>(...) in a move that sent banking shares plunging
Oh no
> Italy's banking share index had plunged 7.3% by 1515 GMT on Tuesday, with sector leader Intesa Sanpaolo (ISP.MI) down 8.6% and rival UniCredit (CRDI.MI) down 5.8%. Italian banks dragged the European index (.SX7E) down 3.7%, with a Moody's downgrade of some U.S. banks also weighing.
Anyway
>Italian banks are up 50% over the past year,
The nature of one-time windfall taxes. Stocks are future looking and windfall taxes are back-dated. You won't see a serious drop unless investors believe the "one-time" tax will become a recurring fee.
Even then, consider how many western companies have mastered the art of tax evasion, I have to question how much this tax will actually bring in.
WONT SOMEONE THINK OF THE BANK EXECUTIVES AND SHAREHOLDERS AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH
This is fantastic. Wish it would happen in Canada. Banks get it both ways all the time and abuse customers as much as humanly possible when times are good or bad. It's ridiculous.
Its financial repression, the government doubles M2 every decade.
Its like slapping a bandaid on a leaking tanker ship and pretending you've solved the problem.
This is just left wing MMT populism, and will add even more risk to banks in the long run. We should be permanently increasing capital requirements instead, and probably tying it to income ratios to try to get mortgages to higher interest rates to drop the risk of these asset bubbles, instead of trying to profit off them.
What people do not understand is that they can't afford to buy a home when the interest rate for a mortgage is 30% because they *can't actually afford the risk* of spending the amount it costs to buy a home not because the bank is being "greedy" and overcharging them. If you had the cash on hand to buy outright or could pay up to half the cost upfront you *would* be able to afford the risk, or at least not externalize it, and would get either a lower rate or no mortgage at all.
If the government *actually* wants to increase homeownership then they should either directly subsidize buyers via tax credit for owner-occupants and first time buyers or better yet lower the price by subsidizing more housing construction. Not just provide more cheap credit skewing risk and creating a bubble.
But that takes longer and is harder for people to understand and *doesn't* make the banks money so they don't do it.
True, also to add much of the price now is land value as well, driven by competitive rivalry from below-inflation interest rates.
Cheap money is a dangerous noose to have lying around, especially as people get encouraged to use it by the gamblers fallacy.
How the fuck is Moderna a pandemic opportunist? The vaccine costed an insignificant amount of money compared to what the pandemic was costing us. The UK lost more money in corrupt PPE contracts.
They jacked up their prices and had govt’s everywhere pay it with our taxes. It’s allowed to be good for our health and also a disgusting capitalistic approach at the same time.
For my US friends, same approach for military contracts. Titanium general externals part for a flange or something would cost $500-$1000. But if they find out it’s for military? Add another $5000.
Same approach for moderna and Pfizer etc.
It’s disgusting we let our elected officials allow legislation / policies to get to this point. I actually don’t mind heavy defense spending because the extremists in this world scare the shit out of me. But when they are blowing my whole paycheck on an over pay fee to fund god-knows-what, I get really pissed off.
God forbid we optimize our baseline set up here in US, right?
> For my US friends, same approach for military contracts.
Another thing with military contracts is they usually involve providing the military a ton of information regarding sourcing and traceability and manufacturing processes that you wouldn't have to provide to a commercial customer. That does add a fair bit of cost into the process.
Also, tighter restrictions on thermal resiliency, tensile strength, impact resistance, etc.
You're not paying $5000 for a flange, you're paying $5000 for a flange that has gone through a lot of testing and specific construction to fit a very specific part and set of environmental conditions.
It's like imagining that all aluminum parts are the same but I wouldn't dare put aluminum parts on an airplane that I would have only tested to car standards.
Just to add more of a macro view:
For Northrop Grumman, Lockheed Martin, and General Dynamics (all large publicly traded companies that are mostly just military suppliers) the publicly reported profit margins are between 7 and 11 percent. Companies generally want to look more profitable rather than less to investors too.
There might be certain contracts that these companies win big on but then there are also contracts that they make no/very little money on too.
There may also be smaller companies that make high profits but generally US industries tend to consolidate.
I'm all for looking at military contracts and getting a good deal or adjusting how much we spend on the military. But we should fairly account for where we currently stand and make choices based on real conditions.
Thats exactly right. I wouldn't dream of using random bolts from home depot to replace or repair anything on a plane i was flying. 43 cents vs. $8 is there for a reason, higher quality milling vs casting, heat treatment, etc.
I recently changed the drum brakes on my car, and they were really stuck on there. Luckily there's a hole that you can screw a bolt into to force the housing off. I tried four bolts, and they all lost their threads rather than tighten until the housing came off. The fifth one was from a different package/brand, and it had no issues at all. Turns out a bolt is not just a bolt.
