The holy curse of bankers

By Chemrock

Shylock, the Jewish moneylender, demanded a pound of flesh from his debtor who could not repay a loan. With that, Shakespeare condemned a moniker on the Jewish community for posterity. Few are those who bother to contextualize what they read or hear. In ancient days when Jews were dispersed all over Europe, they were terribly discriminated against and denied almost any employment or profession. Moneylending in those days was a detested occupation as it was considered immoral. What were a discriminated people to do but take up the jobs that nobody wanted? Many in the Jewish communities ended up as hated moneylenders. Shylock was a consequential creature of the circumstances of the time. As a historical footnote, antisemitism probably evolved out of a perception of Jews as  cold-hearted blood-sucking parasites of humanity.

Throughout history in the Judeo-Christian world, the hand that lends earns ostracism, the hand that borrows earns sympathy. Moneylenders have been chastised, vilified, jailed, killed, expelled, made to make restitutions, properties confiscated. Today, it is fashionable to strip bankers of their veneer of respectability and call them ‘extractive’. What exactly does this mean? It’s a take-off from the term ‘extractive economy’ which describes an economy primarily based on the extraction of non-renewable resources, and an elite community that skims off the top, diverting much wealth to non-productive activities instead of being ploughed back to further develop the economy or distributed to the poor. So bankers are extractive, although not much is explained how they do it. One criticism is bankers don’t do any productive work, they let their ‘money earn money’. The issue is basically an old dead horse named USURY that has been kicked around since time immemorial.

Religion killed usury:

In the ancient world, ‘interest’, as we understand it today, was an unknown concept. ‘Usury’ was what a borrower paid for the use of a loan. It could be additional money, some items of value like a goat, some grains, or in Shylock’s’ case, a pound of flesh. Usury is viewed as immoral in most great religions – in Verdic texts, in Judaism, Buddhism, Christianity and Islam. Great Roman and Greek thinkers of the past too, viewed usury as immoral. Art reflects the times, and so Shakespeare has his hook-nosed Shylock; in the Divine Comedy, Dante has a special place in Purgatory for the moneylenders; Charles Dickens has his evil Fagin in Oliver Twist and his money-grubbing Ebeneezer Scrooge in A Christmas Carol. Where did this deep sense of morality come from? In their worldview, and the simple economy of the time, lending predominantly would have been done at times when someone was in dire need. When someone is in need of shelter, or food, the right thing to do is to provide it free. To do otherwise is to take advantage of the helpless. It has to be from this circumstance that usury became viewed as immoral and unethical.

Justification for the economic activity of lending faces a morality-practicality dichotomy. Philosophers and theologians who wrestled with this have provided no definitive solutions. Morality is in constant conflict with the inalienable need in the real world for loans.

“Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent upon usury. Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury; that the LORD thy God may bless thee in all that thou settest thy hand to in the land her thou goest to possess it.” …Deuteronomy 23:19-20

Even the Abrahamic God is undecided. The final word from the Old Testament is basically Jews are not allowed to take usury from fellow Jews, but they can take it from the Gentiles. During the early part of the Middle Ages (5th-15th century AD) Jews were lending to the Saracens who were conquering the Levant and parts of Europe. (The marauding Arabs were called Saracens till the 10th century when they became known as Muslims). Jews were allowed to lend to their enemies, since the rationale was to pauper thy enemies with usury. Usury was so detested that the Torah requires all debts to be extinguished in the Sabbath Year.

In the New Testament, there was the only time Jesus was totally out of character when he displayed great displeasure and reacted physically at the Temple. How he thrashed and ranted at the moneylenders. On the totem pole of Sins, Usury is probably right at the top, a heinous sin, as this single episode suggests.

The Church has been selective in its position on usury. Sometimes it turns a blind eye, sometimes it comes down hard on moneylenders. Some usurers stay in their good books, some don’t. In 325 AD, the Council of Nicaea banned the practice among clerics. The Church was instrumental in getting Emperor Charlemagne to implement the prohibition of usury into law in 800 AD. Yet, where moneylenders were driven out, it was to the Church that people turn to for loans. Monasteries took on many mortgages for farmlands. After the Knights Templar were disbanded in 1312 AD, the Church took over some of their banking business, funding princes and lords of the land.

During the Reformation years (16th century), Protestant thinkers tried to find leeway to accommodate usury. Given the background of the ecclesiastical competition of the time, it could have been a populist move to win memberships.

Martin Luther, a Reformation leader, felt usury was a grave enemy second only to the Devil, and men are too corrupt to be guided by Christian morality. However, he recognized usury was inevitable. The secular authorities should allow and control it, he said.

John Calvin, another Protestant theologian, postulated that since God allows usury on ‘strangers’ (non-Jews), usury should not be discriminated against. He saw a difference between a person who collects a one-time usury (who should be allowed), and one who sets up business as usurer (who should not be allowed). Usury should be allowed, but subject to a golden rule of observing the Christian morals and charity. He felt usury must not be collected from the needy, but it is alright to lend to the wealthy if it is for a Christian cause.

