SOROS: DESTROY THE BANKING OLIGOPOLY
Famed investor George Soros is calling for a break-up of the banking oligopoly in the United States. His recent comments were made in reference to the big four U.S. banks that have come to dominate the banking sector. CitiGroup, Bank of America, JP Morgan and Wells Fargo now dominate the overwhelming majority of the U.S. bank market.
As regular readers know, I believe this oligopoly is part of the problem and that Ben Bernanke has likely increased the potential risks in the U.S. economy by further consolidating the sector. Perhaps most important, however, is the risks these four banks (and all banks for that matter) are allowed to take. Soros is in favor of the Volcker Rule which would segregate deposits from a bank’s risk taking operations such as hedge funds and prop trading. This appears like a no-brainer after what we just experienced, but unfortunately, with consolidated banking came consolidated lobbyists and that’s a recipe for even further power over Congress. The likelihood of the Volcker Rule passing is close to nothing at this point.
Soros has made a career out of being right. I am guessing he’ll be right again about the U.S. banking system, but it appears as though little will be done about it….
Read the full story at BusinessWeek.
TPC,
My guess is that you voted for Obama. Do you like what he has given this country? You have to realiize by now that the plan he is following is exactly the same as what Chavez has accomplished for Venezuela. I know that you do not like where we are headed. What I have been saying for a while is that the politicians make the ultimate decisions as to the quality of our lives by their actions and the laws they pass. Being politically naive is really dangerous to our future. George Soros has been the major money backer for almost every liberal ( aka Democrat) political action committee for the last 12 years. He backed Gore, then Kerry and finally got a winner in Obama. By Soros’ own words he has said that he hates this country. When all of this is over Obama and Soros intend to give the USA a highly regulated and highly taxed far left socialist state. At the current rate of change we are only 2 or 3 years behind Venezuela. Not a pretty picture is it?
Bill,
I did vote for Obama. But I view everything thru a pretty economic-based window. My general thinking in terms of politicians is this:
If the economic policy is good then there isn’t too much else they can do to fuck up the country.
The last election was a no-win situation on this front. Obama and McCain both displayed a disturbing lack of knowledge with regards to the economy, but Obama appeared like the lesser of two evils. Thus far, his economic policy leaves much to be desired. Banker bailouts, inefficient spending, higher taxes coming down the line, etc. None of this is in-line with what I expected him to do. I thought he had the backbone to crush the bankers, spend on Main Street and generally look out for the middle class. I have been wrong so far. But would McCain have been any better? I doubt it.
Obama is running out of time to right this ship. If unemployment is at 7%+ when he runs in 2012 he will lose. Even if the economy continues at this trajectory….He better start thinking more about Main Street and less about Wall Street.
We’re far from socialist in my opinion, but that doesn’t mean we’re in good shape (despite what you see all over the media these days)….
TPC,
I have great respect for your financial knowledge and have learned a lot from you. As to your even basic grasp of politicians you are very green. There is a chasm between Obama and McCain. And you well know from previous posts that I and all other conservatives consider McCain to be a liberal just like Bush. What is the old saying: If it walks like a duck, looks like a duck and quacks like a duck; well it is a duck. You and others are trying to play economic chess with a far left socialist ( he is not trying to fix our economy he is trying to destroy it and place it under government control), and so far he has won every hand. Obama as I said has an agenda to take America down the same path that Chavez has taken Venezuela. There was a Youtube special done about 4 years ago by Venezuelans showing pictures of the country before Chavez and after Chavez. Do you really think Obama is stupid? He knows that the most important issue in the last year was to create new jobs. He has spent all of his efforts on taking over healthcare, the auto industry and now is working on the banks. He knows what he wants to accomplish, and he is right on track.
A country with four dominant banks is a disaster – they suck the life out of the economy with high NIM and fees. They signal to each other (no collusion there) and simply play their quarter of the business. Australia has four TBTF banks all pursuing identical strategies: competing by advertising, not price or service.
If the USA wants to resume its dynamic path, break the bastards up.
Bankers are not entitled to a quiet life. They are in the business of risk management, and need to be very good at it.