Eurobanks: The FT hoovers up more ECB drivel

Banks take the safe options, but for some reason the media see this as good news.

Just as Robert Peston effectively broadcast Lord Manglesum’s every utterance as Gospel during 2009,  the FT too has become so europhile of late, every spark in the EU igloo is greeted as a sure sign of economic warming.

‘Banks in the eurozone increased their lending to companies in November, reversing a drop the previous month and spurring hopes that the ongoing economic recovery will be buttressed by an extension of credit’, the Pink’un suggested this morning.

Large EU-based companies are doing exactly what their owners and counterparts in the UK are doing: grabbing the cheap money to invest it in short-term easy-profit stuff paying higher rates. Also the phrase ‘ongoing economic recovery’ is an assertion in search of substantiation.

“There is a string of companies that do not get banks loans at all – or only with unacceptable conditions,” said Josef Trischler, managing director of VDMA, the German engineering association. Too right: neurotic banks lend to safe bets – and to hell with the rest.
Tucked away at the bottom of the piece, the FT grudgingly admits that ‘one of the reasons for the slow extension of credit is that the private sector is awash with cash’.
Which does beg the question, why is the fact of nervous Normans lending to greedy Gerhardts a good sign?
The picture is similar in the States: plenty of money for the Biggies, none at all for the upcoming insurgents. Bloomberg notes that ‘More than $369 billion of loans were raised as of Dec. 28, led by financing for the purchase of Burger King Holdings’. That’ll be that little tiddler Burger King, then.
If all banks do is bankroll safe bets, there is no chance at all for genuine capitalism to develop…and to be honest, there’s no point in having merchant banks.

7 thoughts on “Eurobanks: The FT hoovers up more ECB drivel

  1. Big corporations are getting bigger using the ratchet of Gov’t to legislate small business out of business. The same ‘national strategy’ is happening in every sector in every country (fascism).

    And the banks are an integral part of this centralisation of power. The net result, like the USSR, is banks like Gov’t want to pander to and deal with Big Co’s. Dealing with small fry is a pain in the arse.

    Britain is centralised into 5, now 4, mega-monpoly-Banks. I watched Barclays Chief Bob Diamond on a SKY News lunch 2 days ago explain why it was so difficult to get credit into the business community. He winched all the way through because these mega Bosses just don’t live in the small business world, they’re compltely out of touch like Gov’t, the Bank of England and every other large institution (from energy to pensions).

    Our economies are being centralised, the exact opposite of a safe economy. Like the webs vast diffusion, the safety and vibrancy is in lots of small.

    Big is bankrupt. Big is a dinosaur. Big is dead.


  2. KG

    An unfettered free market is a competitive market, it is constantly churning with new entrants, monopolies cannot survive, in fact any monopoly by its very nature kills the market it seeks to dominate.

    Take any example of a monopoly, wether it be attempts to cortner the silver or gold markets. They always fail, the market will not support monopolies for long, competitiors, usually smaller, always work out ways to usurp or get one step ahead.

    You are confusing a free market with the monopolies that have built up precisely due to it’s Big Brother, Government, who protects the monopoly with draconian legislation to force out competition, or propping up the monopolies as with the recent bank bailouts (Britain has only , now 4, banks. Japan has been doing the same).

    All monopolies fail because by their nature they strangle the market they monopolise. They become unprofitable. Only Gov’t who can tax its citixzens to death can continue to support failing monopolies (see US Gov’t with Goldman Sachs and GM etc or Britian propping up bankrupt failing trains and buses)

    What happens in all markets (and economies for that matter) is a few great exponents emerge and begin to dominate a bit. But these guys mature in order to hold a monopoly try to buy up competitiors. But that can only go on so long before they run out of money forever defending their patch.

    Look in any market you care to mention and see the same process and lifespan occuring. Look at the airline biz where the old mature almost senile Flag carriers were usurped by bright young things. First the vacuous brand of Virgin but then real deals like Ryanair and EasyJet.

    Take the Hoover market. Hoover usurped by Dyson. Cars. TV sets. Music.

    The free market exists and works. It’s Government that is the root of all big corporate monopolies and all market perversions/corruptions.

    Kill Big Gov’t and you kill Big Corps’ their biggest protection racket.


  3. John

    The Banks, believe it or not, are commercial organisations. They loan only if they have the confidence they’ll get repaid (Opps, they f**ked that one up!).

    So take any mega-monpoly corporate entity on the planet you like. Let’s take GM or GE, both of who have a return on capital of 1% (or much less, negative, in GM’s case).

    What happens when you remove the teet of the taxpayer to prop up these bankrupt dinosaurs? Yep you’ve guessed it, the banks will run for the hills.

    Remove that cancerous ponzi scheme for monopolists called ‘Government’ from society and you remove the ONLY thing propping up these huge corporate monopolies. As i say these two are joined at the hip.

    Our society is rammed (crammed) to overflowing with dinosaur corporates (and institutions) sucking off the teat of Gov’t, in fact the taxpayer, for their very survival. Look at Japan that won’t let any large Corp fail. They’ve suffered deflation for 20 years with the expense of throwing good money after bad propping up big corporate crap.

    Japan, like Europe, like the US is stagnant and decaying precisely because Gov’t and Big Biz is joined at the hip, the ultimate zombie economies, sucking ever more lifeblood from free enterprise and taxpayers to support their corrupt collusion.

    The correct word for this is fascism which the right has practiced for decades and the modern left Marxists have cottoned onto to sound ‘business friendly’ to get back into office and ply their criminal trade of emptying all pockets of wealth from society.

    Matters not the labels, focus on the structure. Monopoly structures, they serve only an elite scum, the evidence is everywhere.


  4. Hi John

    Not sure I answered your question (11.51pm) properly regards Big Banks restricting the money supply to small and medium business.

    Think through a free market, wholly unregulated (no laws or lawyers of any kind) and remember that breaks all the monopolistic (fascist) powers of Gov’t and British banks. The reason Britain only has 5, now 4, banks is precisely because of the huge draconian layers of legislation protecting their market.

    In a free market dozens if not hundreds of small banks, maybe not even banks but new entities, enter the market. It’ll break the 4 pronged cartel that is our British banking.

    Remember all the problems you think of, the free market always solves better than a regulated to hell one. Free competitive markets will solve all the problems of a viable economic system far better than a corrupt and/or incompetent political system in cahoots with corporate monopolists.

    Any fears you have of a free market pale in comparison to the fascism we currently suffer that you have little choice about, because the ponzi scheme Gov’t has been foisted on society by a corrupt elite, mainly in banking but also by large land owners.

    Government is one ponzi scheme they ratcheted on society, debt-based money is another where the productive wealth of our country is based/siphoned on their money. Rid ourselves of Ponzi Gov’t and Ponzi debt-based money (2 huge social frauds) and all things will change dramatically for the good of us all


  5. Much as I deplore 99.9% of what Governments do Velo, they have yet to invent something as unutterably daft as derivatives as now bought and sold.

    To be honest, banks ARE commercial, and that’s the problem: I’d like them to be more about financing business and property ownership at both local and national levels. This is after all their job, and nothing will persuade me otherwise.


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