(Singapore stole Calvin’s idea when it implemented the law against chewing gum. It is illegal to sell chewing gum in Singapore, but there is no law against its consumption. Anyone caught entering the country with a packet of chewing gum has nothing to fear as it’s for personal consumption. But if several packets are found, then it’s deemed for the purpose of selling which is illegal).

Morality of Usury cannot be rationalized away:

In the Age of Reason, Aristotle came down hard on usury. He reasoned ‘money is barren’ and served no productive purpose. The lender does nothing, but rides on the hard work of the borrower like a parasite and extracts his usury. Aristotle was one smart Alec, but he certainly was never omniscient. There were lessons he learned from Plato that were false. But that does not mean he was dumb either. Contextualization is always helpful. He simply didn’t have the evidence to reason otherwise in his days. In the 4/5th century, the thinking was money was just a means of exchange, all things have intrinsic value. So 1.000 pesos today is the same as 1,000 pesos tomorrow. His view of ‘money is money, ‘money is not productive’, and ‘money cannot make money’ were persuasive thoughts that heavily influenced the old world. Despite the fact that the concept of time value of money is now generally understood, the Aristotelian view still holds sway in some quarters to this day.

In the late Middle Ages came the Scholastic thinkers. Scholasticism is a method of critical thinking with a strong emphasis on dialectical reasoning. Scholastics did not invent anything, their legacy is in their methodology which laid the foundation for all those great universities that sprung up during the Renaissance. They too could not make an argument that usury is not immoral. Their contribution in this conundrum is the proposition that Time has value. The lender is denied the use of his own money. Had he not loaned the money out, he could have used it in other productive ways. Thus usury is compensation for the loss of use. However, they reasoned, Time belongs to God, therefore the lender cannot make money on what does not belong to him. Nevertheless, here was a breakthrough — the idea of time value of money.

In the mid 1500s, Charles Dumoulin, a jurist and a Calvinist, wrote the book Treatise on Contracts and Usury. He argued that money does bear fruit. Loans enabled the borrower to produce wealth which he would not have been able to do otherwise. He was forced into exile by the Church and the book banned. This was the first ray of light that went on to influence European thoughts on money-lending. Again to contextualize, the economy was getting more complicated and lending was increasingly being observed as a necessity in the real world.

Francis Bacon (1561–1626) saw the utility of loans in the provision of liquidity and capital to consumers and businesses. Biblical morality requires loan gratis which is an impossibility. He suggested an usury of 5% on loans for everyone, and a higher usury on some loans to be acquired by some permit system. Bacon basically introduced the modern concept of a base rate and risk pricing on loans.

Usury in the real world:

When things get complicated, answers are to be found in ordinary minds. It’s like a variant of Occam’s razor. What do people do when usury is forbidden – money lending went underground. Soon they found loopholes and ways to circumvent the laws. One common way was to lend in a different currency with usury explained off as exchange differences when the loan was repaid. They invented currency swaps long before our time.

Lending is an inalienable necessity in human affairs. It has oiled the wheels of the economy, no matter how backward or advanced that may be. The Knights Templar banking services enabled the pilgrimages into the Holy Land and grew rich funding the princes and lords of the land. The Church usurped some of the Templar banking activities and grew equally rich. Loans were necessary for the trading and business activities as well as funding wars in the ancient days. No matter the condemnation, discrimination, dangers — money lending persisted because there was a need.

In the Renaissance Period, the New World opened up and trade and commerce expanded at great speed. It was also the Age of Exploration. Economy was no longer the same as in the old days. Capital was in much greater need — to fund commerce and exploration. Had lending still been forbidden, Europe would have remained in the Dark Ages. It was lending and banking activities that pushed Europe into the Industrial Age. It was already evident that lending activities, where permitted, or at least tolerated, the place or city prospered. Genoa was laissez-faire to financial activities and the city flourished. It grew in importance and power that the Church took no action. Holland was the best example. The financial activities supported an economic boom as trade passed through their great ports and made Holland a power in shipping and shipbuilding in the 17th century. In our modern world, better developed and economically successful countries have one thing in common — a sophisticated financial system, one that’s missing in poorer countries.

The utilitarianism of lending gradually gained acceptance, but it could not remove the stain of immorality. In the 1200s, the concept of ‘interest’ began to gain acceptance. ‘Interest’ is from the Latin word ‘to be lost’ so the idea is one of opportunity cost. The lender is compensated for the lost of the opportunity to use his own money. To pay someone for a ‘loss’ is palatable, but a ‘profit’ is detested. In places where lending was not banned, ‘interest’ was used, elsewhere, ‘usury’ continued to be used. This problem of not calling a spade what it is, is the same as what Islam struggled with and decided ‘interest’ is haram (dis-allowed under Sharia Law), but ‘risk-profit-sharing’ is halal (allowed). And so Islamic banking arrived on the scene providing a repackaged usury, fooling no one but themselves.

