martedì 10 gennaio 2012

The Models of Kiwibank and Japan Post

Saving the Post Office: The Models of Kiwibank and Japan Post

by: Ellen Brown, Truthout | News Analysis

A Kiwibank at the Coastlands mall in New Zealand. (Photo: Finsec)
Neither rain nor sleet nor snow may have stopped the Pony Express, but the nation's oldest and second-largest employer is now under attack. Claiming the United States Postal Service (USPS) is bankrupt, critics are pushing legislation that would defuse the postal crisis by breaking the backs of the postal workers' unions and mandating widespread layoffs. But the "crisis" is an artificial one, created by Congress itself. 
In 2006, Congress  passed the Postal Accountability and Enhancement Act (PAEA), which forced the USPS to put aside billions of dollars to pay for the health benefits of employees, many of whom hadn't even been hired yet. Over a mere ten-year period, the USPS was required to pre-fund its future health care benefit payments to retirees for the next 75 years, something no other government or private corporation is required to do. As consumer advocate Ralph Nader observed, if PAEA had never been enacted, USPS would now be facing a $1.5 billionsurplus.    
The USPS is a profitable, self-funded venture that is not supported by the taxpayers. It is funded with postage stamps - one of the last vestiges of government-issued money. Stamps are fungible and can be traded at par, and they are backed, not by mere government "fiat," but by labor. One stamp will buy the labor to transport your letter 3,000 miles. 
The USPS is one of the few businesses the government is allowed to operate in competition with private companies; it is the only US agency that services all its citizens six days per week; and it is perhaps the last form of communication that protects privacy, since tampering with it is against federal law. In 1999, the US employed nearly a million people, and today, it employs around 600,000. Where are those workers to go when the post office is no more?
To Downsize or Diversify? 
Whatever caused the financial woes of the USPS, there is another way to mitigate the crisis than slashing employee benefits and customer services. In a December 21, 2011, article, Tim Fernholz suggested that instead of focusing on cuts, the post office should approach the problem from a business perspective and find a new way to make money. One way to keep the USPS alive, he says, is for it to include basic banking services in its product line, providing a "public option" in banking:
[R]oughly 9 million Americans don't have a bank account and 21 million rely largely on fringe financial services like usurious check cashers rather than traditional financial institutions. Giving low-income people access to a safe banking system will firm up their economic futures.
The Proud, Forgotten History of Postal Banking
Banking in post offices is not new. Many countries, including Germany, France, Italy, Japan and New Zealand, have a long and successful history of it - and so does the United States. 
From 1911 to 1967, the US Postal Savings System provided a safe and efficient place for customers to save and transfer funds. It issued US Postal Savings Bonds in various denominations that paid annual interest, as well as Postal Savings Certificates and domestic money orders. The US Postal Savings System was set up early in the 20th century to attract the savings of immigrants accustomed to saving at post offices in their native countries, to provide safe depositories for people who had lost confidence in private banks and to furnish more convenient depositories for working people than were provided by private banks. (Post offices were then open from 8 AM to 6 PM, six days a week, substantially longer than bankers' hours.) The postal system paid two percent interest on deposits annually. The minimum deposit was $1 and the maximum was $2,500. Savings in the system spurted to $1.2 billion during the 1930s and jumped again during World War II, peaking in 1947 at almost $3.4 billion. 
The US Postal Savings System was shut down in 1967, not because it was inefficient, but because it was considered unnecessary after private banks raised their interest rates and offered the same governmental guarantees that the postal savings system had.
The Kiwibank Model: Postal Banks to Serve Local Communities
