Lack Of Transparency A Boon To Banks
"This lack of transparency is a boon for the banks, says Christopher "Kit" Taylor, executive director from 1978 to 2007 of the Municipal Securities Rulemaking Board, a panel that issues rules on municipal bond sales. "Business moves from transparent and competitive markets to markets where there is less transparency and the profits are greater," he says. "If you don't know how much you're paying, you're going to be paying too much.""
The above quote is from an excellent Bloomberg article in the latest Bloomberg magazine. You can access the article by clicking on the highlighted text above. The article exposes the heinous breach of trust banks used to fleece investors in the Pennsylvania school system. Re my last post, this action was only possible due to the lobbying efforts of financial firms and the receptiveness of politicians as pointed out in the Bloomberg article. All at the expense of citizens of the state of Pennsylvania. This type of behavior appears to be rampant within the financial community as we see more and more outcomes unfolding across a wide spectrum of the global economy. All of these schemes by bankers have contributed to an excess pool of liquidity used to drive the biggest global bubble in history as we have written of time and again.
In the same issue of Bloomberg magazine but in a different article titled 'The Hidden Fees in the 401k' we see how financial institutions are raking in large sums of money from individual investors without disclosing said practices. "......undisclosed expenses for securities trades, administration and advisory services were driving the cost of Elcon's plan to at least 3.5 percent of the amount he invested. He says he was furious because Elcon Vice President Kinh Pham had told workers in a February 2007 memo that Elcon had cut fees to 0.10 percent."
This is part of the same buy & hold investment scheme that is perpetuated so that Wall Street makes their management fees on money regardless of what asset prices do. The same ones lobbyists are using in an attempt to privatize Social Security. Now, I really have no opinion on that topic but it is surely not debatable which lobbyist group is pushing this into the public forum. Wall Street's structure of management fees produces guaranteed income regardless of what our investments actually do. If asset prices go up or down, they still collect management fees. These fees are often used to create or back risky trading schemes by bank trading desks or hedge funds that have, amongst other outcomes, created this massive commodities bubble that costs everyone every time they make a purchase. That's on top of the other financial shenanigans unfolding. Supply & demand? That's a laugh. Wall Street traders are going to ram commodities prices to the moon and make the global economy pay catastrophic prices for the underlying product. Somehow, I'm not sure that was the spirit of free markets that was envisioned when these markets were created for buyers and sellers to trade these commodities. It was supposed to be based on supply and demand characteristics in the real economy. Not, based on supply and demand imbalances created by the financial economy's massive desire for the paper assets used to trade these products. In other words, if people knew what was really happening on Wall Street, we'd likely see a revolt. Of course, I'm taking that statement from eighty years ago when the same shenanigans cost the global economy dearly. I've written of this commodity mess unfolding before and the feedback I generally get is that the markets are working properly. Really? Just like the other shenanigans we've talked about that are now coming to pass. We shall see.
The above quote is from an excellent Bloomberg article in the latest Bloomberg magazine. You can access the article by clicking on the highlighted text above. The article exposes the heinous breach of trust banks used to fleece investors in the Pennsylvania school system. Re my last post, this action was only possible due to the lobbying efforts of financial firms and the receptiveness of politicians as pointed out in the Bloomberg article. All at the expense of citizens of the state of Pennsylvania. This type of behavior appears to be rampant within the financial community as we see more and more outcomes unfolding across a wide spectrum of the global economy. All of these schemes by bankers have contributed to an excess pool of liquidity used to drive the biggest global bubble in history as we have written of time and again.
In the same issue of Bloomberg magazine but in a different article titled 'The Hidden Fees in the 401k' we see how financial institutions are raking in large sums of money from individual investors without disclosing said practices. "......undisclosed expenses for securities trades, administration and advisory services were driving the cost of Elcon's plan to at least 3.5 percent of the amount he invested. He says he was furious because Elcon Vice President Kinh Pham had told workers in a February 2007 memo that Elcon had cut fees to 0.10 percent."
This is part of the same buy & hold investment scheme that is perpetuated so that Wall Street makes their management fees on money regardless of what asset prices do. The same ones lobbyists are using in an attempt to privatize Social Security. Now, I really have no opinion on that topic but it is surely not debatable which lobbyist group is pushing this into the public forum. Wall Street's structure of management fees produces guaranteed income regardless of what our investments actually do. If asset prices go up or down, they still collect management fees. These fees are often used to create or back risky trading schemes by bank trading desks or hedge funds that have, amongst other outcomes, created this massive commodities bubble that costs everyone every time they make a purchase. That's on top of the other financial shenanigans unfolding. Supply & demand? That's a laugh. Wall Street traders are going to ram commodities prices to the moon and make the global economy pay catastrophic prices for the underlying product. Somehow, I'm not sure that was the spirit of free markets that was envisioned when these markets were created for buyers and sellers to trade these commodities. It was supposed to be based on supply and demand characteristics in the real economy. Not, based on supply and demand imbalances created by the financial economy's massive desire for the paper assets used to trade these products. In other words, if people knew what was really happening on Wall Street, we'd likely see a revolt. Of course, I'm taking that statement from eighty years ago when the same shenanigans cost the global economy dearly. I've written of this commodity mess unfolding before and the feedback I generally get is that the markets are working properly. Really? Just like the other shenanigans we've talked about that are now coming to pass. We shall see.
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