People don’t just have to get power. They have to be able to convince others that their power is legitimate, in that they represent the general interest. The mesage from the plutocrats has been ‘you can change your government, but you can’t change the ‘laws’ of the ’self regulating’ market. As markets are anything but self regulating, that message needs to be recognised for the dangerous BS that it is.

The connection between religion and money is a huge topic. Suffice it to say that the ancient world (or at least the part that became Europe) was centred around the Mediteranean. There were well financial and credit centres in 2000 BC.

The French historian Fernand Braudel wrote fascinating accounts of how the centre of business and finance moved from the Catholic countries of the Med to the Protestant north of Europe in the 16th century or so. Wall St, Amsterdam and the City of London had, or have, global reach. It’s a very long, fascinating story.

The market for bonds (debt) is just one part of the world of finance, so we don’t have to propose that there is some conspiracy in that sector. We have been suckered once more, but we weren’t the only ones, so it’s more a question of once bitten twice shy.
One of Warren Buffet’s (reported) principles, which I like, is ‘You don’t have to make it back the same way you lost it’.

…and privatise everything too - just to add to the misery. ‘Do a Chile’ on us - that would keep some folks happy.

“Its about understanding that the deposits taken in by the bank are a liability”

Quite.

Somewhere in my (admittedly) peasant education that makes sense.

After all how could it be possible for a “bank” to accept “money” from “strangers” if it were not so.

Ayn you will agree that when the “bank” has no “money” from “strangers” there is no “bank”

http://heritageamerican.files.wordpress.com/2008/08/ayn-rand.jpg

“the issue isn’t whether you can or can’t “sell” a book of deposits”

At last. I knew I could depend on you.

It is possible to “sell” (or if I may “transfer”) a book of deposits to a competitor.

At last.

My lonely days are over.

http://www.youtube.com/watch?v=uVI254QGSQ4&feature=related

The Church opposed the development of credit and banking for many centuries. They didn’t want people developing any system of obligations which would undermine their own feudal and episcopal holdings. They made lending at interest a sin ‘against God’, but they were happy to take cash for ‘indulgences’.

As Karl Polanyi showed sixty years ago, in The Great Transformation, ‘high finance’ took over the Church’s role as a top level intermediary between states and royal houses. There are rules of conduct in those highly secretive circles, but there is no room for morality in the ordinary sense. We have to understand that.

You say you are a ‘slow learner’, but you haven’t lost your sense of smell. It’s the same old game, with different players. Plutocracy is always a threat to democracy, and we have a bad dose of it. The bond market ‘players’ always knew they were on a winner with ‘our’ banks. It was their business to know all about about the web of personal and institutional connections that Matt Coooper and others have described. That’s just risk assessment.

They correctly calculated that the links between our banks, property interests and political parties were so tight that the taxpayer could and would be put on the hook. They can now look forward to a full repayment of the debt, as well as an opportunity to get their mitts on the billions in cash which was sucked out of the country in windfall gains during the the boom. If it wasn’t for the miserable social consequences, you’d have to hand it to them.

I think use of the term ‘bankrupt’ may be misleading, the state would just need to cut spending by about 40-50%. Unemployment would sky-rocket and health, education and other vital services would deteriorate rapidly. One could argue that if we were able to maintain a democratic market based economy we could overcome this in a decade or two but given such social upheaval this would be unlikely.

you’re right on many fronts there. The problem is that we’re going to be running either sizeable budget deficits and/or going to require sizeable external funding for most of the next half-decade. As such, we “need” the bond markets much more than they need Ireland. The theory (disputed by many) is that if we default on lots of the banks debts, then this funding from abroad may stop, and so bankrupt the State much like Greece is facing right now. Its a bit like a cancer patient complaining about the cost of the drugs he’s taking - ultimately he doesnt have much choice but to keep paying until he’s better again.

David Mc Williams piece in the SBPost yesterday got me thinking a bit. I stand to be corrected on this but most of the major religions had rules on lending money and charging interest on it. In Islam I think some of these restrictions still apply. So, at some level they realised that uncontrolled credit markets could really destablise society.

The bond market as it currently stands seems without rules. The biggest worry is that sometimes it seems that this market and its constituents are treated with the kind of reverence we reserved for the church (”oh the bond market won’t like this etc…..”). We know where that kind of reverence got us!

I’m not saying that we ban credit (I know that it is essential for proper functioning of society) but maybe we need to have a look at what’s going on here.

