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Bloomberg: Smashing The Big Banks -- For Profit

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Four hundred years of economic theory (and economic History) tell us that oligopolies (in any form) are totally parasitic behemoths, which should never be allowed to exist in any legitimate economy. Thus as the (only) Messenger broadcasting the need to whittle-down the corporate monstrosities in the financial sector back within the realm of sanity, my messages have previously been framed in such basic, theoretical terms.

Incidentally, these arguments have observed that (contrary to Corporate Media mythology) these gigantic financial institutions are not even efficient. They have long since passed any economies-of-scale where “bigger is better.” Instead, these Big Banks now exhibit all of the characteristics of clumsiness, inertia, and general inefficiency which all of the Small Government zealots point to – in insisting that “Big Government” needs to be shrunk.

Smashing the Big Banks” does not have to be justified on mere grounds of morality or economic theory alone. It can also be successfully argued that these behemoths need to be scaled-down on grounds of pure economic efficiency. Thus even if all these Big Banks weren’t (in reality) mere cogs of a single Banking Monopoly; there are multiple, sound arguments for dismantling these parasitic predators – and zero arguments justifying their continued existence.

Indeed, Bloomberg itself now reports that “breaking up JPMorgan” would currently produce an instant profit of 30% -- on the asset-value of the components alone – and then its increased profitability as it (once again) operated as a collection of (separate) more-efficient pieces would kick-in:

JPMorgan Chase and Co. (JPM), the biggest U.S. bank by assets, would be worth 30 percent more if broken into its four business segments.

Of course why stop there? Those “four business segments” were each already too big themselves. Why not smash JPM into ten or twelve roughly equal parts – and make this profit/efficiency orgy even greater? The fact that any/all initiatives to splinter these Big Banks produces (cumulative) immediate reductions in overall systemic risk is just icing on the cake.

In writing previously that “too big to fail = too big to exist”; my arguments were always framed in terms of the insanity of creating a financial system which is nothing but a permanently ticking time-bomb. Additionally, the entire mantra of “too big to fail” is nothing but a (very) thin veil for financial extortion:

Give us all your money, or we’ll blow up the economy.”

Clearly in a world which places “profit” ahead of morality and sanity, my smash-the-Big-Banks initiative would generate much greater traction if framed in more appealing terms: a chance for everyone to make (a lot of) money. The alternative paradigms facing us are an illustration of stark simplicity:

1) Continue with our “too big to fail” model, where these financial behemoths are so bloated and inefficient that the only way they can even manage to stay alive is through endless/infinite infusions of Corporate Welfare from our governments (and now us) – which (as a mathematical certainty) is guaranteed to “kill the Host” (i.e. our economies);

2) Break up these Big Banks into (much) smaller, (much) more efficient pieces. Then they will no longer require their $trillions per year in Corporate Welfare – because the competent entities will be profitable, while the incompetent entities will be allowed to wither-and-die, cut off from their too-big-to-fail teat.

That’s called “capitalism”, and once upon a time we practiced something remotely resembling it in our economies: free markets; competition. What a concept!

 

Of course what is most important of all with the Corporate Media itself acknowledging that “smashing the Big Banks” is profitable is that it removes any/all “risks” in taking a sledge hammer to this “too big to fail” oligopoly/monopoly. In playing whack-a-Mole with the Big Banks; everybody wins (even the Big Banks themselves) and nobody loses…except the One Bank.

In shining a magnifying glass on the ever-shrinking wages of the Average Worker (i.e. those who still have jobs); the Corporate Media has used “productivity” as its Whipping Boy, supposedly justifying the endless, ruthless reductions in compensation to the Average Worker. The workers need to be paid their slave-wages on grounds of “efficiency”.

What’s good for the Goose is good for the Gander.

If Western workers had to accept the 50% reduction in their standard of living because they were “no longer competitive” (in a world of “globalization”); this same argument applies not just equally to the Big Banks – but literally an entire order of magnitude greater, in pure economic terms.