In modern times, lending and interest is mostly left to individual contractual rights on a willing party basis. Interest is an accepted cost of capital, but excessive or exorbitant interest is usury. In most countries, interest is in fact set by the government. The Fed decides on the US$ rates and central banks of each country determine their respective rates. All governments are in constant search for Adam Smith’s ‘perfect’ rate. With the base rates determined, lenders add a spread to cover their costs and risks. To prevent predatory lending, countries have various legislation to protect the weak, such as banning illegal money lending. In US, states have laws that set a usury rate which is the highest rate that banks are allowed to charge for loans.

Where are the economists:

“Economics is not a morality play…. The market economy is a system for organizing activity — a pretty good system most of the time, though not always — with no special moral significance.” …. Paul Krugman

Adam Smith (1723–1790) believed that there is a cost to be paid for borrowed money but that the government must regulate the rate. Left unchecked, high interest rate will damage the economy and hurt society. There is somehow, a ‘perfect’ interest rate. Thus the welfare of society was the only justification against the utilitarian argument.

John Keynes (1883–1946) agreed the government must control the interest rates and accepted usury is necessary but condemned it as ‘foul and unfair’. “Avarice and usury and precaution must be our gods for a little longer still.”

Whose fault is it anyway:

In almost every financial disaster, the bankers get chastised. Seldom has there been any serious examination of the true nature of the problems in each specific event. Here’s Franklin Roosevelt putting the blame for the Great Depression of 1929 on bankers :

“The rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men . . . [We must] apply social values more noble than mere monetary profit.”… Franklin Roosevelt

The 2008 sub-prime housing mortgage bubble brought condemnation on Wall Street bankers. Everyone knows about the complicated and junk financial derivatives that brought the market down. Yet none will say it’s the government that created the whole situation. In a nutshell, Fanny Mae and Freddie Mac were agencies set up by government to help provide housing loans to the low-end market, a segment that would not have been able to obtain a housing loan. Clinton and Bush Jr pushed the envelope for the 2 agencies to further their social objectives. This eventually resulted in Fanny Mae and Freddie Mac underwriting all those sub-prime mortgages into billions of $ exposures. With risks fully under-written, financial institutions practically gave real estate loans away to any guy they could pull off the streets. In an era of cheap money, borrowers went overboard into buying houses that they could never afford to pay, driven by greed to cash in during a fast rising real estate market. Fanny Mae and Freddie Mac were government-owned, it then went public (with govt owning the preferred shares), and after 2008, they were nationalized again. Here is a great example of bad outcomes to those tantalized by government take-over of the corporations of the oligarchs.

The investment banking arm of a bank involves certain activities that are of a higher risk (trading in complicated financial instruments and derivatives) whilst the commercial banking arm involves depositor money and financial services to commerce and industry. In the financial disasters of 2008, the high risk investment banking activities brought the banks to bankruptcy. The govt took to pumping cash into the banks. Not to do so would have created a systemic failure to the whole economy because of the closure of the commercial banking arm. Bankers were handed free passes which angered the public. Yet, the deeply rooted cause of the problem was the repealing of the Glass-Steagall Act by Bill Clinton in 1999. Under the Glass-Steagall Act, banks were not allowed to do both investment banking and commercial banking.

In today’s highly corporatized world, owners often no longer run the business. Hired operatives run the business, although many are compensated by stocks and thus gain ownership. But these are not the original family owners. Hired operatives are profit driven with a lower time horizon than the owners. Owners, on the other hand, are more driven by adding value. Down the chain of command, departmental managers running profit centers, with hefty compensation on commission packages, have even shorter time-frame views. They take action that often is in conflict with other departments or long-term interest of the corporation. In today’s economy, transactions and volumes are getting mega-sized. Operations and products are getting extremely complex and technology driven, leaving operating staff, monitoring management, and regulatory agencies, far behind the knowledge curve. The collapse of Baring Brothers in 1995 is a good illustration of what can go wrong. A young hot-shot futures trader, Nick Leeson, practically ran their Singapore office to the ground with his Pounds 827 million losses in speculative trading. Back office supporting staff, head office management, and external auditor all had no idea of what was going on.

Conclusion:

Witches, real or suspected, were burned at the stakes in the mad witch-hunts of the Middle Ages. Moneylenders as a group probably suffered just as much. King Edward I expelled the Jews in 1290, never to return again till the 17th century. In 1190, a group of Jews sought refuge in a castle in York, England, to escape rising anti-Semitism. Some local nobilities who owed substantial money to some of the Jews, capitalized on the situation and instigated violence that ended with the massacre of 150 Jews. Each occasion where the Church, lords of the land, or Kings expelled moneylenders or ordered restitution, borrowers instigated the expulsions from the land or rejoiced. Where would morality be if all of us, having some unpaid mortgages or overdrafts or credit card debts, demonstrated for the heads of these so-labelled parasitic bankers.