Postal banks are now thriving in New Zealand, not as a historical artifact, but as a popular new innovation. When they were instituted in 2002, it was not to save the post office, but to save New Zealand families and small businesses from big-bank predators. By 2001, Australian megabanks controlled some 80 percent of New Zealand's retail banking. Profits went abroad and were maximized by closing less profitable branches, especially in rural areas. The result was to place hardships on many New Zealand families and small businesses.
The New Zealand government decided to launch a state-owned bank that would compete with the Aussies. They called their new bank Kiwibank, after their national symbol, the kiwi bird. But the government team planning the new bank faced major challenges. How could they keep costs low while still providing services in communities throughout New Zealand? 
Their solution was to open bank branches in post offices. Kiwibank was established as a subsidiary of the government-owned New Zealand Post. The Kiwibank web site states:
Back in 2002, we launched with a thought: New Zealand needs a better banking alternative - a bank that provides real value for money, that has Kiwi values at heart, and that keeps Kiwi money where it belongs - right here, in New Zealand.
So we set up shop in PostShops throughout the country, putting us in more locations than any other bank in New Zealand literally overnight (without wasting millions on new premises!).
Suddenly, New Zealanders had a choice in banking. In an early "move your money" campaign, they voted with their feet. In an island nation of only 4 million people, in its first five years Kiwibank attracted 500,000 customers away from the big banks. It consistently earns the nation's highest customer satisfaction ratings, forcing the Australia-owned banks to improve their service in order to compete.
Postal Banking Japan-Style: Funding the Government's Debt With Its Own Bank
Another interesting model is Japan Post Bank, now the largest publicly owned bank in the world.  Japan Post is also the largest holder of personal savings, making it the world's largest credit engine. Most money today originates as bank loans, and deposits are the magic pool from which this credit-money is generated. Japan Post uses its excess credit power to buy government bonds.  By 2007, it was the holder of one-fifth of the nation's debt. As noted by Joe Weisenthal, writing in Business Insider in February 2010: "Because Japan's enormous public debt is largely held by its own citizens, the country doesn't have to worry about foreign investors losing confidence."
If the USPS were to add commercial banking to its product line, it, too, could use its own bank-generated credit to help relieve its debt problems. The USPS is being forced to fund the health care costs of its employees for 75 years into the future, and a large portion of this unreasonable burden is composed of interest charges. According to German researcher Margrit Kennedy, interest composes on average about 40 percent of the cost of all goods and services. That suggests that eliminating interest could reduce the USPS debt by about 40 percent. If the USPS became a bank, it could use the credit generated from customer deposits either to service its own debt directly - something that would effectively be interest-free, since it would own the bank and would get the profits back - or by buying interest-bearing government bonds. The interest earned on the bonds could then be used to pay the interest on the USPS debt.
Other government agencies and local governments could improve their balance sheets in the same way. Public institutions with sizable capital and revenues can cut their infrastructure costs by about 40 percent by establishing their own banks, allowing them to avoid a massive toll in interest to private banker middlemen.    
The Post Office Deserves to Be Preserved
The USPS is a venerable institution that is older than the Constitution. It should be saved, and it can be saved. One way is to support HR1351, a bill introduced by Rep. Stephen Lynch (D-Massachusetts) to repeal the Postal Accountability and Enhancement Act. 
Another way is for the post office to combine mail services with teller services, restoring the Postal Savings System of an earlier era. The result could be not only to save the Post Office, but also to establish a competitive alternative to a runaway Wall Street banking monopoly that even Congress seems unable to control.
Creative Commons License

