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Occupy Wall Street: Must Know Facts About Big Banks

EconMatters's picture





 

 

 

By EconMatters

 

Wall Street big banks, although not entirely responsible for the Great Recession, most experts agree that banks creating and partying in the subprime securitization mess is one of the major contributing events that broke the camel's back.

 

The repeal of provisions in 1999 of the Glass–Steagall Act of 1933 has not only effectively made "Too Big To Fail" a reality and a moral hazard, the subsequent trillion's of dollars in bank bailout funded by the taxpayer has also saddled the already over-indebted nation with even more debt.

 

Even with the Dodd-Frank financial reform, from a market perspective, there are still issues within the structure of the current banking operation that are not adequately addressed.

 

First of all, banks should not have prop trading in-house, period.  At the very least, the clearing house and the trading arm now reside withing the same banks need to be completely separated into different companies, with a physical Chinese titanium wall in between.

 

The reason is that when the the banks, who are active players in trading the markets, can see where all the future market transactions are heading with their clearing house operation, they can position and front-run everybody.  That's an unfair advantage not only disrupting the normal functioning of the markets, but also creates market volatility.  Frankly, we are flabbergasted that with new government regulations coming out of almost everywhere everyday, there's no regulatory oversight in that aspect of the banking industry.

 

Another area that needs regulatory attention from a market perspective is that investment banking houses (rating agencies as well) should be banned from releasing any kind of market moving 'research notes' to the general mass media, unless they are released to everyone (clients as well as the general public) at the same time!

 

When the 'research notes' by, for example, Goldman Sachs, JP Morgan, etc. hit the mass media, those banks and their rich paying clients are already positioned to take advantage of the subsequent reaction en masse from retail investors, which, by the way, are 'properly' disclosed in the fine print of their research notes.

 

Why do you think banks make their "intellectual property" available to the non-paying public in the first place?  Why do you think Goldman flip-flops their forecasts every six months?  It is to move markets to their advantage, as they know they can.

 

A good example of this would be the market movement in the week before the S&P's "official" downgrade of the U.S. sovereign debt.  It is quite obvious judging from the decisive market trading actions that some big players knew ahead of time about the downgrade most likely from S&P.  As we stated before,

As usual, retail investors were the last to know, and once again, Wall Street seemed somehow to know way ahead of even the Whitehouse and Secretary Geithner as nobody sells off 500 points on Dow based on 'rumors'.

S&P is reportedly under investigation of possible insider trading; however, any good lawyer could argue the alleged "leak" by S&P does not exactly fit into the insider trading as stipulated by law.  Again, that suggests an unfair market manipulation and advantage that's entirely not addressed in the current regulatory and legal framework.

 

Here are some more staggering statistics about the nation's biggest banks from Think Progress:  

 

  1. Bank profits are highest since before the recession… 
  2. …even as the banks plan thousands of layoffs 
  3. Banks make nearly one-third of total corporate profits 
  4. Since 2008, the biggest banks have gotten bigger
  5. The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards 
  6. The 10 biggest banks hold 60 percent of bank assets 
  7. The six biggest banks hold assets equal to 63 percent of the country’s GDP 
  8. The five biggest banks hold 95 percent of derivatives 
  9. Banks cost households nearly $20 trillion in wealth 
  10. Big banks don’t lend to small businesses 
  11. Big banks paid 5,000 bonuses of at least $1 million in 2008

When banks have this much power, and consecutive quarters of huge trading profits, it is a sign that 'Too Big To Fail' needs to be broken apart as they represent too much monopoly, as well as a major systemic risk, over markets and the entire financial system.

 

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Sun, 10/23/2011 - 00:57 | Link to Comment butchtrucks
butchtrucks's picture

NY police need to learn from their Australian counterparts how to clear these Occupy scum off the street.  No pussyfooting down there.   Check out these clips of the dirty filthy hippy slackers being cleaned off the streets of Sydney and Melbourne by local cops - including macing some libtard bitch right in the face!

http://www.youtube.com/watch?v=wBvCWJc1iD8

http://www.youtube.com/watch?v=JrRZBVqioeU&NR=1

When the hell are US police going to start clamping down in the same way on the pinko/punko socialist rabble who think they can camp out in our public places and challenge our way of life?

