The credit crunch - Karl Marx speaks from the grave
Robert Henderson
Daily telegraph
By Jonathan Russell
Last Updated: 5:12PM GMT 28 Jan 2009
Karl Marx his card for the recession
Cheering news from the International Monetary Fund. The organisation's
dismal scientists said yesterday that the UK is set to lead the charge
amongst developed economies to post the most severe GDP contraction this
year, with a 2.8pc slide. If you want more gloom, the IMF said the $1.1
trillion of banking writedowns is only about half of what is required to
clear banks' balance sheets. Where will it all lead? Here's a thought
from a political and economic theorist who seems to have fallen out of
fashion recently. "Owners of capital will stimulate working class to buy
more and more of expensive goods, houses and technology, pushing them to
take more and more expensive credits, until their debt becomes
unbearable. "The unpaid debt will lead to bankruptcy of banks, which
will have to be nationalised, and State will have to take the road which
will eventually lead to communism." Yup, that's Karl Marx, mapping out
our economic future back in 1867. Worried? It could be worse. As we keep
hearing, the great depression in the 1930s is widely held to have led to
the rise of fascism
Note: All modern banking is fractional reserve banking, that is, the
bank holds liquid reserves which are only a small percentage of its
debt. Thus it has considerable similarities to pyramid schemes (or Ponzi
schemes if you must) because both rely on the sociological trait that in
normal times only a small percentage of investors/depositors will want
to withdraw their money at any one time. When times become extraordinary
and there is a run on a bank the bank rapidly becomes insolvent.
Marx was right about debt being a prime driver of bank crashes but wrong
about the nationalisation of banks being of necessity the beginning of
the charge to communism. It is perfectly possible to nationalise the
banks and retain capitalism for most other economic activity. It is only
Marxist ideologues who think otherwise for they attempt to fit reality
into their ideology rather than adjusting their ideology to reality.
This drives them into very tight corners more often than not.
Pragmatists, such as myself, never get driven into tight corners in that
fashion because we address every situation on its own merits.
As I have pointed out before, there are sound reasons for banks and
their ilk being nationalised. First, it allows the state to regain
control of the money supply which at present is almost wholly driven by
the creation of credit. Second, it allows the state to institute
procedures which prevent reckless banking. Third, running a cautious
banking system guarantees consistent large profits, profits which could
be used to reduce taxation. RH
--
Robert Henderson
Blair Scandal website: http://www.geocities.com/ blairscandal/
Personal website: http://www.anywhere.demon.co.uk
Ian Smith
finger in the stour:
Or the profits might encourage even more government spending. I'd expect
the present buffoons in charge to waste it all.
Relevant.Search.Result
wrote:
Communism or just any totalitarian -ism is what the rich want. It is
perfectly
compatible with them being on top and exercising unlimited power.
Mel Rowing
wrote:
> Daily telegraph
> By Jonathan Russell
> Last Updated: 5:12PM GMT 28 Jan 2009
>
> Karl Marx his card for the recession
> Cheering news from the International Monetary Fund. The organisation's
> dismal scientists said yesterday that the UK is set to lead the charge
> amongst developed economies to post the most severe GDP contraction this
> year, with a 2.8pc slide. If you want more gloom, the IMF said the $1.1
> trillion of banking writedowns is only about half of what is required to
> clear banks' balance sheets. Where will it all lead? Here's a thought
> from a political and economic theorist who seems to have fallen out of
> fashion recently. "Owners of capital will stimulate working class to buy
> more and more of expensive goods, houses and technology, pushing them to
> take more and more expensive credits, until their debt becomes
> unbearable. "The unpaid debt will lead to bankruptcy of banks, which
> will have to be nationalised, and State will have to take the road which
> will eventually lead to communism." Yup, that's Karl Marx, mapping out
> our economic future back in 1867. Worried? It could be worse. As we keep
> hearing, the great depression in the 1930s is widely held to have led to
> the rise of fascism
Marx also determined that communism would rise in capitalist
(industrial) countries whereas it eventually arose in the agrarian
economies of Russia and China. In fact it never really took hold in
the industrial economies upon which the thesis was based. Even where
it did take hold, it has suffered revisionism and decline. Marx
totally underestimated the benefits of capitalism to the masses. It
depends on mass markets. If the masses that make up that market do not
benefit then those markets will fail. Capitalism simply cannot afford
to impoverish the masses.
