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Post by Deleted on Nov 12, 2013 2:30:30 GMT -5
The business - the funny business - of banking has at its base criminality and immorality. Criminality because, were there no thieves, there would be no need to "deposit" money for safe-keeping. And immorality, because - at least until 1545 and Henry the Eighth - usury was a sin (and still is in most parts of the world). So it is no surprise to find, as Mr. Rainford reminds us, that banks cannot be trusted. www.greenleft.org.au/node/55267"Barclays bank paid US$454 million in fines for manipulating the Libor. In December, UBS was fined US$1.52 billion for the same rort. RBS paid out US$612 million for the offence early this year. Last September, the interlender broker ICAP was fined US$87 million. The latest bank to settle accusations that it rigged the Libor is the Dutch lender Rabobank. On October 29, it agreed to pay US$1.07 billion for its part in what appears to be a rigging scandal that the regulators somehow failed to detect. In Rabobank’s case more than two dozen traders and at least one senior manager got together to manipulate a number of benchmark interest rates. The scheme operated from 2005 until 2011 and involved employees in Utrecht, Tokyo, London and New York. An email intercepted by the US Justice Department found one Rabobank trader, when informed about the bank’s plans to set Libor obscenely high responded: 'Oh dear my poor customers. Hehehe.'" And the latest news is that "Several of the world’s largest currency dealing banks including Barclays, UBS, Deutsche Bank and Credit Suisse group are being investigated in the US, Britain, Switzerland and elsewhere for regularly coordinating to rig currency “fixes”. Two members of the industry committee that assists the Bank of England in overseeing London foreign exchange markets have agreed to take paid leave of absence while the inquiry proceeds." Roll on those incorruptible robots!
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Post by Deleted on Nov 12, 2013 3:09:09 GMT -5
I should perhaps clarify, without prejudice, that I have never attempted to fix the London Inter Bank Offered Rate (LIBOR), although I understand how easy it would be to have done so. Libor’s deepest problems flow not from the rate-setting process, Sydney, but from the character of interbank lending. The bilateral nature of loans means the reference for trillions of transactions is no real market rate at all, but a vestige of an opaque and clubby sector. All the Abrahamic religions have worried about the social evils of usury - the charging of interest. Both the Bible and the Qur'an have forthright things to say about it, from the prohibitions of Leviticus - " Thou shalt not give him money upon usury, nor lend him thy victuals for increase[/i]" (Leviticus 25:37) - to the scathing words of the Qur'an - " Those that live on usury shall rise up before God like men whom Satan has demented by his touch.[/i]" (Qur'an, 2: 275) The most recent manifestation of this age-old concern has been the rise of Sharia-compliant Islamic banking, offering services consistent with Islamic religious belief. Islamic banks are not permitted to invest in alcohol, the arms trade, pornography or gambling, and our Islamic credit card is paid for by a fixed service charge, not by interest. Here's Razi Fakih, from the Islamic wing of HSBC, known as Amanah, and based in Dubai: This recent development, tying religion to the heart of commercial activity, runs counter to what, for most of the twentieth century, had become the received wisdom. Most intellectuals and economists from the French Revolution onwards, including Marx himself, assumed that religion would steadily dwindle as a force in public life. One of the striking facts of the first decade of the twenty-first century has been the return of religion to the centre of the political and economic stage in large parts of the world. Our gold Islamic credit card is part of that growing global phenomenon, one of many attempts to find a new accommodation between those old opponents, God and mammon. BBC - A History of the World in 100 objects - Ming banknote - transcriptAccording to St Paul, they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of 'money is the root of all evil': which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. Interestingly, Baron King of Lothbury thinks that it is not so much the love of money that is the root of all evil. Money is the root of all evil; evil is the root of all money. I therefore do not trust money. Nevertheless, let us make of money what we can, Sydney, for the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods: [/b][/i] Bible Gateway - Matthew 25:14-30 (King James Version) Cast the unprofitable servant into outer darkness, ahinton, for there shall be even more weeping and gnashing of teeth.