Condemnation of bankers as detestable usurers still resonates everywhere. Some quotes extracted from TSOH :

  • “.. bankers…. are parasitic creatures of the capitalist system..”
  • ” They don’t do anything productive in the real economy.”
  • ” They make money off money”
  • “…other people do the heavy lifting.”
  • ” … capitalism in the country <is> based on neo-liberal principles and enabled by parasitic bankers….”
  • “… does not create value or wealth in the real economy. On the contrary, it extracts, it siphons wealth from the economy through punishingly high interest payments…”

If these all sound familiar, they indeed are. Here are some of Karl Marx’s views :

“…. all production is a result of manual labor. The capitalists take advantage of their control over the means of production — secured to them by private property — and “loot” the laborers’ work. Moneylending and other financial activities are not productive, but exploitative; moneylenders exert no effort, do no productive work, and yet reap the rewards of production through usury…”

Capitalism, it’s warts and all, at least worked alright generally and served a free world creditably. Banking services which are free and open have been the crucial engine that led the world out of the Dark Ages and into the modern world. The experiment with the economics of communists is over. We know what happened. The hearkening call to the good old days of proletariat-bourgeoisie rhetoric fails to take heed of some wise words :

“History repeats itself, first as tragedy, then as farce.”…. Karl Marx

 

Comments
65 Responses to “The holy curse of bankers”
  1. karlgarcia says:

    Per Micha wisdom, banking is what is wrong in this world. I often wonder if he/she works in or for a bank or a financial institution, because of obvious knowledge of banking and finance.

  2. karlgarcia says:

    5-6 lending was branded usury until recently, the more evill loan sharks took every atm of every working pinoy(hyperbole).

    Lending, microlending, paluwagan are the trend now. (Same difference)

    • Local (interpersonal) lending in my area can be as much as 2% per MONTH, the equivalent of 24% a year.

      • karlgarcia says:

        Yikes.

        • popoy says:

          An octogenarian would like to request TSOH banking gurus:

          IS THIS 5/6?

          Daily, during early mornings in the 1960s in P and M towns of
          Rizal Province public markets entrance, a middle age woman
          Could be enticing vendors without puhunan: PATUBUAN, PATUBUAN.

          Lending P500.00 as capital for 5/6 to be paid at 5pm. She collects . . .
          End of day = P600
          End of week = P1,791.59 (more than 3 times the capital of P500).
          How much will the principal grow after one year? More than P1 MILLION?

          ARE THE INTEREST RATES OF 5/6: 20% per day; 140% per week;
          600% per month ? Please CORRECT and EXPLAIN why 5/6
          IS NOT 7,300% per annum when the legal interest rate is only 12%

          How true is the urban legend that seriously ill loan sharks take
          So very long to die?

  3. Ancient Mariner says:

    As Will Shakespeare sai, “Neither a borrower or a lender be”. Wise words.

    • chemrock says:

      Without borrowing –
      – you will never be able to buy a house because all money will be spent on rent and there is’nt much left to save up for ( unless your parents have an extra room ).
      – you won’t be able to buy a car because by the time you sabed enought, the prices have risen.
      – you won’t be able to buy big ticket gadgets because by the time you saved enough, the model is already outdated.

      Seriously, there is nothing wrong with borrowing if your cashflow is positive, if the money is spent wisely, or if the money is spent on a project whose RaOI is better than the interest cost.

      As to lending – do lend to those in need, without interest. But never be a sucker.

  4. edgar lores says:

    *******
    Thank you for this wide-ranging historical review of the practice of money-keeping and moneylending.

    I understand the extremes of abuse that financial institutions have wrecked on their customers.
    In Oz, today marks the day when the Royal Commission on Financial Services will release its report and fireworks are guaranteed.

    However, I see banks and financial services as necessary. Not as a necessary evil but simply as an essential factor and facility of living.

    I have personally benefited from the existence and services of banks, both as a depositor and as a borrower. And as a sender and receiver of funds.

    o As an OFW before, I would have been at wit’s end where to keep my salary and how to send money to the family.

    o I am almost certain I may not have come to own the cars or houses that have passed through my hands without banks.

    o I am aware that banks have had a hand in the continuous creation and maintenance of all man-made objects and businesses around me.

    o Every economic transaction I make goes through the bank.

    Now, as a pensioner, financial institutions greatly assist in keeping me afloat. Come to think of it, I have no worries — well, almost none — and can devote my time, not mostly to the pursuit of biological existence but mostly to the pursuit of what Eckhart Tolle calls “presence” and spiritual wellbeing.

    So a “Yay” from me for the “accursed” bankers.
    *****

  5. Micha says:

    No, not yet Fukuyama.

    Triumphalist proclamations notwithstanding, the end of history has been reset.

    Russian communism is a perversion of Marxist thought, its collapse was borne by nothing more than a failure of autocratic Stalinist crap. And as long as there’s a steep tatsulok in our current social order of things – enabled by the parasitic overlords of capitalism – stability will be far down the horizon.

    What to do with the private bankers?

    Charge them with interest.

    • chemrock says:

      Micha, it’s a rather stylist comment if I may say so.

