Conjuncted: Banking – The Collu(i)sion of Housing and Stock Markets

bank-customers-1929-stock-market-crash

There are two main aspects we are to look at here as regards banking. The first aspect is the link between banking and houses. In most countries, lending of money is done on basis of property, especially houses. As collateral for the mortgage, often houses are used. If the value of the house increases, more money can be borrowed from the banks and more money can be injected into society. More investments are generally good for a country. It is therefore of prime importance for a country to keep the house prices high.

The way this is done, is by facilitating borrowing of money, for instance by fiscal stimulation. Most countries have a tax break on mortgages. This, while the effect for the house buyers of these tax breaks is absolutely zero. That is because the price of a house is determined on the market by supply and demand. If neither the supply nor the demand is changing, the price will be fixed by ‘what people can afford’. Imagine there are 100 houses for sale and 100 buyers. Imagine the price on the market will wind up being 100000 Rupees, with a mortgage payment (3% interest rate) being 3 thousand Rupees per year, exactly what people can afford. Now imagine that government makes a tax break for buyers stipulating that they get 50% of the mortgage payment back from the state in a way of fiscal refund. Suddenly, the buyers can afford 6 thousand Rupees per year and the price on the market of the house will rise to 200 thousand Rupees. The net effect for the buyer is zero. Yet, the price of the house has doubled, and this is a very good incentive for the economy. This is the reason why nearly all governments have tax breaks for home owners.

Yet, another way of driving the price of houses up is by reducing the supply. Socialist countries made it a strong point on their agenda that having a home is a human right. They try to build houses for everybody. And this causes the destruction of the economy. Since the supply of houses is so high that the value drops too much, the possibility of investment based on borrowing money with the house as collateral is severely reduced and a collapse of economy is unavoidable. Technically speaking, it is of extreme simplicity to build a house to everybody. Even a villa or a palace. Yet, implementing this idea will imply a recession in economy, since modern economies are based on house prices. It is better to cut off the supply (destroy houses) to help the economy.

The next item of banking is the stock holders. It is often said that the stock market is the axis-of-evil of a capitalist society. Indeed, the stock owners will get the profit of the capital, and the piling up of money will eventually be at the stock owners. However, it is not so that the stock owners are the evil people that care only about money. It is principally the managers that are the culprits. Mostly bank managers.

To give you an example. Imagine I have 2% of each of the three banks, State Bank, Best Bank and Credit Bank. Now imagine that the other 98% of the stock of each bank is placed at the other two banks. State Bank is thus 49% owner of Best Bank, and 49% owner of Credit Bank. In turn, State Bank is owned for 49% by Best Bank and for 49% by Credit Bank. The thing is that I am the full 100% owner of all three banks. As an example, I own directly 2% of State Bank. But I also own 2% of two banks that each own 49% of this bank. And I own 2% of banks that own 49% of banks that own 49% of State Bank. This series adds to 100%. I am the full 100% owner of State Bank. And the same applies to Best Bank and Credit Bank. This is easy to see, since there do not exist other stock owners of the three banks. These banks are fully mine. However, if I go to a stockholders meeting, I will be outvoted on all subjects. Especially on the subject of financial reward for the manager. If today the 10-million-Rupees salary of Arundhati Bhatti of State Bank is discussed, it will get 98% of the votes, namely those of Gautum Ambani representing Best Bank and Mukesh Adani of Credit Bank. They vote in favor, because next week is the stockholders meeting of their banks. This game only ends when Mukesh Adani will be angry with Arundhati Bhatti.

This structure, placing stock at each other’s company is a form of bypassing the stock holders

– the owners – and allow for plundering of a company.

There is a side effect which is as beneficial as the one above. Often, the general manager’s salary is based on a bonus-system; the better a bank performs, the higher the salary of the manager. This high performance can easily be bogus. Imagine the above three banks. The profit it distributed over the shareholders in the form of dividend. Imagine now that each bank makes 2 million profit on normal business operations. Each bank can easily emit 100 million profit in dividend without loss! For example, State Bank distributes 100 million: 2 million to me, 49 million to Best Bank and 49 million to Credit Bank. From these two banks it also gets 49 million Rupees each. Thus, the total flux of money is only 2 million Rupees.

Shareholders often use as a rule-of thumb a target share price of 20 times the dividend. This because that implies a 5% ROI and slightly better than putting the money at a bank (which anyway invests it in that company, gets 5%, and gives you 3%). However, the dividend can be highly misleading. 2 million profit is made, 100 million dividend is paid. Each bank uses this trick. The general managers can present beautiful data and get a fat bonus.