Bond holders actually don’t deserve one red penny from anybody at all!!!!!. They messed up. If it wasn’t for them Greece would not have been able to let its budget deficit balloon in the first place. I wouldn’t have leant money to Greece so why did they?

There should be no bailouts for anybody.

Sorry for the rant. Just getting angry with all of this.

…i believe you just got ‘Gregged’….

the issue isn’t whether you can or can’t “sell” a book of deposits, its to do with the true nature of that transaction. Its about understanding that the deposits taken in by the bank are a liability, backed up by the cash asset alongside it and sitting on the other side of the balance sheet.

If you’re saying that we are going to “sell” the book of deposits and its going to cost us 28bn EYPO’s in cash to get rid of, then you’d be right on the money. If you’re saying we’re going to sell it and receive 21bn against it, then im sorry, you’re completely wrong. Its all about understanding that when we “sell” a deposit book, we actually have to GIVE an asset alongide it, not receive one in return.

“Silly boy. Many people, including me, earn money by selling words.”

And whether they have truth or not is of no concern to you.

Do you have a mother?

There’s a market for everything. Including your words.

“eh….its just the Greek for Euro…”

Silly me. I don’t be noin them things. I is igorant.

It’s all Greek to me.

Silly boy. Many people, including me, earn money by selling words.

bjg

Tell me why you can’t sell a book of deposits.

Howdy.

“Pehaps the main reaon that it is difficult to sell a book of deposits is that they do not belong to you.”

Are you really that ignorant?

“You could sell the deposit taking franchise…staff, buildings, goodwill etc.”

Yup. You are.

Your ignorance goes so far as to imagine that a bank is like McDonald’s.

Tell me. Can I get a “loan” of “money” created out of thin air if I walk into McDonald’s and order a Big Mac and fries or is does that just come with the happy meal?

Is it because they have “staff, buildings, goodwill etc”?

Is that the “banking” franchise?

Would you like condoms with that?

You can do better than that.

Tell me why you can’t sell a book of deposits?

eh….its just the Greek for Euro…

Here’s a word for you.

Take a fifty note out of your wallet.

What “word” is there?

EURO/EYPO.

Is that an eight letter word or two four letter words strung together?

What does EYPO mean?

Is it the word Jean-Claude Trichet used when he instructed Brian Cowen to steal €50bn from the Irish people to bail out Deutsche Bank?

Words Brian?

Try these.

Justice, Fascism, Fairness, Brutality, Truth, Lies.

Is that sufficient “words” for your comprehension?

Thing is I have no idea what “EYPO” means.

But that should be expected.

After all I am just another piece of illiterate scum that has been marshalled into bailing out Deutsche Bank.

I bow to your knowledge of “money”.

“I haven’t got one”

That’s what I thought.

“I could sell you a book of words, though.”

I don’t buy words.

They are free.

Would they be Gold man sacks? Or are they going to give Greece the old ’sack, back and crack’? Painful. Either way.

My take on reading the continental papers this morning is that there are a lot of people out there who doubt that 45bn is ultimately enough (but nobody dare say what ‘enough’ is so better to put that one on the long finger for now) and/or doubt whether the Greek government can get their people to take the medicine without kicking them out - a la Hungary.

That’s assuming Germany goes along with it in the first place - they are saying some very strange things for a country which has allegedely been instrumental in putting this plan together.

Bluff and counterbluff has been the name of the game since the start of the year. I thought the Greeks were winning but now I’m not so sure. ‘Failed state’ anyone? Has some nice islands for sale.

Germany needs to delay action until after those pesky elections. Maybe it will be purely IMF money to fund what Greece needs in May?

‘It could be either a gnome in Zurich, a pan european Jewish banking family, a German or Japanese insurance company, your local credit union. Take your pick.’

Yea right, with respect. As if your local credit union could sit down with the gnomes of Zurich. Just like Cobh Ramblers could play Man U. In an August exhibition match, in aid of charity, and with a few pints afterwards.

25,000,000,000.00 and counting.

Even I find it confusing.

If the banks are not investing your savings in bonds (loans of a particular type), they are maybe investing in mortgages, loans to small businesses, credit card debt, etc. etc. That’s what banks do. Insurance companies do it so they can provide pensions or cover life insurance policies or car or health etc. Basically, they charge you less than they pay out because they can make profits on what you pay them.

It’s a perfectly valid position to say you want nothing to do with all that stuff, but you’ll sort of have to do without a few bits and bobs - money, insurance, banking, credit, that sort of stuff.

they get it from you and …our savings. So the bondholders are in part ….er …us

dont forget Norweigan fishing villages!