Socialism denies the importance of markets.
The debt has not become unbearable. It is being repaid and its that
repayment that is causing problems. For the past two or three months
the amounts advanced in mortgages has been less than aggregated
repayments. This last month I see that credit card repayments have
exceeded payments. We're not all going bankrupt or being repossessed.
Going onto the banks HSBC, Barclays, and Standard Charter have not
availed themselves of Government bailouts. Of the ones that have RBS
paid (according to the man from Barclays) too much for ABN Ambro and
at exactly the wrong time. That is the major factor in that one's
particular trouble. The rest are the ones that have been bundled in
with former building societies that, for historic reasons, were
heavily exposed to the housing sector and the property price crash.
The extent to which the present situation is analogous to the 1930's
slump is also debatable. That depression, contrary to popular belief,
was not caused by the Wall Street Crash nor to the literally hundreds
of bank failures that occurred in the US. The screw was turned by
countries pegging currencies against stronger currencies themselves
pegged against gold and further through a reversion into national
protectionism. There is no prospect of the former though indications
of feelings towards the latter do seem to have emerged of late.
Despite this, that would be difficult in a world that these days
contains a WTO, NAFTA and EU. Further since WW2 globalisation has
gone so far down the line that many countries (including probably this
one) are no longer capable of embracing protectionism.
Neither did the slump in itself bring about the rise of fascism though
one would be a fool to claim that it helped. Fascism didn't rise in
North America or the UK or France, Scandinavia or the Low Countries.
The Treaty of Versailles did exacerbate the situation in Germany
through the imposition of a heavy war reparation payment, much of its
economy proscribed, territory cleaved off to the point of splitting
the country in fact into two.
Chris X
"Mel Rowing" <mel.r...@btinternet.com> wrote in message
news:3ae43258-6fb1-475b...@p23g2000prp.googlegroups.com...
Ultimately though, it will - as we are seeing now.
Capitalism is nothing more than the slow train to the same destination as
Communism.
FriarTuck
position with soros to short the british banks on the stock exchange?
Robert Henderson
<3ae43258-6fb1-475b...@p23g2000prp.googlegroups.com>, Mel
Rowing <mel.r...@btinternet.com> writes
>Going onto the banks HSBC, Barclays, and Standard Charter have not
>availed themselves of Government bailouts.
Oh yes they have. They have only kept float by taking loans from the
BoE fund. RH
Robert Henderson
<Chris...@yahoo.co.uk> writes
>>
>> Marx also determined that communism would rise in capitalist
>> (industrial) countries whereas it eventually arose in the agrarian
>> economies of Russia and China. In fact it never really took hold in
>> the industrial economies upon which the thesis was based. Even where
>> it did take hold, it has suffered revisionism and decline. Marx
>> totally underestimated the benefits of capitalism to the masses. It
>> depends on mass markets. If the masses that make up that market do not
>> benefit then those markets will fail. Capitalism simply cannot afford
>> to impoverish the masses.
>
>Ultimately though, it will - as we are seeing now. Capitalism is
>nothing more than the slow train to the same destination as Communism.
The natural end of a truly free market, ie, one without anti-monopoly
laws - is monopoly or near monopoly. That alone makes a state takeover
easier. Some industries, most notably large scale aerospace projects, is
already there.