The only thing stopping this game is taxing. What if government decides to put 25% tax on dividend? Suddenly a bank has to pay 25 million where it made only 2 million real profit. The three banks claimed to have made 300 million profit in total, while they factually only made 6 million; the rest came from passing money around to each other. They have to pay 75 million dividend tax. How will they manage?! That is why government gives banks normally a tax break on dividend (except for small stockholders like me). Governments that like to see high profits, since it also fabricates high GDP and thus guarantees low interest rates on their state loans.

Actually, even without taxing, how will they manage to continue presenting nice data in a year where no profit is made on banking activity?

Thermodynamics of Creation. Note Quote.

original

Just like the early-time cosmic acceleration associated with inflation, a negative pressure can be seen as a possible driving mechanism for the late-time accelerated expansion of the Universe as well. One of the earliest alternatives that could provide a mechanism producing such accelerating phase of the Universe is through a negative pressure produced by viscous or particle production effects. The viscous pressure contributions can be seen as small nonequilibrium contributions for the energy-momentum tensor for nonideal fluids.

Let us posit the thermodynamics of matter creation for a single fluid. To describe the thermodynamic states of a relativistic simple fluid we use the following macroscopic variables: the energy-momentum tensor Tαβ ; the particle flux vector Nα; and the entropy flux vector sα. The energy-momentum tensor satisfies the conservation law, Tαβ = 0, and here we consider situations in which it has the perfect-fluid form

Tαβ = (ρ+P)uαuβ − P gαβ

In the above equation ρ is the energy density, P is the isotropic dynamical pressure, gαβ is the metric tensor and uα is the fluid four-velocity (with normalization uαuα = 1).

The dynamical pressure P is decomposed as

P = p + Π

where p is the equilibrium (thermostatic) pressure and Π is a term present in scalar dissipative processes. Usually, it is associated with the so-called bulk pressure. In the cosmological context, besides this meaning, Π can also be relevant when particle number is not conserved. In this case, Π ≡ pc is called the “creation pressure”. The bulk pressure,  can be seen as a correction to the thermostatic pressure when near to equilibrium, thus, it should be always smaller than the thermostatic pressure, |Π| < p. This restriction, however, does not apply for the creation pressure. So, when we have matter creation, the total pressure P may become negative and, in principle, drive an accelerated expansion.

The particle flux vector is assumed to have the following form

Nα = nuα

where n is the particle number density. Nα satisfies the balance equation Nα = nΓ, where Γ is the particle production rate. If Γ > 0, we have particle creation, particle destruction occurs when Γ < 0 and if Γ = 0 particle number is conserved.

The entropy flux vector is given by

sα = nσuα

where σ is the specific (per particle) entropy. Note that the entropy must satisfy the second law of thermodynamics sα ≥ 0. Here we consider adiabatic matter creation, that is, we analyze situations in which σ is constant. With this condition, by using the Gibbs relation, it follows that the creation pressure is related to Γ by

pc = − (ρ+p)/3H Γ

where H = a ̇/a is the Hubble parameter, a is the scale factor of the Friedmann-Robertson-Walker (FRW) metric and the overdot means differentiation with respect to the cosmic time. If σ is constant, the second law of thermodynamics implies that Γ ≥ 0 and, as a consequence, particle destruction (Γ < 0) is thermodynamically forbidden. Since Γ ≥ 0, it follows that, in an expanding universe (H > 0), the creation pressure pc cannot be positive.

Atlantis

lemuria6_00

After the Lemurians had existed for ages as beings not very different from the mankind of later times, yet more spiritual than intellectual, a gradual division took place into two well-marked sections, the Sons of Light and the Sons of Darkness. Selfish desire increased and the decline of the third race set in rapidly, but was not allowed to proceed too far. The law of progress prevented too great a downfall by the destruction of a large portion of the individuals through the breaking up of the Lemurian continent. Simultaneously with the decay of the third race civilizations, the beginnings of the new type of man, the fourth, began to appear, and new lands arose from the sea to take the place of the previous continent. Some of the islands of Polynesia are remains of some of the mountaintops of long-forgotten Lemuria, and the native traditions of a universal deluge, etc., greatly puzzled the early missionaries, who could not conceive how the ignorant savages, living in widely scattered islands, had obtained stories closely resembling those of the Creation and the Flood in the Bible. Australia and New Zealand are the largest parts of Lemuria now existing, but there are other portions, such as Ceylon or Lanka, which is a remnant of a northern highland of Lemuro-Atlantis, and the Polar lands, though the latter belong properly to the first and second continents.

