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Archive for March 8th, 2012

Bank of America: $11.9 billion; JPMorgan: $5.44 billion; Wells Fargo: $4.35 billion. These are the fines the banks have paid so far in settlements to the government for wrongdoing amid the financial crisis, recorded as part of ProPublica’s loose, ongoing effort to order the major facts and figures of the disaster.

Of course, to begin to tell whether these penalties come anything close to fair, they have to be considered against each bank’s existing assets. According to Investopedia, Bank of America held $2.26 trillion in valuables in 2010. JPMorgan counted $2.29 trillion, and Wells Fargo had a measly $1.26 trillion in the bank. Those figures stand in addition to the tens of billions each group carries in equity.

And as it’s said below, the SEC permitted banks to pay the settlements quietly, without declaring themselves innocent or guilty.

So what are these punishments? Slaps on the wrist? And do they even come close to recovering the cost in terms of dollars lost and lives ruined among the American public?

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Bad credit? No credit? No problem!

President Daniel Ortega is putting on his banker’s visor and taking time off from denouncing the evils of savage capitalism to try to raise startup capital for the newly announced Bank of ALBA, or BALBA.

The president-turned banking booster told Nicaraguans last night that he’d feel a lot better if Nicaragua took some of its $1.7 billion in international reserves out of established banks around the world and put it the trusted care of BALBA, which is almost one week old.

The birth of BALBA was celebrated during last weekend’s summit of ALBA nations in Venezuela. The idea is that each member country—Venezuela, Cuba, Nicaragua, Ecuador, Bolivia, Dominica, Antigua and Barbuda and Saint Vincent and the Grenadines—support the bank to the tune of what each economy can afford.

In Nicaragua’s case, the country is expected to cough up 1% of its international reserves, whose purse strings are controlled exclusively by the autonomous Central Bank. Ortega is also asking the Sandinista-controlled National Assembly to pony up $4 million for the ALBA bank.

Ortega said Nicaragua’s international reserves are currently just sitting in banks and not being put to good use through loans.

“The most we can say about the reserve banks is that they return us our money, but we can’t make loans,” he said.

Ortega said BALBA will give loans to member states without any conditions to pay for development and social projects—a lending practice that the president thinks will make the bank solid and viable.

“The Bank of ALBA gives us a lot of security because we are talking about a bank that is socialist and just, where we can go to ask for money for productive activities, for social projects, for land titling,” said the self-styled banking lobbyist.

“This will allow us to have a bank that will not put any conditions (on lending)… this is good news because it will allow us to be in better conditions to confront this crisis,” Ortega said.

Ortega said BALBA will also try to attract funds from wealthier nations, to give the bank even more liquidity.

The Sucre cometh

The push to form a joint banking venture is part of a greater plan for ALBA’s financial integration, which will soon include the incorporation of a common currency for commercial exchange known as the Sucre, or more cumbersomely the Unified System for Regional Compensation.

Last weekend in Caracas, Ortega promised that Nicaragua would approve use of the Sucre in the coming weeks, now that he controls a supermajority in the National Assembly.

The Sucre is intended to replace the U.S. dollar as the currency for commercial exchanges between ALBA nations.

While Nicaragua’s incorporation of the Sucre is just around the corner, few understand how it will work or what that will mean for the country’s economy. The Sucre has already been used as a virtual currency in transactions between Ecuador and Venezuela, but questions remain in Nicaragua.

“I don’t think that this will free exporting agencies from paying Nicaraguan exporters in dollars,” says former Central Bank president Mario Arana. “But it could be used to facilitate buying and selling between agencies that so far are monopolizing commercial transactions” between Venezuela and Nicaragua.

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Deep Ecology Graffiti

DIY: How to Make Moss Graffiti

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I think it is easy for Invisible Children and other self-aggrandizing foreigners to make the entire story of the last 30 years of Northern Uganda about Joseph Kony, but there is a history of the relationship between the Acholi people from whom the LRA emerged and the central government in Kampala that is a little more complicated than that.

Kony is a grotesque war criminal, to be sure, but the Ugandan government currently in power also came to power through the use of kadogo (child soldiers) and fought alongside militias employing child soldiers in the Democratic Republic of Congo, something that Invisible Children seem wilfully ignorant of. […]

By blindly supporting Uganda’s current government and its military adventures beyond its borders, as Invisible Children suggests that people do, Invisible Children is in fact guaranteeing that there will be more violence, not less, in Central Africa.

I have seen the well-meaning foreigners do plenty of damage before, so that is why people understanding the context and the history of the region is important before they blunder blindly forward to “help” a people they don’t understand. U.S. President Bill Clinton professed that he was “helping” in the Democratic Republic of Congo in the 1990s and his help ended up with over 6 million people losing their lives.  The same mistake should not be repeated today.

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