The other great thrust against capitalism which will come in the
foreseeable future is the general purpose robot which can perform, say,
90% of what humans do. That will produce a situation whereby to stay
competitive private enterprise has to use robots instead of people with
a catastrophic and chronic level of human unemployment and consequent
reduction in aggregate demand. The fact that the robots will be able to
do the vast majority of what men can do will mean that the old route out
of unemployment created by technological advance - the creation of new
forms of employment - will not be available because the robots will be
able to do that work as well. RH
forbi...@msn.com
wrote:
> The other great thrust against capitalism which will come in the
> foreseeable future is the general purpose robot which can perform, say,
> 90% of what humans do. That will produce a situation whereby to stay
> competitive private enterprise has to use robots instead of people with
> a catastrophic and chronic level of human unemployment and consequent
> reduction in aggregate demand.
Such unemployement needn't be a catostrophy. I don't know how we
get people to define themselves by what they do rather than how they
are employed. Nor do I know how to get people to value that which is
obtained for little cost. the constructs we use to define our quality
of
life seems involve deprivation of the same from others. I can't see
the
future where people gain their freedom and know what to do with it. I
see destructive behavior from those who cannot adjust.
Mel Rowing
wrote:
> In message
> <3ae43258-6fb1-475b-a8f7-caf25c643...@p23g2000prp.googlegroups.com>, Mel
> Rowing <mel.row...@btinternet.com> writes
>
> >Going onto the banks HSBC, Barclays, and Standard Charter have not
> >availed themselves of Government bailouts.
>
> Oh yes they have. They have only kept float by taking loans from the
> BoE fund. RH
http://www.google.com/hostednews/afp/article/ALeqM5ifFnZ_4GemSOxLCZVDtvKEYq6eSg
http://tinyurl.com/ddfl33
http://www.fairinvestment.co.uk/deals/news/banking-news-Barclays-and-HSBC-shares-rise-after-rejecting-Government-bail-out--2351.html
http://tinyurl.com/ahuoe5
http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=455440
http://tinyurl.com/d6yn5k
Democracy Highlander
> Marx also determined that communism would rise in capitalist
> (industrial) countries whereas it eventually arose in the agrarian
> economies of Russia and China. In fact it never really took hold in
> the industrial economies upon which the thesis was based.
You are 100% correct here. The reason was that far away from being a
step ahead from capitalism,
communism was actually a huge step behind. Aka toward feudalism. As
mater of fact this was exactly what communism was: A radical form of
neo-feudalism at the border with slavery system.
Many ignorants talk about the fact that communism was an egalitarian
society. Nothing falser than that.
To understand why, you need to go to basics of economics and look at
the definition of property. You can not own a star in Andromeda Galaxy
not a mountain on Pluto. The reason for that is because there is no
way you can have any form of control over the owned good. The relation
of ownership imply the ability of the owner to have control over it
property.
How can you have control over a common/shared property ? You can do
that by voting over any aspect of how the common good will be used.
Therefore, a country claiming to be based on common ownership must
have an 100% full functional participative democracy. Without
democracy there is no such thing as common property.
However, if you look at every single communist country in the world,
the oligarchy suppressed the democracy as soon as they took control.
By suppressing the democracy, the oligarchy automatically took
possession of all of previous common property: aka THEY STOLED IT.
From that moment on, the oligarchy owner had exclusive ownership of
the stolen goods and the rest of the people were literary slaves on
the oligarchy domain.
The claim that communism was an egalitarian society is as idiotic as
the claim that ancient Rome was an egalitarian society because they
has slaves and all slaves were equal among them, they owned nothing.
The only difference between communism and Roman slavery based society
is that in ancient Rome the slaves were under 1/3 of the population
while in communism the slaves were over 99.9% of the population. As a
result, it is perfectly safe to say that communism was indeed the most
unequal society that ever existed on the face of the planet.
> Even where it did take hold, it has suffered revisionism and decline.
Of course, any system based on oppression, false propaganda and
enslavement is doomed to collapse.
This are totally unnatural systems.
> Marx totally underestimated the benefits of capitalism to the masses. It
> depends on mass markets. If the masses that make up that market do not
> benefit then those markets will fail. Capitalism simply cannot afford
> to impoverish the masses.