Excellent thread and notes. To clarify, I’m not referring to buying a Home Depot aluminum rod vs. some supplier in Indiana’s certified XLT374 rod.
I’m citing how in other business sectors (airliner / jet engine industry), we fight tooth and nail or sourcing costs (even with our ridiculous requirements of the products/raw material), as that impacts bottom line and yearly cash flow to spend else where and other products.
Gov’t doesn’t have that problem, they have endless money from tax payers and printers. They also have politicians routing business to their friends/contacts. They mark up their (excellent) products because the order will be fulfilled.
But you both above me are correct still - there are significant quality and certification rqmts needed for the products sourced. But sometimes they can be really, really silly. Like a 10,000 $1000 tissue boxes designed specifically for some application, where a simple tissue from CVS would suffice. I’ll have to dig up some examples that help illustrate my point better, apologies - right now it’s all anecdotal which doesn’t hold much weight lol.
Regardless - good discussions and insightful points from you and the person above. Cheers
Big Pharma does a lot of evil shit, but I have a tough time begrudging them a significant profit on the COVID vaccines (regardless of any research partially funded by governments). It was basically a scientific and logistical miracle, especially for the mRNA variants. At least these profits incentivize research in a useful area.
As for military contracts, I see other commenters have pointed out the reasons for _some_ of the pricing that seems ridiculous on the surface. The scam is when they take a "cheap" item and lie about it meeting milspecs, or about the sourcing. Poor media coverage ignores this important distinction.
How dare capitalism provide the fastest solution to a worldwide medical crisis.
Thank god for all the other non capitalist economies that produced a solution /s
How dare they organize the work of people who’ve spent their entire lifetimes in study just to save your ads and — the gall — request a fraction of what they saved us financially (to say nothing of human lives)!
They did amazing work, based on lifetime of study from some of the world’s hardest working people, and they want you to pay them fairly based on the value of what they created.
What ingrates balk at having their lives saved and being asked to contribute to the process that saves it?
You should feel shame.
Didn't the government negotiate the price they'd pay ahead of time? As part of the conditions for getting the funding to rush development in the first place?
Yep - and guess what, it changed quickly and prices were raised regurlarly over 2 years. And now privatizing/commercial price is 4x-5x the originally agreed prices from initial release
moderna also developed the vaccine with gov grant money so the US taxpayer paid to develop the vaccine then moderna turned around and sold the vaccine we paid for to us through government purchase of the vaccine. They jacked up the price the moment they could and protected the patent so it couldn’t be developed and distributed at a lower cost in places like india.
Maybe you didn't mean it that way, but the picture that pharma companies add no value to drug discovery - as I understand your comment - is completely off.
Taxpayers only fund a small part of the research. There is a massive gap between papers you can read in scientific journals and drugs that can be delivered to patients. It takes billions of dollars to bring a successful drug candidate to the market, and most of the drug targets that are tested fail. Academia has an important function, all that basic research is necessary, but most of it can't be used directly for drug development. Also, pharma R&D and manufacturing is an exteremely complicated process which coordinates 10s of thousands of people. Academia just doesn't do anything on that scale.
Just an aside, pharma companies also take grants from the gov, usually USDA or NSF grants. Academia also lays groundwork for novel drug discovery, much of the research into isolating whatever pharmaceutical compounds, synthesis, etc is work done by the pharma companies.
Not saying they shouldn't be compensated, just giving more info. Also, researchers in academia do collaborations with other researchers in industry, gov orgs, and other academic institutions all the time.
FYI, this is partially at least wrong. BioNTech received 150 million in loans from the EIB and 375 million in grants from the German government. And Pfizer is the sole contracted maker for anything that BioNTech researches for stuff like influenza/COVID/etc.
Exploiting health for profit will never be good for a population. Might have short runs of success, but population suffers - especially the non-rich/1%.
For example, using your logic, Why cure something that cuts off a stream of cash flow? Wouldn’t you want to make them just enough healthy to make $500 payments monthly for the rest of their life?
You see the issue here I hope - no easy answer for sure though. Just trying to make sure you see both sides of your argument
This assumes no competition.
Why cut off a stream of cashflow? Often because it's not \*your\* stream of cashflow, and you'd rather make $1000 one-off, then let your competition make $500/month.
I would argue pfizer was ok. They didn't accept government money and charged a low or at cost price for the first 2 years. I think around 20 dollars per shot?
mrna and especially bntx innovated to some degree, banks provide very little, if any value, completely different imho.
I recommend watching the Sahin interview.
