Posts

Posted on

Bonus Balls

Here’s a report from the Wall Street Journal http://online.wsj.com/article/BT-CO-20100131-703419.html suggesting bankers are now using financial instruments of the unregulated variety to turn their commission-based share options into cold hard cash. Commission payments are now made in chares as opposed to cash. This is in an effort to stop bankers selling any old rubbish under the guise of grade A material and then retiring from the game, their enormous cash commission bonuses safely stashed away somewhere no-one save themselves can get at it. If the bonuses are paid in shares, goes the reasoning, then bankers will have to behave responsibly inorder to preserve their own commission-paying companies. The bankers though, as I predicted at the time this scheme was thought of, are far cleverer than those who oppose them (whether this opposition or not is purely cosmertic for political purtposes is, of course, a different argument) and will simply invent new ways of cashing in faster than they can be understood and outlawed. Heads, the banks win. Tails, the banks win. Plus ca change.

BB

Posted on

The Banking That Dare Not Speak Its Name… Speaks!

Here’s something we very rarely see; open mention in a mainstream national newspaper (albeit the online version) of the true nature of banking; http://www.independent.co.uk/news/business/news/king-calls-for-radical-banking-reform-in-uk-1879931.html

Bankof England governor Mervyn King offers his views on current banking practices; saying among other things,”Whatever the pros and cons of various alternatives, the system that has the least going for it is the present system”. I have to disagree with him there. The present system works great for the people in charge of it, the banks themselves. It works, if it can be said to be working at all, really badly for the rest of us, denied as we are whenever it suits the banks access to our own money (that generated by our own government for our benefit), and thus denied the chance to build our own wealth. King goes on to suggest that he favours the ideas of little-known Laurence Kotlikoff, an academic who favours scrapping fractional reserve banking. I think this is the wrong way to go myself, I favour authourity-controlled infinite funding for genuine wealth-generating schemes, but the real significance of what’s being discussed here in virtual print is that fractional reserve banking and what it means are themselves being discussed openly. It isn’t overt, it’s not glaring headlines in a red-top, but it isn’t covert either. We need to see more and in-depth examination, dissection if you will, of fractional reserve banking in the media and the sooner the better. There’s an election coming up; how are the public to know which way to vote if they have no grasp one of the major issues of the day even exists?

BB

Posted on

Obama Declares War On My Arse

President Obama Declares War On The Banks, bawls one headline, presumably missing the days when it could stand urchin-like on street corners exhorting passers by to “Readallaboutdit” inbetween sniffs. President Obama, it seems, proposes to reinstate key elements of the Glass Steagall Act to restrain the banks, causing many to think that – at last! – he’s turned against them. The effect of Glass-Steagal (and the new legislation too, to an extent) is drawing a clear line between what we in Britain refer to as casino banking and high street, deposit banking. The point of this is that when the casino bank bets too far and goes broke, it isn’t any longer able to count your and my money, safely deposited with a separate company, as assets it can lose. We don’t all lose our money when the casino banks lose theirs, so the economy as a whole survives, in a much-abreviated nutshell. Glass Steagall was introduced after the Great Depression as a way of ensuring that another Great Depression never happened. Lobbying by the banks saw it repealed in 2004. Lo and behold, as we’ve seen another series of bank crashes followed, again imperilling the broader economy. Good old Obama for bringing back Glass-Steagall, then, eh? Phew!
Not really. It doesn’t address the heart of the problem at all, that the banks simply shouldn’t have the place in society that they do. Banks don’t lend money, they create it. A banking license isn’t a license to lend money, it’s an extension of the sovereign power formerly of the monarch, eventually surrendered to parliament, to create money out of thin air. We pay the banks a fee for this we call interest. When we have a government elected by the electorate to further and safeguard the interests of that electorate that can create money itself for free, it’s an absurd situation to even suggest that when we need money for funding a sound business proposal we have to go cap in hand to a third-party privately-owned bank and ask them to create money for us, incurring fees in the process. It’s nonsense, and the banks simply shouldn’t be in this entirely parasitic position. They give the community nothing, and in charging recurring fees for effectively doing nothing they endlessly cream off money that should be being spent towards the betterment of the community as a whole. They grow fat for doing nothing while the community suffers for no good reason.
Obama’s proposed legislation won’t do anything to change this. What it will mean is that the banks will once again have brought the greater economy to its knees, profited handsomely from the experience, and survived essentially intact to repeat the process in the future. A repeat of the earlier Great Depression scenario, in fact, as they were bailed out back then too. Obama’s proposed legislation leaves them free to repeat the experience again next century, sooner if they wish, if the economy has revived enough to make it worth their while. It’s not a punishment for the banks, it’s a gift, a lifeline – through this they’ll survive in place as they are to cripple us all financially another day.
I’ve said before that Obama is the bank’s puppet, a reader of press-releases, nothing more. His recent proposals do nothing to change that view. When he campaigned on the basis of change, he seems to have neglected he meant the kind of change that usually has plus ca attached to it.

BB

Posted on

New Banks For Old! Oh Wait; They ARE The Old…

New banks are being created to buy the old ‘Good Bank’ formed form the ashes of Northern Rock. A good thing? Not in my view, simply more of the same. We don’t need more private banks operating for private profits, we need genuine competition to the existing cartel not additions to it. We need banks that work on favour of the public, effectively distribution outlets for government-created money to the little guy. I note no-one seems to be interested on making loans/creating money (using fractional reserve principles) for the smaller business. They’re onlyinterested in the big fish. Where are the big fish going to be coming from if the small fish areen’t ever allowed to develop? All the proposals seem to suggest is more business as usual and frankly, that’s no good for anybody.