This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are and  She is also chairman of the Public Banking Institute.

SNB's Hildebrand Resigns from his Post

SNB’s Hildebrand Resigns from his Post on the Back of Forex Scandal

By   |  Forex  |  Jan 10, 2012 09:59AM GMT
As reported last week, the chairman of the SNB’s wife made large forex gains from taking a short position in the CHF prior to the announcement of a peg on the EURCHF by the SNB. The USDCHF has moved lower on the news announcement and approaches the 38.2% of the move up from the January 3rd low.


Bobbys Corner-Open Market-January.9.2011

Good Morning:

The euro saw some strength as we start the new week.  With news that German Chancellor Merkel, and French President Sarkozy have met to discuss a plan to rescue the 17 nation single currency.

Talks were held in Berlin, where Chancellor Merkel and President Sarkozy are looking to sort out new rules on fiscal responsibility by member nations.  they will be focusing on tighter budget controls, along with keeping the crisis from spreading more.

The loonie dropped as the price of oil has started to drift lower.  With Canada as a major oil supplier (especially to the US) any move in the price of crude will cause concerns in Canada.

Gold and silver are slightly higher-while oil is a touch softer at this time.

AUDUSD looking to break higher. Above 200 hour MA and 38.2% retracement


The AUDUSD has moved above the 200 hour MA and now the 38.2% of the move down from last weeks high to low move. The 200 hour MA comes in at 1.0225 level  . Stay above that, and the price bias remains bullish. Move below and there could be some disappointment and liquidation of longs.   On Sunday night, the retail sales came out weaker at 0.0% vs 0.4% expected. This sent the pair lower but there has been a move higher with the improved EURUSD.  Looking for momentum.

EURUSD keeps the better tone after early NY fall, but remains contained


The EURUSD fell in early NY trade. Comments from Sarkozy and Merkel reminded the market of the Greek situation but after a fall to the midpoint of the days range (and the close from Friday at 1.2720)  the buyers came back in the market.  The price is above the corrective channel but has been stalling in front of earlier day highs.


lunedì 9 gennaio 2012

Robert Fisk: Bankers are the dictators

Robert Fisk: Bankers are the dictators of the West

Suggested Topics

Writing from the very region that produces more clichés per square foot than any other "story" – the Middle East – I should perhaps pause before I say I have never read so much garbage, so much utter drivel, as I have about the world financial crisis.

But I will not hold my fire. It seems to me that the reporting of the collapse of capitalism has reached a new low which even the Middle East cannot surpass for sheer unadulterated obedience to the very institutions and Harvard "experts" who have helped to bring about the whole criminal disaster.
Let's kick off with the "Arab Spring" – in itself a grotesque verbal distortion of the great Arab/Muslim awakening which is shaking the Middle East – and the trashy parallels with the social protests in Western capitals. We've been deluged with reports of how the poor or the disadvantaged in the West have "taken a leaf" out of the "Arab spring" book, how demonstrators in America, Canada, Britain, Spain and Greece have been "inspired" by the huge demonstrations that brought down the regimes in Egypt, Tunisia and – up to a point – Libya. But this is nonsense.