Mon, 10/24/2011 - 12:55 | Link to Comment 11b40
11b40's picture

My, my.  Aren't you just full of yourself?  You are aware that Australia is essentially a socialist country, right mate?  

Did you know, for instance, that if you sat in a pub and bragged about somethng like cheating on your taxes, the chances are good that someone would take you outside and kick your ass?  You would certainly become an outcast and regarded as a criminal.  Somehow, I am not sure you would do well there.

Sun, 10/23/2011 - 01:33 | Link to Comment blindman
blindman's picture

the problem in america is that they are
cutting back on the welfare for the rich
due to the debt crisis so the cops are getting
soft, ya know. some are even gay lib types
when they take off their uniforms. it is a
shame what has been goin' on. not in australia tho.
they have the kangaroo, the boxing marsupial.
the libs need to lighten up on the welfare for
the bankers issue. they don't understand the
way of life thing.

Mon, 10/24/2011 - 20:28 | Link to Comment 11b40
11b40's picture

Hey blindman.....surely this butchtrucks is not THE drummer Butch Trucks!  Could it possibly be?

Hey Butch....is that you?  You got a boy named Dereck?

Fri, 10/21/2011 - 14:53 | Link to Comment AchtungAffen
AchtungAffen's picture

"The six biggest banks hold assets equal to 63 percent of the country’s GDP "

Huh? What about JP Morgan's 73 trillion in derivatives now backed by the taxpayer? I thought that number exceeded world GDP...

Fri, 10/21/2011 - 15:14 | Link to Comment Willzyx
Willzyx's picture

JP Morgan has exposure derivatives with a notational value of about $73 trillion.  The actual amount they may have to pay out is far less than $73 trillion.  Not to mention, derivatives are kept off balance sheet.

In 2010, GDP was $14.7 trillion.  The biggest banks (JPM and BAC) have balance sheets listing assets north of $2 trillion each.  Citi is close behind.  I'll guess the 6 together have $10 trillion.

$10 trillion / $14.7 trillion = 68%

Fri, 10/21/2011 - 15:39 | Link to Comment byteshredder
byteshredder's picture

Amen HPD!

The Libertarian (end the Fed) movement never had a chance with OWS. It has always been a progressive/socialist movement with radical Saul Alinskyites planning to unleash their tactics on the people: 

http://www.youtube.com/watch?v=6BARB-aSqYM

I'm sorry to dissappoint all those Zero Hedge readers who thought OWS was a movement about sound money and limiting goverment's role of collusion in financial markets -- it's not! 

It's about class warfare. Its about redistribution. It's about fundamental transformation of America. Its about the Road to Serfdom.

The socialists own the narrative. They have the MSM on their side to keep the narrative on message. There is no way this message can be redirected away from its current trajectory.

There is a good reason this movement was called Occupy Wall Street by the organizers and the MSM rather than Occupy the Fed Resv or Occupy DC. 

Fri, 10/21/2011 - 19:16 | Link to Comment 11b40
11b40's picture

My goodness!  2 paranoid delusionals in a row.

Or, maybe just partisan hacks, making every effort to define and discredit a move against the status quo.  A movement growing exponetionally and gaining favor with the public by the day.  A movement that is calling attention to many of the things the vast majority of informed citizens agree need to be changed.  A movement that is made up of a wide swath of the public, and not, as you would have us all believe, all a bunch of 'dirty hippies', and Communists, and Marxists, and Anarchists, and any other red-meat label that you think sounds cool.

Here's a suggestion.  Grab a beer, sit back, watch & wait as the drama unfolds.  Not a single one of us knows where this is going to lead, but the train has left the station...destination unknown.

Fri, 10/21/2011 - 23:03 | Link to Comment byteshredder
byteshredder's picture

I work in downtown Chicago, I've been to see the rallies. I've seen the people, I've heard what they had to say. I've seen the signs. In 2010 I had a contract at the BBH building in Manhattan, at ground zero of OWS. I stay in contact with friends that I've made there and they tell me what it is like every day to get into work. They have seen the people, heard what they had to say, seen the signs. 

I know what I am talking about. 

My family is from Ukraine, living under Communuism. We know the lies, the hopelessness of truly being trapped. We know where this is headed. Trust us, you don't want to go there.