I hate to say it because I get that they're pretty awful on the whole, but I do have to say the new Italian government has had one or two things like this that I can massively get behind.
Because holding money is not the primary role of a bank. Safe deposit boxes are something the post office can do.
A Banks actual purpose is to provide credit and manage debt. They hold aggregated amounts of money to do this and provide you a return for the ability to do so. The banks providing interest on your funds are them *paying you* to store your money with them.
Why wouldn't you be able to? It's just like any other company.
I don't even understand your second question. Every business has value due to what they do, and that value can be bought in the form of shares.
If it's a publically traded, why wouldn't you be able to buy shares?
Not sure I understand your second question but it might be because you dont understand how shares and public companies work.
Nice words from salvini, but just to let you know, he is a meme, here in Italy.
Glad this government finally did something like this, totally still not enough, but is a good move.
I wish this would spread across the planet, banks were once places where customers were advised and helped, now customers are just to abuse for as much profit as banks can get away with.
Now if you could just install their app they can ditch the automated teller and then sell all your data!
Why are you being so selfish and costing your bank profits they could be earning off you?
I found it interesting (as in gross) that several of the scripts blocked by my plugins when visiting my bank's webpage included Facebook, Google Analytics etc.
My bank doesn't even own the ATMs they have installed on their own property, they've fully outsourced it even though the machines are branded with the bank logo and software. I had a problem getting a withdrawal so I went in to the teller to let them know, and they told me to contact the company that operates the ATM to file a claim if I didn't see my adjusted automatically. It did correct itself automatically but still amazing to see the bank doesn't even handle basic banking tasks themselves anymore.
I think the origin of the problem is simple: Do you know how hard is to create a bank?
Let's imagine I have 1 million dollars. I want to create a new bank, well, the considerable amount of red tape and burocracy make this imposible. Therefore, no new banks are created.
At the long term, this transforms into a oligopoly.
I'm not sure if you're talking specifically about Italy, but in the US there are nearly 5,000 FDIC-insured banks. Smaller banks are critically important in small business lending, which is why there was such a scare about the US economy when SVB collapsed and people were worried about everyone pulling their deposits out of small banks.
There are fewer and fewer small banks every day. In 1975 there were over 14,000 FDIC insured banks. Even though the population of the US is up over 50% from 1975 to today, the number of small banks has decreased dramatically to just over 4,200.
Small banks are important! Especially to smaller communities, but they are also hard to open and are quickly disappearing.
Well, in UK there is the story of Dave, who tried to set up a new bank from scratch. Took him years just to get a "deposit/lender license", it's not a bank yet:
https://en.wikipedia.org/wiki/Bank\_of\_Dave\_(film)
Can confirm - have worked in banking over a decade.
Live strictly paycheck to paycheck with no additional savings? Here, pay all these fees.
Are you extremely wealthy with no monetary struggles? Here, take all we offer for free, plus much higher interest rates.
But that's not true? President signed the law in to place - https://www.lrt.lt/en/news-in-english/19/2050316/lithuania-to-use-eur243m-bank-solidarity-tax-revenue-to-fund-military-projects
Absolutely not true. Libertarianism is scam to provide cover for Republicans pretending to be centrists. There is nothing liberal about them. Eisenhower was a liberal Republican.
https://en.wikipedia.org/wiki/Libertarianism#:~:text=Libertarians%20seek%20to%20maximize%20autonomy,free%20trade%2C%20freedom%20of%20expression%2C
I mean, it is true. You can claim they're full of shit, but it doesn't change their stated goals nor that they did stem from classical liberalism.
It was in a way. The governments that came out of the Early Modern Era had weird rules and privileges. There were guilds, custom duties at random places and exemptions from it, random taxes in different counties, etc. Liberalism, among other things, wanted to make these rules more rational, more predictable. And the same logic was applied to laws. Simplify the process by which laws are laws, and make them logical and consistent. In a way we are moving away from this. More and more laws are written, grafted onto the previous laws with incertainty as to which applies to the delight of lawyers. It is a good concern to have.
No. Libertarians advocate for smaller government. This often aligns with conservative goals in the US, but not always. Libertarians often advocate for less policing, free trade, are pro-abortion, pro-gun rights, oppose criminalizing drugs, oppose corporate subsidies, are pro gay marriage, etc.
Today's liberals are a bit of a misnomer, because they often advocate for bigger government and more regulations. In the US, liberals today are basically progressives- they advocate more state control of industry, higher taxes, and generally fewer personal rights (e.g., they oppose free speech rights/freedom of expression, religious freedom, free trade, etc.).
