Capitalism - Bad for your health

There could be thousands more heart attacks if the Northern Rock crisis was repeated at other banks across the UK, a Cambridge University study suggests. Cardiac deaths surged "briefly and regularly" every time there was a systemic bank failure, the team found.

The report, which examines how banking crises have affected health in the last 40 years, is one of the first to look at the relationship between the two. When a financial crisis hit a developed country, heart attacks rose by 6.4%. This figure was even higher in the developing world, the Globalization and Health journal study suggested. In countries such as India a combination of both poorer banking regulatory systems and inferior health care could lead to an even higher death toll - with deaths rising by as much as 26%, the researchers suggested.

Extrapolated to the UK, more crises in the style of Northern Rock, where funding problems last year triggered the first run on a British bank in more than a century, could lead to as many as 5,000 more fatal heart attacks. The elderly, who would be more likely to be at risk of heart problems in the first place, would be the most likely to feel threatened by risks to their life-long accumulated savings.

Capitalism should come with a health warning .

And if that news depresses you , it is also revealed that the new generation anti-depressants have little clinical benefit for most patients and in most cases had no more effect than taking a dummy pill.

Jobs for the Boys

Jonathan Powell, former chief of staff to Tony Blair, is to become a senior executive at a leading bank. He will take up a full-time position as a senior managing director of Morgan Stanley's investment banking division. The son of an air vice-marshal, Mr Powell comes from a powerful family that includes his brother Charles, who was Margaret Thatcher’s foreign policy adviser. His other brother, Chris, is influential in advertising and has done some work for the Labour party.

A former journalist and diplomat, Mr Powell is expected to play a role in transactions involving some of the bank's largest clients in UK and Europe. As a managing director in Morgan Stanley's investment banking division, Mr Powell will be responsible for introducing the bank to important governmental and corporate clients he met during his time as aide to Mr Blair.

It has become increasingly commonplace for investment banks to hire former government ministers and politicians to introduce them to clients and brief them on government policy. Former Conservative prime minister John Major is a senior adviser to Credit Suisse while ex-German chancellor Gerhard Schröder works part-time for Rothschild. Italian Prime Minister Romano Prodi spent time with Goldman Sachs before and after his first spell as Italian leader in the 1990s. Lord Waldegrave, a former Conservative minister, is vice-chairman of investment banking at UBS, Switzerland's biggest bank. Jeremy Heywood, Mr Blair's former principal private secretary, left his job as Morgan Stanley's co-head of UK investment banking to become Gordon Brown's head of domestic policy in June.

Brown-nosed snouts in the trough

Bank Fraud

Elsewhere and if committed by others this would be classed as fraud and the perpetrators would be hounded but with such influence and clout with the State the banking industry can do no wrong under the eyes of the Law , it seems .

Britain's high street banks have raised billions of pounds in funds through complex financial deals that use supposedly charitable trusts which are not donating a penny to good causes . Trusts are set up during an elaborate process known as securitisation, which has increasingly replaced the traditional mortgage model in which banks made loans to home buyers and held on to the loans until they were paid off.
Over the last seven years, banks have been pooling many of their loans and turning them into mortgage-backed securities which can then be sold to large investors.
The banks have been doing this through trusts which they can control without owning, isolating financial risks, and keeping their liabilities off their balance sheets in a way that makes them appear more profitable. By giving the trusts a charitable status, they can be operated indefinitely. The trusts are not obliged to make any payments unless they are eventually wound up, and even then the amount any charity might receive would be only a small fraction of the sums raised.

Of the 12 institutions investigated by the Guardian, all admitted that their current series of "charitable" trusts had given nothing to charity.

Halifax names the National Society for the Prevention of Cruelty to Children (NSPCC) as a beneficiary, and has since raised funds on the back of almost £50bn of home loans. The Halifax admitted that this trust had not paid a penny to the NSPCC, however, and the charity said it knew nothing about the arrangement.