Wake up America. You are being led into a Socialist trap. They are using all of your institutions against you. Universities. Media. Courts. Government. Corporations. Religion.

Destination: slavery, true 3rd world slavery!

 

Sat, 10/22/2011 - 09:10 | Link to Comment 11b40
11b40's picture

....and your actionable solutions would be__________?

This is not the Ukraine.  We don't have a heritage of being dominated and fearful.  This country has been hijacked & I, for one, want to DO something about it.  The trap that has been sprung on us is not Socialism, but more akin to creeping Facism.  There is no serious Communist, Marxist, Leninist, or even Socialist movement in this country.  There are always fringe loonies on both ends of the political spectrum, but they will not gain meaningful support.  However, their actions are calling attention to the issues & making people think.  The amount of information available that exposes the lies and the crimes of those at the top is growing by the day.  The call for accountability is rising.  What we want is very simple...implement the rule of law.  If not, then the people NEED to rise up and overthrow the lawmakers and the enforcers.

So very sorry you find this unsetteling, and it's inconvenient for you friends as they make their way to their downtown offices.  Boo fucking hoo.

 

Sat, 10/22/2011 - 10:53 | Link to Comment byteshredder
byteshredder's picture

I agree with 90% of what you say, but when the system collapses due to a manufactured crisis, the overthrow will come from the left. They are the ones that control the institutions (media - current truth; education - indoctrination; courts - gulags). 

The German people did not see a serious Facist movement as Hitler prepared to take power. If you continue to go down this path that leads to a national crisis; the result will be a form of socialism that will control your daily life like you cannot imagine unless you have lived in Soviet Union, Cuba, China, Venezuela or North Korea.

You truly do not understand who you are dealing with and the lengths they are prepared to go to see this country collapse. America must collapse before they can bring socialism to the rest of the world. If/When it happens in America, their first order of business will to exterminate 10% of the population that they fear cannot be re-educated. That's 25 million people. Every communist regime had to do this to at least 10% of its population to fight back the counter-revolutionaries, Hitler, Stalin, Mao, Che, Pol Pot, etc...

Study the history of Communism and Fascism. They are both implementations of socialism and they are both totalitarian oppressors of the people. Read "The Comming Insurrection" and then come back to me and tell me that's not whats going on with OWS. If you Google it you will find a copy online. Get to know who you are getting in bed with.

Mon, 10/24/2011 - 12:47 | Link to Comment 11b40
11b40's picture

As a 64 year old male who was raised an Army brat and spent a good portion of the 50's and 60's in a Europe that was recovering from WW2, I have a pretty good idea of what can happen.  Having spent my own time in combat against communist forces in VN, I have a vested interest in staying informed.  As a student of history, I know all about the various 'isms', and you are mixing the ones on the left and the ones on the right.

You are also confused about the media.  Do you think Comcast, Newscorp, GE, Disney, TimeWarner, & Viacom are leftists.  If anything, they are Facists, but mostly, they are mercantilists.

Regardless...go back and read my post.  This is America.  Our heritage is independence, and we are the most heavily armed civillian population ever on earth.  This is not Cambodia, nor is it the impoverished and war-torn Eastrern Europe of the early 20th Century.  There is no support for any of these 'isms' in the general population.

Crawl out from under your bed, put on your big boy britches, and DO something about the things you don't like.  DEMAND this government start working for the people again.  That's what both the Tea Party activists and the OWS crowd are doing, both in the best traditions of their heritage.  Take a stand & make your mark, and flush that paranoia down the toilet.

Fri, 10/21/2011 - 14:43 | Link to Comment 11b40
11b40's picture

You sleep with the lights on, HPD?

Fri, 10/21/2011 - 14:09 | Link to Comment blindman
blindman's picture

http://www.craigmurray.org.uk/archives/2011/10/circuses-without-bread/
Circuses Without Bread
by craig on October 21, 2011 9:36 am

.
"..All this killing brings triumphalist politicians smirking on our screens. We seem to have become as dehumanised as ancient Rome. Little human pity is expressed for the way Gadaffi was killed – indeed there is notably less media reflection of pity or revulsion than there was at the (at least judicial) hanging of Saddam Hussein. Is that a measure of the descent into bloodlust barbarism in our society? The complete lack of empathy towards the traveller families being torn from their homes at Dale Farm is part of the same brutalism towards “the other”. Why don’t we go the whole way and have them eaten by lions in the ring?

