bankdecay

The siren call of austerity

Reblogged from azspot

The United States government, which has a monopoly on its currency, is $15.2 trillion in debt, roughly the same as the entire output of the economy for a year.

That figure has been sung in a refrain about massive debt threatening to bring down the economy and cause inflation. Facts, however, show otherwise.

The country was much deeper in debt, relative to the size of the economy, in 1946 than it is today and yet what followed was decades of prosperity. The 1946 debt remains and, after six decades of growth, it is inconsequential.

In Japan, government debt is roughly twice annual economic output and yet the country continues to function because real interest rates are at or below zero.

To be sure, conditions can change and interest rates can rise sharply, though central banks have ways to limit that. But that is not the problem today. The problem today is shrinking incomes due to shrinking spending.

Austerity budgets, by reducing government spending, will only make incomes fall more. The only way to make incomes rise is to make spending rise, which in the short run means more borrowing by governments to enable more public sector spending.

(Source: azspot)

Posted January 28, 2012 at 3:29 pm 26 notes

"Some banks have gone in the seemingly wrong direction. For example, Bank of America caused outrage recently when it announced it would be charging monthly fees for customers to withdraw or use their own money in checking accounts with debit cards. This attempt to generate profits led to a mass exodus from customers, who instead opened banks with smaller financial institutions. It wasn’t long before BofA announced a cancellation of the plan."

Banks on Facebook: Any Hope to Build Trust? | Pronet Advertising

Posted January 4, 2012 at 2:06 pm

Reblogged from mohandasgandhi

mohandasgandhi:

STUNNING Facts On Income Inequality and Bank Bonuses

Stunning facts about bank bonuses on Wall Street, average compensation and homeless kids are shared by The Young Turks host Cenk Uygur.

From ThinkProgress:

In the United States, the top 1 percent controls roughly 40 percent of the nation’s wealth. According to the study, which examined Roman ledgers, previous estimates, imperial edicts, and Biblical passages, Rome’s top 1 percent controlled less than half that at the height of its economic power, as Tim De Chant notes at Per Square Mile:

Their target was the state of the economy when the empire was at its population zenith, around 150 C.E. Schiedel and Friesen estimate that the top 1 percent of Roman society controlled 16 percent of the wealth, less than half of what America’s top 1 percent control.

Of course, the millions of Romans at the bottom of the empire’s class structure — the conquered and enslaved, the poorest Romans, and the women who had little civic or economic empowerment — would probably disagree with the study’s conclusion. Still, it serves as yet another highlight of how large the income gap in the United States has become over the last three decades.

Still, it’s unbelievable that the wealth of the bottom 60% in the U.S. is less than the Forbes 400 richest and that the 6 heirs to the Walmart franchise have the combined wealth equal to the bottom 30% in this country. Give the bankers their record bonuses anyway. They’re doing a fantastic job.

Posted December 26, 2011 at 5:44 pm 68 notes

"These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books."

Reblogged from thecallus

Securities and Exchange Commission enforcement division director Robert Khuzami • Discussing the civil fraud charges that the SEC filed against six former top execs at Fannie Mae and Freddie Mac, charges that came about due to alleged misrepresentation of investors’ exposure to the subprime mortgage crisis. Lawyers for the six officials claim that the executives acted in the best interests of investors despite the allegations otherwise. (via shortformblog)

So…Fannie Mae mis-stated risks. The banks mis-stated risks. The originators and servicers mis-stated risks. Borrowers mis-states risks. The entire value chain of the mortgage market was founded on fraud.

And the SEC let it happen for decades, which is why it gets to sue everybody.

(via thecallus)

Posted December 17, 2011 at 11:29 am 10 notes

Reblogged from loveyourchaos

(Source: defacedbook)

Posted December 11, 2011 at 9:33 pm 3288 notes

pancakenation: Well, hot damn.

Reblogged from redcloud

pancakenation:

Well, hot damn.

(Source: deac0n)

Posted December 9, 2011 at 10:29 am 74 notes

"The U.S. Treasury Department is investigating whether Bank of America, Wells Fargo and eight other major banks may have illegally foreclosed on about 4,500 active-duty servicemen and women."

Did banks illegally foreclose on active-duty troops? | McClatchy

Posted December 1, 2011 at 4:42 pm

shortformblog: Here’s Bank of America’s stock over the past five years. Steep freefall, yes? Well, it looks like it might suck even more, because the company’s stock is right near the $5 mark for the second time since 2006; it it goes below it, investors would see extra restrictions placed on the stock. Bad things come in fives for BofA.

Reblogged from shortformblog

shortformblog:

Here’s Bank of America’s stock over the past five years. Steep freefall, yes? Well, it looks like it might suck even more, because the company’s stock is right near the $5 mark for the second time since 2006; it it goes below it, investors would see extra restrictions placed on the stock. Bad things come in fives for BofA.

Posted November 30, 2011 at 9:40 am

Examining the big lie: How the facts of the economic crisis stack up

Reblogged from blissandzen

blissandzen:

Before you have to go face the Fox congregation again, go study up.

Posted November 29, 2011 at 8:05 pm 1 notes

Should We "End the Fed"?

Reblogged from ryking

The U.S. Federal Reserve System [the Fed’s primary functions are carried out by a system of 12 regional Federal Reserve Banks] is a study in obfuscation. It appears in the organization chart of the U.S. government and presents itself to the world as an independent government body, but its highly complex governance structure assures its operations are in fact controlled by the big banks whose interests it faithfully serves. It piously reports that its accounts are subject to extensive internal and external audit, but only the special one-time audit ordered by the U.S. Congress in the Dodd-Frank financial reform bill signed into law by President Obama on July 21, 2010 under vigorous Fed protest revealed the amount and the beneficiaries of its $16 trillion post-crash handouts.

There are angry calls from both left and right to shut down the Fed. The anger is justified. The call to shut it down, however, ignores the reality that a national money/banking system requires oversight and management by a central bank or its institutional equivalent. The choices center on that institution’s degree of transparency, to whom it will be accountable, and what its priorities will be.

(Source: azspot)

Posted November 19, 2011 at 9:20 pm 58 notes