Welfare for corporate criminals while real people starve
tony at cultureshop.org.uk
Tue Feb 26 00:54:25 GMT 2013
The new US Secretary of State, John Kerry, is an
extremely dangerous Bushite firestarter
Both 2004 presidential candidates, George W. Bush
and John Kerry, are members of Skull and Bones, a
satanic secret society based on sexual deviance
and organized crime. Bush and Kerry each, during
their induction to Skull and Bones, laid naked in
a coffin in front of the older Bonesmen, enjoying
themselves while recounting their entire sexual histories.
The US military, too, hosts a similar crime ring.
Kay Griggs, ex-wife of a Marine Colonel, has
described the horrors she endured at the hands of
a homosexual/rapist/pedophile ring that was just
as untouchable as the Vatican sex mafia that brought down the Pope.
KPMG, Deloitte, Ernst & Young and
PricewaterhouseCoopers hit back as probe attacks audit closed club
Mark Leftly - Friday 22 February 2013
The Competition Commission has found that the
audit market has systemic issues that have led
to a closed club of the Big Four accountants dominating the sector.
Senior figures at KPMG, Deloitte, Ernst & Young
and PricewaterhouseCoopers have reacted angrily
to the findings of Laura Carstensen, the
commissions inquiry chairman, that the market is
suffering from a lack of competition. Between
them, the Big Four run the numbers of more than
95% of the FTSE 350, a market worth almost £800 million in fees.
Why Should Taxpayers Give Big Banks $83 Billion a Year?
Welfare for corporate criminals while real people starve
By the Editors Feb 20, 2013 11:30 PM GMT+0000
On television, in interviews and in meetings with
investors, executives of the biggest U.S. banks
-- notably JPMorgan Chase & Co. Chief Executive
Jamie Dimon -- make the case that size is a
competitive advantage. It helps them lower costs
and vie for customers on an international scale.
Limiting it, they warn, would impair
profitability and weaken the countrys position in global finance.
So what if we told you that, by our calculations,
the largest U.S. banks arent really profitable
at all? What if the billions of dollars they
allegedly earn for their shareholders were almost
entirely a gift from U.S. taxpayers?
Granted, its a hard concept to swallow. Its
also crucial to understanding why the big banks
present such a threat to the global economy.
Lets start with a bit of background. Banks have
a powerful incentive to get big and unwieldy. The
larger they are, the more disastrous their
failure would be and the more certain they can be
of a government bailout in an emergency. The
result is an implicit subsidy: The banks that are
potentially the most dangerous can borrow at
lower rates, because creditors perceive them as too big to fail.
Lately, economists have tried to pin down exactly
how much the subsidy lowers big banks borrowing
costs. In one relatively thorough effort, two
researchers -- Kenichi Ueda of the International
Monetary Fund and Beatrice Weder di Mauro of the
University of Mainz -- put the number at about
0.8 percentage point. The discount applies to all
their liabilities, including bonds and customer deposits.
Small as it might sound, 0.8 percentage point
makes a big difference. Multiplied by the total
liabilities of the 10 largest U.S. banks by
assets, it amounts to a taxpayer subsidy of $83
billion a year. To put the figure in perspective,
its tantamount to the government giving the
banks about 3 cents of every tax dollar collected.
The top five banks -- JPMorgan, Bank of America
Corp., Citigroup Inc., Wells Fargo & Co. and
Goldman Sachs Group Inc. - - account for $64
billion of the total subsidy, an amount roughly
equal to their typical annual profits (see tables
for data on individual banks). In other words,
the banks occupying the commanding heights of the
U.S. financial industry -- with almost $9
trillion in assets, more than half the size of
the U.S. economy -- would just about break even
in the absence of corporate welfare. In large
part, the profits they report are essentially
transfers from taxpayers to their shareholders.
Neither bank executives nor shareholders have
much incentive to change the situation. On the
contrary, the financial industry spends hundreds
of millions of dollars every election cycle on
campaign donations and lobbying, much of which is
aimed at maintaining the subsidy. The result is a
bloated financial sector and recurring credit
gluts. Left unchecked, the superbanks could
ultimately require bailouts that exceed the
governments resources. Picture a meltdown in
which the Treasury is helpless to step in as it did in 2008 and 2009.
Regulators can change the game by paring down the
subsidy. One option is to make banks fund their
activities with more equity from shareholders, a
measure that would make them less likely to need
bailouts (we recommend $1 of equity for each $5
of assets, far more than the 1-to-33 ratio that
new global rules require). Another idea is to
shock creditors out of complacency by making some
of them take losses when banks run into trouble.
A third is to prevent banks from using the
subsidy to finance speculative trading, the aim
of the Volcker rule in the U.S. and financial ring-fencing in the U.K.
Once shareholders fully recognized how poorly the
biggest banks perform without government support,
they would be motivated to demand better. This
could entail anything from cutting pay packages
to breaking down financial juggernauts into more
manageable units. The market discipline might not
please executives, but it would certainly be an
improvement over paying banks to put us in danger.
+44 (0)7786 952037
Twitter: @TonyGosling http://twitter.com/tonygosling
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"Capitalism is institutionalised bribery."
"The maintenance of secrets acts like a psychic
poison which alienates the possessor from the community" Carl Jung
Fear not therefore: for there is nothing covered
that shall not be revealed; and nothing hid that
shall not be made known. What I tell you in
darkness, that speak ye in the light and what ye
hear in the ear, that preach ye upon the housetops. Matthew 10:26-27
Die Pride and Envie; Flesh, take the poor's advice.
Covetousnesse be gon: Come, Truth and Love arise.
Patience take the Crown; throw Anger out of dores:
Cast out Hypocrisie and Lust, which follows whores:
Then England sit in rest; Thy sorrows will have end;
Thy Sons will live in peace, and each will be a friend.
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