It's the banks, stupid

[jj]

It's not a conspiracy, but when banks fail, the rich people behind them don't fail, rather they get bailed out. When a puny mortgagee fails, they lose everything.

 

[IchabodPlain]

Comparing the graph in your site against reported profits over the last couple years, I really don't see it as a big issue for any of the listed banks but RBS. The rest have had annual profits which are at or near their undeclared losses. Why would it cripple them to report the losses over a 1-2 year period? What am I missing?

 

[Evermind]

As well as the "dozens of other signs" could you please provide some evidence to support the first three.

Of course. I'm not saying 3. is the undeniable truth. Jusy added the third option which is possible. Time will tell us what's really happening. We seem to have a long way to to before something will be really clear.

They are merging the European financial systems and tightening the ties as we speak. Watch that carefully. If they pronounce a United States of Europe, with 1 president and so on, then you'll have another very visible sign.

 

[Puppycow]

Of course. I'm not saying 3. is the undeniable truth. Jusy added the third option which is possible. Time will tell us what's really happening. We seem to have a long way to to before something will be really clear.

They are merging the European financial systems and tightening the ties as we speak. Watch that carefully. If they pronounce a United States of Europe, with 1 president and so on, then you'll have another very visible sign.

Um, you said "Of course" in response to a request for evidence, but failed to provide such evidence.

ETA: I did look myself for any evidence of George Soros advocating a "global currency". The only thing I could find were some comments about special drawing rights at the IMF. Special drawing rights are not a global currency however, but a unit of account used by the IMF whose value is determined by a weighted basket of four major currencies: The US dollar, the euro, the yen and the pound sterling.

 

[The Don]

Of course. I'm not saying 3. is the undeniable truth. Jusy added the third option which is possible. Time will tell us what's really happening. We seem to have a long way to to before something will be really clear.

They are merging the European financial systems and tightening the ties as we speak. Watch that carefully. If they pronounce a United States of Europe, with 1 president and so on, then you'll have another very visible sign.

So please provide evidence of the three signs...

• multiple elitists have already proposed a global currency (like George Soros and many others)
• There are longlasting plans to merge the IMF and Worldbank, maybe around Bretton Woods II
• Rogue banks like Goldman Sachs etc. create crises on purpose. They set up unstable financial bubbles, which they know they will burst. They bet then against the bubbles and profit of other people's mistery.

 

[psionl0]

So please provide evidence of the three signs...

If the evidence exists it will only show that corporations do what corporations do.

There is no way that anybody could deduce from these "signs" that, behind it all, there is a conspiracy to enslave the world through a single global currency.

 

[The Don]

If the evidence exists it will only show that corporations do what corporations do.

There is no way that anybody could deduce from these "signs" that, behind it all, there is a conspiracy to enslave the world through a single global currency.

I disagree.

• Evidence of Soros proposing a global single currency is thin on the ground.
• I cannot find reliable evidence of concrete plans to merge the World Bank and the IMF
• Allegations of corporations deliberately engineering crises seem to be well beyond the normal operating model of corporations

Evermind has floated the possibility that the global financial crisis has been deliberately engineered by large corporations as a way of enforcing the implementation of a single global currency and suggested that these are the signs. Highlighting that there is no evidence for the signs seems sensible to me.

 

[psionl0]

IF the evidence exists it will only show that corporations do what corporations do.

There is no way that anybody could deduce from these "signs" that, behind it all, there is a conspiracy to enslave the world through a single global currency.

Does that make a difference?

 

[Ethan Thane Athen]

So, the problem is that any attempt to fashion a solution to the problem (of zombie banks), recognises that there is a problem, which exacerbates the problem?

Oh dear.

I believe a member of staff at the UK Regulator (FSA) raised the problem formally well before the crash, highlighting the danger that subsequently occurred almost exactly as he warned. At the time he was told by his bosses to 'Shut up or you'll scare the horses'. So that attitude was there even before the crisis.

I don't know whether it is still the case but at the time, I understand the bonuses of senior employees of the FSA were determined (at least in part) by how the banks reported on their performance! Utterly bizarre - a regulator that could be seen as procedurally in the pocket of the people they're supposed to be regulating.

