We Are Ruled By Price Fixing Cartels
We Are Ruled By Price Fixing Cartels
(posted with permission from: http://sane-ramblings.blogspot.com/2012/07/we-are-ruled-by-price-fixing-cartels.html)
In 2008-09 the global financial system nearly collapsed due to massive fraud by some of the world's largest banks. Were they held accountable for their actions? Did any senior officials go to jail? Did any of them have to repay the money they took?
No, their banks all received huge bailouts at taxpayer expense, no-one was ever put on trial and the big bonuses and shareholder dividends continued as normal. Nor was there any significant new regulation or oversight put in place, as the U.S. government deemed giant U.S. banks "too big to fail." Today, those "too big to fail" institutions control over 3/4's of U.S. banking assets.
Yet there was no money set aside to bailout millions of U.S. home buyers unable to afford the mortgages those lenders put them in, and millions of homes have been foreclosed.
But one of those institutions, J P Morgan Chase, the U.S.'s biggest bank, to make more money, recently invested their savers' money, money backed by the U.S. taxpayer, in $100 billion worth of derivatives and in other exotic financial securities, some of which were the type that nearly brought down the banking system in 2008-09. J P Morgan Chase didn't disclose the magnitude of its investment, nor apparently were regulators aware. The Wall Street Journal broke the story.
When some of those exotic financial investments went bad, J P Morgan Chase announced a $2 billion loss. But The Wall Street Journal said it would be much higher. Last week J P Morgan Chase raised that loss to $5.8 billion, and it now appears there are bigger losses yet to come.
Meanwhile, last week giant U.S. and other banks that finance Visa and MasterCard purchases settled a lawsuit with some of the biggest retailers, such as Wal-Mart, Walgreen's, Rite-Aid, etc. for $6 billion. The lawsuit was over the stranglehold the banks had over the financing, including forcing the retailers to absorb the cost of customers using the credit card.
But from now on, there will be more equitable sharing of credit fees among giant banks and retailers, each of which is welcome to charge customers as much as they like. Where is the U.S. government in all of this? Missing in inaction.
Also this last week was the LIBOR (London Interbank Offered Rate) scandal.in which Barclay's Bank agreed to pay a large fine, while not acknowledging it was guilty of anything. The LIBOR interest rate pegs the interest costs for borrowers all over the world, trillions of dollars or Euros, and Barclay's, and soon to be acknowledged, some other global banks fixed those rates to benefit themselves.
These are the times we live in. But historically we have seen this before. In the U.S. in the late 19th and early 20th centuries, cartels in oil, railroads, steel, etc. bribed politicians (today we call these bribes "campaign contributions"
and ran amok at the expense of the people.
But eventually, "muckrakers," newspaper investigative reporters put the ugliness of their actions in front of the people, who refused to tolerate it any longer. Anti-trust actions were taken and these giant cartels were broken up or restructured, which is what needs to happen today. And rest assured it eventually will, for what we are witnessing is greed run rampant by a few, at the expense of the many.
This greed is ironic, for life is short and no-one can take their possessions with them. So to what real benefit to themselves is there in leveraging money from others, corrupting the political process and turning a blind eye to the harm they cause? It may occur to some of these people there is a greater purpose in life than what they are doing and perhaps they will change and instead of being a scourge on humanity, become a blessing to humanity.
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