Opinion – Here is what you need to know about Putin’s meeting with Tsipras — RT Business – John Gelmini

Vladimir Putin’s Russia has enough problems of its own but will demand a warm weather port from Greece and will want a stake in Greek banks and other assets before giving the Greeks a penny. If Greece defaulted on a Russian loan, there would be no second chances, and Russia would probably simply sequestrate the entire country, until the entire debt was paid.

Dr Alf is right to suggest that Greece is playing a dangerous game. As things stand, the EU is probably hardening towards not paying “Danegeld” to Greece. By ‘doing nothing’ Greece will financially implode.  Many people in Northern Europe are questioning the wisdom of granting Greece more loans if Greece is not prepared to deliver structural reforms.

Last time the Greeks defaulted, the Germans helped Greece as did China, in exchange for a Greek island which they will no doubt turn into a warm weather port for themselves and their blue water fleet. Providing Russia with such facilities is not a smart move strategically for Greece nor for the West.

Ahead of a formal default, there would probably be a grey period, with the government issuing IOUs to public sector workers and other ‘Mickey Mouse’ national accounting – perhaps then, Greece’s citizens will start to see their government differently? Creditors would prefer a Greek regime more capable of sorting out the economy, preferably without more bailouts and threats.

Opinion – GE’s Immelt shows how to break up a big bank – MarketWatch

Jeffrey Immelt, Chairman and CEO of General El...

Jeffrey Immelt, Chairman and CEO of General Electric speaks at a U.S. Climate Action Partnership event. (Photo credit: Wikipedia)

This story by MarketWatch about GE is a must-read in my view. Check it out!

via GE’s Immelt shows how to break up a big bank – MarketWatch.

This story somehow disturbs me. It raises mixed feelings and starts a series of conflicting thoughts about GE. There was a time in my life when I really admired GE, then I started to question GE’s effectiveness and how it interfaced with its environment. Indeed in the introduction to my doctorate I declared my ambivalence to GE as a bias.

Anyway, let me return to the MarketWatch article. The headline is very, very powerful. As I contemplated the headline, my mind raced ahead and thought of follow-up articles like, ‘What Chairmen of Big Banks in the UK, Germany, France and Japan can learn from GE’s Immelt’s Big Bank Breakup’.

Regular readers of this blog will know that I’m deeply suspicious of the Financial Services industry. Simply,

  • Customers don’t get the benefit effective competition, with too many ‘me to’ products
  • Service charges are not evidenced with transaction cost analysis
  • Customer service is frequently based on broken processes – somehow the public sector seems more customer friendly than big banks
  • Bank executives are paid far too much for ineffective performance
  • Tax paid never seems to resemble declared profitability, and the
  • Financial Services lobby seems to be too powerful in directing government policy

I still worry about what happened in the 2008 Financial Crisis. Why were bankers never held accountable? Why did so few go to jail?

Since 2008, there has been a series of high profile bailouts, yet austerity has dealt a very painful hand to the middle and working classes, plus of course to Southern Europe. Why have the banks not been held to account as well?

GE is often regarded as a bell-weather stock for US financial markets. So the suspicious part of me wonders ‘Why is GE bailing out of Financial Services, and why now?’ Of course, there are standard answers like GE is returning to its industrial base but I’m still uncomfortable.

Before writing this blog, I had a quick scan of GE’s Wikipedia page. Let me quote the following:

Controversies and criticism

The six reactors in the 2011 Fukushima I Nuclear Power Plant catastrophe had been designed by General Electric. Their design had been criticised as far back as 1972.

In March 2011, The New York Times reported that, despite earning $14.2 billion in worldwide profits, including more than $5 billion from U.S. operations, General Electric did not owe taxes in 2010. General Electric had a tax refund of $3.2 billion. This same article also pointed out that GE has reduced its American workforce by one fifth since 2002.

In December 2011, the non-partisan organization Public Campaign criticized General Electric for spending $84.35 million on lobbying and not paying any taxes during 2008–2010, instead getting $4.7 billion in tax rebates, despite making a profit of $10.4 billion, laying off 4,168 workers since 2008, and increasing executive pay by 27% to $75.9 million in 2010 for the top 5 executives.

In November 2014, Synchrony Financial, formerly GE Capital, came under investigation by the Justice Department for over potential bankruptcy violations.

Between March 1990 and February 2001, General Electric was fined or ordered to pay damages by a court 42 times, amounting to at least $934,027,215, according to a report from the Multinational Monitor.

Let me ask an open question:

What are the wider implications of GE exiting Financial Services, and is the timing significant?