Tuesday, August 6, 2013

George Osborne and Zombi Banks.

Strawmen of Finance

We discuss the strawmen of finance, the Help to Buy straw purchase scheme in the UK and the ‘unrealized’ losses on the Fed’s balance sheet as the bondpocalypse gallops into town. Max Keiser also asks, “why don’t the people have a bank that they can call their own?” In the second half, Max talks to Laura Willoughby of MoveYourMoney.org.uk, about moving your savings out of the Too Big To Fail banks and about out-competing the toxic banks and their interest rate apartheid. Read more at http://www.maxkeiser.com/2013/08/kr480-keiser-report-strawmen-of-finance/#ZGUcvqqmb5pxspXs.99

Posted by khards @ 09:47 PM (2106 views)
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12 thoughts on “George Osborne and Zombi Banks.

  • Interesting point is that Lloyds shares are up because mortgage lending is up, funded by tax payers help to buy scheme. Funded by tax payers to boost tax payer owned shares of Lloyds!

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  • Max states, housing bubble will burst in 24 months.

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  • Max is the anti-Krust she said that HPs wouldnt crash or she would eat her hat, he says the bubble will burst within 24 months or he will eat his pants (I hope thats the American version – otherwise im more than put off my All Bran!).

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  • mark wadsworth says:

    A Zombi Bank?

    Is that a mix between scary like zombie and cute like Bambi?

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  • Max states, housing bubble will burst in 24 months.

    Everybody wants dates – but that’s the one thing that’s impossible to give.

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  • “A Zombi Bank? – Is that a mix between scary like zombie and cute like Bambi?”

    http://www.thefreedictionary.com/zombi

    1. zombi – (voodooism) a bank or supernatural force that reanimates a dead debtors
    2. zombi – a bank of voodoo cults of Anglo-Saxon origin worshiped especially in the West
    3. zombi – a dead banks that has been brought back to life by a supernatural force (QE)
    4. zombi – a bank who acts or responds in a mechanical or apathetic way; “only an automaton wouldn’t have noticed”
    5. zombi – several kinds of rum with fruit juice and usually apricot liqueurzombi – several kinds of rum with fruit juice and usually apricot liqueur

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  • “Move Your Money” – whence? hence? No list of banks from which (all banks?) or to which (none?) we should move our money.

    There is no bank in which it is safe to deposit your money. A New Zealand report recently stated “The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.”

    Plans to deliver clear title to the banks of depositor funds originated with the G20 Financial Stability Board in Basel. Under these plans bank depositors are unsecured creditors holding IOUs or promises to pay, A US (FDIC) – UK (BoE) document called “Resolving Globally Active, Systemically Important, Financial Institutions (G-SIFI).” stated that

    “An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company (i.e. the depositors] into equity (or stock). In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.”

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  • mark wadsworth says:

    The lass from Move Your Money seemed nice enough, but she misses the point.

    The money is actually the debts i.e. the mortgage debts, and that is firmly in the hands of the banks. Your bank deposit is merely a reflection of your percentage ownership share of that money.

    If everybody went to the bank to withdraw their savings, then we’d have a run like Northern Rock, and OK, let’s assume we identify a decent socially responsible etc bank like Bank of Church of England.

    All that happens then is that the government gives the existing banks a massive loan equal to the savings which were withdrawn, so the mortgage borrowers are still stuck where they are, and there is nothing left for the ethical BoCoE to “invest” in so it won’t be able to pay any interest at all – meanwhile the bailed out banks will be coining it in.

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  • Icarus. I moved to Metro Bank. Credit card and overdraught interest rates are about half of HSBC, you get an English call centre, banks are open 7 days a week, from 8am to 7pm. Fantastic safety deposit boxes and they serve tea and coffee when you are there to talk to a member of staff. I LOVE IT!!

    Because of the rates and call center, I’ll keep them even if I don’t have a local branch.

    They even have a local bank manager who can query loan rejections, and even if that doesn’t work, you can appeal to head office. No more Computer Says No nonsense. It is old fashioned banking with a modern twist.

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  • On the telephone banking, they take queries 24hrs a day!!

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  • stillthinking says:

    I thought she missed the point that the UK is totally insolvent. If you want to move your money in the UK, here’s an idea, move it -away- from the country.
    doh!

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  • mark wadsworth says:

    ST, no “the UK” is not insolvent there is plenty of “money” here!

    Because money = debt. That is how money originates. So those £1.2 trillion outstanding mortgages and £1 trillion government accumulated debts are real money (to the extent that they will be paid, and by and large, ignoring a few bad debts and inflation nibbling away) they will be paid.

    None of this can be moved abroad. A loan “secured” on UK land and buildings is firmly attached to the UK, and the UK government cannot decamp to a tax haven in the Bahamas.

    Only individuals or individual companies (or in extremis, corporations like Detroit) can be insolvent (they owe more money than they have assets or earnings to service the interest), the system of “money” as a whole always ends up that the total amount of DEBTS = the total amount of ASSETS because those ASSETS (like bank deposits) are merely a record of “ownership” of the underlying debts and so by definition it always nets of to precisely nothing.

    Like, there are x million cars in the UK owned by y million people. The cars are there are some people own them. If you deduct the value of “car ownership” from the value of “cars” you end up with zero every time.

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