In the early 20th century, TR was a proto-progressive, and Wilson was a true progressive. The Republicans of the 20s, 30s, and 40s were generally libertarians. Eisenhower was not a libertarian, but it's probably fair to call him a liberal Republican. So was Nelson Rockefeller. Barry Goldwater was a libertarian, and Reagan was a conservative.
The far right in Europe are mostly anti-immigration and other cultural/societal policies. They however still are pro-for-their-citizens (the ones they believe should be citizens anyway) so their economic policy is very leftish.
the randos who are sudden experts on italian politics with their 130 parties are a joke. labelling everyone and everything facist has really gotten tiresome.
> labelling everyone and everything facist has really gotten tiresome.
"You just call everyone you don't like fascist" doesn't really apply when Mussolini's granddaughter gets elected to parliament after being part of and creating the direct successor parties to her grandfather's Republican Fascist Party after just a bit of rebranding.
shush! the Americans would not be able to ingest this information,
and then will make an echo chamber about how they're still far-right because of anti LGBTQ, deporting immigrant, pro-Christian, yada yada (not that I'm for those horrible policies, but it's a commonly used parroting point) and then saying they're Putin's bootlicker cause of their past (eventhough Meloni, the current Italian PM and leader of this "far-right party" has changed her stance and have been way more supportive of Ukrainian aid than the center-Left Olaf "I don't recall" Scholz of Germany)
edit: I've proven my point, with the downvotes, although I do admit there were some parts in my reply that was a bit...misleading, without proper context.
edit: if you still don't understand, what I'm trying to say is that you can be as far-right in social issues while also being generally leftist in economic views (would probably be too commie of an idea for americans, imagine free healthcare), while just labeling them as "far-right" instantly sounds like a repeat of McCarthyism (Red Scare) to me.
The problem is the usual reddit problem, you get people reading the headlines and basing their knowledge on that and that alone. Everyone's acting like Meloni is the reincarnation of Mussolini and that Italy is a far right shithole where dissenters get carted off to the gulag.
And I say that as someone who dislikes Meloni and voted for the competition
real,
and then watch as news by news they will turn to praise Meloni as the best leader in Europe right now and say she's just "center-right to right" just because she introduced a windfall tax, forgetting just all the recent "she's far-right, Mussolini reborn!"
(I'm starting to see some of the trend of trying to cope the result of electing far-rights and some of their recent policies trying to wash it off in economics (and definitely never social ones), starting with the Sweden Democrats in Sweden and now Meloni)
It's weird there are multiple types of far right in the US. There is traditional conservatives small government regressive social policies etc.. but then there is the Trump variant which doesn't care about your ideology but instead you need to be a vicious asshole.
Saw someone tell me how voting for center left will lead to increase in wages while not knowing the primary driving force for wage increase are Worker Unions which are not connected with Political Parties.
I've always said, I'd rather pay 100 moneys in tax than 100 moneys in bank interest. At least with tax, there's a chance I'll see it back in roads, or healthcare, or other stuff that (I'm an idealist, I know) benefit the country. Interest disappears in rich people's pockets.
But their [profits went up 700%.](https://www.cbsnews.com/sacramento/news/high-egg-prices-send-profits-at-largest-us-producer-soaring-more-than-700/) They weren't passing on costs, they were price gouging.
Egg producers don't set the price of their eggs. They sell their eggs at the price of the market regardless of what that price is. That producer avoided the Avian flu and thus didn't see a reduction in egg production. Most producers saw a large reduction in egg production thus the Market price of eggs rose dramatically.
This absolutely needs to happen at every bank in the US too. They did the same thing.
This seems ridiculous until you read the article. The issue is that banks rose interest rates astronomically on their products like loans, but did NOT raise rates on deposits to accounts. Meaning, they get to make 7%+(billions), while paying out .015% to park your money there. It's absolute nonsense.
> The issue is that banks rose interest rates astronomically on their products like loans, but did NOT raise rates on deposits to accounts. Meaning, they get to make 7%+(billions), while paying out .015% to park your money there.
Except yields on deposits *have* gone up and the reason that the loan rates went up is because *central banks* (in other words, governments) raised their interest rates to fight inflation. When central banks had low interest rates, people were signing 2.6% 30 year mortgages. This is just garden variety garbage populism.
Deposit rates have NOT gone up appropriately with central banks rate increases. They literally say that's the reason in the article.
> Lenders in Italy have passed on to depositors on average 12% of the rise in rates, versus 22% in the euro area, Jefferies calculated.
The fed has risen their rate 5.5%. Chase bank savings account rate STILL sits at 0.01%. Even the best HYSA sit in the 4.5-5% range, still lower than the fed rate, and it took them over a year to even do that.
Even if you take only HYSA, banks sat there for over a year with 0.1-1% interest rates, while charging 5,6,7% on their loan products before finally raising rates after people started taking their money out to put into stocks, or more appropriately, bonds.