We “can’t afford” to pay the Average Worker in the West a livable wage, and so the Middle Class have become the Working Poor. But we “can afford” to hand $trillions per year in Corporate Welfare to a handful of non-competitive, grossly inefficient (and entirely criminal) Big Banks? This goes beyond insanity, and straight into the realm of financial perversion.

Indeed, the word “non-competitive” is clearly euphemistic with respect to these Big Banks. They are an open crime syndicate. Having already been caught (illegally) rigging the $500-trillion LIBOR debt market, and being caught laundering” the money of international Drug Lords on a near-weekly basis; the latest revelation of Big Bank crime is the (illegal) rigging of currency markets.

The recurring spikes take place at the same time financial benchmarks known as the WM/Reuters (TRI) rates are set based on those trades. Now fund managers and scholars say the patterns look like and attempt by currency dealers to manipulate the rates, distorting the value of trillions of dollars in investments in funds that track global indexes.

The crimes of these Big Banks (all instruments of the One Bank) now exceed the scope of their “legitimate” banking business by dollar value. They are fraud-factories first, and “banking” comes a distant second. Smashing the Big Banks would not merely provide huge profits for all involved, it would force these gangsters to cease much of their extortion, racketeering, and market-rigging – and once again engage in legitimate commerce.

Then there is poor, Eric Holder, so-called “Attorney General” of the United States. In the current, banking crime syndicate; he’s nothing but a sleazy Bag-Man – publicly pledging not merely to “look the other way”, but to actively cover-up all Big Bank crime. Even the Italian Mafia doesn’t force its own “bought Cops” to publicly confess that they serve organized crime.

In the process of evolving from “banks” to Comic Book gangsters who are now getting caught engaging in sleazy, warehouse shake-down” operations; these Banksters now not only consider their crime to be a way of life, but they are ridiculously inefficient criminals. We never hear the Italian Mafia whining that it needs $trillions in subsidies, or it will “go out of business.”

Smash the Big Banks to dramatically reduce the systemic risk of financial collapse (and permanently remove “too big to fail” from our vocabularies). Smash the Big Banks to save near-bankrupt Western governments $trillions per year in Corporate Welfare. Smash the Big Banks to reduce organized crime. Or, simply smash the Big Banks to make a lot of money.

We may not all be able to agree on our reasons; but we can certainly all agree on the result.

 

 

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Jeff Nielson
...
written by Jeff Nielson, September 03, 2013
As a Canadian Jeff I thought you might like to read this:

This appeared in the Slog Blog today:-

from 2011 in the Mail: (UK newspaper Daily Mail)

‘In 1930, a mere nine years before the outbreak of World War Two, Americadrew up proposals specifically aimed at eliminating all British land forces in Canada and the North Atlantic, thus destroying Britain’s trading ability and bringing the country to its knees.Previously unparalleled troop movements were launched as an overture to an invasion of Canada, which was to include massive bombing raids on key industrial targets and the use of chemical weapons, the latter signed off at the highest level by none other than the legendary General Douglas MacArthur.’

So Britain's "closest" ally has "form" when it comes to chemical weapons. That's what you call a "special relationship".



Lol GeorgeSilver!

Perhaps all readers here should review that historical anecdote...as we assess reports of the recent "chemical weapons attack" in Syria? smilies/wink.gif

Once the economic destruction has already taken place; the "strong arm" of the military inevitably rises up to maintain control over these (our) shattered economies.

And thanks to the "War on Terror", where near-invisible Terrorist Boogeymen could show up anywhere, even in our own societies tomorrow; who knows where the NEXT "WMD attack" will be staged???
georgesilver
...
written by georgesilver, September 03, 2013
As a Canadian Jeff I thought you might like to read this:

This appeared in the Slog Blog today:-

from 2011 in the Mail: (UK newspaper Daily Mail)

‘In 1930, a mere nine years before the outbreak of World War Two, Americadrew up proposals specifically aimed at eliminating all British land forces in Canada and the North Atlantic, thus destroying Britain’s trading ability and bringing the country to its knees.Previously unparalleled troop movements were launched as an overture to an invasion of Canada, which was to include massive bombing raids on key industrial targets and the use of chemical weapons, the latter signed off at the highest level by none other than the legendary General Douglas MacArthur.’

