Macroeconomics

October 18, 2011 § 6 Comments

How….

does it work? What makes the banks tick? How did things get into this situation? Where did all the money go and what will happen next?

Tonight I will be answering questions like these and many more using my experience and skill as an IB in the front office of a prestigious German bank. I will draw on hard facts and figures and place them in the context of the struggle currently being faced by England’s poor. I will aim to enlighten and brighten up this dark night.

Ok, so are you ready? Let’s begin. First of all I would like you to lie back and imagine an egg. Picture it in your mind. Revolve it carefully. Examine it in all its forms. Now, follow my train of thought here, picture it closely–  that egg is a representation of the State.

We all know that there are many ways of cooking an egg—frying, boiling, poaching, baking. In other words there are many ways of organising a state. Imagine yourself breaking open that egg and dumping it into the frying pan. Next envisage what kind of egg you would like it to be.

Would you like to fry it (federalism), scramble it (anarchy) boil it (totalitariansiam) or just poach it until it is nice and fluffy (democracy). Which did you choose? I chose mine poached.

Now let’s also look at the composition of an egg. First you have the egg white— the people, the masses, the 99%. Within that you have the tasty yolk— the bankers, the wealthy, 1%.

Now we all know that the yolk is the tastiest part of the egg. While the white can be used to make cakes, bread that sort of thing, its morally redundant from a tastiness perspective.

Now that we have established this fact, one must ask oneself the very exacting question—which came first, the chicken or the egg?

Well the chicken obviously gave birth to an egg while it itself hatched out of a chicken. Either way I think that we are both in agreement, an egg cannot survive alone. It is in itself a complete object, perfect in all its parts. So you see bankers are necessary. Not everyone likes the yolk but an egg without a yolk would be just hideous.

What are you going on about Tim, you say? The truth is I don’t know. What I’m trying to say is that banks are evil institutions which suck the blood dry from us, the poor folk.

Indeed banks have been the scourge of the capital system since forever. Recall how in ancient times Jesus broke into the temple of Jehovahand scattered the usurers wages all over the floor in a fit of rage.

No one likes them. And sure the last four years have been tantamount to buggery. Yet where would you put your money without a bank? They are necessary!

Here are some hard stats:

The total value of the UK banking system is in the region of $3trillion pounds.

UK banks made profits of 15 billion pounds last year.

The average wealth of a citizen in the UK is nearly thirty times that of an Australian.

The richest three traders on my desk earn more than 18 million pounds per year.

The facts, I think, speak for themselves.

So, Tim, why do 1 % of the world control 99% of its wealth?

Well my simple answer is: “I don’t know.”

Yes it’s as simple as that. I haven’t the faintest idea. And how could I? They’ve got me trading the Nikkei 24/7/31/365. I can tell you about good places to eat sushi in Tokyo (Nippokami in Rappongi), the best hotels in Gstaad (the Palace), where to buy your new Ferrari (Barry’s Autoworld in Wimbledon). But who knows why the world is in such a fix. More to the point- who cares!

Banks actually don’t make any money these days. Banks are bankrupt!

Look lets just break it down. A poor child in Africa probably controls 0.00000005% of the wealth in this world. You, a reader and thinker, probably control at least 17 times more wealth than that poor child.

A poor child in Africa longs for rain. As I look out of my window I can see the rain streaming down my pane. Yes it’s wetting it down.

A poor child in Africa would kill for an egg. And you, with your cosy rooms, twenty carat Cartier, polo games and Brietling watch shun them! Shame on you!

For who is better off tonight? Is the banker sitting next to me talking about having dinner at Claridges happy? Will his steak au poivre taste any better in his mouth just because it has hung in an oak cask for 17 days longer than yours? Will his chips be more succulent just because they were cut from the finest Royal Jersey potatoes and fried in a light mulberry batterment than the one’s you buy from, say, Waitrose?

No I hear you, munching on your pate, say. Point made.