 

[Democracy Simulator]

Comparing the graph in your site against reported profits over the last couple years, I really don't see it as a big issue for any of the listed banks but RBS. The rest have had annual profits which are at or near their undeclared losses. Why would it cripple them to report the losses over a 1-2 year period? What am I missing?

As Liam Halligan is writing to a primarily UK audience, I think he picked the recent PIRC report on the UK banks as a starting point for the article. Whether those banks can effectively weather the coming storm in the Eurozone is hard to assess. However, we have the recently announced 140 billion pound injection from the BoE as an indication that there is some danger. Mervyn King seems to broadly agree with Halligan. From his Mansion House speech:

Sir Mervyn said that the problem with Europe's lenders was "one of solvency". He added: "Until losses are recognised, and reflected in balance sheets, the current problems will drag on.

http://www.telegraph.co.uk/finance/...ropean-banks-need-major-recapitalisation.html

 

[UndercoverElephant]

Perhaps it is better to have short-term pain and clear out the insolvent institutions and bad debt from the system, so things can grow again? Might that not actually be preferable to a decade or two of stagnation?

Unfortunately there is an even deeper problem underlying the underlying problem you're talking about. Yes, no mainstream politician anywhere in the western world is ready to admit that the banks are bankrupt. There is an unrecognised but fundamental problem with the existing banking and monetary system - several in fact. But underneath all this financial chaos is an even more fundamental problem and that is that we are globally hitting the physical limitations to growth, exactly as predicted by the Club of Rome 30 years ago. And that means that even if we were to have a "great reset" - a massive writing off of bad debts accompanied by massive losses to investors/savers - that we still would not be able to get sustainable growth going again. Instead what would happen would be that commodity prices, especially oil, would go sharply upwards, killing off the growth.

We don't just need to face up to the truth about our broken banking/monetary system. We also have to face up to the fact that we need to completely rethink our economic system it can cope with degrowth. There is absolutely no point in trying to recreate/restart the same system again after a debt jubilee.

 

[UndercoverElephant]

3. The few megabanks are jamming up the system on purpose to put as much middle-class people into the lower class and take over as much smaller banks and institutions as possible. Finally the situation will be so bad, that the only option is to introduce a global currency, possible digitally. This is their longlasting plan on which they embarked before or during the creation of the United Nations.



Signs:

- multiple elitists have already proposed a global currency (like George Soros and many others)
- There are longlasting plans to merge the IMF and Worldbank, maybe around Bretton Woods II
- Rogue banks like Goldman Sachs etc. create crises on purpose. They set up unstable financial bubbles, which they know they will burst. They bet then against the bubbles and profit of other people's mistery.


There are dozens of other signs, will add them when I think about them. If everybody knows other signs, add them. And I mean no signs in the sky.

Who would issue this global currency?

In the current environment, there can be only one replacement for the US dollar as global reserve currency, and that is physical gold.

 

[stilicho]

Except that much of this is posturing by those who don't like IFRS accounting for banks, being taken up by those who don't understand it at all.

There is probably more disclosure now than there has been ever before on the balance sheets of banks but there remain some other issues. I believe (from anecdotal evidence) that banks are being slower to take action against borrowers in trouble - the political fallout from shutting business down, and the problems of trying to sell secured assets in a recession mean the banks are playing the long game.

This means realisation of losses is being deferred and losses are uncertain, so capital is being held back to cover these losses. However it is also being held back due to worries that the euro crisis could end badly leading to a longer deeper recession. And regulators have insisted on higher capital levels. Therefore their lending capacity is less.

On the other hand demand from businesses for loans is reduced as they are doing the same - keeping cash and flexibility incase there are more rainy days.

All this means that the economy is not behaving like it did up to 2007 when it was being driven by cheap borrowing (and for which the bank regulators have mostly escaped censure).

Whoosh. Went right over everyone's heads.

Please show them an example of a distinction between IFRS accounting standards and those that preceded it. Even though I work in the financial sector, I don't deal with those policy changes and I'd like to understand it a little better too.

Just ignore the bank-bashers that roost here.