So Britain's "closest" ally has "form" when it comes to chemical weapons. That's what you call a "special relationship".
Jeff Nielson
...
written by Jeff Nielson, August 31, 2013
I'm going to take it a step further: let's smash ALL banks. Why do we even need them? Everyone will answer that we need banks to provide capital to get new projects done and keep the economy moving, to buy a house, etc., and that comes from private banks operating in the fractional reserve money creation system. Without this ability to lend credit, then where would we get the money from to fund all these new things?

Well, this rationale completely misunderstands the unfortunate reality: the reason we currently need banks to provide credit in order to do anything in the economy is because THEY'VE STOLEN THE MIDDLE CLASS' WEALTH, turning us all into debt slaves with an average $0 net worth, so that we NEED to borrow from our usurious masters in order to do anything!

If we got rid of the fractional reserve lending system, turned banks back into what they used to be -- simple safe repositories for our money outside of our homes, if we instituted a government-issued, non debt-based currency, along with a wealth tax that prevents runaway wealth concentration, then the average middle class person would by default HAVE TO own enough wealth to be able to buy his own house by himself, without going into debt, maybe after saving up for a few years. The laws of supply and demand would dictate this. Any new capital projects would go forward based on their financial merit, using money that the average middle class person wants to invest. Imagine that, raising capital to fund new projects from average investors looking for somewhere "productive" to place their savings -- what a concept!

This concept is so simple, so obvious, but it's lost to 99% of the people out there who think that our perpetual slavery is some law of the universe that we can't escape from. How is it that we depend on insolvent private corporations to create money? What magic talents do they have to justify this exorbitant privilege? None! In fact, they tend to be the snakes who LEAST deserve to be able to create money. It's totally absurd.


Indeed Null, I've pretty much articulated the same sentiments myself. "Banks" even in their most neutral (benign?) form are the ultimate PARASITIC MIDDLE-MEN, exceeding even the capacity of LAWYERS to insert themselves into financial transactions.

And much like we have created this massive, cumbersome LEGAL HIERARCHY which supposedly justifies/necessitates having a society filled with Lawyer-Parasites; we have an even larger FINANCIAL HIERARCHY being cobbled together to create the illusion that we need an even larger number of BANKER-PARASITES.

There are only three niches of people in our societies who believe we "need" bankers and/or lawyers:

1) Bankers
2) Lawyers
3) Serfs

smilies/angry.gif
Jeff Nielson
...
written by Jeff Nielson, August 31, 2013
Jeff,
The Clinton-Bush-Obama-Republican next is one of our major problems. The Parties flip-flop in our fixed national elections, but they are both joint owners of the Big Government Party(Fascism as Gerald Celente rightfully claims). They have been in full time collusion since the late 80's when they threw out the Woman's League of Voters. Now it is impossible for a third party to have a real voice in the elections, and hand picked candidates are determined by Party Hacks smothering dissent within the parties. Questions in debates are now screened and known before hand.
Obama Care is a set up for the total Nationalization of Health Care within the next six years. Dictatorial medicine by a Dictatorial Government!
The housing industry is being controlled by the Banksters with backing by the government including purchasing the mortgages.
The automotive industry has seen GM become Government Motors, along with Chrysler.
The Growing government is by far the largest employer in the land.
Fifty million people are now on food stamps on the government tab, yet they are not rebuilding roads, bridges, and parks as they did under Roosevelt!
Jeff, I'm retired. From what I can tell, you are the only one that is working and not on the government payroll! I think my solution is simple, the banksters and the government will suffocate themselves from the sheer weight of all the worthless fiat paper money they have printed. Following this collapse, America will rebound and take control of their governments at all levels. Gone will be the days when a puppet tries to dictate to us from a teleprompter.