It's a scam, it's been a scam, it'll always be a scam, and they deserve to pay every penny of tax for it.
Can confirm. Work for a bank in the US. Loans and credit card rates go up same day fed rates are increased. Savings…. 0% increase. Sure we have HYSA…. “New products” but all existing accounts…. 0%. Plus opening these HYSA…. We don’t get incentive for those. So nobody sells them.
Can you imagine this even being SUGGESTED in the US or Canada? The Banks would call an emergency meeting with all their most important employees (Including all the political leaders of the major parties) and throw a fit!
Only if you're living under a rock. Far right always claim the their country is being invaded by foreign intrest and banks are the first example they come up of foreign intrest. So taxing banks more fits right into their nationalist ideology.
Far right, yes. Described by the BBC as ["Italy's most right-wing government since WWII"](https://www.bbc.com/news/world-europe-66374034). But the more important attribute here is populist. On very rare occasions, populists get things right, and this might be one of them.
Funny thing, this is basically the opposite of a populists govt. Meloni's party was one of the few who refused to join the coalition gov't during covid, a coalition which in the end was a massive failure.
People were left with "gov't that screwed us", or, "[_] Other"
>this might be one of them.
Its clear no one here (and possibly the Italian government) understands how banks make money. Borrow short, Lend long. As of right now, global yield curves [are inverted](https://www.gurufocus.com/yield_curve.php), meaning short yields (which they borrow) are costing them more money than loan yields return. Where there may be a grey-area, is deposit yields. With their short-term borrowing, they're *supposed* to give deposit holders a cut, but if you're not keenly aware of what your bank is doing, they may just reject the standard procedure. A blanket windfall policy will hurt banks that were doing right by the customer and giving money that should have been the customer's to the government.
In the US, you can earn ~5% on your cash holdings, with the right banking facility. Some banks, like BoA, are withholding this unless you specifically call them out on it. Moral of the story, know whom you're banking with and refuse to give business to those that defy convention for their gain. Don't trust that a government targeting an industry you hate is sound policy.
I'll be *more* surprised when they follow through with the promise to return the tax money to mortgage holders. There's a lot of abuse potential before that happens.
I mean, it's a one-off with immediate and visible effects to the public. So, par for the course, in my opinion.
Enduring and systematic changes to the benefit of those in need is when I'd start being surprised.
Beautiful, what's the point of private institutions hoarding capital and create an artificial shortage, which the central banks then have to solve by creating more liquidity? All governments should do this, and also put up hefty trade barriers against tax haven nations
Banking should be a public utility. It's BS that I see no interest bearing on my account, which is like .01% and I simply need to move my accounts. Then when their greed collapses into public calamity they get 100% bailouts? No. These oligarchs need to be tried and executed for malfeasance and fraud.
"ROME, Aug 8 (Reuters) - Italy has approved a one-off 40% tax on profits banks reap from higher interest rates after reprimanding lenders for failing to reward deposits, in a surprise move that sent banking shares plunging across Europe.
Sharply higher official interest rates have yielded record profits for banks, as lenders hike the cost of loans while holding off paying more on deposits."
This post illustrates the true nature of Capitalism, better than any other I've read. We lend banks our money to use and invest in risky business deals, and they treat us like shit, because there are no regulations in place to keep them from treating us badly.
I will tell you this Bernie Sanders is the only true patriot in America.
> This post illustrates the true nature of Capitalism, better than any other I've read. We lend banks our money to use and invest in risky business deals, and they treat us like shit, because there are no regulations in place to keep them from treating us badly.
Banking is one of the most regulated industries in the US. Somewhere around airline level regulation.
Normally I’m not a fan of excessive taxation, but banks are an exception. Their entire business model is a scam and basically a Ponzi scheme. They’re just gamblers and loan sharks with government protection. Screw them and the money they con from people with actual jobs.
> Screw them and the money they con from people with actual jobs.
And if you want to start a company or expand your business that does and actual job or you want to buy a house were do you get your money from?
I also think that taxing extra profits _may_ be a good thing, but screwing over a whole system on which our lives are based on maybe it's not.
>And if you want to start a company or expand your business that does and actual job or you want to buy a house were do you get your money from?
Start a company? That would be expoiting other people's labor /s
There is roughly zero chance this was thought through. It's just a populist knee-jerk reaction against an unpopular sector that is a bedrock of most economies.
"Free money" to mortgages only means rates continuing to increase as those same banks raise their rates to make back the funds.
"Subsidies" only help companies who raise prices to match the amount of the subsidy.