Well, be assured that it is going to fail. The big problem with free-
markets is that they allow in the long run too much concentration of
economic power. And economic power can and do influence the rest of
the power in any society. As power become more concentrated, a
capitalistic society is inching toward a neo-feudalism, aka toward
what communism used to be.
However, due to democracy, when the collapses become evident the
capitalism can not suppress the people's will for a change. Then
changes happen. We see it in the Great Depression which was the first
systemic collapse of the capitalism. The socio-economic reformed taken
by FDR repaired the problems and allowed the capitalism to survive
another 80 years.
Now, it happen again, and we have a multiple choice:
- reform it again in the same direction as FDR did, so it will survive
for another 80 years toll the next collapse.
- we can go a bit further with reforms and bring stronger social-
democratic plans in the system which will make it more stable and able
to survive much longer till the next collapse.
- oppose the reforms and stay strong in defense of deregulation, no
government intervention and totally free-market/free-trade at the will
of multinational corporation. This will guarantee the crisis will go
downhill fast (as it happen in Russia in 1917) and we may take the
risk that some idiots/history-ignorants/power-hungry-crooks will pop
up and bring communism in Western World.
James Hammerton
> In message
> <3ae43258-6fb1-475b...@p23g2000prp.googlegroups.com>, Mel
> Rowing <mel.r...@btinternet.com> writes
>> Going onto the banks HSBC, Barclays, and Standard Charter have not
>> availed themselves of Government bailouts.
>
> Oh yes they have. They have only kept float by taking loans from the
> BoE fund. RH
How much have each of these banks borrowed from the BoE?
James
--
James Hammerton,
http://jameshammerton.blogspot.com/
http://www.magnacartaplus.org/news/
Mel Rowing
<democracy.highlan...@gmail.com> wrote:
> On Feb 1, 6:06 am, Mel Rowing <mel.row...@btinternet.com> wrote:
> > Marx totally underestimated the benefits of capitalism to the masses. It
> > depends on mass markets. If the masses that make up that market do not
> > benefit then those markets will fail. Capitalism simply cannot afford
> > to impoverish the masses.
>
> Well, be assured that it is going to fail. The big problem with free-
> markets is that they allow in the long run too much concentration of
> economic power.
To be replaced by what?
Nah! As I have said the markets can never be allowed to fail. To do so
would be akin to the peasant farmer eating his seed corn.
Economic power boils down to market power which in the end means
consumer power.
Of course large organisations can produce economies of scale but with
limits. Manager are important but they are seldom owners.There does
does come a time when no matter how many resources a given enterprise
is prepared to put into management further expansion hits diminishing
terms where improvements in economies of scale hit zero whilst
inflexibility, inertial forces and more complex managerial problems
move a large organisation into negative territory. This has happened
time and time again.
De-mergers are just as common an event as mergers and takeovers.
Remember ICI? British Gas? Cadbury Schweppes? Severn Water?
It only takes some bright boy to do his maths homework and work out
that the sum of the parts are worth more than the whole and a large
organisation is doomed.
In addition there is always new technology and fields that are the
seed of new enterprises (Microsoft? Google?)
Even in the case of established activity like retailing, you find that
that new companies emerge as old ones disappear or are eaten up by
bigger competitors.
> And economic power can and do influence the rest of
> the power in any society. As power become more concentrated, a
> capitalistic society is inching toward a neo-feudalism, aka toward
> what communism used to be.
> However, due to democracy, when the collapses become evident the
> capitalism can not suppress the people's will for a change. Then
> changes happen. We see it in the Great Depression which was the first
> systemic collapse of the capitalism. The socio-economic reformed taken
> by FDR repaired the problems and allowed the capitalism to survive
> another 80 years.
> Now, it happen again, and we have a multiple choice:
>
> - reform it again in the same direction as FDR did, so it will survive
> for another 80 years toll the next collapse.
And that would appear to be the way to go.
