[Marxism] Fictitious capital

Steve Palmer spalmer999 at yahoo.com
Wed Oct 21 11:57:27 MDT 2009


This is part of the explanation but, I suggest, a sideshow compared to the real action which is the remarkable generosity of the US taxpayer. I've compiled a table of Financial Profits and government transfers to the financial sector. In addition, the government is now paying interest on reserves (including *excess* reserves) held at the Fed as well as substantial fees for 'advice', as well as fees for issuing Treasuries etc.

Domestic Profits

        Financial  Gov't transfers to   Financial Profits
        Industry   Financial Industry   Without transfer
2008 Q2   330.8         0.0                  330.8
     Q3   297.5       -30.4                  327.9
     Q4   130.3       270.7                 -140.4
2009 Q1   253.9       222.9                   31.0
     Q2   280.7       137.9                  142.8

Source:  BEA Press Release for GDP and Profits; Federal Reserve Flow of Funds, Table F9.


--- On Wed, 10/21/09, Louis Proyect <lnp3 at panix.com> wrote:

> From: Louis Proyect <lnp3 at panix.com>
> Subject: [Marxism] Fictitious capital
> To: "Steve Palmer" <spalmer999 at yahoo.com>
> Date: Wednesday, October 21, 2009, 9:38 AM
> http://blogs.law.harvard.edu/philg/2009/10/17/how-wall-street-is-making-its-billions/
> How Wall Street is making its billions
> 
> Wall Street banks have had profitable quarters. JPMorgan
> Chase 
> reported $3.6 billion in profit (more than $1 billion per
> month). 
> Goldman Sachs was only slightly behind, at $3.2 billion.
> These 
> profits supposedly came from “trading.” I asked a
> friend who has 
> worked in the money business how this was possible. “For
> someone 
> to make money trading, there has to be someone on the other
> side 
> of every trade who is losing money. Where does each bank
> find 
> someone who can lose $1 billion every month?”
> 
> He explained that “carry trade” would be a more
> accurate 
> description of what they’re doing. 


      




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