In early August I blogged The Ingenuity of the Markets – featuring a skit by the brilliant British satirists John Bird and John Fortune.

This is in similar vein about the famous South Sea Bubble (circa 1720).

It was not the Bubble to End All Bubbles as advertised. They never are…

British political satirists John Bird and John Fortune discussed the so-called credit crunch back in October 2007.

This skit isn’t dated in the least. The biggest joke of all – failed gambler-bankers walking away with massive bonuses at the taxpayer’s expense – is still breaking news.

Here’s an extract from the report in yesterday’s Daily Mail: How bailed-out U.S. banks kept on dishing out bonuses

Nine Wall Street banks received a combined £75billion in taxpayer cash last October to help them survive the financial meltdown.

But according to a shocking report by New York Attorney General Andrew Cuomo, bonuses paid by several of the biggest institutions were ‘substantially greater’ than the banks’ earnings.

• Goldman Sachs’s net income was £1.4billion, yet it paid out nearly £2.8billion in bonuses. It received £6 billion in bail-out funds.
• Morgan Stanley earned £1billion and paid nearly £2.7billion in bonuses. It also received £6billion from the taxpayer.
• JPMorgan Chase earned £3.3billion, paid £5.2billion in bonuses and received £15 billion from the government.

Citigroup, Bank of America and Merrill Lynch, which all needed government funds, also paid billions to hundreds of executives despite posting massive losses.

The report claimed that America’s biggest banks awarded a total of nearly 4,800 bosses with bonuses of a million dollars or more each last year.

Check out the 2009 NewMatilda.com Political Cartooning Competition as it approaches the final round. Australia has some talented cartoonists.

I especially like a runner-up in Heat 10 by freelancer Jon Kudelka.

It’s a nice follow-up to the notorious Doonsebury moneychangers cartoon.

'The Evolution of the Parasite'

As the new millenium dawned, the ‘Anglosphere’ had a seemingly well-established grip over the finances of the world. This financial dominance – vastly out of proportion to the populations of the English-speaking nations – was reflected in military muscle. The dominant USA was considered by all and sundry to be the sole remaining ‘Superpower’: politically, militarily and economically.

It seems so long ago. Yet until 2007, the Old Order remained essentially intact. Since then, what we’ve come to know as the ‘World Financial Crisis’ has been akin to a new deal in a global poker game. As the cards are flipped face up in mid-2009, it’s apparent there’s been a phenomenal shift in world power. New players have joined the table. They’re outclassing former high rollers.

The two graphs below show the top twenty banks in the world by market capitalization, in 1999 and 2009 respectively. The author/s of my source for these graphs also points out that last month, for the first time, China became Brazil’s largest trading partner. Trade with Brazil has long been an indicator of financial power  The USA held the No 1 position from the 1930′s; before that, Britain had been the dominant trading partner for several generations.

Dramatic shifts are currently underway – yet there’s no real sign yet that the English-speaking countries intend to put their bloated military spend into reverse and rejoin the rest of the world. If they did, others would be greatly enouraged to do the same. As it is, the rest of the world is likely to view warily the real intentions of nations with a long track record of illegal invasions, imperialism and starting new wars.

Jim Lobe: serious journalism

Chas Freeman: independent intelligence

IPS Journalist Jim Lobe interviewed Chas Freeman recently – providing readers with a fascinating insight into the kind of views that scare the most entrenched vested interests that retain an inordinate amount of power in Washington DC, even under the new Obama Administration.

Mr Freeman was proposed by the US Director of National Intelligence, Admiral Blair, as the new Chair the National Intelligence Council (NIC). Freeman’s nomination was subjected to a vicious, sustained attack from the Zionist lobby and he ultimately withdrew – but landed some punches of his own on the way out.

Intelligence agencies in the western world have been largely hijacked by special interests, with the Israel Lobby and closely-related financial and military-security interests at the top of the foodchain. Freeman shows there are still practioners of the real Art of Intelligence in the USA.

Below are two extracts I found especially interesting. The whole interview is well worth a read.

Snitched from Private Eye…

George and Bernie - can you tell the difference?