 

[stilicho]

It's not a conspiracy, but when banks fail, the rich people behind them don't fail, rather they get bailed out. When a puny mortgagee fails, they lose everything.

Huh? A bank can lend and so can a mortgagee. In fact, a bank is very often the mortgagee in a real estate contract.

 

[psionl0]

Just ignore the bank-bashers that roost here.

I agree.

Cover up your ears and shout "NAH NAH NAH" in an attempt to drown out their voices because they are all saying, "we told you so".

 

[Evermind]

I disagree.

• Evidence of Soros proposing a global single currency is thin on the ground.

• 
  
  Well, Soros was just one of the names which came into my mind. This Wallstreet Journal article gives some quotes from Soros. He wants to "establish new international rules" and "reform the currency system." And he also wants "a grand bargain that rearranges the entire financial order." And in this videoclip he is talking about these subjects.
  
  

  [*]I cannot find reliable evidence of concrete plans to merge the World Bank and the IMF

  In the topic "Who Rules The World" I have linked 4 studies in favour of this merger. It's in the planning, there are no official statements that I know of which set a date or so.
  
  

  [*]Allegations of corporations deliberately engineering crises seem to be well beyond the normal operating model of corporations

  
  You really need to delve into the mindset of Wall Street, if you can't even consider this. Rogue bankers don't have allegance to anybody, exept the magic words like 'profit' of 'bonus.' There have been made dozens of good documentaries which lined out how the 2008 crash happened and that they let it happen. That Goldman Sachs bets against its own unstable constructions is very wide-known as far as I know of.
  
  

  Evermind has floated the possibility that the global financial crisis has been deliberately engineered by large corporations as a way of enforcing the implementation of a single global currency and suggested that these are the signs. Highlighting that there is no evidence for the signs seems sensible to me.

  
  Well, don't expect that a quick Google search will provide all the answers...
  This study of the IMF describes the special drawing rights, which is the next step. And it also goes on about a world currency. They call is the Bancor, after the proposed global currency by J. M. Keynes during WWII. If you look at the figure on page 4 of the study you can see how the road to the global currency is set out.
  
  There are many persons and governments who addressed their aim for a global currency the last few years. On the Wallstreet Journal website there must be at least 5 or so. I've read several examples of that on that website the last few years.

 

[kevsta]

I agree.

Cover up your ears and shout "NAH NAH NAH" in an attempt to drown out their voices because they are all saying, "we told you so".

 

[Evermind]

You really need to delve into the mindset of Wall Street, if you can't even consider this. Rogue bankers don't have allegance to anybody, exept the magic words like 'profit' of 'bonus.' There have been made dozens of good documentaries which lined out how the 2008 crash happened and that they let it happen. That Goldman Sachs bets against its own unstable constructions is very wide-known as far as I know of.

I had to be sure that it would be quite easy to find via google or another search engine. In less than 1 minute I found this part of a transcript of a PBS documentary which points it out very superficially:

NARRATOR: One of the Wall Street banks that took advantage of a declining market was Goldman Sachs. According to a congressional investigation, the bank created a series of CDOs containing toxic subprime and then sold them to customers—

LLOYD BLANKFEIN: [television commercial] We at Goldman Sachs distinguish ourselves by our ability to get things done on behalf of our clients—

NARRATOR: —while Goldman Sachs, using credit default swaps, bet against them.

Sen. CARL LEVIN (D-MI), Permanent Subcommittee on Investigations: They bet against their own clients, so when the clients lost money, Goldman was making money. Goldman has a little slogan that the clients come first. No, they didn’t. Not in these transactions. Goldman came first, second and third. They were really, I think, the only major bank which made money when the housing bubble burst.

It might be the best option to look into your congressional records for yourselves.


But while Goldman takes much of the heat the other megabanks have had their own scams too, of course. For instance, watch this interview on Bloomberg with a spokesperson of JP Morgan Chase, who managed to tell the audience staight-faced that the business of food stamps is very important to them, and due to some kind of a strange reason the demand for it has increased the last few years. OK, the guy doesn't look that intelligent or so, in fact he has a rather strange look in his eyes like the just smoked a big one or so, but I'm pretty sure he defenitely knew that his employer was one of the main catalysors for the financial meltdown. And why wouldn't they? Their power on governments worldwide is substantial enough to get them being bailed out again, and again, and again.