      Do permit me to explain to most readers whom I’m inclined to think do not understand. Francis Fukuyama wrote ‘The End of History’ in late 1980s. He was basically reflecting on Immanuel Kant and Hagel’s views on Idealism theories. Fukuyama was reflecting on this against the backdrop of communism undergoing an implosion at the time. Gobachev was giving up on state run economy and China was embracing capitalist reforms. The backdrop was all through the Cold War period, communism was the only ideology left standing that challenge the liberal ideology of free markets. Fukuyama saw the collapse of Soviet Union and China (he was wrong on China). So with the death of communism, there is no more ideological challenge to liberalism. There will be a state of hemostasis in the world and some kind of wonderful will fill the world. He termed it The End of History.

      So Micha points out here not so fast, unfettered liberalism is not yet king.

      If I may go further, I guess Micha is alluding to the big challenge of great inequality of wealth that is all over the world.

  6. popoy says:

    OOT but the topic has high public interest salience: THE REHAB OF MANILA BAY.

    The Laguna de Bay and the Manila Bay may already have breached the VANTAGE point of NO RETURN. Both can’t be rehabbed anymore to its pristine beginnings. But you can not bring life back to nature that NEVER DIE. Both bays aren’t dead and to claim so smacks of natural science ignorance.

    TSoH sentinels should be asking about the broad and specific plans as based on a thorough FEASIBILITY STUDY already done for the Manila Bay Project. Aside from the direct and indirect BENEFITS and COST to beneficiaries and SUFFERERS such mammoth expenditures could just turned into grand pilferage of taxpayers money.

    ADEQUATE planning alone will EAT 20% of the Project Cost. Four Billion Pesos project will need 800 millions pesos just to plan it. This is PART ONLY (so elementary) of what to look for:

    Technical feasibility—HOW, the thousand HOWS; hydrologic cycle of the Manila Bay, involving rivers and tributaries, the entire far flung watersheds in the Bay’s perimeter; defined rehabilitation, cleaning, dredging, etc. Partial reclamation cannot be rehabilitation; The extent of damage as basis, to plan the extent of rehab.

    MARKET feasibility – WHO buys and benefits; the opportunity cost of capital; public funds spent for the project is a lost to Education, Health, etc., spending; the affected segment of the population: who suffers (the Squatters) who benefits, shipping industry, etc.

    LEGAL feasibility: the HOW of control, punishments, of polluters, need for amendments, repeal and enactments of new laws;

    COMMERCIAL/FINANCIAL FEASIBILITY -HOW MUCH in terms of COSTS and BENEFITS. Prepared accurate PROJECTED repeat PROJECTED financial statements: Sources and application of Funds; Cash Flow, Income/Profit and Loss STATEMENT and Balance Sheet.

    OPERATIONAL feasibility: WHO, WHICH AND HOW of agency involvement. The nitty-gritty of scheduling TASK, ACTIVITIES;

    THE AXIOM: A government PROJECT IS NOT a government program. A PROJECT HAS A DEFINITE BEGINNING AND A DEFINITE ENDING. A project consumes DEFINITE TIME AND DEFINITE RESOURCES.

    RECLAMATION IS NOT REHABILITATION. The Public Estates Authority has a colorful history. To revisit the experience is to have a hint of wisdom.

    • popoy says:

      After posting the above, I started reading online news. LOOK what I just read:
      ———————–
      Magin Martin Louis Ongpin • 9 hours ago

      As a former member of the Board of the Pasig River Rehabilitation Commission (PRRC), at the time when Gina Lopez was PRRC chair, I have long ago looked for the source of the waters that flowed into Manila Bay and found out that it includes the waters from the Pampanga River, Angat River, Tullahan River, rivers that flow into Laguna Lake, Zapote River and the Parañaque River. All toxic waste that flow into these rivers must be treated before it goes into the Manila
      Bay. This include fertilizers used for the crops and feeds and metals elements used in material products used in the materials we use in everyday life like steel, cement plastics, polyesters, polyamide, PVC, polystyrene, etc. Fisherfolks in Macabebe, Masantol, Hagonoy, Obando, Malabon, Navotas, Laguna Lake, Zapote, Parañaque and we in Metro Manila should express our concern if we want want to sustain our fresh and bracket water food supply.
      Link:

      https://www.philstar.com/headlines/2019/02/04/1890772/duterte-places-reclamation-body-under-office-president

      • karlgarcia says:

        From Cito Beltran. The pollution(not just Manila Bay) is a spiderweb of faults.

        https://www.philstar.com/opinion/2019/01/30/1889262/spider-web-faults

        • popoy says:

          THERE YOU GO!

          Here’s where I go.

          My eldest son’s Godfather, a tall Ala Eh, was the youngest Provincial Veterinarian of Batangas, the number one and prime Livestock province of the country at the time. Because he was first assigned in Panay Island province, once or twice we traveled by slow ship in style to Manila courtesy of livestock shippers from the Visayas. I was young and in awe of the College of Vet Med until the time its youngest Dean left academe, was recruited to work for an authoritarian regime. Ah, the blast from the past will always haunt senior elderlies.

