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Financial questions and parasites
by Thanos Kalamidas
2008-10-28 09:20:23
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Over the last few days I keep reading about the necessity of a radical banking reform and I still don’t understand how they are going to manage that by funding the private banks so they can continue giving loans. The usual arguments are that by continuing loaning companies and enterprises they circulate money and keep inflation under control.

There is something here I miss, the state is going to use my money, money I gave through tax to build schools and hospitals are going to banks so they can continue their …institutional work! Let’s see the two elements now, this ‘I’ which is not exactly ‘I’ but a very big we, so big that can cover over 99% of the world's population, people who had and will never have shares in any big international enterprise and they will never have a bank account bigger than a few hundred dollars, Euros or whatever else. These very same people are the people who honestly pay their tax, don’t even dare to think otherwise, you see the states have this weird habit always go after the small ones, the ones who didn’t pay just a few hundreds and never after the ones who owe millions and in the end they use them as example. But I suppose state tax and how the state uses the tax all together is another issue.

The thing this moment is why does the state is using the money I paid out of the little money I make for hospital and schools and the state does that using the worst possible blackmail, threatening me – again this me includes the we - that I will lose my job if I don’t …obey! This is like a nightmare! People are already losing their jobs in France, in UK, Italy and Germany. Renault factories had to close and somebody was saying in the news that you can see how deep the crisis is because Mercedes Benz sales gone 20% down. And reading that I don’t know if it is to cry or laugh hysterically. The people who actually screwing millions lives are the very same who can afford the bloody Mercedes Benz! And since they stopped buying a new model every two months or the last convertible for their mistress thousands of people will lose their jobs and what the state does to help them buy the new convertible? Funds them with the money got from the people who might lose their job. Surreal!

The second element is the institutional role of the banks. Ladies and gentlemen you probably haven’t understood but banks make profit, unbelievable profit and they make it from you. When forced to decrease the interest they increase their profit so in the end of the end the only ones to win are the banks and the last few days with all this horror scenarios the banks made bigger profits, have no doubt about this. While the interests where going higher they increased their net profit and when the interests where force to decrease their profit didn’t change, what really changed is the number of the employees the banks will not need their services and all the services they used from other companies. When interest was 4.2% the banks profit was 1.25; when the interest in days dropped to 3.5% the banks profit remained 1.25 and this is a simple example, the reality is the horror.

I have said many times in the past that I have nothing to do with finance or economics, I know how to spend money but never been good on how to make money but still you cannot ignore all the things coming from every way the last few weeks and you cannot stop feeling angry with all the games you sense that they play in your back. The other day I was reading a headline, Bill Gates is not the richest man in the world after all this financial crisis and Roman Abramovich might not be able to spend billions on new players for Chelsea and the only thing I could think of was, god this is a very bad joke! There are people who can afford life day by day, people who will be homeless if this situation continues and the media expect us to feel sorry for Bill Gates and Roman Abramovich?

Have the states been corrupted so much? Because this is the only conclusion I can come with, have they been corrupted so much to care more on if Bill Gates is on the top of the richest men in the world and if Abramovich can buy more players for Chelsea than what happens to the people, the people who walk in the streets, the every day people who make this world really going around? Have the states forgotten what their job really is and why they are there? Since when my ‘I’ and ‘we’ has become the well being of Bill Gates and any Bill Gates of any nationality, when did that happened? Did capitalism after the fall of the wall became so arrogant to forget the real force behind the profit and created castles over the green sand, because that’s what they created the last three decades, castles of green sand inside the temples of stocks and shares.

Any suggestions? Are there any suggestions for all these financial brains who, over the last few days, have analyzed all the sides of the major problem, even in tabloids next to the Page-Three Girls? The last few days even media trash and dwarf parasites have suggestions on what George W. Bush should do and all that in arrogant editorials all of them forget who is really suffering and who is really going to pay the outcomes of a overproducing and over-consuming society they produced and fed for decades worst of all they forget that their parasite role helped this crisis and these parasites are the mouthpieces of the blackmail, obey or you are losing your job!

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Emanuel Paparella2008-10-27 12:08:11
I suppose we can blame the Medici for inventing the modern banking system, but there is a caveat: they were into making money and plenty of it, but they also understood Beauty and its revelation in art as something that transcended money and in some way offered an oasis from the trivialities and banalities of the daily struggle of life. The movie “Wall Street” is revealing in this respect: the Medici respected art for its own sake; the modern cultural barbarian places art in his living room simply to show off how wealthy and prosperous he is, or as an investment to be sold as soon the price is right, and thereby misses the whole idea of art and remains mired in his cultural philistinism. It appears that things have to get much worse in our brave new capitalistic world before they get any better. Time will tell.

Eero Nevalainen2008-10-27 12:56:07
There is a difference between recapitalizing banks and just buying junk loans or taking lender risk into government books.

Recapitalization allows for the system to remain functional and trust to remain in place at least so that bank runs and other chaotic conditions are avoided. In return, existing shareholder equity is diluted -- essentially destroyed in most cases. This is punishment enough for the bankers. In the very long run, the taxpayer may even turn a profit...

Thanos2008-10-27 12:58:02
I think another problem is the overvalue of some (a lot?) shares. sometimes the overvalue reaches 700%, perhaps now they get to their real price.

Eero Nevalainen2008-10-27 14:10:34
Stock market is not that much of a problem... the "right" price for a company at the market is always the fair market value, which can be very easily determined as the market is very liquid. Thus stock market overvaluations just cause some people/companies take it in the chin and that's it.

Then again the big problem we've had has been in the credit markets, where there have been very non-transparent, illiquid securities that have been "marked to fantasy" in investment banks' books... add to that all sorts of fancy derivatives contracts, and we're in the mess we find ourselves in...

Thanos2008-10-27 17:17:16
I agree with you and I'm wandering if all these patches they are trying to apply is the way out or we will find ourselves soon in deeper trouble and by the way i insist that this 'we' means the ordinary people with minimum bank accounts

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