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Post by ahinton on Nov 12, 2013 7:11:24 GMT -5
The business - the funny business - of banking has at its base criminality and immorality. Criminality because, were there no thieves, there would be no need to "deposit" money for safe-keeping. And immorality, because - at least until 1545 and Henry the Eighth - usury was a sin (and still is in most parts of the world). Not everyone who has deposited money in a bank does so solely for the purpose of safe keeping, although with interest rates being almost non-existent in Europe today, there seems to be ever less other reason to do so. However, what would be the alternative? Given that most people no longer use cash for most purchases and most people are not paid in cash for most things either, banks and credit cards are essential to the flow of money from one person to another. Even those who keep legally acquired cash on their own premises under their own supervision will be unlikely to get insurance cover for most of it, so it will be as much as the mercy of thieves as it would be in a bank account; your observation that there would be no need to deposit money for safe keeping taks no account of the fact that there are thieves and they'll be after you carefully hidden cash just as they will the funds in your bank account. So it is no surprise to find, as Mr. Rainford reminds us, that banks cannot be trusted. www.greenleft.org.au/node/55267"Barclays bank paid US$454 million in fines for manipulating the Libor. In December, UBS was fined US$1.52 billion for the same rort. RBS paid out US$612 million for the offence early this year. Last September, the interlender broker ICAP was fined US$87 million. The latest bank to settle accusations that it rigged the Libor is the Dutch lender Rabobank. On October 29, it agreed to pay US$1.07 billion for its part in what appears to be a rigging scandal that the regulators somehow failed to detect. In Rabobank’s case more than two dozen traders and at least one senior manager got together to manipulate a number of benchmark interest rates. The scheme operated from 2005 until 2011 and involved employees in Utrecht, Tokyo, London and New York. An email intercepted by the US Justice Department found one Rabobank trader, when informed about the bank’s plans to set Libor obscenely high responded: 'Oh dear my poor customers. Hehehe.'" And the latest news is that "Several of the world’s largest currency dealing banks including Barclays, UBS, Deutsche Bank and Credit Suisse group are being investigated in the US, Britain, Switzerland and elsewhere for regularly coordinating to rig currency “fixes”. Two members of the industry committee that assists the Bank of England in overseeing London foreign exchange markets have agreed to take paid leave of absence while the inquiry proceeds." The LIBOR scandal may be one of the more notable instances of corruption in the financial world but it's by no means the only one; indeed, there are so many and they're so endemic that even a casual glance at financial practice soon reveals that one doesn't need banks and financial institutions to ensure that such corruption exists and thrives. Now that's not to say that all financial dealings are by nature corrupt, but they are all open to the risk of becoming corrupted. Roll on those incorruptible robots! Robots are, as I have reminded you previously on several occasions, designed, manufactured, programmed, maintained and ultimately disposed of by humans, including those very humans to whose widespread global corrupt practices you draw attention above. In today's world, much of the movement of money is already done electronically in any case and, whilst the procedures involved are not quite the same as actual robotics, they are heavily dependent upon automation. How on earth would the addition of robotics to current procedures help to reduce, let alone eliminate, corrupt financial practice?
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Post by Deleted on Nov 12, 2013 9:08:05 GMT -5
Robots are, as I have reminded you previously on several occasions, designed, manufactured, programmed, maintained and ultimately disposed of by humans . . . This article about self-replicating robots may be of interest to the membership. en.wikipedia.org/wiki/Self-replicating_machineIt is admittedly as yet more principle than practice I would say. How on earth would the addition of robotics to current procedures help to reduce, let alone eliminate, corrupt financial practice? Well the great thing about robots is that they follow rules, without deviation and with utter predictability. In that respect they would differ from the wildnesses and unfairnesses of the bankers of the world would they not.
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Post by Deleted on Nov 12, 2013 9:19:23 GMT -5
I suppose that I should confess that I have a series of automated trades I can carry out at the touch of a button, Sydney. I programmed them myself, and they can be considered to be robotic in nature. Their objective is to make a profit, although there may be consequences I am at present totally unaware of. The reason I cannot simply abandon markets to such robots is because they cannot necessarily work out the ethics of what they do. Yet can we?