      • To me, Manila Bay is not really much of a sea resource, compared to other waters in and around the Philippines. It is a big lake that makes travel from Olongapo to Manila very tedious and filling it in would be more useful than building bridges. In fact, I think Mayor Estrada views the city as landlocked and it is cheaper to fill than demolish existing buildings to build something huge of scale, probably by the Chinese predominantly for the Chinese. That will play out as it does, in terms of fitting in, discrimination, and all that. But it will be governed by the Philippines so the Philippines is ultimately accountable for it. In terms of economy and prosperity, it would be of considerable value to construct a new, properly laid out, modern city. Clark is a long way away.

        • chemrock says:

          For me, a new city for Manila to expand to, is an inevitability. If it turns out to be a mistake, in terms of cost, then it’s just a mistake. Nothing is guaranteed. But you cannot plan a city by private enterprise which is what Estrada’s city is. Some people cornered every square inch of land even before it started. It has to be state property. I understand there is some sharing 70:30 or something like that with state holding the smaller parcel.

          • Ah, I haven’t read of the particulars. I look at it in being in the model of a lot of Chinese developments in Asia, huge in scale with the gorilla being the State and the companies doing the bidding. Dennis Uy to me is just the local agent for China. I have no facts to back that up, it is just speculation. I don’t know of anyone here who can do the scale of what is proposed.

          • karlgarcia says:

            Most public lands lije tge bases are managed by the BCDA, which led and will lead to privatization.

            Many lands are squatted,
            People stay put.
            Even legitimate land owners stay put in these infra projects, as evidenced by the .
            opposers of the NLEX and SLEX link.
            And those pictures of unfinished roads and bridges

            Gov has the right to eminent domain, but they have a problem of paying, this is exacerbated by fake titles.

    • karlgarcia says:

      I would like the spillway to be part of the priorites of build build build, and the fish cages should be removed.

      Regarding reclamations, I guess it can t be stopped.

      More wtps or waste water treatment plants from water concessionaire and individual business establishments must be setup.

      Air pollution can end back to the waters, it may not be on the form of acid rain, but frequent milder versions of it. So both clean air act and clean water act must be implemented.

      My wish for relaxing the clean air act for incineration and waste to energy to proceed, still stands, otherwise no recycling program can reduce the waste.

      • popoy says:

        THERE I GO here in TSoH years ago, ASVEN should be the headwaters of what to clean a little Manila Bay because during the long hot many summers ASVEN’s thirsty canals shall wet its labyrinth and quench it’s dryness from the saline waters of Manila Bay. ASVEN to live and prosper needs to take good care of Manila Bay.

  7. NHerrera says:

    The Holy Curse of Bankers.

    Indeed:

    It cannot be denied that the banking companies are making oodles of money [Ref, Micha].

    But it cannot be denied they are “holy” in the sense that they are useful to the society [Ref, chemrock].

    • Banking is a very sensitive business because banks deal with people’s money, so if a bank makes a mistake or denies a loan or gets out the legal dogs to collect a bad loan, then the primary emotions toward the bank will range from anger to hate and the overall industry is painted by the sum of all the incidents collecting anger and hate. Still, most people are like Edgar if they spend a little time thinking about it. Banks really do make life a lot easier and richer.

    • chemrock says:

      The malls are making goodies.
      The telecommunications are making goodies.
      The hospitalities are making goodies.
      The hospitals are making goodies.
      The fast food franchisors are making goodies.
      The real estate developers are making goodies.
      The casino operators are making goodies.
      The security service providers are making goodies.

      In the sea of goodies, the bankers stand out. Yet none take the kind of risks that bankers do. Nor provide the multi-faceted services that banks provide.

      Our discussions on bankers is monopolised by incidents of rogue management, which can happen anywhere, and inequitable govt bail outs in financial crisis, which happened only in US. We led what is essentially a US-centric matter cloud our views. It’s good to be able to see through the mist.

    • NHerrera says:

      Yep, the bankers on balance are the goodies not the baddies!

  8. Australia’s banks came through the court’s looking glass whole. It was not the disaster that some had expected. They do have some things to clean up.

    https://www.reuters.com/article/us-australia-banks-inquiry-idUSKCN1PU09B

    • edgar lores says:

      *******
      Yes, thank you.

      I was going to write an update… but I had to go to the bank. 🙂

      The expected fireworks fizzled out. Still, the banks have been chastened with 76 recommendations from the Royal Commission.
      *****

      • Haha! I trust the bankers were chastened and helpful.

      • karlgarcia says:

        Where are the floods? Crocodiles were seen in the streets. Is it just in Queensland?

        • edgar lores says:

          *******
          Upper Queensland.

          I live in lower Queensland near the New South Wales border.

          I have not been affected by the monsoonal rains.

          Townsville, where crocodiles — and snakes! — roam the streets, is 1,336 km away. This is more than twice the distance between Manila and Pagudpud (559.6 km).
          ******

          • karlgarcia says:

            Good to know that you are far.

          • popoy says:

            Australia is one of the true cosmic country of the world. She has nature’s everything good and Godly space from lush foliage to desert sands and rocky mountains; the only country with an Outback and the seeds of the human race whose recessive genes is for the better to turn yellow, brown or white upon intermarriage. You see them meek and mild in the streets of Darwin.

