Wolfgang was a vice president, Private Business Loan division, at the New York City based branch of a German bank that I worked at in the late eighties. Wolfgang would joke after he had a few beers on Friday afternoon before closing time that his younger brother by half a dozen years was a foot taller than himself as Wolfgang had been born in the early 1950s and there was not enough food to go around in post-war Germany and so he grew up stunted so to speak. Of course as an employee of a German company he expected lifetime employment and his apartment in Manhattan was subsidized by the bank. Subsidized so much that he and a few other of the senior German staff had their cash invested in foreign exchange in our trading room. The irony of all ironies and I checked the story out was that that trading room had once been a separate office space when the building was built in the 30s, and the headquarters of the British spy network in America headed up some Canadian up to and including World War II in this old art deco building in Rockefeller Center. That once that trading room had met a goal of how many percent it targeted and made on arbitrage it stopped for the day, usually mid afternoon, the traders some American and some German bullshitted and the Dutch trader in charge would start to break out the Becks, the preferred German beer for a preferred German bank.
And an American working in the lower echelons of support in Money Transfer, the Dutch trader would on many Friday afternoons, Friday afternoon being the weekly time to share a beer with comrade workers in the name of fellowship etc., the Van man, his name began with "Van der ...", he to hand out Becks to us peons in the ranks of Money Transfer just outside the Trading Room. And of course it would be impolite to refuse. And my supervisor did not object, an Irish American such as myself did not object to fellowship with our employer higher ups. But our manager, an Irish American, (the Germans like the Irish - neutral in the war lol) who would not insult the management of a German Bank would caution me, us, that if anybody makes a mistake and we lose money because of the Beck's, well you would be on the unemployment line, the lifetime employment thing was carried over to the American workers of that bank in a surreal sort of way, but only the regular German employees, German interns shipped in for six month as a time from Deutschland, were the only ones being fire proof. LOL
And it took some time for me at the Friday afternoon beer fests in the Board Room to realize how different a company can operate in America sharing the profits in its meager matters to staff.
The only other company I had experienced almost the same lifetime employment, profit sharing etc was when I started out as a clerk in Money Transfer at Bankers Trust in NYC.
And to give you an idea of what banking was like under Glass-Steagall was like, it probably was more like the bank following all these rules and whatnots, was finished around mid-afternoon, as least for the executives, meetings done, quotas met etc. The thing I was involved in, in Money Transfer was the daily dance with the FED, the Federal Reserve Bank, and on a daily basis for other smaller banks in each Federal Reserve region. The New York Fed was the premier forum for money and careers, and on a daily basis as part of a two week average of what a bank had to have on hand in its account at the FED was the most important thing on the Planet.
Of the ten largest banks in America, nine were in New York City, and the tenth was in California, Bank of America. Other banks in Chicago etc. kept accounts with New York Banks and indirectly was covering their two week average of reserves to be part of the system and follow all the rules of sound banking.
The Fed closed everyday at 6:30 P.M.everyday. That bank's could not be below their reserve requirements of they would be heavily fined. The big nine were the major players. So if say Chase, was below its own target for the day of its targeted two week average with the Fed in reserves, it had to shop around to buy money, and or Federal Funds, from other banks, to meet its goals. So if Chase could not find money at a rate it wanted to pay, all the other banks on the streets turned into sharks and would sell Federal Funds over and above their averages, at shark rates to Chase in order for the Fed to close on time. Chase has not met its goal and or reserve target and requests, for a fee and or fine, a 15 minute extension of closing time, while Chase nickels and dimes more reasonable blocks of Fed Funds to some in on target.
I don't know how much of all this is computerized but in the eighties when I was in banking that is how they did that. And so it was a two way street. Banks need Fed Funds and buy them and the Fed Funds average on reserve cannot exceed a certain amount. This all over and above so-called assets. This is what the Fed says you should have on hand be meet possible runs on the bank and based on the assets he say you have in your bank in terms of cash and loans. So buying and selling Fed Funds and as close to the vest as possible was the name of the game.
I came in a temp and I had what I thought was a silly job. I was tearing off tickets for a teletype machine and calling major customers with figures in numbers Fed Fund monies. And the deal was something like this. Your major companies, that sell farm equipment, horde grains in the market, make soap bubbles in Ohio, etc must have a checking account with cash in it and the checking account paid no interest. So what these major Fortune 500 companies did was with the help of a loophole and senior management closing their checking accounts everyday at 5 P.M. and then loan the money to the Fed Fund traders to buy and sell at lucrative rates and then next morning see the totals of principle and interest of their overnight loan to my bank.
I suppose all this kind of boring. That the banks with Glass-Steagall rules were run like some utilities and they could only make so much money on a daily basis in a way and a lot of the extra cash, profit, got siphoned off into profit sharing, all employees, clerks and VPs alike all in the same profit sharing plan. Pretty good too. Some people there in mere clerical jobs after 20 years employment had something an average of 50k stock in the company, by not taking each yearly payment, but plowing it back into the plan.
About halfway through my five year stint at Bankers Trust that there was a changing of the guard from the old management to new management at the Board level and that change was now into creative derivatives and Chinese Checkers investments that were the forerunner of hedge fund things. I left the bank to do some writing. Friends stayed on and found work with other banks as the corporate culture began to change. Could never understand why Bankers stock remained like a blue chip item when I kept hearing about the degradation of the quality of customer BT now handled.
That Donald Trump's bad loan of 50 million was common knowledge in the ranks in the early eighties though it never made it to the newspapers. They kept him and his loan on the books as an asset. Starting to cook the books for a decade and a half of internal decline until Deutsche Bank bought them out in 1998. They starting screwing their biggest and best customers like shit having them invest in losing derivative logarithms, so easy then with computers etc. Their logic, management's or so I heard, was that they would find other big customers to replace the ones that had done their banking at Bankers for decades. Sounded a bit coked up to me but hey I am nobody in the scheme of such things. I sold my BT stock to support myself and my attempts at writing. The real money was in the fees in the packaging of loans, like the ones they had with Donald Trump. Sound familiar. Sound like a prelude to a crash.
Trump's dealings with Deutsche Bank date back decades
But BT stuck by him. It's unclear if the bank got all of its money back, but it did collect a $10 million payment in 1996 when Trump took his restructured hotel and casino company public, a deal BT helped underwrite.
But the firm's zeal for cash also led to big legal and public-relations problems, starting in 1994 when Procter & Gamble and Gibson Greetings sued the bank for misleading them on derivatives deals. Tapes surfaced of BT employees describing how they duped clients. "That's the beauty of Bankers Trust," one broker boasted.
Around the same time, New York state auditors discovered that executives routinely pocketed unclaimed customer cash in what prosecutors described as a vast slush fund. The bank pleaded guilty in 1999 to three felony charges and agreed to pay a $63 million fine as part of a settlement with state and federal authorities.
"It's not every day that a bank cooks its books," a then–federal regulator observed.
The bank's ultimate undoing began in 1998, when Russia defaulted on its sovereign debt and uncorked a worldwide panic. BT lost nearly half a billion dollars in 12 weeks, which essentially forced its sale to Deutsche Bank. Now, the long history of that relationship with Trump is in Mueller's hands. He will surely have some fascinating material to sift through.
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So I am wondering if BT in the eighties (the glory days of Saint Ronny) and nineties was already on life support on Russian money filtered in loans through Deutsche Bank. One has to wonder when Donald did his deal with the Devil, but I already have the opinion on record that Donald got turned at @Penn.
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