There always have been economic cycles. Once upon a day climate was
the determinant factor. Since the industrial revolution, human
economic activity has become increasingly important. Generally
speaking the severity of a recession is a function of the time that
has elapsed since the last one. It's a long time since we had the last
one (1990-92). Some would argue that recessions serve as corrective
mechanisms within markets.
Democracy Highlander
> > Well, be assured that it is going to fail. The big problem with free-
> > markets is that they allow in the long run too much concentration of
> > economic power.
>
> To be replaced by what?
Nobody knows. It will be very useful to be able to know what the
future have in store :-)
Personally, I am an adept of reforms rather than revolutions. So, if I
would have my way the next step will still be based on capitalism core
but with much more regulation, social protection, democratic
participation in economic decision and rules to prevent too much power
accumulation.
> Economic power boils down to market power which in the end means
> consumer power.
Unfortunate this is not very accurate. Markets are unstable by
default, they never self regulate properly and have the very big
problem of monopoly creation.
Let see an example. WalMart put pressure on producers to lower prices.
A manufacturing company keep cutting costs to be allowed to stay in
business with WalMart until their bottom line become zero. At that
moment, they have to move the manufacturing offshore to stay in
business. They fire local workers to employ in China. The unemployed
workers obviously have all the reasons to want to harm WalMart and not
shop there but keep buying from JCPenny or Sears as they did when
employed. However being unemployed their budget is less than half as
before, any cent count and the 10...15% lower prices at WalMart make
the difference between clothing their kids or letting them undressed
in the incoming winter.
The market signal: After WalMart push a company to offshore jobs his
consumer base (and profits) rose. Therefore, from free-market point of
view the pressure from WalMart to dismantle domestic economy and move
it into third world countries it is very good.
It will take many years until all the domestic economy is collapsing
at third world country levels.
Only then even WalMart sales are hurt by what they did a decade ahead.
But by then, WalMart already have shops opened in Asia and just move
there to start the game all over again. The destruction of western
world in long run is a no concern to markets, they eye the quickest
profit NOW.
So much for westerner's "consumer power". The real world economics is
way more complicated.
> Of course large organisations can produce economies of scale but with
> limits. Manager are important but they are seldom owners.There does
> does come a time when no matter how many resources a given enterprise
> is prepared to put into management further expansion hits diminishing
> terms where improvements in economies of scale hit zero whilst
> inflexibility, inertial forces and more complex managerial problems
> move a large organisation into negative territory. This has happened
> time and time again.
It is called "The Law of Diminishing Returns". While this may hold
true into a theoretical pure competitive economy the results can not
be trusted in real life monopolies: like Microsoft on software, like
Comcast on areas where FIOSS does not reach or WalMart in poor
neighborhoods.
The problem is that by it share size, a monopoly influence the market
itself. A monopoly does not compete like other firms plying on the
same market environment but they change the market environment in such
a way to screw others. Here is another example, floating on the
internet:
Microsoft Windows have 95% of desktop market share, Linux have about
1%. A software company want to develop a new version for their
bookkeeping applications. To develop the program to run both on
Windows and Linux the costs are 10% bigger than to develop it to run
exclusively on Windows.
Economics reasoning: A 10% increased in investment to make it cross-
platform bring me a 1% extra revenue. If I develop Windows only and I
use the same 10% to develop a companion application (Windows only too)
the return for companion application can be about 10%, aka 10 times.
From economics point of view, it make all the business sense to ignore
Linux market.
Then, the customers shop around for a new computer / operating system
to run his bookkeeping application. He looks on which operating
systems the company made available the new version. So he is going to
buy Windows.
This is the reason, a monopoly will never ever be brought down by
market forces. That is actually the definition of a monopoly, it
dominated the markets and bend market to suit it own needs. Only non
market forces can bring a monopoly or an oligopoly down.
> It only takes some bright boy to do his maths homework and work out
> that the sum of the parts are worth more than the whole and a large
> organisation is doomed.
Not if the size is so big that they bend market rules. And it does not
take a monopoly to that, only a local or semi-monopoly like WalMart.
> There always have been economic cycles.
