arabia, where the kings are, not directly, increasing the prices of the crude, and then ivesting it again in the citibank. It clearly shows there is some political advantage to be made out of it, if not sooner, then later.

Thirdly, there is always an increase in the real estate prices when ever the market is booming and that too in the area which no one previously liked to live, and even without the basic civic amenities. How this is done, to inflate the prices. All the dirty politics come into the picture. Lets take an example of Gurgaon in India. What makes it so special that even in a short span of 2-3 years , the real estate prices shoot like the rocket. I fully agree, the economy booming, industries growing, new means of earning are there, but is there sufficient basic civic amenities ? Answer is no, and even then the prices are climbing. How? Throgh the political advantage , take the land at a dirt cheap price, even that is much higher for landlords, they were not elligible for, and then sell them to the corporates at a higher price, inflating the price of land. Thus making common man to pay highly inflated prices even to get a rented appartment, forget of even buying it.

What i want to communicate is that, all the ill gotten money comes into the financial industry and that too without proper checks, even thogh we have lot of regulations, acts and KYC programms.

I will let you know later how this ill gotten money created a havoc in the finanical industry.

This is all for today. In my next blog, will write on the consequences and the tumbling of financial industry due to the involvement to the PEP's ill gotten money.

Till then, enjoy reading and brainstorming the real cause of financial mayhem.

Frauds in Financial industry - Part 1

This is regarding to the various frauds done in the financial industry, and industry itself is responsible for this. Greed for ever increasing margins and decreasing level of risk apetite combined with the lax attitude towards the regulatory framework makes it all happen.

And we give it name as great depression of 1930s', sweden banks failure 1992s',sub-prime and credit crunch 2008s' and this goes on in most of the country.

Has any one given a deep thought as to why these happen again and again in some corner of this world despite so called a new regulation comes after such occurence. Are we so greed or is there some thing else going on, which drives us to see such a situation. There should be some other factors also, except for greed.

These really are a stain on the financial sector which involves hard earned money of the poor people. Wait..Watit..hard earned money of people so called poor politician, religious head , landlords,dukes-monarchs-dictators,and corporate honchos.....

We must consider certain things before delving deep into this topic,

1) the money so put in the finanical sector is of the HNI which are none other than these so called politician or PEP(politically exposed person), it can be from isreal or india, libya or lebanon, anywhere of the world. These politician have the same creed and are never on the edge of extinction.

2)Religious head, from every corner of the world, these people try to force thier will, coercive other freedom in the name of religion and masses and accumulate wealth. Then this wealth is used to manipulation in the finacial sector.

3)Landlords, the most powerful person in the emerging markets, as per a recent study, what ever is generated by the emerging market, the landords and their real estate services swallow it all and in the bad times of the economy , they ask for certian help from the so called bank.

4)dukes-monarchs-dictators, as the name suggests they are age old tradition of the will and power in some one influential for a period of time. They usually get the money out of their respect and the fear. I will put robbers and the thiefs in this category as they do the same work.

5) corporate honchos, the best a man can create a fortune, in the name of ethics and values. These are the ones who are equally responsible for any failure in the financial sector. The difference between above categories and this one is, corporate honchos generate resvenues and the all 4 above eats it.

This is all the initial stage set for this "Frauds in Financial industry - Part 1"

Think on it, rest we will discuss this tommorrow with some wierd logic and strage examples, so that one reads it, he should say, truth is starnger than fiction..