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Post by ahinton on Nov 12, 2013 10:26:40 GMT -5
Robots are, as I have reminded you previously on several occasions, designed, manufactured, programmed, maintained and ultimately disposed of by humans . . . This article about self-replicating robots may be of interest to the membership. en.wikipedia.org/wiki/Self-replicating_machineIt is admittedly as yet more principle than practice I would say. Not only that, but also the first generation of these self-replicating robots will, just like the non-self-replicating ones, have been designed, manufactured and programmed by humans and will almost certainly have to be disposed of by humans when their usefulness has come to an end; furthermore, what guarantee would there be that such robots be not only self-replicating but also self-developing? How on earth would the addition of robotics to current procedures help to reduce, let alone eliminate, corrupt financial practice? Well the great thing about robots is that they follow rules, without deviation and with utter predictability. In that respect they would differ from the wildnesses and unfairnesses of the bankers of the world would they not. They would not. Who would make those rules in the first place and for whose benefit? Banking is international, so how would robots respond to changes in rules made in various customer countries or to new agreements between countries? Robots, bankers and the rest would supposedly be doing their stuff ostensibly for the benefit of their customers; even if such robots, self-replicating or otherwise, could eventually take over some of the work currently undertaken by human bankers, it will only be a matter of (very little) time before corrupt humans corrupt said robots in order to screw advantage just as they do now. Why? Well, in no small part because they would be functioning for the supposed benefit of their human customers!
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Post by Deleted on Nov 12, 2013 14:17:02 GMT -5
Out of interest, ahinton, what do you want from your bank?
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Post by ahinton on Nov 12, 2013 16:24:14 GMT -5
Out of interest, ahinton, what do you want from your bank? A decent and reliable service, which is what I get and have indeed got from it since I joined them in 1989.
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Post by Deleted on Nov 12, 2013 23:47:28 GMT -5
I suppose that I should confess that I have a series of automated trades I can carry out at the touch of a button, Sydney. I programmed them myself, and they can be considered to be robotic in nature. Their objective is to make a profit, although there may be consequences I am at present totally unaware of. . . . So, after incorporating refinement upon refinement, the point may one day be reached at which it is possible to predict the future perfectly. Right every time! That would be stage one. The Member might then progress to stage two, which is not only the prediction of the future, but the actual creation thereof. Making things happen the way one wants them to. True influence! After that would come stage three: the seamless merging of the future with the present. Time travel whenever one wants - or rather, the entire abolition of time. We do not know whether any one has ever - or yet - managed that; we are not told, there are no records. But if we plug on at making the mystery of the future more and more accessible is it not sooner or later bound to happen?
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Post by ahinton on Nov 13, 2013 2:20:11 GMT -5
stage three: the seamless merging of the future with the present. Time travel whenever one wants - or rather, the entire abolition of time. We do not know whether any one has ever - or yet - managed that; we are not told, there are no records. But if we plug on at making the mystery of the future more and more accessible is it not sooner or later bound to happen? Busoni did that years ago - and incorporated the past into it, too.
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Post by Deleted on Nov 13, 2013 4:20:45 GMT -5
Out of interest, ahinton, what services do you want from your bank?
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Post by ahinton on Nov 13, 2013 6:17:36 GMT -5
Out of interest, ahinton, what services do you want from your bank? Those that I receive - no more, no less; 24/7 telephone access to helpful staff, fully itemised monthly statements and general efficient management of a current account and Mastercard account - in other words, basic retail banking and nothing else.
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Post by Deleted on Nov 13, 2013 6:26:10 GMT -5
And now a question from me for ahinton: how did Busoni manage that?
