Guest Post by Paul Craig Roberts
CNN is happy to report more bad news that can help the presstitutes unseat President Trump:
“Mass unemployment. Surging bankruptcies. An unprecedented health crisis. It’s going to be really ugly. Here come the big bank earnings.” https://www.cnn.com/2020/07/13/investing/bank-earnings-recession/index.html
The report has interesting information that CNN doesn’t seem to have noticed. CNN reports that banks are in trouble because of low interest rates. But don’t banks pay low interest rates and charge high rates? Interest on credit card balances is 19%, and if you miss a payment the interest rate can rise to 29%.
CNN reports a S&P Global Ratings estimate of $2.1 trillion in credit losses due to the pandemic and says the five largest US banks have set aside $35 billion against loans expected to go bust.
That is not much of a cushion for the loans of our five largest banks. Unless rules have changed and I am mistaken, bank reserves are an offset to profits. If the five banks expect $35 billion in profits and put that amount in reserves, they have no profits to report and no taxes to pay. Later when they need a stock price boost, they can stop adding to reserves, and their earnings will show a big jump.
There is another interesting point in the CNN report that went unnoticed. Because of various scandals and penalties, Wells Fargo is currently prevented from growing its balance sheet. In other words a hold has been put on its size and the bank is prohibited from acquiring more assets to offset its losses. Could the Federal Reserve be setting up Wells Fargo for a takeover by one of the New York Banks? A bank that can’t grow its balance sheet is not in a good position to remain independent.
In my youth US economic policy focused on preventing concentration of economic activity. No more. Concentration is the new normal. In the US the five largest banks have about half of total bank assets. Media ownership is concentrated in 6 corporations. Big Box chains have taken over from independent businesses. Amazon is an online retail monopoly. Google, Facebook, and Twitter are essentially monopolies.
We have gone from monopoly is bad to monopoly is good. Anti-trust, once an area of economic study, seems to have disappeared from the curriculum and from federal regulation.
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Don’t worry. I’m sure it will all be ok. Trust them.
“Concentration is the new normal. In the US the five largest banks have about half of total bank assets. Media ownership is concentrated in 6 corporations. Big Box chains have taken over from independent businesses. Amazon is an online retail monopoly. Google, Facebook, and Twitter are essentially monopolies.”
This is what 50 years of economic development policy ( i.e. corporate welfare) has gotten US. Mom and Pop retail is dead and Big Box demanding wear a mask or don’t shop. Next it will be, take the vaccine or no shopping for you. We have arrived. The New Normal Order is here and we built it with our tax dollars.
“Discover Where Corporations are Getting Taxpayer Assistance Across the United States
SUBSIDY TRACKER is the first national search engine for economic development subsidies and other forms of government financial assistance to business.”
https://www.goodjobsfirst.org/subsidy-tracker
Walmart to require face masks for all customers
New mandate follows similar policies at Starbucks, Best Buy and Costco
There is no business in America that’s killed more Mom and Pop retail store than Walmart and they did it with our tax money and support. Capitalism is my savior . I shall not want, unless I refuse to wear a mask.
A secret behind Wal-Mart’s rapid expansion in the United States has been its extensive use of public money. This includes more than $1.2 billion in tax breaks, free land, infrastructure assistance, low-cost financing and outright grants from state and local governments around the country. In addition, taxpayers indirectly subsidize the company by paying the healthcare costs of Wal-Mart employees who don’t receive coverage on the job and instead turn to public programs such as Medicaid. This website brings together available information on both kinds of subsidies involved in Wal-Mart’s “double-dipping.” In the future we will add data on other ways Wal-Mart relies on taxpayers to finance its growth.
http://www.walmartsubsidywatch.org/
Kroger and Kohl’s have now joined the mandatory mask band wagon.
Walmart used to pride itself on selling American made good, but once Mr. Sam passed the baton, it was “how much can we outsource from China?”
I believe that the evolution of the retail system is a natural progression that continues to ever greater concentration and size as long as the societal underpinnings are there to be used. The internet and cheap oil made the development of Amazon inevitable, as was the box-store trend before that, as was the department store before that, et cetera. I think we’re at the end of that development cycle, and we’ll rapidly slip back to an earlier form when it’s what the society can support. I’m betting we will slip farther down the scale than most will believe, and it will take some time to even establish local markets. The destruction of the currency will greatly exacerbate the problems we face.
That has been my position since I’ve been on this forum. Concentration of power is bad, doesn’t matter whether it’s private or government. The only possible power that can destroy the monopolies and fix this, is a powerful, lethal, and just federal government. A second term Trump is the only possible remedy on the horizon. Don’t fuck up, November 3rd.
This ^^
Goldman Sachs reported blowout earnings today. So much winning!
We need to dissolve these massive companies back into little ones. Amazon, Google, Fbook, and all the big media companies like Comcast should be busted up. Personally, I’d like to see a new “fairness doctrine”; it’s about time.
Come on PCR. You don’t have to say “New York Banks”. You can say “jews”. Everyone knows.
Ken, you are dumb as a rock. Let’s look at the CEOs of the biggest banks. Jamie Dimon, JP Morgan. Nope. Wells Fargo, John Stumpf. Not walking to Temple on Saturday. Citibank, Mike Corbat. Try again. Bank of America, Brian Moynihan. I’ll let you figure that one out.