The real comparison, needless to say, has been dodged by Western reporters, so keen to extol the anti-dictator rebellions of the Arabs, so anxious to ignore protests against "democratic" Western governments, so desperate to disparage these demonstrations, to suggest that they are merely picking up on the latest fad in the Arab world. The truth is somewhat different. What drove the Arabs in their tens of thousands and then their millions on to the streets of Middle East capitals was a demand for dignity and a refusal to accept that the local family-ruled dictators actually owned their countries. The Mubaraks and the Ben Alis and the Gaddafis and the kings and emirs of the Gulf (and Jordan) and the Assads all believed that they had property rights to their entire nations. Egypt belonged to Mubarak Inc, Tunisia to Ben Ali Inc (and the Traboulsi family), Libya to Gaddafi Inc. And so on. The Arab martyrs against dictatorship died to prove that their countries belonged to their own people.
And that is the true parallel in the West. The protest movements are indeed against Big Business – a perfectly justified cause – and against "governments". What they have really divined, however, albeit a bit late in the day, is that they have for decades bought into a fraudulent democracy: they dutifully vote for political parties – which then hand their democratic mandate and people's power to the banks and the derivative traders and the rating agencies, all three backed up by the slovenly and dishonest coterie of "experts" from America's top universities and "think tanks", who maintain the fiction that this is a crisis of globalisation rather than a massive financial con trick foisted on the voters.
The banks and the rating agencies have become the dictators of the West. Like the Mubaraks and Ben Alis, the banks believed – and still believe – they are owners of their countries. The elections which give them power have – through the gutlessness and collusion of governments – become as false as the polls to which the Arabs were forced to troop decade after decade to anoint their own national property owners. Goldman Sachs and the Royal Bank of Scotland became the Mubaraks and Ben Alis of the US and the UK, each gobbling up the people's wealth in bogus rewards and bonuses for their vicious bosses on a scale infinitely more rapacious than their greedy Arab dictator-brothers could imagine.
I didn't need Charles Ferguson's Inside Job on BBC2 this week – though it helped – to teach me that the ratings agencies and the US banks are interchangeable, that their personnel move seamlessly between agency, bank and US government. The ratings lads (almost always lads, of course) who AAA-rated sub-prime loans and derivatives in America are now – via their poisonous influence on the markets – clawing down the people of Europe by threatening to lower or withdraw the very same ratings from European nations which they lavished upon criminals before the financial crash in the US. I believe that understatement tends to win arguments. But, forgive me, who are these creatures whose ratings agencies now put more fear into the French than Rommel did in 1940?
Why don't my journalist mates in Wall Street tell me? How come the BBC and CNN and – oh, dear, even al-Jazeera – treat these criminal communities as unquestionable institutions of power? Why no investigations – Inside Job started along the path – into these scandalous double-dealers? It reminds me so much of the equally craven way that so many American reporters cover the Middle East, eerily avoiding any direct criticism of Israel, abetted by an army of pro-Likud lobbyists to explain to viewers why American "peacemaking" in the Israeli-Palestinian conflict can be trusted, why the good guys are "moderates", the bad guys "terrorists".
The Arabs have at least begun to shrug off this nonsense. But when the Wall Street protesters do the same, they become "anarchists", the social "terrorists" of American streets who dare to demand that the Bernankes and Geithners should face the same kind of trial as Hosni Mubarak. We in the West – our governments – have created our dictators. But, unlike the Arabs, we can't touch them.
The Irish Taoiseach, Enda Kenny, solemnly informed his people this week that they were not responsible for the crisis in which they found themselves. They already knew that, of course. What he did not tell them was who was to blame. Isn't it time he and his fellow EU prime ministers did tell us? And our reporters, too?