Lemuria is said to have perished finally 700,000 years before the commencement of the Tertiary age of geology. The highest group of its inhabitants, the comparatively few “Sons of Light,” were not disturbed by the upheavals, for they had taken precautions and had moved away to safer regions; most of the small proportion of the average mankind that escaped centered towards land which is now under the waters of the North Atlantic. They formed the nucleus of the next root-race, the Atlantean, and from that land the coming great Atlantean civilization spread over the new continent that was rising. Nature never breaks the continuity of her processes, so no hard and fast line can be drawn as to when one race ends and another begins. For many thousands of years the first subrace of the fourth had been developing parallel with the culminating of the last subraces of the third, just as we see today a new subrace of our fifth root-race forming in America; so that the relic of mankind saved from destruction contained representatives in all degrees of advancement. It should be well remembered that it is not only mankind as a whole, but man as the individual ego, whose progress we are tracing. The races are the temporary vehicles of the larger life of the egos constituting them, and though they may perish when they have served their purpose, and before they have fallen too deeply into degradation, the immortal ego simply passes on to the next experience and will continue to do so until the succeeding manvantara or world period.

Atlantis gradually took form as Lemuria broke up under the turbulent disruptive forces of the adolescent period of earth’s growth, and as the portion of humanity which escaped the destruction spread afar, they peopled the newly risen lands and some of the old that were not submerged, with a race which subsequently touched the lowest depths of materiality that the world has seen. Since the Atlantean period man has been rising, though with many cyclic depressions, for the Atlantean civilization marked a turning point in the history of the Earth. Until then mankind was slowly descending into material conditions with a corresponding obscuration in spirituality. The Atlanteans stand as the apotheosis of matter, and it was in those far-distant days that the heaviest karma of the human race was generated, a karma which is holding us back from the advance we should otherwise make, and whose existence explains many of the difficulties and anomalies of life. Humanity reached its fullest physical development in the fourth race, the physical bodies themselves being much larger than at present. The old saying that “there were giants in those days,” was correct when applied to the Atlanteans. The curious decrease in the size of many organisms, which is so well marked in the case of the fearful saurians of the Secondary period — now represented by comparatively minute reptilian forms — also took place in the human kingdom; but as the practice of cremation was almost universal we are not likely to find many remains of gigantic human bones. Immense footprints have been found in the geologic strata of Nevada and Ohio, USA, which seem to be human, but geology has not definitely sanctioned the claim that they are so.

Legendary island of Atlantis.

The fourth race started under far less favorable conditions than the third, and towards its decline the story of Lemuria was repeated on lower levels; the same fight between the higher and lower natures within and without was waged, but more mercilessly; and as that was the age of passion and desire in excelsis and the eclipse of spirituality, the result was mainly in favor of the lower principles for a long time. But not forever, for, although the majority of the Atlanteans were not the descendants of the higher group of the third race, the “one third that remained faithful” fought such a good fight that they were enabled to escape before the Deluge from the lands that had been cursed by the evildoers, and to become the progenitors of the majority of our present humanity. The story of Noah’s Deluge is, in one of its aspects, a fanciful account of the great Atlantean submersion; but it also has deeper meanings, one of which allegorizes the primeval building of the world.

Full personal responsibility came to the man of the Atlantean period, and although the last or final choice between spiritual advancement on the one side, and materialism or personal aggrandizement on the other, “good and evil,” has not yet come for the mass of humanity, and will not until the next round, a long step in that direction was taken by the Atlanteans. But nature is merciful, and the world is not destined to perish ingloriously; so before the mischief had become irreparable, “the law that moves to righteousness” again arrested further degradation by giving a shock which allowed the egos to start anew with a fresh opportunity, upon new lands not soaked through with the evil memories of past sins. The majority of the Atlantean evildoers perished finally amid indescribable terrors, and the ocean soon obliterated all remains of that proud civilization which had misapplied greater powers than any with which we have since been entrusted. The last large destruction took place towards the close of the Meiocene age, when the Alps were upraised. Most of those then destroyed were of the giant race; but mankind was already diminishing in size, and when the final destruction of the few remaining islands upon which Atlanteans still existed took place, only about 11,000 years ago, men had long before assumed their present proportions. It was the latter destruction to which Plato refers when he handed on the tradition that the gods had caused the wicked Atlanteans to perish 9,000 years before his time. Airships of great perfection were used by the “White Adepts,” and the measures taken and the weapons spoken of illustrate a much deeper knowledge of natural forces — magic — than science has yet suspected, fortunately for us in this age of selfishness!