History shows that bloody appetite once aroused feeds upon itself. We have already had Defence Secretary Hammond on Sky News today positing NATO action now against Syria, while the current US proto-pretext for attacking Iran – the fantasy plot against the Saudi Ambassador – is as believable as Gadaffi’s death in the crossfire.

More death is on the way, to keep the circus going. Then the crowds may not notice there is no bread – no jobs, and their earnings and income eaten up by huge state enforced transfers to the bankers, whether by bailouts or “quantitive easing”.
"
....
..

Fri, 10/21/2011 - 14:23 | Link to Comment 11b40
11b40's picture

The lions in the ring?   Those are being saved for the grand finale.

Fri, 10/21/2011 - 14:22 | Link to Comment Zero Govt
Zero Govt's picture

it wasn't the "repeal of provisions in 1999 of the Glass–Steagall Act" that marked the onslaught of Wall Street criminality and the easy money debt-slave economy... the repeal marked the date Wall Street corrupted the US Govt and bought not only their Govt ratchet but their Get-Out-of-Jail Card too

Nope the real epoc changing event was the establishment of Govt as a monopoly institution in every nation. That was the beginning of the end for a free society and free markets. It was the beginning of putting the parasites at the top of the food chain and the productive people under it, being consumed

..and despite Govt ruining country after country each many times over the penny did not drop for anybody (ie. society itself, economists, philosophers, journalists, academics, politicians themselves) during the centuries of persistent historic failure of this most corrupt, unproductive, perverted and criminal of all mans institutionalised stupidities 

the bubble of Wall Streets grotesque criminality and robbery is yet another cancerous wart on every society that grows Govt... for it is Govt that grows parasites, fed on the power of a monopoly institution placed as the 'one true God' in society that can hand down any decision rather than allow society, and the economy, freely to find its own path/s

Govt is the biggest social and economic mistake in history... all other failings follow and are mere compoundings of the original fuking colossal error of monopolisation

Fri, 10/21/2011 - 13:31 | Link to Comment sgt_doom
sgt_doom's picture

"Even with the Dodd-Frank financial reform..."

You are forthrightly telling us you have read this legislation in its entirety and stand by the above, sir???

You are telling us you don't comprehend the fine points and aspects of this so-called legislation, and fail to understand the super-sized, by design, ultra-loopholes (5 at least in number), while the entire structure allows for covert bailing out of the banksters at the clearinghouse level by the Fed.

RTFL, please!

Fri, 10/21/2011 - 14:57 | Link to Comment alangreedspank
alangreedspank's picture

Yeah, the bill always has this "deemed appropriate by the commitee" tone on every crucial issue. Of course the banks will never buy "the commitee" out right ?

 

Fri, 10/21/2011 - 12:52 | Link to Comment devo
devo's picture

End the Fed.

Fri, 10/21/2011 - 12:50 | Link to Comment earleflorida
earleflorida's picture

quite.

Fri, 10/21/2011 - 12:23 | Link to Comment Shizzmoney
Shizzmoney's picture

A+ post here, only thing missing is footnotes for the facts (which *we* know, but maybe the uninformed reader doesn't).

When co-workers challenge me on #OWS for "being against capitalism/companies" (and literally JUMP down my throat; one guy asked me, "You gotta problem?" like he wanted to fight me lol), I mentioned these types of facts (including some other stuff on the Federal Reserve) and how it actually affects HIS WAGES/HEALTHCARE and his potential/actual kids WAGES/HEALTHCARE/EDUCATION.  Of course, he went on tilt, and walked away saying, "What we NEED to do is bring jobs back form China!" (which is how *my* company prospers lol).

We are a debt based society.  Two ways to combat this are

a) Banks who are honest, give loans, and allow growth by ALL entrepenuers, not just big companies (like mine; which told me today not only are they NOT giving me raise, but also slashing a sick day off total PTO) 

b) Savings (which most don't do b/c we are in personal debt with college/rising cc iRates/rising mortgage iRates...as well as the fact more than 50% of the coutnry isn't making enough to keep up with inflation). 