giovedì 5 gennaio 2012

Swiss central banker chief's insider trading

Swiss central banker dumped francs on eve of devaluation
Swiss National Bank Caves Over Chief's Dollar Deals
By The Associated Press
via Google News
Wednesday, January 4, 2012
GENEVA -- After days of stonewalling, the Swiss National Bank gave in Wednesday to demands that it shed light on currency trades from its chief's personal account that netted fat profits as he led efforts to lower the Swiss franc's value.
The Swiss government, meanwhile, reiterated its support for bank chief Philipp Hildebrand amid growing disquiet over the possibility that the private dollar deals unfairly earned his family tens of thousands of francs or dollars.
The Swiss National Bank decided to publish a report by external auditors PricewaterhouseCoopers and release its previously secret guidelines for senior officials. The move came only hours after the Swiss political weekly Weltwoche claimed that Hildebrand had personally authorized the currency deals previously thought to have been conducted by his wife.
"The report by PWC shows that recent reports in certain media about the transactions of the Hildebrand family are partly incorrect and contain no information that wasn't already known to the controlling authorities," the central bank said in a statement.
Like most central banks, the SNB forbids senior officials from engaging in personal trading where they might profit from insider knowledge about an upcoming monetary policy decision.
A key question is whether the trades were done by the bank chief or his wife Kashya, a former currency trader, and whether Hildebrand knew of them.
The Zurich-based Weltwoche weekly said it had obtained bank statements showing that Hildebrand himself bought large amounts of U.S. dollars before selling them for profit.
"We have all the bank statements showing the relevant transactions, plus a verbal assurance from a bank employee confirming that it was Hildebrand personally, not his wife, who ordered the transactions," Weltwoche's Deputy Editor-in-Chief Philipp Gut told The Associated Press in a telephone interview.
Gut declined to identify the bank employee, but said he was a client adviser at Bank Sarasin. The Basel-based private bank said it has fired an IT support employee who leaked confidential information about "currency transactions by the family" of Hildebrand.
The audit report released by the bank Wednesday cites emails indicating it was Kashya who used 400,000 francs to purchase 504,000 U.S. dollars on Aug. 15 -- informing her husband only a day after the transaction occurred. The audit report doesn't say whether she was aware of the SNB's currency plans, nor whether it was Hildebrand or his wife who, less than two months later, sold $516,000 for 475,000 Swiss francs.
The trade seemed to earn the Hildebrands almost 75,000 Swiss francs ($83,000) because between the purchase and the sale of U.S. currency, the Swiss National Bank had increased franc liquidity and set the minimum exchange rate of the euro at 1.20 Swiss francs. The two actions helped to sharply raise the value of major currencies like the dollar against the franc.
Auditors concluded that the cheap purchase of U.S. dollars two days before the SNB's liquidity decision Aug. 17 was "delicate," but since Hildebrand had declared the transaction a day earlier, he hadn't breached any rules.
On the sale of U.S. dollars, the auditors concluded it was part of a property deal that began in March. They decided that because Hildebrand had held almost $1.2 million from the deal for over six months, he also didn't breach SNB rules with the Oct. 4 dollar sale and in fact lost money in the exchange.
The Swiss government, meanwhile, issued a statement Wednesday saying it had discussed the affair with Hildebrand at a Cabinet meeting Dec. 23.
"The Federal Council sees no reasons to question the outcome of the audit. It has pronounced its support for Mr. Hildebrand," the government said.
Media commentators and lawmakers had urged greater transparency from the SNB and from Hildebrand, 48, whose unblemished image is considered crucial to the credibility of Switzerland's small but powerful central bank. Hildebrand has scheduled a news conference for Thursday.
Weltwoche, which published the latest allegations against Hildebrand, is close to the nationalist Swiss People's Party and its prominent billionaire backer, former Justice Minister Christoph Blocher.
Bank Sarasin said in a statement late Tuesday the fired IT support specialist passed details of the Hildebrands' account to a People's Party lawyer, who then arranged a meeting with Blocher.
Blocher, who has repeatedly criticized Hildebrand's management of the central bank, said through his spokesman he had no plans to comment on the case.

Ron Paul Raises $13 Million In Q4

Ron Paul Raises $13 Million In Q4, Only Romney Raised More


Paul is the only candidate with the resources to challenge financially
Steve Watson
January 5, 2012
Ron Paul
FEC figures released this week indicate that the Ron Paul 2012 campaign raised $13 million in the fourth quarter of 2011, a significant increase on the $8 million Paul raised in the third quarter.
A large bulk of that cash came from an independently organized donation drive last month. The campaign saw $4 million donated in just one weekend in mid December as part of a ‘Tea Party Money Bomb’.
The funds will allow the Paul campaign to forge ahead and buy more advertising ahead of further primaries and caucuses nationwide.
Unlike candidates such as Rick Santorum and John Huntsman, Paul has the potential to continue to raise substantial sums of money and progress his campaign beyond Iowa and New Hampshire, owing to a large and loyal grassroots support base.
Only Mitt Romney will be able to pull in more funding nationwide. His fourth quarter total is said to be in the region of $20 million.
Following his second place finish in Iowa, Santorum gained around $1 million in donations in a 24 hour period. Campaigning in New Hampshire last night, Santorum told his supporters that over half the funding for his entire campaign so far came in on Tuesday and Wednesday.
  • It is clear however that Santorum has no national fundraising network. Indeed, his website was unable to handle the amount of donations in the wake of the Iowa results and experienced a period of inactivity.
As Newt Gingrich has fallen away from the front runners, donations to his campaign have slowed significantly. The former House Speaker posted around $10 million in the fourth quarter, however, his campaign is still mired in substantial debt.
Sources indicate that Rick Perry has around $3.5 million in his coffers, but he will also find it hard to continue to raise funds when he is polling in low single digits.
Steve Watson is the London based writer and editor for Alex Jones’, He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.