The fifth or Aryan race had started some time before the last destruction of Atlantis. Descended from the more spiritualized and better class of Atlanteans, a few had preserved the knowledge of their ancestors and were ready to revive it when the race demanded it. The institution of the Mysteries in all countries at a later period was an effort, and fortunately a successful one, to preserve the ancient wisdom from the profanation it had suffered in Atlantis. An example of the profound knowledge of the Atlanteans is shown in the astronomical computations of Indian astronomy, which are based upon a little that was permitted to escape from the guardianship of the Mysteries.

It was in Atlantis, too, that language took its inflectional form, after having passed from the stage of musical nature-sounds in the second race, to monosyllabic speech in the later third, and then to the agglutinative form in the fourth. Of course writing was well known to the fourth race, for during its long career it possessed civilizations higher than were those of Greece or Rome in their palmiest days, and even far higher than our own civilization today, though it may have been lost to the world at large during the period of confusion when the first subraces of the fifth were forming. The traces of writing in the “Stone Age ” (which belongs to our epoch) are not conclusive; and yet it is strange and entirely unexplained by modern science, that Palaeolithic man could draw animals upon antlers and cavern walls, etc., in a style that would not disgrace a good draughtsman of today, and which is certainly superior in accuracy to that of some of the Egyptian conventional representations of animals, or to the crude drawings of the famous Bayeux tapestry which was woven perhaps five hundred thousand years after the time of the supposed brutal “primitive” man — a savage that we are told was nearly on a level with his hypothetical ape-grandfather! Palaeolithic (ancient Stone Age) man was in reality carrying on some memories of the perished civilizations, as his artistic talent shows; the Neolithic (new Stone Age) man who followed him had lost this power, although he was improving in some other respects. The Palaeolithic drawings show no resemblance to the scrawls of children, but display concentrated observation and high technical skill — in other words, qualities of advanced civilization!

With this gradual break-up of the fourth race civilizations, which were varied and numerous, the dawn of what is known to science as the human period, begins. In actual years the distance is enormous from the first subrace of the fifth race to the present day, and what is generally supposed to be the whole history of man “does not go back. In the brief space at our disposal, only the most cursory reference can be made to the progress of humanity during the fifth race.

The destruction of the spiritually degraded Atlanteans gave a shock to the survivors which resulted in the sinking of material civilization for a long time over the main portion of the globe; we are not yet told exactly what proportion of the world kept some vestiges of the past greatness, but it cannot have been large. Anyway, the effect of the fresh start was good, for it provided conditions under which the later comparatively unsophisticated tribes could be helped by advanced souls who incarnated among them and taught them the elements of the arts and sciences. In every tradition that has come down to us from antiquity a Golden Age is spoken of — the “Garden of Eden” in the Bible — and, although in some cases this unmistakably refers to the first, second, and the early third races, when rudimentary mankind had not fallen into materiality, it may generally be taken to mean the dawn of the fifth when mankind was again comparatively pure and happy, and was guided by semi-divine kings, adepts of wisdom and compassion. In Egypt the traditions of many dynasties of gods and heroes were recorded by Manetho, and have actually come down to us, though the lists of names have been mutilated. While no doubt the details of the Greek, Hindu, Egyptian, Central American and Scandinavian cosmogonies and primitive histories of mankind are largely allegorical, their general agreement is not due to chance. By degrees the same old process of materializing came into action; and as the “family” races, or smaller divisions of the subraces, differentiated into the nations of the later ages, we arrive at “historic” and present times, with the numerous red, yellow, brown, black, and white representatives of the complex developments of the great evolutionary process of human expansion. Although we have descended into an age of moral and spiritual darkness (not intellectual), as compared with the Golden Ages it must not be forgotten that in the great journey of the soul from spiritual conditions through the material and back to a higher point, it is subject to a continual series of smaller cyclic ups and downs, and that even in the darkest time necessary experience is being gained. As we have long since passed the densest materiality of the fourth race, every step onwards is leading to higher conditions, and although the road seems to cross many a hill and descend into dark valleys, its general tendency is upwards all the time.