FREE MARKET CAPITALISM is the way out of this CRONY "CAPITALIST"-ACTUALLY FASCISM STATE we live in today. 

It's almost as if the two parties have morphed into the National Socalist Party (no barganing rights for labor, biased and uninformed education, subversive state-run media, and wealth rules all), minus the bigotry. 

Some of the sheeple are waking up, but most love being zombies.  They like the taste of blood, even though it too, like the movie, will end up killing them in the end. 

 

Fri, 10/21/2011 - 13:55 | Link to Comment WallStreetClass...
WallStreetClassAction.com's picture

Upvote my friend! You are indeed correct. The sheeple are waking up. I credit that in no small part to the message of OWS. Granted, there are a few peaceniks/hippy types there, but they are attracted to these types of events. It's pretty raw democracy, so I think it needs to be embraced in its pure and ugly form. I believe with time OWS will become more on the point of the actual finance reform - as in campaign finance and Glass-Steagall reinstatment. I am in corporate finance myself, and actually going to AFP conference in November (Boston) where Bill Clinton will be making opening remarks. I will try to pursuade him to sign the online petition for the reinstatement of Glass-Steagall....

http://wh.gov/g0h

I'll keep everyone updated

Fri, 10/21/2011 - 14:07 | Link to Comment Pitchman
Pitchman's picture

Shizzmoney: I totally understand your point.  You are fighting an uphill battle.

“It is hard to free fools from the chains they revere.”- Voltaire
AND
“The most potent weapon of the oppressor is the mind of the oppressed.”
Steven Biko

The best way to address those who hold on to their myths is to ask questions that makes them confront the misconception.

You could come up with a nice list from our posts over the last week.... 

THE ROOT OF OUR SOCIAL, ECONOMIC AND MILITARISTIC WOW'S IS AN EVIL MONETARY SYSTEM.  EVERYTHING ELSE IS A SYMPTOM OR AN ACTION THAT SUPPORTS IT.  AT THE HEART OF THIS SYSTEM ARE THE CENTRAL BANKS (THE FED), THEIR DISHONEST MONETARY POLICIES AND THOSE WHO CONTROL IT.  SUCH POLICIES, LAWS AND THE CAPTURE OF REGULATORS ARE FOR THEIR BENEFIT.  AN ACCOUNT OF THE PEOPLE HAS NO PLACE IN IT. - Inflection Point

See: Chris Hedges: On Civil Disobedience & What Is Capitalism"

Above all, we aim to break up the global banking cartel centered at the Federal Reserve, International Monetary Fund, Bank of International Settlements and World Bank."   

See: Anonymous Shines A Light On The Hypocrisy Of Our Leaders

Why do the American people stand by a CENTRAL BANK; the Federal Reserve? It is owned by the banks themselves charging us interest on every dollar in circulation. The Founding Fathers fought the revolution to free us from this model of DEBT SLAVERY ECONOMICS! 

See: Occupy The FED & Withdraw Your Money From TBTF Banks

You see, as with the $1.2 Billion SunPower scam below, the House Always Wins.
See: Obama's Problem With Solyndra: It's A Warm Up For SunPower

The following, with commentary, was originally posted here on ZH. See: Hi, It's Tim, I'm Stuck In Paris, And Need You To Send $500

Fri, 10/21/2011 - 11:55 | Link to Comment TheAkashicRecord
TheAkashicRecord's picture

I don't mind if banks want to prop trade, but if they do prop trade, that should come with a caveat that they, and they alone must reap the consequences from the risks they take.  

Fri, 10/21/2011 - 15:22 | Link to Comment jmc8888
jmc8888's picture

That makes no sense.

They are trading with the DEPOSITERS money.  THEY take the risks.  Not the banks.

 

The answer to the article is so simple even a caveman can do it.

 

If, and it did, Glass-Steagall's repeal allowed them to do this....first by weakening of...in various stages...then outright repeal...the answer to this isn't coming up with a new wheel...the answer is to re-enact Glass-Steagall in FULL 1933 form.

 

No other way to do it, and people that don't want to do it, don't understand the difference between MONETARISM, and what America stands for.  Because the two are enemies.

Fri, 10/21/2011 - 11:47 | Link to Comment Little John
Little John's picture

I hope the bankster class has guns 'cause I want this to be a fair fight.  God created free men, thieves created the banks, Col. Colt is gonna make them equal.