            Far from the traversing mighty sun Australia down under has the invigorating four seasons of the countries in the countries up there just below the glaciers. So unlike many countries its population used to be more than 75 per cent urban and minuscule rural.

            In the days of yore by air travel Melbourne to Darwin is more distant than Melbourne to Manila. Two passenger planes could take off, one from Melbourne to Manila, the other from Melbourne to Darwin. The Manila bound would have already landed back in Melbourne, the other one is yet to land in Darwin.

            Australia because of its peoples’ righteous might remains the free world’s feared loyal ally.

            • popoy says:

              The eche bucheche above might look better in stanzas:

              Australia is one of the true
              cosmic country of the world.
              She has nature’s everything good
              and Godly space from lush foliage
              to desert sands and rocky mountains;

              the only country with an Outback
              and the seeds of the human race
              ab ORIGINS whose recessive genes is
              for the better to turn yellow, brown or white
              upon intermarriage as you see them walk
              meek and mild in the streets of Darwin.

              Far from the traversing mighty equatorial sun
              Australia down under has the invigorating
              four seasons of the countries in the countries up there
              just below the glaciers.

              So unlike many countries its population
              used to be more than 75 per cent urban
              and minuscule rural.

              In the days of yore by air travel Melbourne to Darwin
              seemed more distant than Melbourne to Manila.
              Two passenger planes could take off,
              one from Melbourne to Manila,
              the other from Melbourne to Darwin.
              The Manila bound would have already landed
              back in Melbourne, the other one is yet
              to land in Darwin.

              Blokes and Sheilas they may be called
              Australia because of its peoples’ righteous might
              remains the free world’s feared
              and rare loyal ally.

            • edgar lores says:

              *******
              Popoy, thanks for the hymn to the Land Down Under.
              *****

              • popoy says:

                Edgar,

                words, Words, WORDS
                what can you make of them
                the English called theirs England
                gave their King a Kingdom and with
                the Irish, the Scots and Welsh,
                Anglo Saxons a United Kingdom.
                Australia’s Head of State is a Queen
                They honored her with a state
                they named Queensland.

              • popoy says:

                U R WLLCME Edgar

        • popoy says:

          Crocodiles and snakes anywhere, everywhere: it’s so unfair
          being the butt of cynics’ metaphor of
          words mightier than swords?
          Here’s a short example.

          DANGAL IS DEAD

          Yes, Yes, YES, many of us,
          university graduates in the early sixties
          had been fated to work
          in the three Crocodile Farms
          but many had survived unscathed
          from these Gulags of Corruption.
          The noble character of workers
          called DANGAL; it died
          a slow UNLAMENTED
          but shameful death amongst
          the shameless, those laughing
          fat crocodiles in the three Gulags.

  9. Micha says:

    Some countries are at least beginning to see the folly and danger of unregulated banking.

    “Italy Guns For Glass-Steagall-Type Law to Break Up Banks”

    https://wolfstreet.com/2019/02/03/italy-glass-steagall-type-law-to-break-up-banks-cut-bailout-costs-for-taxpayers/

    “On Friday, Italy’s coalition government unveiled new banking regulations that it hopes to pass in the coming months, including a rule that would separate banks’ commercial and investment arms. It would be the Italian equivalent of the Glass-Steagall Act, the 1933 U.S. law that separated commercial banks that took deposits, made loans, and processed transaction, from riskier investment banking activities. The law was designed to protect deposits. Its repeal in 1999 led to the consolidation of the U.S. banking sector, unfettered risk-taking by deposit-taking banks, and arguably the Financial Crisis just eight years later.”

    “In Italy, investment and commercial banks have been able to operate in unison since 1993, but that could all change if this new law is passed. Breaking up the banks would remove a lot of the risk, such as derivatives and other speculative instruments, from Italy’s deposit-taking banks. Without these hedge-fund and investment-banking activities, large banks such as Unicredit and Intesa Saopaolo would become smaller, less interconnected and less systemically risky.”

    • Banks have long been closely regulated by up to three agencies, a state or national regulator, the Fed for fed members, and the FDIC. These include monthly financial tracking (loan losses, etc) and unannounced on-site inspections. Troubled institutions are given precise performance goals to get back on track and failing banks are taken over by government agencies and sold or managed through liquidation. The ‘deregulation’ you speak of has to do with the kinds of activities the largest banks are allowed to engage in. They are allowed into riskier, complex instruments because the instruments are beneficial to investors and the bankers understand and can create the instruments (packaged loans in tiers). The trouble is that their mainstream banking is put at risk. The problem with splitting is that the investment arms are not backed by a large capital base and are weaker and riskier.

      • I would add that regulators now impose ‘stress tests’ on banks to see how they would perform under a weak economy. That is a recent addition to the regulatory load. And I forgot to mention the standard performance obligations banks operate under for capital, loan quality, and earnings, among other laws.

        • karlgarcia says:

          Thanks Joe, but even if we clear the issues in this blog, this issue will come back not to haunt us, but to enlighten us some more.

