About Finance and Politics

What this video shows is based on facts. But why should we take it as warning. Change is natural. And it’s not as if the Christian world has been perfect, or even good for the human race.

Those who claim that teenage pregnancy or dropping from school is a life choice, and must not be judged by society, but rather be supported like any other life style, can use the same argument to justify serial rapists or murderers. After all, these, as well, are nothing but life choices.

While charities take care of individual, governments – while not forgetting about individuals – must take care of the society as a whole. Forgetting that a functioning society is more than a herd of individuals living their life choices is the safest way to chaos. We are not immune!

An old truth that in current UK seems more relevant than ever. And as people cannot uncorrupt themselves, replacement is the only solution.

In the last year, Britain’s top ten best-paid chairmen have led their companies to an average loss of 36%. In contrast, the companies of the 10 lowest-paid chairmen in the FTSE 100 have gained 1% in average.

We should then expect that companies with unpaid chairmen, or no chairmen at all should perform the best.

In a dark-humoured twist of morality, contemporary, post-democratic Human Rights have turned into state’s responsibility to protect criminals under its care, on the expense of the majority of law abiding citizens, who are invisible to the authorities. It’s high time to rethink the principle, rather than knee-jerk the details.

And for the nit-pickers amongst you who don’t accept any general statement without concrete examples. Here is one example to satisfy this perversion:

http://church-of-templar.blog.co.uk/2009/04/04/romanian-serial-rapist-5887465/

First published in the British humour magazine "Punch Magazine" on April 3, 1957: But still VERY pertinent to Banking practices today.

Q: What are banks for?
A: To make money.

Q: For the customers?
A: For the banks.

Q: Why doesn't bank advertising mention this?
A: It would not be in good taste. But it is mentioned by implication in references to reserves of
$249,000,000,000 or thereabouts. That is the money they have made.

Q: Out of the customers?
A: I suppose so.

Q: They also mention Assets of $500,000,000,000 or thereabouts. Have they made that too?
A: Not exactly. That is the money they use to make money.

Q: I see. And they keep it in a safe somewhere?
A: Not at all. They lend it to customers.

Q: Then they haven't got it?
A: No.

Q: Then how is it Assets?
A: They maintain that it would be if they got it back.

Q: But they must have some money in a safe somewhere?
A: Yes, usually $500,000,000,000 or thereabouts. This is called Liabilities.

Q: But if they've got it, how can they be liable for it?
A: Because it isn't theirs.

Q: Then why do they have it?
A: It has been lent to them by customers.

Q: You mean customers lend banks money?
A: In effect. They put money into their accounts, so it is really lent to the banks.

Q: And what do the banks do with it?
A: Lend it to other customers.

Q: But you said that money they lent to other people was Assets?
A: Yes.

Q: Then Assets and Liabilities must be the same thing?
A: You can't really say that.

Q: But you've just said it! If I put $100 into my account the bank is liable to have to pay it back,
so it's Liabilities. But they go and lend it to someone else and he is liable to have to pay it back,
so it's Assets. It's the same $100 isn't it?
A: Yes, but....

Q: Then it cancels out. It means, doesn't it, that banks haven't really any money at all?
A: Theoretically......

Q: Never mind theoretically! And if they haven't any money, where do they get their Reserves of
$249,000,000,000 or thereabouts??
A: I told you. That is the money they have made.

Q: How?
A: Well, when they lend your $100 to someone they charge him interest.

Q: How much?
A: It depends on the Bank Rate. Say five and a-half percent. That's their profit.

Q: Why isn't it my profit? Isn't it my money?
A: It's the theory of banking practice that.........

Q: When I lend them my $100 why don't I charge them interest?
A: You do.

Q: You don't say. How much?
A: It depends on the Bank Rate. Say a half percent.

Q: Grasping of me, rather?
A: But that's only if you're not going to draw the money out again.

Q: But of course I'm going to draw the money out again! If I hadn't wanted to draw it out again I
could have buried it in the garden!
A: They wouldn't like you to draw it out again.

Q: Why not? If I keep it there you say it's a Liability. Wouldn't they be glad if I reduced their
Liabilities by removing it?
A: No. Because if you remove it they can't lend it to anyone else.

Q: But if I wanted to remove it they'd have to let me?
A: Certainly.

Q: But suppose they've already lent it to another customer?
A: Then they'll let you have some other customers money.

Q: But suppose he wants his too....and they've already let me have it?
A: You're being purposely obtuse.

Q: I think I'm being acute. What if everyone wanted their money all at once?
A: It's the theory of banking practice that they never would.

Q: So what banks bank on, is not having to meet their commitments?
A: YOU GOT IT!