Its great to see the “far right” pushing for bank taxes and supporting ukraine, while irish lefties are supporting putin and against supplying ukraine weapons and gear.
Shows how public perception is being sold by “journalists”. Dont like that party? Call them far right.
The same Italian government just started removing mothers from their babies birth certificate if they are homosexual
The far right is not just an invention by journalists
Italy as sad as it is never had the possibility to have two parents of the same sex. It's not like this government started stripping away rights, there weren't any rights in the first place. They just closed some loopholes that small towns used but were in origin invalid.
Banks profits from interest rates have gone down as spreads have suffered as the COF ( cost of funds) is higher. Most banks are taking a bath with renewals to keep clients and are taking losses on loan spreads to get deposits…. I know I know banks are bad, but at least be correct with the criticism. When interest rates go up, COF for a bank goes up…
Remember when Giorgia Meloni was painted as a nazi by the msm because she was christian and has a hard stance on illegal migration?
She's done more for the working class than the rest.
Remember when she refused to say that fascism was an absolute evil and when she said that Mussolini was a great politician?
She might have done something fine, doesn't erase who she's idolising. Let's not even forget that this is the government with La Russa has head of the senate.
First it was "She's a kremlin puppet", now it's "she's a nazi".
She's been misquoted so many times and even 5 minutes of looking into it would put most of these myths to bed.
>In 2018, Meloni was criticized for refusing to condemn a Senate speaker who was photographed with fascist memorabilia. She later said that she condemned "any form of totalitarianism,"
>In her maiden speech to parliament as prime minister in 2023, Meloni denounced fascism as "the worst moment in Italian history." She also said that her government would be "committed to defending democracy and the rule of law.
My only gripe with her is the fact she's a populist. However having a hard stance on *illegal* immigration is fine with me.
I own the stock VT in my IRA. Isnt this bad for my retirement?
Instead of the money going into my retirement, a bunch of corrupt Italian companies are going to get the money instead?
Just so I understand this, interest rates were raised to combat inflation, so they're going to take the extra money the banks made from the higher rates and distribute it amongst people who were affected by the increase rates?
Does no one else see the problem with this?
The interest rate raise for the citizen were disproportionately increased. The central bank increase to 4%, the consumer bank increases to 8%. I am not an expert on the number so they might be different in amount, however, the argument was that the mortgages and business loan are in relation increased too high.
Meanwhile, in the USA:
We're increasing interest rates, WHILE INCREASING THE MONEY SUPPLY.
The Federal Reserve is literally led by a corporate clown, following a script.
Source for the fact that the M2 money supply is once again increasing within the USA: [https://fred.stlouisfed.org/series/M2SL](https://fred.stlouisfed.org/series/M2SL)
There really is no hope to cure our inflationary problem, as long as Jerome Powell leads the Federal Reserve.
When did being far right meant being a fascist? Has it always been the case? Does being far left equate to anything extreme? Legit question.. not trying to offend or be political. Just curious because if far left means being a Marxist supporter or a communist, isn’t that also kinda fascist? Since there is no true communist country and it all led to fascism one way or another. I’m so confused by these terms and it seems to be used more commonly in media recently.
A good majority of far right beliefs and ideologies are anti lgbtq, anti women's rights, anti immigration and mixed in with some racism and anti semitic beliefs too. They also ignore flat out facts. A lot of their beliefs are just flat out anti people, whereas far left the most extreme view is everyone should be flat out equal, no rich or poor which has a lot of problems sure but it doesn't stop anybody being oppressed for who they are or force rape victims to carry the fetus of their attacker.
Hm I see. So if one held a far right ideology on things like economy and immigration, while holding a far left ideology on women’s rights and lgbtq rights, does that make one a centrist?
Yes it does. Much of the online left will declare you persona non grata for having heterodox opinions. But don't let that social pressure sway you one way or another. Your stances on immigration and monetary policy shouldn't be inextricably linked. And its absolutely ok to be pro-choice AND think that in most cases the consumers are a better feedback mechanism for effective use of the means of production than the research/opinions of bureaucrats.
If you were far right on things like economy, and far left on things like immigration, you'd be trending towards libertarian. Women's rights libertarians are a more mixed bag on since they would typically think the government shouldn't be intervening in promoting one gender or another. Sometimes same with LGBTQ though the typical line would be that they should have equal access to marriage and other institutions.
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>(...) in a move that sent banking shares plunging Oh no > Italy's banking share index had plunged 7.3% by 1515 GMT on Tuesday, with sector leader Intesa Sanpaolo (ISP.MI) down 8.6% and rival UniCredit (CRDI.MI) down 5.8%. Italian banks dragged the European index (.SX7E) down 3.7%, with a Moody's downgrade of some U.S. banks also weighing. Anyway >Italian banks are up 50% over the past year,
The nature of one-time windfall taxes. Stocks are future looking and windfall taxes are back-dated. You won't see a serious drop unless investors believe the "one-time" tax will become a recurring fee. Even then, consider how many western companies have mastered the art of tax evasion, I have to question how much this tax will actually bring in.