OK, we're back on "the same page". The "problem" is the Two-Party Dictatorship (which, itself, is actually operated by the One Bank). Obama is merely the current figurehead -- chosen because he is an especially adept and charismatic Liar.

Indeed, we now see a rather distinct pattern in the One Bank's game of "Tweedle-Dee and Tweedle-Dumb". Democrat presidents come straight out of the mold of the "smooth-talking Used-Car Salesman"; while when a Republican is chosen we get some knuckle-dragging Thug who has difficulty dealing with any words of more than two syllables.

...And all signs are that the U.S. is being prepared for some skull-busting Thug to take over from Obama.
Null
...
written by Null, August 31, 2013
I'm going to take it a step further: let's smash ALL banks. Why do we even need them? Everyone will answer that we need banks to provide capital to get new projects done and keep the economy moving, to buy a house, etc., and that comes from private banks operating in the fractional reserve money creation system. Without this ability to lend credit, then where would we get the money from to fund all these new things?

Well, this rationale completely misunderstands the unfortunate reality: the reason we currently need banks to provide credit in order to do anything in the economy is because THEY'VE STOLEN THE MIDDLE CLASS' WEALTH, turning us all into debt slaves with an average $0 net worth, so that we NEED to borrow from our usurious masters in order to do anything!

If we got rid of the fractional reserve lending system, turned banks back into what they used to be -- simple safe repositories for our money outside of our homes, if we instituted a government-issued, non debt-based currency, along with a wealth tax that prevents runaway wealth concentration, then the average middle class person would by default HAVE TO own enough wealth to be able to buy his own house by himself, without going into debt, maybe after saving up for a few years. The laws of supply and demand would dictate this. Any new capital projects would go forward based on their financial merit, using money that the average middle class person wants to invest. Imagine that, raising capital to fund new projects from average investors looking for somewhere "productive" to place their savings -- what a concept!

This concept is so simple, so obvious, but it's lost to 99% of the people out there who think that our perpetual slavery is some law of the universe that we can't escape from. How is it that we depend on insolvent private corporations to create money? What magic talents do they have to justify this exorbitant privilege? None! In fact, they tend to be the snakes who LEAST deserve to be able to create money. It's totally absurd.
paxjds1
...
written by paxjds1, August 30, 2013
Jeff,
The Clinton-Bush-Obama-Republican next is one of our major problems. The Parties flip-flop in our fixed national elections, but they are both joint owners of the Big Government Party(Fascism as Gerald Celente rightfully claims). They have been in full time collusion since the late 80's when they threw out the Woman's League of Voters. Now it is impossible for a third party to have a real voice in the elections, and hand picked candidates are determined by Party Hacks smothering dissent within the parties. Questions in debates are now screened and known before hand.
Obama Care is a set up for the total Nationalization of Health Care within the next six years. Dictatorial medicine by a Dictatorial Government!
The housing industry is being controlled by the Banksters with backing by the government including purchasing the mortgages.
The automotive industry has seen GM become Government Motors, along with Chrysler.
The Growing government is by far the largest employer in the land.
Fifty million people are now on food stamps on the government tab, yet they are not rebuilding roads, bridges, and parks as they did under Roosevelt!
Jeff, I'm retired. From what I can tell, you are the only one that is working and not on the government payroll! I think my solution is simple, the banksters and the government will suffocate themselves from the sheer weight of all the worthless fiat paper money they have printed. Following this collapse, America will rebound and take control of their governments at all levels. Gone will be the days when a puppet tries to dictate to us from a teleprompter.