But this is nothing to cherish for. Economic cycles are just the
external manifestation of an unstable system. The vibrations you hear
when you put a microphone to close to loud speakers, the music
amplifier become a noisemaker and instead of listening to the singer
you cover your ears. This is what economic cycles are. Is nothing good
to have them and I see not a single rational reason we have to
tolerate them and not try to improve the stability in our economic
system.
> Generally speaking the severity of a recession is a function of the time that
> has elapsed since the last one. It's a long time since we had the last
> one (1990-92). Some would argue that recessions serve as corrective
> mechanisms within markets.
Yes, they are. No doubt about that. When the microphone noise break
the beer bottles from the tables, the idiot from the volume control
will finally figure out that he turned the volume too high.
But what about putting in charge a smarter guy with more training so
he do not interrupt the concert and spill beer all over the customer
pants ? Wouldn't that be a more civilized musical experience ?
Nigel Molesworth
<3785b945-96eb-4c8f...@v5g2000prm.googlegroups.com>,
forbi...@msn.com wrote:
'Universal Guaranteed Income'
An SF novel I read decades ago.
You study for a career, not to actually do the work, but to add to you
UGI.
The highest qualified made the most.
--
Molesworth
Robert Henderson
<jah.u...@yahoo.co.uk> writes
>Robert Henderson wrote:
>> In message
>><3ae43258-6fb1-475b...@p23g2000prp.googlegroups.com>,
>>Mel Rowing <mel.r...@btinternet.com> writes
>>> Going onto the banks HSBC, Barclays, and Standard Charter have not
>>>availed themselves of Government bailouts.
>> Oh yes they have. They have only kept float by taking loans from
>>the BoE fund. RH
>
>How much have each of these banks borrowed from the BoE?
>
>James
>
Almost certainly those figures are not available to the public on the
grounds of commercial sensitivity - imagine the effect on a bank's share
price if one bank had borrowed much more than the average borrowing. RH
Mel Rowing
wrote:
> In message <6um6seFfvms...@mid.individual.net>, James Hammerton
> <jah.use...@yahoo.co.uk> writes
>
> >Robert Henderson wrote:
> >> In message
> >>Mel Rowing <mel.row...@btinternet.com> writes
> >>> Going onto the banks HSBC, Barclays, and Standard Charter have not
> >>>availed themselves of Government bailouts.
> >> Oh yes they have. They have only kept float by taking loans from
> >>the BoE fund. RH
>
> >How much have each of these banks borrowed from the BoE?
>
> >James
>
> Almost certainly those figures are not available to the public on the
> grounds of commercial sensitivity - imagine the effect on a bank's share
> price if one bank had borrowed much more than the average borrowing. RH
Just imagine the effect on the share price if investors were left in
the dark vulnerable to gossip and rumour.
This is why all companies are obliged to provide investors and
potential investors with with any information that might reflect on
the share price in any way. That's why they issue reports,
prospectuses, statements through the stock exchange and open letters
to shareholders through the press such as this one (issued 26th
January 2009):
http://www.investorrelations.barclays.co.uk/INV/A/Content/Files/Open_Letter_260109.pdf
Exrtact:
"On the basis of the above year end capital ratios, we calculate that
the Group's Tier 1 capital
exceeds the regulatory minimum required by the FSA by an amount
equivalent to some £17bn in
PBT. This scale of loss absorption capability, when looked at in the
context both of the solid and
diversified profitability of the Group during the stress test of 2008,
and of the substantial write
downs that we have taken, gives us confidence that our capital
resources are sufficient to manage
Barclays safely and prudently even in these difficult markets. For
these reasons we confirm in this
letter that we are not seeking subscription for further capital -
either from the private sector or
from the UK Government."
Robert Henderson
<8a815e1c-a6a5-4c31...@p2g2000prn.googlegroups.com>, Mel
Rowing <mel.r...@btinternet.com> writes
>>
>> Almost certainly those figures are not available to the public on the
>> grounds of commercial sensitivity - imagine the effect on a bank's share
>> price if one bank had borrowed much more than the average borrowing. RH
>
>Just imagine the effect on the share price if investors were left in
>the dark vulnerable to gossip and rumour.