Fri, 10/21/2011 - 13:47 | Link to Comment unnamed enemy
unnamed enemy's picture

oh don't wory - they have guns. however its not going to be a fiar fight - their guns are more, bigger and better than yours.

like imagine a squadron of apache helicopres firing into a crowd armed with shotguns and semi automatic, gnerally light weapons - this is the type of fight you can expect.

Fri, 10/21/2011 - 16:38 | Link to Comment buyingsterling
buyingsterling's picture

Hopefully resisters won't be gathered in crowds. It'll be low intensity conflict if they choose to slug it out with the population en masse. And that generally goes the way of the population, in time. But they probably won't go that far. A wmd attack on a city will be all they'll need to cow most of the population and bring in the full police state. Then, for many, those who resist te police state will be the terrorists. That's what I would do if I were them. Take the focus off the banks, nip the resistance in the bud, and lose less infrastructure overall.

Or, they might just want us dead. There's a higher concentration of people who believe in individual liberty here than anywhere else in the world. Almost everyone else has given up the keystone, the right to self-defense.

Fri, 10/21/2011 - 11:39 | Link to Comment TheMerryPrankster
TheMerryPrankster's picture

You know I'd pay money to see a movie where the Texas chain saw massacre occured in the executive suites of th big 5 banks.

Fri, 10/21/2011 - 11:24 | Link to Comment maddogs
maddogs's picture

The idea that the Class A stockholders in the Federal Reserve Corp can have Prop trading rights via owned Primary Lending Institutes which are Class A holders/Members of the Fed and NOT,be sticking their hand, BOTH HANDS in the cookie jar is the greatest con jobs ever foisted on so many people in all history.

Fri, 10/21/2011 - 13:28 | Link to Comment sgt_doom
sgt_doom's picture

Exactly, my good citizen, maddogs, exactly.

"Wall Street banks, although not entirely responsible..."    Huuuuuh????

The posers are out in force:

"They are really decent, good people; it's the system."  ---- Noam Chomsky,

discussing the billionaire bankers of Wall Street.

"They are decent people. It's the system."  ---- Lawrence Lessig, Harvard Law,

discussing the US Congress (later he claims that "..Wall Street took advantage of a corrupt congress." – Riiigght!)

"They are just doing their jobs."  -- Richard Wolff, econ prof.

discussing the Wall Street bankers, and others.

The disinformation specialists would have everyone believe this "just happened"  -- the meltdown "magically appeared"  -- it was all "an accident."

A forensic audit of the above three's consulting fees and other assorted fees over the past fifteen years would prove might interesting!

In 1921 or '22, an ultra-leveraged run took place, ending in the Great Crash of 1929, and securitization was later ended officially in 1933.

Starting around 2000, up until mid-2007, another ultra-leveraged run took place, resulting in the global economic meltdown.

Nothing magical about it, and well planned and well designed with much effort, thought and lobbying to enact predatory jurisprudence and predatory legislation to allow the banksters to sell $100 to $1,000 worth of debt for every $1 of debt on hand.

And they made billions upon billions selling hundreds of trillions worth of debt --- then want to blame the rest of us, while claiming no one is really at fault.

Fri, 10/21/2011 - 13:52 | Link to Comment blindman
Fri, 10/21/2011 - 11:42 | Link to Comment TheMerryPrankster
TheMerryPrankster's picture

It is a great con, however I'd put it up against either

1. Voting matters

or

2. The Federal reserve act

as to being the Greatest fraud.

Fri, 10/21/2011 - 11:20 | Link to Comment PaperBear
PaperBear's picture

The sooner these six biggest banks go bankrupt and their assets are sold off the better

Fri, 10/21/2011 - 10:59 | Link to Comment cuban555
cuban555's picture

Patience folks......this to shall pass. It is only a matter of time before these TBTF go under. They are all technically insolvent.

 

Fri, 10/21/2011 - 10:58 | Link to Comment New American Re...
New American Revolution's picture

2B2Fails not totally reponsible?  No shit, it took their lap dogs in Washington for an accomplice.   Todd-Fwank still has issues?   No Fucking Shit, it really hasn't, didn't, and won't do shit.    OWS needs to know what the 2B2Fails have done?    Well, they also need to know that Washington is the enabler and how this unholy relationship is possible.   This would then explain how GS and some insiders can be so far ahead of any market move; Insider Info, usually from the FED, but sometimes from their crony capitalist friends.

