March 17, 2012 in Finance
Now that I have had a day to research fractional banking, talk with other people about it, and recognize the ramifications, my head is spinning.
The reason is simple. This concept of creating money out of thin air disrupts the traditional paradigm of wealth, value, and labor.
It begs the questions, “If an item of value can be created without effort, is it still valuable?”
However, what happens if the things that were once valuable are no longer valuable?
Does this create unrest? Does this cause people to flee in confusion?
Is this what we are seeing in the flurry of bank resignations? At last count, the number was approaching 400.
The resignation story grazed mainstream media this week when the New York Times published an Op-Ed piece by Greg Smith, a former Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East, and Africa. The piece was his resignation letter.
It documented why he is leaving. The story caught the attention of at least once major network and became the lead story on that night’s news.
He claimed he was disgusted with the change in attitude he has seen at the financial institution. He said it was all about the money and not about the customer.
Smith’s story is interesting in that it calls attention to a situation without telling the true story. This is mainstream media’s (MSM) primary way of distracting from the truth. They report a story that explains questions raised by the general public without giving the true reason. This has worked in the past as the general public as blindly accepted the explanations without question.
The technique has become less effective.
In fact, LordOfArcadia; a member of AboveTopSecret.com has followed this story extensively. Rather than buy MSM’s bland explanations, he decided to see if the number of resignations was really an abnormally.
Here is what he wrote:
The Securities Exchange Act of 1934 requires that publicly traded companies must report to the SEC whenever a member of the Board or a certain officers resigns. Also, the SEC has a database named EDGAR that is open to the public. After a little research, I discovered that corporations must report said resignations on Form 8-K, Item 5.02. From there, it was a simple matter of searching only Form 8-Ks within a specific range of dates, and including the boolean search terms “Resigns” and “Resignation”.
I felt this would at least offer us a baseline comparison to see if there is truly an uptick in resignations, or if it just appears that way. I think you will be interested in the results.
Since 2008, the number of quarterly SEC resignations has hovered around 2000 a quarter. In the fourth quarter of 2011, the number bumped to almost 7000. So far, in the not yet complete first quarter of 2012, the number is around 16,000. If we throw out the averages, there are 5000 additional resignations in last quarter and 14,000 more this quarter. At this rate, we can conservatively say the number will approach 20,000 by the end of the month.
I now realize this story is even bigger than I imagined. The hundreds of resignations were only those reported through news stories. The SEC research indicates something larger, much larger.
I will continue to write about this tomorrow.