Famed investor George Soros is calling for a break-up of the banking oligopoly in the United States. His recent comments were made in reference to the big four U.S. banks that have come to dominate the banking sector. CitiGroup, Bank of America, JP Morgan and Wells Fargo now dominate the overwhelming majority of the U.S. bank market.
As regular readers know, I believe this oligopoly is part of the problem and that Ben Bernanke has likely increased the potential risks in the U.S. economy by further consolidating the sector. Perhaps most important, however, is the risks these four banks (and all banks for that matter) are allowed to take. Soros is in favor of the Volcker Rule which would segregate deposits from a bank’s risk taking operations such as hedge funds and prop trading. This appears like a no-brainer after what we just experienced, but unfortunately, with consolidated banking came consolidated lobbyists and that’s a recipe for even further power over Congress. The likelihood of the Volcker Rule passing is close to nothing at this point.
Soros has made a career out of being right. I am guessing he’ll be right again about the U.S. banking system, but it appears as though little will be done about it….
Here is an interesting chart that shows the ascendancy of the financial sector in the US.
Commercial banking is largely an administrative function, with a few highly paid decision makers, and many lower paid functionaries and clerks that make a decent if unspectacular wage commensurate with a utility function.
Starting with the Reagan privatization revolution, the finance sector began to grow in importance, moving from a utility serving the capital distribution and storage needs of the real economy taking a relatively small percentage of real output, to a dominant force in the national decision making process, controlling the allocation of capital through its powerful influence and lobbying in Washington, placement of its supporters in political positions of power, and the consolidation of the mainstream media into an oligopoly of four or five major corporations.
Now we have a financial sector dominated by a relatively few number of multinational corporations that are certainly not utilities serving the productive economy. In reality the big multinational banks have become hedge funds speculating in a broad range of markets, often in competition if not contrary to the interests of their customers, relying on other people’s money for capital to sustain an outsized leverage and a steady stream of rents and speculative winnings, and to cushion any losses in the event of the occasional market downturns.
And if we do not give the banks their demands, if we do not maintain the status quo, then they threaten that they cannot protect the world from financial ruin and a collapse of the money system, which they themselves control. And this is no mere extortion, no corruption of a single party or person, but the foundation of an enduring modern tyranny.
“Single acts of tyranny may be ascribed to the accidental opinion of a day; but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing a people to slavery." Thomas Jefferson
A massive fire erupted near a NATO base in the Buca district, near Izmir, Turkey. The fire broke out on Sunday evening in western Turkey. The fire blew through the grassy wooded area and is now perilously near NATO’s military base pushed forward by strong winds.
The NATO base in proximity to the inferno is Allied Land Command (LANDCOM), the standing headquarters for NATO land forces in the region. The Commander LANDCOM is the prime land warfare advisor to the All...
The global rally in equities Moderated last week. The average gain of the eight indexes on our world watch list was a respectable 0.41%, down from the previous week's steroidal 3.87% average. Hong Kong's Hang Seng was the top performer with a 1.41% advance. At the other end, the chronic laggard Shanghai Composite fell 1.36%.
A Closer Look at the Last Four Weeks
The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. We've also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the compara...
By Jacob Wolinsky. Originally published at ValueWalk.
Relypsa Inc (NDAQ:RLYP) — to be acquired by Galenica AG (VTX:GALN) for $32 per share in cash is soaring this morning up about 58 percent at the time of this writing in early morning. On the other hand shares of Galenica are down on the announcement by about 8 percent. What are the details of the deal? Here is what the sell side analysts are saying about the pharma news.
Relypsa Inc (NDAQ:RLYP) bid – analysts react
Relypsa will be acquired by Galenica for $32 per share, a 59% premium over the last closing price. We have thought that Relypsa would likely be acquired at some point, given the opportunity to grow Veltassa to be a significant commercial brand, ...
Companies around the world are exploring blockchain, the technology underpinning digital currency bitcoin. In this Blockchain unleashed series, we investigate the many possible use cases for the blockchain, from the novel to the transformative.
Most people agree we do not need to know how a television works to enjoy using one. This is true of many existing and emerging technologies. Most of us happily drive cars, use mobile phones and send emails without knowing how they work. With this in mind, here is a tech-free user guide to the blockchain - the technology infrastructure behind bitcoin...
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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