It’s hard to conceptualize world economic affairs in all their complexity. Yet some of the fundamentals of the economic crisis are not too hard to grasp. The careful use of analogy can help. Here’s a neighbourhood analogy. To keep it simple, I’ll mention only two important households…

Imagine you are the head of a poor but very large household. Your family works hard over many years to make cheap products for neighbours to enjoy. One very rich neighbour in particular buys vast amounts of your produce.

It's not easy being brave

In return for your family’s sweated labour, you’re paid wages in the form of personal IOUs. The guy who buys most of your goods pays by personal cheque. He has the biggest, most expensive house on the block, so you consider his IOUs/cheques are good. You cash some cheques, but being a thifty type, you save many of his payments too. Over time, your savings accumulate.

Your big and wealthy neighbour spends a lot of money on extravagances. You think it unwise, but consider that’s his business. He employs huge numbers of security guards armed with powerful, expensive weapons – spending far more on this than anyone else on the block. Indeed, he spends nearly as much on ‘security’ as all the other households put together. From time to time, some of his henchmen invade other people’s houses. You think that’s wrong and say so… but he does command a lot more heavy firepower than you could ever afford, so you don’t complain too loud. Meanwhile, you work harder and harder to make more things for him to enjoy. Your savings keep accumulating…

The Good Old Days lasted until about a year ago.

Lucky Larry Silverstein

That was when the world economy was a never-ending boomtown success. Ponzi schemes thrived. Wars blossomed. The derivatives market seemed steel-framed. All was well  - as long as you overlooked hundreds of millions of near-starving people and other pesky distractions such as global environmental decline. And most folk, in the wealthiest nations on earth, did precisely that.

They were the Good Old Days. Now it’s a Brave New World. Luck favours the brave – and there’s none braver than Lucky Larry Silverstein, the Lego-Man of New York City.

In case you’ve forgotten, Larry is the leaseholder of several large properties in NYC. Larry was unlucky on September 11th 2001, when three of his finest towerblocks crumbled into dust.

WTC 7 Collapse: the worst 'luck' ever - but Larry still has a lego set

All three steel-framed skyscrapers dropped at near free-fall acceleration in their own footprint, ‘without warning’. It hadn’t happened to anyone else, ever. What rotten luck!

But Larry soon got lucky again. He scoffed large dollops of insurance dough and began rebuilding. The towerblock known previously as the Salomon Building (World Trade Center Building 7) has already been completed, five stories taller than before. Good old Larry! He didn’t even brag about it. The opening of the new building, in May 2006, took place with remarkably little fanfare. What modesty!

WTC 7 Mark 2: 'green & safe'

Private Eye eyeballs the leading bankers of the realm on the occasion of their recent visit to the Mother of Parliaments.

Will a tasteful display of contrition restore confidence?

Banking chiefs front the House of Commons Select Committee. They are very sorry.

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Just a few questions:

• Who are the rating agencies?
• To whom are they accountable?
• Does anyone with a brain believe what they say anymore?
• Why do we still listen to them?
• Why aren’t their bosses in jail?

Geir Haarde: blamed ratings agencies for Iceland's meltdown

A couple of weeks back, I watched a BBC ‘HardTalk’ interview with Gerr Haarde, the former Prime Minister of Iceland. When asked how he got things so spectacularly wrong – allowing obligations accrued by Icelandic banks to jeopardize the solvency of the entire nation – he had a convincing answer. The ratings agencies said it was OK.

Last week, I watched some of Britain’s leading bankers hauled over the coals before the House of Common Treasury Select Committee. How did they screw up so badly? They sighed deeply. The ratings agencies, they said, with glum looks. The ratings agencies said it was all just fine.

I suspect these answers are broadly truthful. I doubt the bankers lied on oath, not when they had a way out. The ratings agencies, assuredly, got things spectacularly wrong. They told their clients that toxic slime was wholesome organic fertilizer. Perhaps they were genuinely misled. But the natural inference, in such a situation, is that these folk are shocking liars. At the very least, they should be required to prove that’s not the case.

If they don’t do that, what’s the point of taking anything they say seriously any more?