      • edgar lores says:

        *******
        Thanks for this. The problem in a nutshell.
        *****

      • chemrock says:

        You are right in that the capital base of the investment arm will be weakened. However, it is morally right, and equitable too, that shareholders ought to secure their own resources to play in activities that offer higher returns but come with higher risks, instead of using depositor funds.

        A weakened investment bank leads to lower risk taking, making it more difficult for all those mega deals that do not improve production — such as all those billion $ deals in the high tech industry which were basically acquisitions to corner markets.

    • chemrock says:

      I am for this ruling.

  10. caliphman says:

    It is interesting to note the inherent contradictions in this supposedly holy curse on bankers. As you point out, the early Christan church considered it immoral or sinful to loan money and charge interest on it. But to be sure, this was the teaching not only in early Christianity but also doctrinal in Islam upon its founding. It was believed that the Koran required the repayment of any loan but any interest on it was purely voluntary on the part of the borrower as an expression of gratitude and not as compensation asked by the lender for the loan. The fact that Judaism did not have such prohibitions is the reason why Jewish clans such as the Rothschilds were able to dominate banking as we know it to the present day. Today Goldman Sachs rules the financial world and it’s bankers advise the world’s political and business leadership. This greatly fanned the anti-Semitic sentiment present even during the Roman era and is perhaps largely responsibleas a result for whatever contempt for bankers and banking that may exist today. It did not help that it was early rabbinic teaching that moneylending and charging interest was okay, so long as it was not between Jews.

    These are among the religious, moral and ideological contradictions that are most prominent these days to me. The current Catholic Church through its bank in the Vatican and BPI in the Philippines are among the wealthiest and most profitable banking institutions respectively in the world and in the country in spite of its early teachings. Similarly in the Arab world, trillions of petrodollars are managed by Muslim bankers in investment and loan portfolios seeking the highest returns. Perhaps a more relevant contradiction Is between the inherent Marxist doctrine against excessive returns to capital and China lending out it’s enormous trade surpluses as loans to poor developing countries at above market interest rates and in order to wrest political concessions. Then again of course, the Communist Manifesto were written by Marx, Engels, and carried out by Trotsky and other renowned European Marxist-Leninists who were what else- Jews.

  11. caliphman says:

    I believe the point of my comment was the Catholic, Islamic, and Communistheirarchies are past kicking the moral can down the road and are now practicing what they used to preach was sinful. Is that not more conclusive than any church or mosque sermon or written manifesto?

    • edgar lores says:

      *******
      Hah! 🙂
      *****

    • Micha says:

      Ancient rulers in Mesopotamia and Rome have practiced debt cancellation based on the recognition that usurious lending makes it impossible for debt repayment. Debts that cannot be paid cannot, in all likelihood, be paid. The idea is to give their subjects a clean slate.

      Biblical Jubilee, in which the Catholic church made a splash of celebrating with the Great Jubilee Year in 2000, also involves debt forgiveness. Some version of the Lord’s prayer states, “and forgive us our debts, as we also have forgiven our debtors”.

      This brings me to the time when Cory Aquino refused to leverage her political capital and instead caved in to the lobbying and demands of neo-liberal bastards to payback the debts incurred by the dictator even if it meant subjecting the population with severe economic difficulty through brutal austerity measures.

    • Micha says:

      I remember this song was a hit back then.

    • chemrock says:

      The trinity you mentioned have long passed making any moral justification by npt calling a spade what it is.

      I was referring to us laymen to kick the can.

      Incidentally, one may have a softer view of the Vatican bank when is acquainted with the institution. The real name of the bank is Institute for the Works of Religion. It is not the Central bank of the Vatican. It fact its assets do not even directly belong to the Holy See. It doesn’t take on deposits nor do investment work. It’s main function is to provide the safekeeping and administration of fixed and non-fixed property entrusted to it by the different people and intended for religious or charity works.

  12. popoy says:

    The discussion on usury and banking, their moral aspects could be delimited to the Divine Commandment Theory compared against the harm-based theory. For example, Jesus and the money lenders versus the lima-anim (5/6) money lenders helping the teeming penniless side-walk and public market vendor borrowers. The theist position versus the atheist position if it does good then it could be moral. Immoral if HARMFUL?

    What happened to the Amanah Bank which purportedly does not charge interest (payment for the use of money)? What happened to the Central Bank’s own managed Rural Banks? Was not it’s reason for being to help farmers and fishermen? Were there big-time borrowers who/which sent some RBs into bankruptcy?
    http://www.bsp.gov.ph/publications/media.asp?id=4798&yr=2018

    It’s a stretch but is the human crocodiles’s pork barrel or earmarks moral? Politicians steal “big-time” but they and their family dynasty are adored for helping the poor “small-time”?

    In a way I also had tried to inveigled banking guru here to scalpel the compounding specifics of 5/6. And there was NADA. In this age of artificial intelligence are there still biblical 5/6 money lenders? May be the internet as St. Peter’s (of the Pearly Gates) book of AI and knowledge of sinners can give TSoH readers some answers, even incomplete answers. This post then stands corrected and penitent.

  13. quietpoetic2 says:

    I think God forbid usury because he know the Jews would abuse it (kidding!).

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