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Post by Deleted on Nov 13, 2013 8:42:42 GMT -5
Unfortunately, I have to pass on Busoni, Sydney, but I suppose that different people want different services from banks, if not from Busoni. A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. As usual, the practice turns out to be more complicated than the theory. According to Adam Smith, ahinton, consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it. It is often overlooked that Adam Smith, the founder of modern economics, did not take the pure market mechanism to be a free-standing performer of excellence, nor did he take the profit motive to be all that is needed. Perhaps the biggest mistake lies in interpreting Smith’s limited discussion of why people seek trade as an exhaustive analysis of all the behavioural norms and institutions that he thought necessary for a market economy to work well. People seek trade because of self-interest – nothing more is needed, as Smith discussed in a statement that has been quoted again and again explaining why bakers, brewers, butchers and consumers seek trade. However an economy needs other values and commitments such as mutual trust and confidence to work efficiently. For example, Smith argued: Adam Smith explained why this kind of trust does not always exist. Even though the champions of the baker-brewer-butcher reading of Smith enshrined in many economics books may be at a loss to understand the present crisis (people still have very good reason to seek more trade, only less opportunity), the far-reaching consequences of mistrust and lack of confidence in others, which have contributed to generating this crisis and are making a recovery so very difficult, would not have puzzled him. There were, in fact, very good reasons for mistrust and the breakdown of assurance that contributed to the ongoing global financial crisis today. Writing in the FT, Amartya Sen tries to explain: FT - Adam Smith’s market never stood aloneThis institutional vulnerability has implications not only for sharp practices, but also for a tendency towards over-speculation that, as Smith argued, tends to grip many human beings in their breathless search for profits. Smith called these promoters of excessive risk in search of profits “prodigals and projectors” – which, by the way, is quite a good description of the entrepreneurs of subprime mortgages over the recent past. The implicit faith in the wisdom of the stand-alone market economy, which is largely responsible for the removal of the established regulations in the UK and the US, tended to assume away the activities of prodigals and projectors in a way that would have shocked the pioneering exponent of the rationale of the market economy. Despite all Smith did to explain and defend the constructive role of the market, he was deeply concerned about the incidence of poverty, illiteracy and relative deprivation that might remain despite a well-functioning market economy. He wanted institutional diversity and motivational variety, not monolithic markets and singular dominance of the profit motive. Smith was not only a defender of the role of the state in doing things that the market might fail to do, such as universal education and poverty relief (he also wanted greater freedom for the state-supported indigent than the Poor Laws of his day provided); he argued, in general, for institutional choices to fit the problems that arise rather than anchoring institutions to some fixed formula, such as leaving things to the market. The economic difficulties of today do not, I would argue, call for some “new capitalism”, but they do demand an open-minded understanding of older ideas about the reach and limits of the market economy. What is needed above all is a clear-headed appreciation of how different institutions work, along with an understanding of how a variety of organisations – from the market to the institutions of state – can together contribute to producing a more decent economic world. The Bank of England is arguably key to the prosperity of the UK economy, because it issues the money, and much of the debt, on which our trade over the past three hundred years has been based. The Bank of England has, in a profound sense, always rigged the market, in the specific sense that it has chosen to attempt to control prices, not to mention how much British banks should safely be allowed to lend. A bank links together customers that have capital deficits and customers with capital surpluses. So, for example, if you deposit money with your bank, Sydney, it may well be the case that I borrow it to help fund some of my business activities around the world. Of course, lending money to kleines c is relatively high risk, so the bank wants some form of security on its loan, and plenty of interest. Perhaps such insecurity helps explain the obscene heights of Libor, Sydney?
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Post by Deleted on Nov 22, 2013 20:49:05 GMT -5
Out of interest, ahinton, what services do you want from your bank? Those that I receive - no more, no less; 24/7 telephone access to helpful staff, fully itemised monthly statements and general efficient management of a current account and Mastercard account - in other words, basic retail banking and nothing else. As I have indicated somewhere I would never wish to connect with a bank telephonically. But I do benefit from two items which the member has not mentioned: a) a current account subject to no "fees" and b) a credit card account subject to no "annual fees." These I obtained by way of simple insistence; bankers will always back down when pressed.
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