So I leave you with one final thought. They may control 99% of the wealth but they can’t control 99% of the happiness!

Thank you and good night!

This will be followed by a Q and A session on Twitter where I will endeavour to address YOUR questions.

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§ 6 Responses to Macroeconomics

  • Eidos says:

    Hi Secret Banker,

    I have a question for you, but I am not on Twitter so I can not engage in conversation with you there.

    Can you say whether it is a true assumption that Capitalism requires expansion (empire building) to exist?

    If not, can you propose a few things that might define a new Capitalism minus this?

    By the way, you drop so many clues about where and with whom you work it couldn’t be hard to figure out your identity. So, I am assuming your profile is fictional. But I still find it entertaining.

    I am an OWS supporter and have attended the NY protests.

    The email address I entered is not real, so perhaps you can answer with a post. Thanks.

  • Poussir says:

    Hello M. Secret,

    I live in Nairobi, Kenya….thats in Africa. I am looking out of my window and praying for rain because we have been going through a rather strenuous drought.

    In addition to this the local power company raised its prices by almost 20% this week, apparently attributed to the financial shenanigans in Europe.

    Our currency is the worst performing currency in the world at the moment, or is it Nigeria’s. It doesn’t matter, all I know is that its lost 30% of its value and that translates to a sharp rise in almost everything.

    See, we import quite a lot and only export a bit of tea, coffee and veggies. Everything is twice its price now but I still earn 400$ a month and support a child.

    Rumours abound that its banks who have been doing a naughty bit of forex trading and hoarding currency to cause a shortfall in the market. I know that we need banks but it pains my heart to deny my child something while a banker exits his AC’d office and leaps into a chauffeured house a million richer because of games they are playing with us.

    So with due respect, I will put money under my bed. I will borrow only from relatives who charge no interest and I will never set foot in a bank again. If I want to make payments I will use mpesa (http://en.wikipedia.org/wiki/M-Pesa) to transact.

    I have developed an unhealthy hatred for capitalism and what it stands for so bankers are included in my unhealthiness. I will read your blog though, only to learn what a steak au poivre is and maybe have a laugh to forget my world.

    Regards,
    Poussir

    • sexbank says:

      Poussir
      Indeed the market has been undertaking many shenanigans recently and I pity your plight. Its certainly a sad state of affairs. It is no secret that the rate of shenanigans multiplies daily, so fast that our economists have coined the new term of ‘shenanihanigans.’ There may be no end to these dealings, and in time it would not surprise me to learn that these shenanihanigans will soon multiply to become shenanihaniganinans. Hoard your currency while you can.
      Tim
      PS– I wonder if you are any relation to the Rogermans of Nairobi?

      • Poussir says:

        Sexbank,

        I believe my second cousin on my mothers side has been doing something akin to rogering for the Rogermans of Nairobi.

        Thanks for your sage advice. Granted I will not sleep uncomfortable as I hoard my currency.

        PS. Can I open an untraceable off-shore account with about two hundred dollars?

      • sexbank says:

        Good, I trust that you will spread the news of my great works far and wide, as I surely would like to make inroads into the Nigerian market. Its a booming place.

  • Robert Browne says:

    Well Tim,

    Enjoy it while it lasts, because pretty soon you could be eating Walkers crisps and singing “buddy can you spare a dime” at the entrance to some tube station or buddy can you spare a penny.

    Meredith Whitney told us 17 months ago, back in May 2010 that European banks were stuffed with hundreds of billions of bad loans. Nobody believed the joke stress tests. Personally, I was predicting the demise of the European banking system well before Ms. Whithney joined in based on my own asymmetric study of what was/is happening in Europe.

    I take some satisfaction that at least the child in Africa will have some skills and strength that enable it to survive with the help of God! Now what skill does an investment banker have that can help them to survive in the real world besides waffling about knowing something about how to play the derivative time bomb. Trouble is Tim I am betting that very few will have the balls or brains to get off before it explodes.

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