These are special circumstances. If the amounts borrowed by all the
banks were made public any bank which borrowed much more than the others
would be vulnerable to a collapse in their share price. RH
Mel Rowing
wrote:
> In message
> <8a815e1c-a6a5-4c31-a9e1-1774e8bd9...@p2g2000prn.googlegroups.com>, Mel
> Rowing <mel.row...@btinternet.com> writes
>
>
>
> >> Almost certainly those figures are not available to the public on the
> >> grounds of commercial sensitivity - imagine the effect on a bank's share
> >> price if one bank had borrowed much more than the average borrowing. RH
>
> >Just imagine the effect on the share price if investors were left in
> >the dark vulnerable to gossip and rumour.
>
> These are special circumstances. If the amounts borrowed by all the
> banks were made public any bank which borrowed much more than the others
> would be vulnerable to a collapse in their share price. RH
They certainly are! But this does not affect rules of disclosure one
jot.
I draw your attention to Admission and Disclosure Standards of the
Stock Exchange
"Continuing obligations
The Exchange has a responsibility to ensure that it operates orderly
markets. In order to achieve
this it is essential that companies on our markets publish price
sensitive information on a timely
basis and in accordance with the rules of their home competent
authority, which impose a
general obligation on companies whose securities are admitted to
trading on a regulated market
to release information of this type. The timely publication of
information benefits companies by
allowing the market in their shares to function properly and benefits
investors by ensuring that all
participants are operating on an equal basis.
The Standards relating to disclosure of information to the Exchange
are outlined in ‘Continuing
Obligations’ and include a requirement for an issuer to inform the
Exchange of the timetable for
any corporate action affecting the rights of existing shareholders."
There is a civil liability too. Investors who lose money through non
disclosure may well be in a position to sue directors.
In any case, all loans and borrowings would show up on the company
financial report a public document published at least once a year and
these days usually downloadable from the company's website.
Werner
wrote:
...
> As I have pointed out before, there are sound reasons for banks and
> their ilk being nationalised. First, it allows the state to regain
> control of the money supply which at present is almost wholly driven by
> the creation of credit.
In the US we have the Federal Reserve Bank. Although technically
private, it is really a government agency. Its function is to control
the money supply. During times of economic woe it supplies banks with
money to lend. That is what got the US into this bind.
Second, it allows the state to institute
> procedures which prevent reckless banking.
In the US it prevented the prevention of reckless banking. It actually
encouraged it.
"In 1992, Congress mandated that Fannie and Freddie increase their
purchases
of mortgages for low-income and medium-income borrowers.
Operating under
that requirement, Fannie Mae, in particular, has been
aggressive and
creative in stimulating minority gains."
"The two companies are now required to devote 42% of their portfolios
to
loans for low- and moderate-income borrowers"
http://articles.latimes.com/1999/may/31/news/mn-42807
http://www.youtube.com/watch?v=_MGT_cSi7Rs
http://www.youtube.com/watch?v=cMnSp4qEXNM&feature=related
http://www.youtube.com/watch?v=RYz1rbB5V1s
http://www.youtube.com/watch?v=ivmL-lXNy64&feature=related
http://www.youtube.com/watch?v=usvG-s_Ssb0
http://www.youtube.com/watch?v=XjYDzyQNqX8
http://www.youtube.com/watch?v=_CcFdjXvjvE&NR=1
http://www.youtube.com/watch?v=o6ZHOxJLUGI&NR=1
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&partner=permalink&exprod=permalink
http://americanfuturefund.com/2008/09/25/barney-frank-blocks-reform-attempts/
• 1) Securitization for residential mortgages was invented in 1970 by
Ginnie Mae. It was expanded by government sponsored enterprises (e.g.,
Fannie Mae and Freddie Mac) and private institutions through the 1980s
and '90s to include a wide range of financial assets. 2) Congress has
consistently eliminated regulatory obstacles to securitization with
the Secondary Mortgage Market Enhancement Act (SMMEA), Real Estate
Mortgage Investment Conduits (REMICs), Financial Asset Securitization
Investment Trusts (FASITs), and Riegle Community Development and
Regulatory Improvement Act.
