7:41 Dec 10th, 2011 | 242 notes
When I talk about this in the United States, I’m often attacked, ‘oh, you don’t believe in the free market economy’, I say, how much free market can there be? You say deregulate, the moment the banks get in trouble, you say bail them out, the moment you bail them out, you say go back to deregulation. That’s not a free market, that’s a game, and we have to get out of the game. We have to get back to grown-up behaviour.
3:43 Nov 28th, 2011 | 15 notes
The point of Bloomberg’s story is not that it’s a scandal that the Fed lent lots of money to save the banking system. Few would argue that the big banks should have been allowed to just collapse. The point is how and why the central bank’s secrecy was so corrosive. It allowed executives like Jamie Dimon to mislead investors about why JPMorgan Chase was taking Fed funds. It allowed Ben Bernanke to fib to Congress about only lending to “sound” banks while his staff was, for instance, declaring Citigroup unsound. And it perverted the post-crash debate on how to create a better and safer banking system, which Bloomberg Markets argues is at least in part why we ended up with something as weak as Dodd-Frank and with bigger banks than ever.
Ryan Chittum, CJR
11:00 Nov 25th, 2011 | 17 notes
Invariably, these behemoth institutions use their size, scale and complexity to cow politicians and regulators into believing the world will be placed in peril should they attempt to discipline them. They argue that disciplining them will be a trip wire for financial contagion, market disruption and economic disorder. Yet failing to discipline them only delays the inevitable – a bursting of a bubble and a financial panic that places the economy in peril.
Richard W. Fisher
9:01 Nov 18th, 2011 | 6 notes
I don’t say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization.
David Mooney, chief executive officer of Chicago’s Alliant Credit Union and former banker
12:32 Nov 17th, 2011 | Notes
Even before the police raid, some of the campaign’s organisers had been looking for a floor in a nearby building to shelter for the winter. The intellectual action has already been moving out of the park and into working groups that discuss everything from alternative banking to green economics. The alternative banking group defies the traditional image of Occupy Wall Street. Many of its most committed participants come from the finance industry, including some bankers and traders from large Wall Street firms. It has been organised by Carne Ross, a diplomat and author of The Leaderless Revolution, and Cathy O’Neil, a quantitative financial analyst who has worked at D.E. Shaw, the hedge fund, and RiskMetrics, the consultancy. The group is drafting comments on implementation of the Volcker Rule limiting proprietary trading in large banks, and trying to invent a structure for a new kind of mutual bank. It could draw on credit unions and mutual organisations such as Mondragon, the Basque federation of worker co-operatives. “I worked in the financial industry and spent years doing something that I slowly but surely realised was a house of cards,” Ms O’Neil told me. “You observe the incentives at first hand and see how corrupt it is.” She admits it is “a little bit bizarre” to find insiders planning Wall Street’s overthrow but they are “the only ones who understand it”. If Occupy Wall Street is to leave a permanent mark, this is the sort of effort on which it must focus, rather than seizing patches of land. The brokers who met at a Buttonwood tree on Wall Street in 1792 to found the New York Stock Exchange created something enduring. They did not need to sleep under it.
11:00 Nov 8th, 2011 | 4 notes
"Are debt strikes, then, the next logical step?"
“When I talk to people about what we could do that would really compel Congress and Wall Street to meet our demands or really alter the current system, we inevitably start discussing what non-cooperation with our own oppression would look like. What does it mean to stop cooperating with the banks? What we inevitably end up describing is some variation of a debt strike, simply ending our own participation in a system that exploits us.” …
Many have noted that what happened in 2007 and 2008, when the banks were handed billions in bailouts and secret ultra-low-interest loans, was essentially a capital strike. Finance essentially said that if they didn’t get bailed out, they’d shut down the system—stop lending, jam up the works, and make life miserable for everyone.
Yet those same banks, once bailed out, have flatly refused to do the same for a nation of borrowers thrown into crisis by their actions. Their argument seems simple—the borrowers knew what they were doing, it’s their obligation to pay.
8:58 Nov 8th, 2011 | 26 notes
Consider that we trust military and homeland security personnel with our lives, yet we don’t give them lavish bonuses. They get promotions and the honor of a job well done if they succeed, and the severe disincentive of shame if they fail. For bankers, it is the opposite: a bonus if they make short-term profits and a bailout if they go bust.
Nassim Nicholas Taleb