Commentary - 02/20/2008

Barclays: Quietly Preparing For An Assault

Does it get any more arrogant than this? First, Barclays has the "quietly conquering the world of finance" website, and then this article comes out today in the UK Telegraph: "Buoyant Barclays eyes Wall Street's investment banks." Can it be any more obvious than that?

Barclays president Bob Diamond is preparing an assault on Wall Street's biggest investment banks after the British lender emerged relatively unscathed from the credit crunch.
Did Barclays really avoid the sub-prime fallout, or did they just dump them into the laps of the various corporations that they are involved in? The links in the paragraph below shows how Barclays is ALREADY a Major Holder of each investment bank, and a Major Holder within many of the Major Holders.
The high street bank contained its sub-prime fall-out for 2007 to writedowns of just 1.64bn, only 300m more than unveiled in November. By comparison, Citigroup, Merrill Lynch and Morgan Stanley all revealed several billion dollars of secondary provisions.
Going back to the 1889 Great Red Dragon book, let's see what the old book has to say:
The East India Company, as such, did not engage in these manufactures. All the stockholders would not wish to invest in them: so large a corporation would be unwieldy; and the immensity of the monopoly might excite alarm and provoke opposition. It would be much better to operate through smaller corporations. A few capitalists might hold the stock of a great number of them without exciting jealousy; and their management would be quiet and easy. The different corporations were like the regiments of an army: it was easy to form them into brigades, and divisions, and army corps, so as to give them the compact solidity of a grand military organization. It had the flexibility of individual enterprise, and the solidity of a despotism.
So, with that thought in our minds, we'll continue on with the UK Telegraph article. Do not hesitate to drill down through these links. They show the inter-connections between these corporations and I've totalled up the associates' involvement the best I can. There may certainly more control than I show because it's difficult to find out which hedge funds are actually fronts for the larger corporations. This is why the public need ownership transparency laws and why they are lobbied against so forcibly.
Profits improved at Goldman Sachs and JP Morgan but Citi, Merrill Lynch, Bear Stearns and Morgan Stanley all needed cash injections after sub-prime writedowns decimated their balance sheets.
Now that is all quite interesting, because back in October 2007, Barclays needed a few billion from the US Federal Reserve for its American "clients." This was documented here.
Barclays and Royal Bank of Scotland have lined up emergency funds of up to $30bn (15bn) from the US Federal Reserve to bail out American clients caught up in the global credit crunch.

Barclays has been given permission to borrow up to $20bn through the facility, while RBS can borrow up to $10bn. The banks would have to put up assets as collateral with the Fed to gain access to the cash. A spokesman for Barclays Capital said: "This secures another potential source of funding should our US clients seek it."

Kind of makes one think, "Who actually runs our Federal Reserve, and for whom?" We know that the Feds say that our Federal Reserve is owned by its member banks. So the next question is, "Who owns our banks?" I've tried to answer that on these two webpages:
Who Controls The Ten Largest Money Center Banks?
Who Controls The Largest Investment Brokers?

Henry Kissinger once noted, "Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world." One more point to make here. I do not think Barclays by itself is the controlling entity. John Varley and Bob Diamond are only well-paid EMPLOYEES. Others behind-the-scenes are pulling the puppet strings, but we'll never know who. Doesn't matter, because:

Sometimes The Dragon Wins

2008 by Edward Ulysses Cate
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