The answer?   Scrap the whole pile of shit, for shit, once shit, stays shit.   You can fry it, bake it, sautee it.   You can put salt and pepper on it with melted butter, and it is still shit.

And from the tenor of your letter, I have this feeling that you don't know shit.   Let me introduce you....

Fri, 10/21/2011 - 10:57 | Link to Comment blindman
blindman's picture

http://www.informationclearinghouse.info/article29463.htm
'One Super-corporation Runs the Global Economy'... and it could be terrifyingly unstable

By Rob Waugh

October 20, 2011 "Daily Mail" - -A University of Zurich study 'proves' that a small group of companies - mainly banks - wields huge power over the global economy.

The study is the first to look at all 43,060 transnational corporations and the web of ownership between them - and created a 'map' of 1,318 companies at the heart of the global economy.

The study found that 147 companies formed a 'super entity' within this, controlling 40 per cent of its wealth. All own part or all of one another. Most are banks - the top 20 includes Barclays and Goldman Sachs. But the close connections mean that the network could be vulnerable to collapse.

The 1318 transnational corporations that form the core of the globalised economy - connections show partial ownership of one another, and the size of the circles corresponds to revenue. The companies 'own' through shares the majority of the 'real' economy

'In effect, less than one per cent of the companies were able to control 40 per cent of the entire network,' says James Glattfelder, a complex systems theorist at the Swiss Federal Institute in Zurich, who co-wrote the research, to be published in the journal PLoS One.

Some of the assumptions underlying the study have come in for criticism - such as the idea that ownership equates to control. But the Swiss researchers have no axe to grind: they simply applied mathematical models usually used to model natural systems to the world economy, using data from Orbis 2007, a database listing 37 million companies and investors.

Economists such as John Driffil of the University of London, a macroeconomics expert, told New Scientist that the value of its study wasn't to see WHO controlled the global economy, but the tight connections between the world's largest companies.

The collapse of 2008 showed that such tightly-knit networks can be unstable.

'If one company suffers distress,' Glattfelder says, 'This propagates.'

The research requires more analysis, but it could be used to look for the weaknesses in the network of global wealth, and prevent future financial disaster.

Looking at 'connectedness' also puts paid to conspiracy theories about the world's wealth - companies connect to highly connected companies for business reasons, rather than world domination.

The 'core' of 147 companies also represents too many interests to wield real political power - but it could act 'as one' to defend common interests. Sadly for market reformers, resisting change may be one such common interest.

The top 50 of the 147 superconnected companies
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

* Lehman still existed in the 2007 dataset used

Click here to read more.

Fri, 10/21/2011 - 12:02 | Link to Comment TheAkashicRecord
TheAkashicRecord's picture

Very cool study, I caught this on physorg a couple months ago. 

Check this 

http://tiny.cc/gl3cp

Using empirical analysis to map wealth and power networks is a good thing!

"Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," says James Glattfelder. "Our analysis is reality-based."

Fri, 10/21/2011 - 12:45 | Link to Comment blindman
blindman's picture

thanks for the link to that discussion.
i don't get the reaction of repugnance
or disdain for the word "conspiracy" that
most people seem to have. to me conspiracies
are just about as common as bacteria in
the restroom at the local tavern. when
a good conspiracy comes to fruition they call
it a law, or a security, or a contract.
conspiracy is just "breathing together".
or "with breath". two or more people sharing
an idea, concept or set of assumptions and
then acting and believing their operating
model is "real".
.
conspiracy mid-14c., from Anglo-Fr. conspiracie, O.Fr. conspiracie "conspiracy, plot," from L. conspirationem (nom. conspiratio) "agreement, union, unanimity," noun of action from conspirare (see conspire); earlier in same sense was conspiration (early 14c.), from Fr. conspiration (13c.), from L. conspirationem. An O.E. word for it was facengecwis. As a term in law, from 1863. Conspiracy theory is from 1909.
.
conspire late 14c., from O.Fr. conspirer (14c.), from L. conspirare "to agree, unite, plot," lit. "to breathe together," from com- "together" (see com-) + spirare "to breathe" (see spirit). Or perhaps the notion is "to blow together" musical instruments, i.e., "To sound in unison." Related: Conspired; conspiring.
.
this is the danger here today. not the fact of conspiracy which is universal, but the reaction to
it by "authority". in their infinite ignorance they
"feel" they are being targeted by conspiracists and
have through their own conspiracy empowered themselves
to prosecute and kill others for merely breathing in
an antagonistic, to their design, manner. ie. what
a mess they have made of the language.

