It’s Official: The World’s Finances Are In The Hands Of The Few

I wonder how closely the names on this report map to the Bilderberg Group?

A recent analysis of the 2007 financial markets of 48 countries has revealed that the world’s finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system’s vulnerability as it stood on the brink of the current economic crisis.

A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early 2007. Stefano Battiston and James Glattfelder extracted the information from the tangled yarn that links 24,877 stocks and 106,141 shareholding entities in 48 countries, revealing what they called the “backbone” of each country’s financial market. These backbones represented the owners of 80 percent of a country’s market capital, yet consisted of remarkably few shareholders.

The most pared-down backbones exist in Anglo-Saxon countries, including the U.S., Australia, and the U.K. Paradoxically; these same countries are considered by economists to have the most widely-held stocks in the world, with ownership of companies tending to be spread out among many investors. But while each American company may link to many owners, Glattfelder and Battiston’s analysis found that the owners varied little from stock to stock, meaning that comparatively few hands are holding the reins of the entire market.

via Research – ISNS.

Nine US Banks Paid Out $33 BILLION in Bonuses

Following on from yesterday’s story about Goldman Sachs as the root of all evil, today we get the information that:

Nine banks that received government aid money paid out bonuses of nearly $33 billion last year — including more than $1 million apiece to nearly 5,000 employees — despite huge losses that plunged the U.S. into economic turmoil. … The nine firms in the report had combined 2008 losses of nearly $100 billion.

(Source: WSJ)

And if you think things are going to change, don’t be deluded. Here’s what the Obama White House had to say:

"The president continues to believe that the American people don’t begrudge people making money for what they do as long as…we’re not basically incentivizing wild risk-taking that somebody else picks up the tab for," said White House Spokesman Robert Gibbs.

What happened to Obama’s feigned outrage last year before the election? It’s all gone, baby. It disappeared to the same place as his promises about Gitmo, prison camps, climate change and health care.

If the NBA has a salary cap, why can’t American corporations? One of the key problems with capitalism is the open-ended nature of the upside. It breeds unlimited greed. Surely we can combine the good aspects of capitalism – eg incentives for creativity and effort – but restrict the upsides? I know we have tiered taxation, which effectively acts as a way of channeling some of that upside back into the system, but it doesn’t stop companies and individuals trying to bleed the economy for as much money as they can get their hands on, despite the negative consequences.

It still seems to me that we need another system, one that limits the greed but retains the incentives. 

GDay World 386 – Banksters (part 2)

My guests today help me explore some of the alternatives to the “Big Four” banks in Australia. Let’s say that you, like me, want to completely disassociate yourself from the Big Four – where do you turn? Are there alternatives in Australia?

Yes, say my guests:

Andrew Hadley, COO, Credit Union Australia
Tony Beck, Group Manager, Corporate Affairs, ME Bank (Members Equity)

They both belong to organisations that can provide all of the same services that you get from your bank – and they will do it with less fees and with much more customer service. Why? Both organisations are owned by their members instead of shareholders. In CUA’s case, they are owned by their customers. In ME’s case, they are owned by a group of superannuation firms which, in turn, are owned by their members.

So both organisations exist to provide good service – not solely for the sake of returning profits to shareholders. And, judging by their NPS scores, it makes a difference.

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Today’s music is by:

TwistedRick Estrin & The Nightcats
“U B U” (mp3)
from “Twisted”
(Alligator Records)

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