Northern Rock had raised £71bn through a Jersey-registered trust called Granite, which issued a prospectus that told potential investors: "Any profits ... will be paid for the benefit of the Down's Syndrome North East Association (UK) and for other charitable purposes."
Down's Syndrome North East, a small charity run by volunteers from a semi-detached house on the outskirts of Newcastle, was told nothing about this and did not receive any money.

Standard Life's trust, named Lothian, says it operates "for the benefit of charities involved in the domestic and international wellbeing of children". Standard Life would not identify these charities, but acknowledged that it had not paid them any money.

The Alliance and Leicester, for example, said it was one of the last UK banks to enter the mortgage securitisation market, and protested it had merely copied its competitors. "When entering the market, we took legal advice and followed a well-established structure already in use by very many other UK banks," a spokeswoman said. What an excuse but that's capitalism -- no scruples at all in the hunt for profits and always ready to join others with their snouts in the trough .

The Credit Crunch

Further to the previous post this news item perhaps explains the reason why many workers find it necessary to work long hours .

Around one in three mortgage customers face higher repayment rates and difficulty in borrowing more on their homes in the light of the recent credit crunch.Lenders have become increasingly cautious following the problems in the credit markets, and as a result many home- owners will be offered less favourable terms if they want to remortgage their homes. More people than ever are set to fall into the sub-prime category as a result of missed debt repayments, meaning that borrowing will now be put out of reach for many.

Mintel market analysts , estimates that around 9% of the UK's 16.5 million mortgage holders will now be considered sub-prime by lenders. It also forecasts that a further 24% could also be considered a high risk because of their personal circumstances, such as being self-employed or not having a regular income, or because they had moved frequently or fallen behind with household bills. Those coming off fixed-rate deals taken out before the recent interest rate rises will be particularly hard-hit and that many people may not be able to absorb these increases and millions of people could start to suffer financially.

Other research released yesterday, from web credit specialists uSwitch.com, claimed that one in four people are now struggling with unmanageable debts and 12% admit they have missed repayments during the past six months. Around 23% of people say their current level of borrowing either borders on being unmanageable or is no longer manageable. The group said 12% of people also admitted they have missed payments on debts or bills during the past six months and 10% have had a payment bounced by their bank because they had insufficient funds in their account. 38% of people applying for new credit were turned down with 19% of personal loan applications rejected.

One in 10 people claim they are now trapped in a vicious cycle of debt where they may need to get further into debt just to meet their existing financial obligations, and 13% may have to turn to credit just to meet their living costs. At the same time, one in five consumers say they have maxed out at least one of their sources of credit, with 11% going up to their spending limit on a credit card and 10% doing the same on an overdraft.

23% of people are now more worried about money than they were a year ago and 18% are more worried about debt.At the same time 34% say they are feeling financially worse off and more than half of people do not think it is a good time to make a life-changing decision such as buying a home, having a baby or changing jobs.

The average person now sees half of their take-home pay eaten up by debt repayments, with 35% going on their mortgage and 18% spent on unsecured debts.

Is it no wonder that many now try to earn more by working more - just to pay off debts

Preferential Treatment

How different the government can respond to some financial woes .

Mr Darling told MPs the government had a clear duty to protect the public interest . The government put up huge loans to save the Northern Rock bank , emergency funding equivalent to twice the amount of the annual primary school budget. Deposits of savers would continue to be fully guaranteed .

Contrast now the collapse of the Farepak Christmas savings club that last year drove many of its low-income victims into a cycle of debt according to a union-sponsored report . Many of those affected were low-paid women saving small sums for Christmas who went into debt to buy the gifts they had been expecting to purchase with their Farepak savings . Over 122,000 people have lodged claims , and they have been told to expect just 5p in the pound for their claims, and that there will be no payout this year.

Centre for Crime and Justice Studies Director Richard Garside. said "Many Farepak customers are asking why, if the government was prepared to underwrite Northern Rock to the tune of billions of pounds, no comprehensive help has been forthcoming"

"I think it is annoying that they just treat ordinary working class people like that..." said one victim of the company's collapse .

And there lies the answer ....ordinary working class people are treated that way by the capitalist system just because they are working class .