Fri, 10/21/2011 - 12:49 | Link to Comment blindman
blindman's picture

ps.
all these entities listed above are
abstract non persons. that they are
treated as persons and have rights
above persons or equal to persons is
a conspiracy against humanity, no?

Fri, 10/21/2011 - 17:58 | Link to Comment BigJim
BigJim's picture

Looking at 'connectedness' also puts paid to conspiracy theories about the world's wealth - companies connect to highly connected companies for business reasons, rather than world domination.

The 'core' of 147 companies also represents too many interests to wield real political power...

I can't believe they've come up with such a doltish conclusion. Behind every corporation are people - the shareholders. Look at WHO owns the majority of shares in these companies and you can bet THEY have interests completely in common.

Good study, stupid conclusion.

Fri, 10/21/2011 - 19:17 | Link to Comment 11b40
11b40's picture

Not stupid at all. 

The BOD's of most companies could give a rat's ass about the generic shareholder & most of the big corps have inter-locking BOD's.  It's the way the they massage one another's pay packages to orgasmic highs and jizz all over the common stock owner.

Fri, 10/21/2011 - 12:54 | Link to Comment blindman
blindman's picture

.

.

their function is to empower human persons to a supra human level, making them, the actor in the name of the organization, immune from aspects of law. relieving certain human limitations and responsibilities. the attempt is to escape karma but it can't work and is a doomed ideology, in time.

Fri, 10/21/2011 - 12:53 | Link to Comment 11b40
11b40's picture

Yes....but don't tell the Supreme Court.

Fri, 10/21/2011 - 12:50 | Link to Comment Widowmaker
Widowmaker's picture

It's worth saying over and over.

Record bonuses are not matters of national security.

Fri, 10/21/2011 - 10:34 | Link to Comment williambanzai7
williambanzai7's picture

You do not believe the movement is entirely constructive...

Such as what pray tell?

Jamie Dimon throwing a temper tantrum or Barney Frank juggling TBTF gerbils...

Fri, 10/21/2011 - 23:58 | Link to Comment New_Meat
New_Meat's picture

WB7:

"You do not believe the movement is entirely constructive...

Such as what pray tell?"

I'll take a bite on the "entirely constructive" piece ('cuz part of the difficulties reside in the "all-or-nothing" of the actuality of the Jacobin-crowd's demands): {here we go} have you, WB7, seen anything "constructive"?

sub-1: "have you seen anything coherent (yes, your ART is certainly that, and we love it for that as a basic component) in the #OWS 'message stream'.?

There is some point, with respect to some initial objective.  Can't see that, yet.  Looking.

- Ned

Fri, 10/21/2011 - 13:02 | Link to Comment divide_by_zero
divide_by_zero's picture

WB, all roads for this "movement" lead back to Soros, Tides for the original Adbusters OWS call and multiple support front groups after the fact (heck even a ThinkProgress link to boot in this article). Only thing OWS has going for it is the veritable coddling by the MSM but that's to be expected nearly all progressive controlled (even Faux Right News to a large extent), whereas the OWS has ANP, ACP, and CAIR on-board hardly an MSM peep about anti-semitism that's been on display. However Main St is pretty perceptive when they go out to see the occupiers and what's going on, they're not buying it. The real problem is getting the progressives that are the backbone of the financial industry and both parties OUT(thus the appearance of both being the same)! The TP has started on the right, but it's a struggle against constant infiltration/co-opting. The OWS may not want the DNC(snicker) but everything there goes back to Soros and he will have his way with 500-1000 front groups you never know where support is coming from.

Fri, 10/21/2011 - 14:55 | Link to Comment Mr. Mandelbrot
Mr. Mandelbrot's picture

Mark Levine, is that you?

Do NOT follow this link or you will be banned from the site!