I notice too that Mr. Chen’s bank formerly tried operating under the moniker of ‘The Bank of Britain’ until the Bank of England reportedly objected. Hey, at least we knew who was behind the Bank of Britain!

BB

Posted on

Competition For The Banks

Competition for the banks is not a new idea. Here it is illustrated by excerpts from It’s a Wonderful Life together with the suggestion that we too need an alternative to going crawling to Mr Potter.

http://tinyurl.com/ybojonk

The difference between America, well, some places in America like for instances North Dakota, and Britain is that they have community banks that locals can use as an alternative to the too-big-to-fail type of institution that gamble with the money and rely on taxpayer bailouts to keep them out of trouble when they get into it and use taxpayers’ money to give themselves huge bonuses either way. Here in the UK, we simply don’t have anything similar. We may have credit unions and so forth but they can only lend what they have (full reserve banking) they don’t have what the high street banks have which is a license to create money (fractional reserve banking). I’ve said for years that the only thing that will really scare the banking fraternity is genuine compeition, a real alternative, and so far such an idea isn’t even being discussed here in the UK. If the government exercised its authority against the banks then that would terrify the banksters but so long as the banks can offer more reward to politicians than the electorate can then that isn’t going to happen. Whatever the way forward might be, politics isn’t it.
Anyway, I’m glad to see that Mr Bailey and presumably Harvey the rabbit had these ideas before me, before I was even born in fact. Perhaps we should remind ourselves we’ve grown up in an era where we regard going to a private bank to get into debt whenever we need money for something beneficial to our community as normal only because we’ve been conditioned into it. Earlier generations hadn’t been schooled to think the way we do and still regarded it as clearly artificial at best, outrageous at worst. So should we.

BB

Posted on

Greed Is Good

The point of encouraging greed is, as the Roman invaders here knew and understood,
if you create an aspirational society and you control the money
supply by monopoly, you bring into being a machine that makes you
wealthy. If you have a society where everyone wants to “get on” and
you define what “getting on” means, and they need money to do it and
they have to come to you to get it, you rule. Every time they trade,
which they need to do to “get on”, they need money and they can only
get it from you. You let them have it cheap (as we’ve had here in
recent years) the money supply grows and everyone prospers. You make
it expensive or, as currently is the case, largely unavailable, and
people starve, as we’re seeing. When you see people using expression
like greed is good, it’s banker thinking, the bankers having the
effective monopoly today of the money supply. It’s not pointless or
ridiculous, the point is it make money for the people who run the
economy, not the people who have to live in it. We live under an
imposed cultural model, one which has been imposed upon us to further
the interests of the imposers, not we who live under it. It was never
intended to be benign and you shouldn’t think it’s silly or irrational
because it isn’t, you just mistake it’s intentions.

BB

Posted on

Throwing Moodys

Why are we bothered one way or the other that rating agency Moodys are suggesting Britain might lose its credit AAA rating?
Moodys has been thoroughly discredited in recent times as it repeatedly gave AAA ratings to what turned out to be sub-prime rubbish. I understand it only exists courtesy of the big banks, who fund it.
Why then would we (or anyone at all) take any notice of its assessments?
And, while we’re on the subject, where are all the court cases? Why aren’t we reading in the press of furious pension fund managers and the like suing the backside off the credit rating agencies (like Moodys) and the banks themselves for knowlingly recommending and selling them investments marked as gold-plated when they were anything but and the sellers were well aware of this? It has occurred to me that here is another reason for the banks to be sitting on the output of QE, as they may well be needing all the readies they can lay their hands on to pay the rather large fines that ought to be coming their way. Something rather odd is happening though, or rather not happening; I’m not hearing about banks and credit rating agencies being sued?

BB

Posted on

BBC News – Banks Criticise Plans For Windfall Tax On Bonuses

 

She added that one million jobs in the UK were supported by the banking industry

BBC News – Banks criticise plans for windfall tax on bonuses

No doubt true enough but how many businesses and so jobs are not being supported by the banks by their refusal to lend to small businesses? It’s true the banks have a duty not to lend into a financially precarious environment but it is they themselves who have bought about this fragility. It can fairly be argued that a business model is out of date when it means that a small group of shareholders have their interests catered for against the broader interest of the entire country.

The banks may well be supporting their own employees but in so doing they are creating and maintaining the unemployment of an increasing number, one certainly far in excess of a paltry one million.

 

BB

Posted on

Global Warming

Recent research indicates that artifacts found underwater off Japan and India are from 7500 BC. The environments they were found in, deep underwater and obviously man-made, indicate flourishing civilisations existed on land-masses now underwater around 12000 BC. When I say flourishing civilisation, I hasten to point out there’s no evidence these guys polluted the skies with air travel or the seas with shipping the way we do. No suggestion of man-made pollution back then. They got swallowed up by the advancing waters just the same however. This suggests to me warming and cooling is a natural and ongoing consequence of the world turning, commonplace in the scheme of things, rather than directly created by the scheming hands of man.

It gets turned into something else by the politicians as an excuse to exercise further authority over the rest of us. Plus of course it serves as a distraction from their endless economic incompetence.