You have two cows, and you write down on a piece of paper that the cows are worth $100 each.

You notice the cows are on fire. Your paper still says $100.
Fortunately, mark to market has been suspended so you don't have to pay attention to the fire.

Your cows are dead from fire. Your paper still says $100.
Fortunately, mark to market has been suspended so you don't have to pay attention to the dead cows.

You notice that you aren't getting as much milk as expected, so you adjust the model and mark the cows down to $98. You are confident, however, that the dislocated stream of milk revenue will quickly revert to expectations.

You need to borrow some money so you ask investors for a loan against the cows. The investors tell you the cows are dead, and you already owe them $200 dollars you borrowed to buy them in the first place. You show them the paper that says the cows are worth $98 each.

They light your paper on fire. You ask the government to buy the dead cows at $98 each.

The government holds meetings all weekend and finally comes up with a plan to inject $45 dollars into your cattle ranch. In exchange, the government gets a right to milk generated from the cows at some point in the future. It expects you'll buy a new cow with the $45.

You have two dead cows, $45 and $200 in debt to your investors. You have no plans to buy new cows, so you take the $45 as a bonus.

Remember Lee Iacocca, the man who rescued Chrysler Corporation from it's death throes?

He's now 82 years old and has a new book, 'Where Have All The Leaders Gone?' In his book he is talking about the US, but it is just as relevant to what is happening here in the UK.

Here are some excerpts.

Lee Iacocca Says:-

'Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, 'Stay the course.'

Stay the course? You've got to be kidding. This is America , not the damned 'Titanic'. I'll give you a sound bite: 'Throw all the bums out!'

You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore.

The most famous business leaders are not the innovators but the guys in handcuffs.. While we're fiddling in Iraq , the Middle East is burning and nobody seems to know what to do. And the press is waving 'pom-poms' instead of asking hard questions. That's not the promise of the ' America ' my parents and yours traveled across the ocean for. I've had enough. How about you?

I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. The Biggest 'C' is Crisis ! (Iacocca elaborates on nine C's of leadership, with crisis being the first.)

Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.

On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. A hell of a mess so here's where we stand.

We're immersed in a bloody war with no plan for winning and no plan for leaving.

We're running the biggest deficit in the history of the country.

We're losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs.

Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble.

Our borders are like sieves.

The middle class is being squeezed every which way..

These are times that cry out for leadership.

But when you look around, you've got to ask: 'Where have all the leaders gone?' Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point.

Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?

We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.

Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane or demanding accountability for the decisions that were made in the crucial hours after the storm.

Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.

Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when 'The Big Three' referred to Japanese car companies? How did this happen, and more important, what are we going to do about it?

Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.

I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bonehead on Fox News http://www.foxnews.com/ will call them a name? Give me a break. Why don't you guys show some spine for a change?

Had Enough? Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope - I believe in America . In my lifetime, I've had the privilege of living through some of America 's greatest moments. I've also experienced some of our worst crises: The 'Great Depression,' 'World War II,' the 'Korean War,' the ' Kennedy Assassination,' the 'Vietnam War,' the 1970's oil crisis, and the struggles of recent years culminating with 9/11.

If I've learned one thing, it's this: 'You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a call to 'Action for people who, like me, believe in America '.. It's not too late, but it's getting pretty close. So let' s shake off the crap and go to work. Let's tell 'em all we've had 'enough.'

Make your own contribution by sending this to everyone you know and care about. It's our country, folks, and it's our future. Our future is at stake!!

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes.
So the first four men were unaffected.
They would still drink for free. But what about the other six men? The paying customers?

How could they divide the $20 windfall so that everyone would get his fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $15 instead of $18 ( 20% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free.
But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $ 20,"declared the sixth man.
He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a Dollar, too.
It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth man and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him.
But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, this is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

It has taken them some time, but at last, our train masters have discovered a new way to cut more cost, while improving their statistics and making commuter’s trip even more miserable. Three trains with one stone. Not too bad for people who get huge payments for failing at their job.

How do they do it?

The Bedford to Moorgate trains, a morning service only, take commuters from Bedford, Luton, Harpenden and St Albans to the City. However, as Moorgate train ticket cost as much as a ticket to Farringdon, the masters have decided to stop this service altogether, and let everyone take the London Bridge train, and change at Farringdon to the underground.

This will have a strong cultural impact, as it will force direct commuters to the City to experience joys of the London underground. Paying the additional underground fare, will add to consumer spending, increase our GDP, and help the economy at this time of hardship.

On the other hand, by not operating this train, the train company will still get the same number of commuters paying the same amount of money. Absolutely genius isn’t it?

Besides, no one likes the City worker any longer. Let them all suffer.