Jeff Nielson
...
written by Jeff Nielson, August 30, 2013
Thomas Jefferson's sinister prophecy "banks and corporations will deprive the people of all property" is taking place under Obama right now in North America. These same institutions have driven real unemployment to almost 25% causing many people to lose their homes, 50 million are on food stamps, and Obama has in essence nationalized health care and placed the burden of paying for it on the middle class. Excuse me, Obama has excluded King Obama, Congress, and most Unions from Obama Care; all are the major components of the Democratic Party. Clearly, Obama and the Democrats are basically making the Republicans middle class pay for Obama Care. Discriminator is Obama's middle name. The Supreme Court stands bye saying nothing, while the Democrats Discriminate against half the citizens in the US. The Court Justices even sanctified this discrimination by declaring Obama Care legal, and sanctifying the shredding of the Constitution. It appears the US Republic is dead and that we citizens are mere indentured servants of the Banksters and their paid Lawmaker Lackeys in Washington DC.
Once upon a time when Anti-Trust laws were enforced, banks were small and served the people. Now the Banks oppress the people and the law of the land with the help of Obama, Holder, and the Supreme Court Justices. mmm.....Wonder what profession these individuals profess to practice!! Most of Congress are lawyers.... We have one hell of a problem with these sad, pathetic lawyers!!



Paxjds, CAREFUL: your ideology is showing. What's your "solution"? Another round of Tweedle-Dee/Tweedle-Dumb -- except this time with Tweedle-Dumb back in power?

The Puppets in the White House don't make decisions; they follow orders, and so it doesn't matter what colour stripes you paint on the White House Puppet -- as they all DO the same things for their Master.

Jeff Nielson
...
written by Jeff Nielson, August 30, 2013
I can hardly understand why people don't return to the views of the USA's founders. They despised the "moneychangers," as they called them.

"History records that the Money-changers have used every form of abuse, intrigue, deceit and violent means possible to maintain their control over governments by controlling money and its issuance." - James Madison

"[It was] the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War." - Benjamin Franklin

"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." - John Adams

"If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied." — Thomas Jefferson

"I believe that banking institutions are more dangerous to our liberties than standing armies...." - Thomas Jefferson


Yes MrP, the Sheep (and our societies as a whole) are going down the tubes because the apathetic masses couldn't remember the warnings of those who had learned their Histoy.

Now the Sheep will get their OWN "history lesson" -- the hard way...
paxjds1
...
written by paxjds1, August 29, 2013
Thomas Jefferson's sinister prophecy "banks and corporations will deprive the people of all property" is taking place under Obama right now in North America. These same institutions have driven real unemployment to almost 25% causing many people to lose their homes, 50 million are on food stamps, and Obama has in essence nationalized health care and placed the burden of paying for it on the middle class. Excuse me, Obama has excluded King Obama, Congress, and most Unions from Obama Care; all are the major components of the Democratic Party. Clearly, Obama and the Democrats are basically making the Republicans middle class pay for Obama Care. Discriminator is Obama's middle name. The Supreme Court stands bye saying nothing, while the Democrats Discriminate against half the citizens in the US. The Court Justices even sanctified this discrimination by declaring Obama Care legal, and sanctifying the shredding of the Constitution. It appears the US Republic is dead and that we citizens are mere indentured servants of the Banksters and their paid Lawmaker Lackeys in Washington DC.
Once upon a time when Anti-Trust laws were enforced, banks were small and served the people. Now the Banks oppress the people and the law of the land with the help of Obama, Holder, and the Supreme Court Justices. mmm.....Wonder what profession these individuals profess to practice!! Most of Congress are lawyers.... We have one hell of a problem with these sad, pathetic lawyers!!


MrPaladin
...
written by MrPaladin, August 29, 2013
Yes, smash the big banks! I agree!

I can hardly understand why people don't return to the views of the USA's founders. They despised the "moneychangers," as they called them.

"History records that the Money-changers have used every form of abuse, intrigue, deceit and violent means possible to maintain their control over governments by controlling money and its issuance." - James Madison

"[It was] the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War." - Benjamin Franklin

"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." - John Adams

"If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied." — Thomas Jefferson

"I believe that banking institutions are more dangerous to our liberties than standing armies...." - Thomas Jefferson

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