After thinking about which documentary could be best for you to watch if you are interested in this information and to which this is all quite new information, I think the four part documentary of the Canadian CBC called Meltdown is a good one to start. Gives a nice peek behind the curtain, and it features some big players.

 

[Evermind]

But the big question "why!?" that they do all this is propably the most difficult one to find out, but also the most important one. Therefore you have to dig into psychology, sociology, psychopaty, etc. Another minute on a search engine came up with this study about the addictiveness of greed and wealth. You have to take the journey into the brain of the 1% megabankers who don't have the slightest idea how normal people live, struggle and suffer, because of their addiction. It has to do with stimulating the exact same pleasure points in the brain as sigarettes, (prescription) drugs and some other addictive things to, including social media as I have often read already. I don't know this linked study yet, but looking into the source list it seems kinda OK. I've put it in my own reading list too.

But it even goes way beyond all of this, into the realms of psychopathy. To sell people mortgages etc. which are meant to implode, to cut funding to thousands of people at the same time or ordering them out of their homes, without blinking an eyelid or without any feeling of remorse or empathy. These are two of the most basic and important personality traits we have, which distinguishes us from the beasts more or less. I have read or heard a while ago that potential employees of Goldman Sachs are screened via a psychological test for having some common traits of psychopaths and sociopaths, but I'm not quite sure where I got this information from. I think it was from the former CEO of Goldman - turned into whistleblower - mrs. Nomi Prins. She has written quite extensively about the shady things which happen behind the scenes of Big Banking. A good place to start might be her own website.

For many bankers it must be hard to live with some of the crimes they have committed. I recently read an interview with a former top banker of broker from my home country The Netherlands, who couldn't take it anymore and had to stop with his job. It began to weigh more and more on his conscience, until he broke, like he said. He started and couldn't stop crying on his way back home in his car because he knew he was ruining poor and naive people of their pensions, homes, etc. I'm pretty sure there must be dozens of such people in the US who want to speak out about the fundamental corruptness of the global financial capitalist system.


And here's another small but interesting view regarding the screening of employees of Goldman Sachs from the website Business Insider.

A small article on the Psychology Today website.

And here's a good article on the Harvard Business Review website called Psychopaths On Wall Street. It's a preview of quite an exploding new book about 'true psychopaths' and the lesser known and understood 'almost psychopaths.'


This may provide some interesting leads to start your own investigation.

 

[Aber]

Please show them an example of a distinction between IFRS accounting standards and those that preceded it.

Key question is when and how you recognise losses on loan portfolios.

Overall you will know the expected losses on a portfolio of loans over an economic cycle. The range of options for recognising losses (which are not all allowed under IFRS) include:
- recognising the expected loss when the loan is advanced, and adjusting for actual experience
- recognising the expected losses over the average life of the portfolio
- recognising the expected losses over the average life of the portfolio, taking into account the economic cycle
- recognising losses on individual loans when there is specific information that a loan may not be repaid eg change in credit rating
- recognising losses on individual loans when repayments are missed

Often losses are the difference between the loan value and the value of security, often property. If the property market is inactive it is difficult to estimate the bank would get from the security (which IIUC is a large part of the problem for Spanish banks).

These are generally split between specific provisions (for individual loans where there is eveidence that they will not be repaid) and general provisions (for loans not specifically identified as bad yet). Overall the differences are subtle and it gets complicated understanding exactly how each bank estimates its losses - which is why stock market analysts are well paid.

IFRS tries to minimise general provisions as they allow management a lot of discretion for adjusting reported profits. However this means that bank's results are more volatile as they report higher profits in good years and larger losses in economic downturns. None of this should make a difference as there is far more disclosure now than historically, and capital adequacy will be calculated separately.

IFRS has an academic basis ie it is planned to complete and coherent, unlike accounting standards which were built up piecemeal by practitioners. This has thrown up some mind-blowing concepts such as if a company's credit rating is downgraded, it should report a profit, as its liabilities have decreased in value.