Sunday, December 7, 2008

Biggest banks keep going only by borrowing increasingly vast sums on the overnight market

The bankers will die a thousand deaths

Britain’s bankers know what is seldom stated openly: that all banks borrow short and lend long, and are therefore technically insolvent. It is only the confidence of depositors that ensures that they – and the financial system – remain in business.

Posted by gardeniadotnet @ 01:22 AM (1929 views)
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25 thoughts on “Biggest banks keep going only by borrowing increasingly vast sums on the overnight market

  • gardeniadotnet says:

    Jesus entered the temple and drove out all those who were buying and selling in the temple, and overturned the tables of the money changers and the seats of those who were selling doves. And he said to them, It is written, my house should be a house of prayer ; but you are making it a robber’s den.

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  • from the times comments :-

    Invite Ron Paul and his financial advisor to give a lecture in Parliament, in order to explain how a monetary system can be made to work effectively. If you must employ one fox after another, to run the henhouse, you should expect to lose chickens.

    Clive Burghard, Lancing, ENGLAND

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  • from the article :-

    Actually, the banks get their drift, even if Brown doesn’t. The untold story of recent weeks is the gigantic withdrawal from British banks of funds on deposit, not so much by disenchanted individual savers as by multi-national corporations, which have more ofa choice. As a result, some of our biggest banks keep going only by borrowing increasingly vast sums on the overnight market. This makes them very nervous indeed, in a Northern Rocky way.

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  • A useful reminder that banks have to borrow at LIBOR -so how can GB possibly expect them to lend at base rate?
    I didn’t realise that they are having to pay a 12% coupon on the bailout money too?
    Seems like GB’s intent is to destroy the banks.

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  • Just like having to resort to using a credit card to pay the mortgage, ends in tears.

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  • As George Soros said, until politicians and powerful interests stop hijacking these crises to forward solutions that serve their own interests first, the crises will not end.

    Brown is saving himself first and the economy second, just as Paulson tried with the $800bn bailout, and what the Bank of England did with the interest rate cuts.

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  • It does seem comrade Brown is intent on destroying the banking system after all the banks are trying to rebuild their balance sheets by taking actions such as charging borrowers more interest & repossesing homes that mortages are not being paid on and also paying savers more interest. Also what bank would want to lend money to buy an asset that is falling in price. All these actions are politically unpleasant for Brown and will cost him votes.

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  • AMUSING COMMENT FROM ANOTHER BLOG

    It seems to me that the economic downturn is not by accident. Bubbles and busts in the past reveal a pattern, whereby transference of wealth and monopolization of production is acomplished.
    Even if the ism could be changed, that is just mechanical; the same forces would mold the system to suite themselves, changing regulatory acts and corrupting regulatory agencies.
    Nationalizing the Fed, if it could happen, would only bring about state controle to a state that is already corporate- finance controlled; you would have the same elite controle, a communist state, unless all controling factors were removed beforehand.

    Note that our whole system is geared to enslavement through debt. The system seems to represent the willingness of the people to go along with it. By pushing imagery of violence and fear in the news and movies, pushing the circus of low entertainment, and repititious conditioning through the news media – we are kept in a box; a limited frequency range in our thinking and perceptions. Thats The Matrix; being plugged into a programed reality.

    Here are some informative writers, especially Spingola, who does alot of research on anything she writes about;

    http://newswithviews.com/Spingol…ola/ deannaA.htm

    http://newswithviews.com/Stuter/…ter/ stuterA.htm

    http://www.youtube.com/watch? v=_…feature=related

    I always check back, because this is a forum, so it’s interesting and also polite to look for responses. I’m trying to get my own point across, as best as i can. Not trying to urinate in anyones pond and then come back looking for a bloated cruxpuppy floating around on the surface. Sorry, in advance, if i sound at all abrasive; i’m working on that.
    Peace.
    refirex | 12.06.08 – 9:15 p

    http://www.informationclearinghouse.info/article21395.htm

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  • Malct, if I look at where I grew up, a mining and then factory town, I don’t see the world as any different now from the world that existed in my life time and in the generations before me. Yet what you describe you seem to describe as new, but really what are the new features? It’s just the same, and I suspect inevitable, system.

    Also to say that power is concentrated in the hands of the few and that the few are going to tend to operate in a way to perpetuate this, is simply trite. Self interest is what drives humam beings and it will override any system you look to set up, the conclusion of Animal Farm, if i remember school.

    You seem dizzy with the possibility that things could be different when nothing suggests that is viable. You protect yourself from this conclusion by never having to think or describe how your world would work in practice or how it could even be achieved from here.