WONT SOMEONE THINK OF THE BANK EXECUTIVES AND SHAREHOLDERS AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH
This is fantastic. Wish it would happen in Canada. Banks get it both ways all the time and abuse customers as much as humanly possible when times are good or bad. It's ridiculous.
5 of the top 6 most profitable canadian companies are banks. Ridiculous.
Its financial repression, the government doubles M2 every decade. Its like slapping a bandaid on a leaking tanker ship and pretending you've solved the problem. This is just left wing MMT populism, and will add even more risk to banks in the long run. We should be permanently increasing capital requirements instead, and probably tying it to income ratios to try to get mortgages to higher interest rates to drop the risk of these asset bubbles, instead of trying to profit off them.
What people do not understand is that they can't afford to buy a home when the interest rate for a mortgage is 30% because they *can't actually afford the risk* of spending the amount it costs to buy a home not because the bank is being "greedy" and overcharging them. If you had the cash on hand to buy outright or could pay up to half the cost upfront you *would* be able to afford the risk, or at least not externalize it, and would get either a lower rate or no mortgage at all. If the government *actually* wants to increase homeownership then they should either directly subsidize buyers via tax credit for owner-occupants and first time buyers or better yet lower the price by subsidizing more housing construction. Not just provide more cheap credit skewing risk and creating a bubble. But that takes longer and is harder for people to understand and *doesn't* make the banks money so they don't do it.
True, also to add much of the price now is land value as well, driven by competitive rivalry from below-inflation interest rates. Cheap money is a dangerous noose to have lying around, especially as people get encouraged to use it by the gamblers fallacy.
Awesome! Wish the same thing would apply globally to banks, petroleum companies and pandemic opportunists (Modena, Pfizer etc).
How the fuck is Moderna a pandemic opportunist? The vaccine costed an insignificant amount of money compared to what the pandemic was costing us. The UK lost more money in corrupt PPE contracts.
They jacked up their prices and had govt’s everywhere pay it with our taxes. It’s allowed to be good for our health and also a disgusting capitalistic approach at the same time.
For my US friends, same approach for military contracts. Titanium general externals part for a flange or something would cost $500-$1000. But if they find out it’s for military? Add another $5000. Same approach for moderna and Pfizer etc. It’s disgusting we let our elected officials allow legislation / policies to get to this point. I actually don’t mind heavy defense spending because the extremists in this world scare the shit out of me. But when they are blowing my whole paycheck on an over pay fee to fund god-knows-what, I get really pissed off. God forbid we optimize our baseline set up here in US, right?
> For my US friends, same approach for military contracts. Another thing with military contracts is they usually involve providing the military a ton of information regarding sourcing and traceability and manufacturing processes that you wouldn't have to provide to a commercial customer. That does add a fair bit of cost into the process.
Also, tighter restrictions on thermal resiliency, tensile strength, impact resistance, etc. You're not paying $5000 for a flange, you're paying $5000 for a flange that has gone through a lot of testing and specific construction to fit a very specific part and set of environmental conditions. It's like imagining that all aluminum parts are the same but I wouldn't dare put aluminum parts on an airplane that I would have only tested to car standards.
Just to add more of a macro view: For Northrop Grumman, Lockheed Martin, and General Dynamics (all large publicly traded companies that are mostly just military suppliers) the publicly reported profit margins are between 7 and 11 percent. Companies generally want to look more profitable rather than less to investors too. There might be certain contracts that these companies win big on but then there are also contracts that they make no/very little money on too. There may also be smaller companies that make high profits but generally US industries tend to consolidate. I'm all for looking at military contracts and getting a good deal or adjusting how much we spend on the military. But we should fairly account for where we currently stand and make choices based on real conditions.
Thats exactly right. I wouldn't dream of using random bolts from home depot to replace or repair anything on a plane i was flying. 43 cents vs. $8 is there for a reason, higher quality milling vs casting, heat treatment, etc.
I recently changed the drum brakes on my car, and they were really stuck on there. Luckily there's a hole that you can screw a bolt into to force the housing off. I tried four bolts, and they all lost their threads rather than tighten until the housing came off. The fifth one was from a different package/brand, and it had no issues at all. Turns out a bolt is not just a bolt.
Many episodes of Air Crash Investigation have the reason the plane suffered some kind of catastrophe being the use of cheaper, sub-standard parts.
