How can we stop these bank failures? Make banking boring again. Bring back the Glass-Steagall Act.
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Banks may be crashing in the US and shaky in Switzerland, but in Germany bank business in booming. Literally, because thieves are blowing up ATMs (aka cashpoints, cash machines, automatic teller machines). There have been more than 450 incidents so far this year where explosives and incendiary devices were used to blast open German ATMs for unauthorized withdrawls. German authorities just arrested 42 suspects in the robberies, many of them Dutch, presumably because banks in the Netherlands have already closed down ATMs due to these kinds of attacks.
More:
“German police nab 42 suspects over ATM explosions,” Richard Connor, DW News
Update:
“Germans fret over exploding ATMs as cross-border crime wave hits,” Tom Sims and Nette Noestlinger, Reuters
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Unregulated derivatives trading crashed the U.S. economy back in 2008, and two years later Congress passed laws to prevent that from happening again. But Citigroup just wrote derivatives deregulation into the $1.1 trillion federal funding bill, and Congress passed it. Now Citi can blow people’s savings on bad exotic derivatives bets, and taxpayers will likely cover the losses.
Here’s what Senator Elizabeth Warren (D-MA) had to say about that:
Financial institutions across Andalusia are under percussive attack from Flamenco Flash Mobs. Guerilla performances of these indignados flamencos are political demonstrations, expressions of anger and frustration at the Spanish economic crisis. Like this performance in a branch of Bankia, they’re choreographed by the anti-capitalist group Flo6x8.
More:
“Los “indignados flamencos” Flo6x8 arrasan en Internet con su bulería contra Bankia,” Vertele.com
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“Remember when the Icelandics did the unthinkable and, unlike Ireland, told bank creditors to take a hike? They also imposed capital controls and allowed the value of their currency to fall – the Icelandic krona has lost almost half of its value against the euro over the past five years.
The ‘experts’ queued up to assure us that these latter-day Vikings would be severely punished for their impertinence. While no one forecast that a hole would open up in the North Atlantic and swallow Iceland whole, some of the predictions came pretty darned close.”
JPMorgan Chase & Co. had an awkward moment recently when it bet its hedges instead of hedging its bets. This resulted in a $2 Billion loss, some management changes, and loss of CEO Jamie Dimon’s ability to lobby against Wall Street reform with a straight face.
“Goldman Sachs, the global investment bank and financial services firm, announced Friday morning that it is running for president of the United States.”
“… the conglomerate will forgo donations altogether and instead finance the campaign with a portion of the $10 billion in taxpayer-funded bailout money the investment bank received in 2009. “
— “Goldman Sachs announces presidential run,” K.M. Breay, Salon
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Citigroup CEO Vikram Pandit said he would be happy to talk with Occupy Wall Street protesters, calling their motives “completely understandable.” “Trust has been broken between financial institutions and the citizens of the U.S., and that is Wall Street’s job, to reach out to Main Street and rebuild that trust,” said the chief of the third largest U.S. bank. He made the remarks as he mingled with plain working folks at a breakfast organized by Fortune magazine. If you can’t make it to Mr. Pandit’s executive suite, Gawker obligingly provides his mobile phone number (646-512-4269) and suggests a few questions. Can’t get through? Try Mr. Pandit’s office phone (212-793-1201) or email him (vikram.pandit@citi.com).
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“Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx.”
“The wily philosopher’s analysis of capitalism had a lot of flaws, but today’s global economy bears some uncanny resemblances to the conditions he foresaw.”
“As he wrote in ‘Das Kapital,’ companies’ pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an ‘industrial reserve army’ of the poor and unemployed: ‘Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.’
The process he describes is visible throughout the developed world, particularly in the U.S. Companies’ efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant.
U.S. income inequality, meanwhile, is by some measures close to its highest level since the 1920s. Before 2008, the income disparity was obscured by factors such as easy credit, which allowed poor households to enjoy a more affluent lifestyle. Now the problem is coming home to roost.”
Who wrote that? The Senior Economic Adviser at UBS, the Swiss bank. Read it all:
“Give Karl Marx a Chance to Save the World Economy,” George Magnus, Bloomberg
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