    The futility of thinking the world can be changed by posting notes here is more awful than the horrors you purport to point to.

    There will be typos in this note, you can focus on those if you don’t like the message

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  • bellwether,

    Pure self-interest is what drives some human beings, not all. In fact a minority of human beings. Most of us have some empathy with, connection to and sense of responsibility to the world around us. Unfortunately the lack of concern for others that the minority have tends to make it easier for them to get into positions of power, so the ruling ‘elite’ or whatever you want to call them have a high concentration of power. Hence things ARE moulded in the way that reflects their thinking – this idea of self-interest underpins free-market capitalism, the government policy of metrics and league tables and if you read any self-help book about how to be successful, it’s in there as well. The problem is that it’s just not psychologically normal for the rest of us.

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  • Sorry that should have read ‘high concentration of these people.’

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  • Shipbuilder I’m sorry I think this is naive. Have you ever read Darwin or modern interpretations of his theories eg Richard Dawkins or John Gray. Competition, sexual competition, exists at every level.

    We also have an issue because as a species of animal we have been too succesful

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  • bellwether, it’s a psychological fact. I was not claiming that we have no self-interest, that would be naive, but pure self-interest with no regard for others is sociopathy. The top of politics and business has a higher proportion of such personality types.

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  • These are the people who will always rise to the top because they have more guile. It is inevitable. The impotent remain just that.

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  • As I understand, altruism is hard-wired into the brain and forms part of the evolutionary process.

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  • bellwether, what is guile? The fact is that people with certain personality types are more successful and that these personality types are not ‘normal’, which suggests that things could be changed if this was recognised and factored into any political or economic systems.

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  • shipbuilder – very sound and very diplomatic.

    A look at the book/film The Corporation would help anyone curious about this fundamental aspect of commercial / politciacl life to understand how it works.

    I believe it is too deeply ingrained in our legal structure for a populace the majority of whom are unaware of its existence to be effective in correcting. I hope I’m wrong. But having said that you seem to have a good handle on Political Ponerology and psychopathy, and I’m sure there is more mileage in that than taking on shape shifting lizards. No offence to anyone. Someone reckons we only need the square root of one percent of the population to reach a certain level of awareness for ethics to overcome power. I hope they are right, because even that will be a struggle and we don’t have much time.

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  • that’s political – I’m getting a new keyboard for xmas.
    family can’t afford a brain transplant.

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  • Guile is analogous to cunning. Of course empathy is hard wired, it is just that when it comes to it self interest takes precedence, expect possibly where genes are involved.

    The kind of world you allude to might be more feasible if the human population was a fraction of what it is. Tribal life seems closer to the idyll but we have gone way past that point.

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  • empathy is not hardwired in all humans – some lack the genes

    with go guilt, compassion and honesty

    no matter what the level of population a percentage will always lack the genes

    unless of course – ah no.

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  • Malct you seem to assume yourself to have empathy, compassion and honesty. Well done.

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  • bellwether – I am sorry – I am a disillushioned, angry and frustrated old [email protected]

    you are best off talking to shippy he is much more capable of answering your questions

    in a manner you will relate to.

    When he gets to my age, if he does, he might relate to my anger and frustration

    he may even, like me, have children and grandchildren he loves

    who’s welfare is beyond his control

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  • gardeniadotnet says:

    21. bellwether said… Malct you seem to assume yourself to have empathy, compassion and honesty. Well done.

    I’m confused by your post:

    – Are you suggesting malct does not have these qualities?
    – Perhaps you are saying these qualities are so common as to be unremarkable?
    – Or are you saying someone who has these qualities is deserving of your contempt?

    Please explain.

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  • 19. bellwether said…

    “The kind of world you allude to might be more feasible if the human population was a fraction of what it is.”

    Hence why awareness of these personality types, as long as we are aware there is a problem, could be factored into economic and political reform.
    As you say, in the modern world, there is none of the natural regulation of the community to keep these people in check. So we need to have economic and political systems that provide that regulation, instead of the current systems that simply work in their favour.

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  • bellwether, most of your points are very negative. Most things you say seem to suggest hoplessness – the logical conclusion, as we should expect, nothing you can do etc. I’d say that is logical result of darwinistic thought.

    Dogmatic belief by the majority in the conclusions reached by the observations made by certain sections of the scientific community with regard to natural selection and mechanical causation governed by mathematical laws =

    no ‘God’ = automation = pointlessness = despair + survival defence mechanisms = the planet earth 2008.

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