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Secrecy Kills The Free Market And Democracy

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http://ukhousebubble.blogspot.com/2008/07/...lling-lies.html

Yesterday, the Wall Street Journal reported that the FSA would like to conceal the disclosure of emergency loans to troubled UK banks. The suggestion comes in the wake of the NRK crash, when there was a widely held belief that public disclosure of BoE emergency loans actually destabilized NRK rather than helping it.

There is a simple test of any new policy initiative; consider a few plausible hypothetical scenarios and see how the initiative would deal with them. For example, suppose there was a hypothetical bank – lets call it the Halicrap – that suddenly finds itself holding a pile of rapidly defaulting mortgage debt. The CEO of the Halicrap calls up the FSA and says that the bank needs some secret emergency financing. Sensing that the bank could be careering towards a bank run, the FSA agrees to give the bank some secret funding.

Suppose also that you are a shareholder of the Halicrap and you decide to buy an additional tranche of shares. Since the Halicrap and the FSA conceal the funding difficulties from you, you buy these additional shares without fully understanding the health of the bank. Since you are also an existing shareholder, you have a right to know the true financial position of the bank. After all, the CEO is, technically speaking, working for you and not the FSA. You have a right to know what the CEO is doing on your behalf.

Consider another hypothetical bank – say the Royal Bank of North Britain – who decides to give a line of credit to the Halicrap. Again, the fact that the Halicrap is secretly receiving money from the state would materially affect whether the Royal bank would extend a credit to the Halicrap. Suppose further that the Halicrap subsequently became bankrupt, it is not hard to see plenty of useful employment for lawyers as the Royal Bank argues, with some justification, that the FSA withheld information that adversely affected the financial position of creditor banks.

Hmmm I can see this ending up in the courts if the banks are getting secret loans how can the stock market calculate risk??? Plus these loans would be coming from the taxpayer, if the bank goes under and the govt loses billions is this now going to be brushed under as top secret??? Will the UK need someone like Heseltine who refused to sign gagging orders so the British taxpayer knows what's going on???? (Yes I know it probably wasn't done out of chivalry more out of a fear of getting caught but at least he did it)

The free market can only operate with openness secrecy kills it.

Surely this funding would be in breach of EU rules??? Or if it's secret the EU will never know and no one can object?

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The Free Market is a myth, there is no free market, the whole thing is rigged to ensure those with all the money keep all the money.

As I said recently on another thread:

"In a free market, all people are judged equally before the law, but how can this be the case if some people can hide behind the corporate veil and others can't?

The absurdity that is the doctrine of company personhood has given a small minority of the population (namely directors) a much greater power-to-responsibility ratio than everyone else in the country.

It gives a small minority of the population the ability to totally abuse the capital of a company that they do not own, by means of excessive executive pay etc. Shareholders do not get a fair return on their capital. Workers do not get a fair wages for their labour.

And since the company's legal personality can only exist by court enforcement, the entire plc structure is really an extension of the state system.

Inidvidual shares may do exceedingly well, but in general, shares in PLCs as an asset class are a scam."

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Bank propping is not the only market manipulation going on to boost Joe Public Esquire's confidence in FunnyMoneyTM. On Tuesday spot gold briefly hit $975/Oz and within 1/2 hour had been slapped down by $40/Oz.

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Just a small correction. Heseltine did not debunk for any principled reason. It was an expedient for his own (failed) ambitions to be prime minister. Prior to this, he would have compromised his principles multiple times without a struggle. Secondly, it is very old news that the press and other significant bodies have been gagged regarding government bail outs, the latest one being the recent announcements about Bradford and Bingley, where every single news broadcaster and most newspapers acted under instructions to give two messages. 1. Bradford and Bigley are F%ucked. 2. No need to panic. Your deposits are safe.

VP

Edited by VacantPossession

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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