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Giant Banks Take Over Real Economy As Well As Financial System …
Enabling Manipulation On a Vast Scale
They also say that the big financial players are able to manipulate virtually every market in the world.
And that the government has given the banks huge subsidies … which they are using for speculation and other things which don’t help the economy.
But the big banks have only gotten bigger – and more interconnected – than before the phony financial “reform” legislation was passed a couple of years ago.
As if that wasn’t bad enough, four congressmen point out that the big banks are not taking over the tangible economy as well … which allows them to control and manipulate the markets.
Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012.Goldman Sachs stores aluminum in vast warehouses in Detroit as well as serving as a commodities derivatives dealer.[ii] This “bank” is also expanding into the ownership and operation of airports, toll roads, and ports.[iii] JP Morgan markets electricity in California.
In other words, Goldman Sachs, JP Morgan, and Morgan Stanley are no longer just banks – they have effectively become oil companies, port and airport operators, commodities dealers, and electric utilities as well. This is causing unforeseen problems for the industrial sector of the economy. For example, Coca Cola has filed a complaint with the London Metal Exchange that Goldman Sachs was hoarding aluminum. JP Morgan is currently being probed by regulators for manipulating power prices in California, where the “bank” was marketing electricity from power plants it controlled. We don’t know what other price manipulation could be occurring due to potential informational advantages accruing to derivatives dealers who also market and sell commodities. The long shadow of Enron could loom in these activities.
According to legal scholar Saule Omarova, over the past five years, there has been a “quiet transformation of U.S. financial holding companies.” These financial services companies have become global merchants that seek to extract rent from any commercial or financial business activity within their reach.[iv] They have used legal authority in Graham-Leach-Bliley to subvert the “foundational principle of separation of banking from commerce”. This shift has many consequences for our economy, and for bank regulators. We wonder how the Federal Reserve is responding to this shift.
Originally posted by MichaelPMaccabee
Are you of the opinion that the banks don't already own the economy?
Originally posted by ShadellacZumbrum
reply to post by FortAnthem
A couple of things to note. .. .. .
If there is obvious manipulation of the markets, it is sure to Not end well. How is it the SEC is not all over this?
Secondly, ALCOA supplies Coca Cola with Aluminum for their cans. So why is Coke the one lodging the complaint?
STATE STREET CORPORATION owns 56.83M shares worth $484.22M
Vanguard owns 47.80M shares worth $407.23M
Manning & Napier Advisors owns 30.82M shares worth $262.60M
JPMORGAN CHASE & CO owns 25.87M shares worth $226.37M
Inves owns 21.75M shares worth $185.32M
GOLDMAN SACHS owns 15.29M shares worth $130.30M
I.G. Investment Management owns 10.18M shares worth $88.38M
Charles Schwab Investment Management owns 7.80M shares worth $65.41M
Credit Suisse AG owns 7.56M shares worth $64.42M
Geode Capital Management owns 6.99M shares worth $59.56M
UBS AG owns 6.64M shares worth $58.79M
D. E. Shaw & Co owns 5.62M shares worth $48.79M
Elm Ridge Management owns 5.60M shares worth $56.15M
GAM Holding owns 5.58M shares worth $55.88M
Perkins Investment Management owns 5.32M shares worth $46.51M
Citi owns 5.10M shares worth $44.14M
TCW owns 4.95M shares worth $49.62M
How about the investors? What if they get pi$$ed and sell all of their stock in those commodities? Megabanks better watch their backs or they could end up with commodities that are not worth chump change.
The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers.
We start from a list of 43060 TNCs identified according to the OECD definition, taken from a sample of about 30 million economic actors contained in the Orbis 2007 database (see SI Appendix, Sec. 2). We then apply a recursive search (Fig. S1 and SI Appendix, Sec. 2) which singles out, for the first time to our knowledge, the network of all the ownership pathways originating from and pointing to TNCs (Fig. S2). The resulting TNC network includes 600508 nodes and 1006987 ownership ties.
Constructing a Lorenz-like curve (Fig. 3) allows one to identify the fraction of top holders holding cumulatively 80% of the total network control. Thus, the smaller this fraction, the higher the concentration. In principle, one could expect inequality of control to be comparable to inequality of income across households and firms, since shares of most corporations are publicly accessible in stock markets. In contrast, we find that only 737 top holders accumulate 80% of the control over the value of all TNCs (see also the list of the top 50 holders in Tbl. S1 of SI Appendix, Sec. 8.3).
......
We find that, despite its small size, the core holds collectively a large fraction of the total network control. In detail, nearly 4/10 of the control over the economic value of TNCs in the world is held, via a complicated web of ownership relations, by a group of 147 TNCs in the core, which has almost full control over itself. The top holders within the core can thus be thought of as an economic “super-entity” in the global network of corporations.