3) The Riegle Act also instructed federal
regulators to reduce risk-based capital requirements for bank holdings
of small business loan securities.
http://www.nado.org/loansales/securitization1.html
Third, running a cautious
> banking system guarantees consistent large profits, profits which could
> be used to reduce taxation. RH
>
> --
Not necessarily. Profits are taxed to fund more government spending.
Dollars in the common treasury are like fish in the common sea -
anyone who can will harvest to extinction. That is why socialism is
fundamentally corrupting and can not work. ----
http://www.capitaldistrict-lp.org/how.shtml
http://www.youtube.com/watch?v=Dp8ZmQMCtqA&feature=related
http://www.youtube.com/watch?v=-FSoXKapKQs&feature=related
Governing has become a way to get privileges for some at the expense
of others.
http://www.capitaldistrict-lp.org/what.shtml
Robert Henderson
<92afcf27-5485-4789...@40g2000prx.googlegroups.com>, Mel
Rowing <mel.r...@btinternet.com> writes
>> >vulnerable to gossip and rumour.
>>
>> These are special circumstances. If the amounts borrowed by all the
>> banks were made public any bank which borrowed much more than the others
>> would be vulnerable to a collapse in their share price. RH
>
>They certainly are! But this does not affect rules of disclosure one
>jot.
>
>I draw your attention to Admission and Disclosure Standards of the
>Stock Exchange
>
>"Continuing obligations
>
>The Exchange has a responsibility to ensure that it operates orderly
>markets. In order to achieve this it is essential that companies on our
>markets publish price sensitive information on a timely basis and in
>accordance with the rules of their home competent authority, which
>impose a general obligation on companies whose securities are admitted
>to trading on a regulated market to release information of this type.
>The timely publication of information benefits companies by allowing
>the market in their shares to function properly and benefits
>investors by ensuring that all
>participants are operating on an equal basis.
Amounts raised by the individual lenders have not been disclosed.
"Lenders Borrow Ł185 bn from Bank" D Telegraph 4 2 2009
Mel Rowing
wrote:
> In message
> <92afcf27-5485-4789-a818-fed5669bb...@40g2000prx.googlegroups.com>, Mel
> Rowing <mel.row...@btinternet.com> writes
> >The Exchange has a responsibility to ensure that it operates orderly
> >markets. In order to achieve this it is essential that companies on our
> >markets publish price sensitive information on a timely basis and in
> >accordance with the rules of their home competent authority, which
> >impose a general obligation on companies whose securities are admitted
> >to trading on a regulated market to release information of this type.
> >The timely publication of information benefits companies by allowing
> >the market in their shares to function properly and benefits
> >investors by ensuring that all
> >participants are operating on an equal basis.
>
> Amounts raised by the individual lenders have not been disclosed.
> "Lenders Borrow £185 bn from Bank" D Telegraph 4 2 2009
They may not have been disclosed to the Daily Telegraph but they will
certainly appear on the company's financial statement statutorily
issued once a year but more usually two. No doubt the Business
editorial staff of the DT browse over them when they become available.
Robert Henderson
<8d4d6c31-8f75-4ae2...@z1g2000yqn.googlegroups.com>, Mel
Rowing <mel.r...@btinternet.com> writes
>> >participants are operating on an equal basis.
>>
>> Amounts raised by the individual lenders have not been disclosed.
>> "Lenders Borrow £185 bn from Bank" D Telegraph 4 2 2009
>
>They may not have been disclosed to the Daily Telegraph but they will
>certainly appear on the company's financial statement statutorily
>issued once a year but more usually two. No doubt the Business
>editorial staff of the DT browse over them when they become available.
>
the figures were not in the public fold. RH