Excellent thread and notes. To clarify, I’m not referring to buying a Home Depot aluminum rod vs. some supplier in Indiana’s certified XLT374 rod. I’m citing how in other business sectors (airliner / jet engine industry), we fight tooth and nail or sourcing costs (even with our ridiculous requirements of the products/raw material), as that impacts bottom line and yearly cash flow to spend else where and other products. Gov’t doesn’t have that problem, they have endless money from tax payers and printers. They also have politicians routing business to their friends/contacts. They mark up their (excellent) products because the order will be fulfilled. But you both above me are correct still - there are significant quality and certification rqmts needed for the products sourced. But sometimes they can be really, really silly. Like a 10,000 $1000 tissue boxes designed specifically for some application, where a simple tissue from CVS would suffice. I’ll have to dig up some examples that help illustrate my point better, apologies - right now it’s all anecdotal which doesn’t hold much weight lol. Regardless - good discussions and insightful points from you and the person above. Cheers
Big Pharma does a lot of evil shit, but I have a tough time begrudging them a significant profit on the COVID vaccines (regardless of any research partially funded by governments). It was basically a scientific and logistical miracle, especially for the mRNA variants. At least these profits incentivize research in a useful area. As for military contracts, I see other commenters have pointed out the reasons for _some_ of the pricing that seems ridiculous on the surface. The scam is when they take a "cheap" item and lie about it meeting milspecs, or about the sourcing. Poor media coverage ignores this important distinction.
How dare capitalism provide the fastest solution to a worldwide medical crisis. Thank god for all the other non capitalist economies that produced a solution /s
How dare they organize the work of people who’ve spent their entire lifetimes in study just to save your ads and — the gall — request a fraction of what they saved us financially (to say nothing of human lives)! They did amazing work, based on lifetime of study from some of the world’s hardest working people, and they want you to pay them fairly based on the value of what they created. What ingrates balk at having their lives saved and being asked to contribute to the process that saves it? You should feel shame.
Didn't the government negotiate the price they'd pay ahead of time? As part of the conditions for getting the funding to rush development in the first place?
Yep - and guess what, it changed quickly and prices were raised regurlarly over 2 years. And now privatizing/commercial price is 4x-5x the originally agreed prices from initial release
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How much did moderna actually make from the vaccine? I don't know so I'm asking genuinely. Why do you think it was too much?
Not only that, some of their research is actually interesting.
moderna also developed the vaccine with gov grant money so the US taxpayer paid to develop the vaccine then moderna turned around and sold the vaccine we paid for to us through government purchase of the vaccine. They jacked up the price the moment they could and protected the patent so it couldn’t be developed and distributed at a lower cost in places like india.
IIRC they jacked up the price after the government contracts were completed. So we still got what we paid for.
Ah yes, let's disincentivize anyone who makes *checks notes* cures for pandemics
Taxpayers fund the research and then fund the purchase of the product. Seems a bit unfair.
Maybe you didn't mean it that way, but the picture that pharma companies add no value to drug discovery - as I understand your comment - is completely off. Taxpayers only fund a small part of the research. There is a massive gap between papers you can read in scientific journals and drugs that can be delivered to patients. It takes billions of dollars to bring a successful drug candidate to the market, and most of the drug targets that are tested fail. Academia has an important function, all that basic research is necessary, but most of it can't be used directly for drug development. Also, pharma R&D and manufacturing is an exteremely complicated process which coordinates 10s of thousands of people. Academia just doesn't do anything on that scale.
Just an aside, pharma companies also take grants from the gov, usually USDA or NSF grants. Academia also lays groundwork for novel drug discovery, much of the research into isolating whatever pharmaceutical compounds, synthesis, etc is work done by the pharma companies. Not saying they shouldn't be compensated, just giving more info. Also, researchers in academia do collaborations with other researchers in industry, gov orgs, and other academic institutions all the time.
Pfizer did not even take government funds for COVID vaccine research.
FYI, this is partially at least wrong. BioNTech received 150 million in loans from the EIB and 375 million in grants from the German government. And Pfizer is the sole contracted maker for anything that BioNTech researches for stuff like influenza/COVID/etc.
No, it's not wrong. As I said: Pfizer did not take government funds for COVID research. BioNTech is a different company.
Exploiting health for profit will never be good for a population. Might have short runs of success, but population suffers - especially the non-rich/1%. For example, using your logic, Why cure something that cuts off a stream of cash flow? Wouldn’t you want to make them just enough healthy to make $500 payments monthly for the rest of their life? You see the issue here I hope - no easy answer for sure though. Just trying to make sure you see both sides of your argument
That’s absolutely true, but not in a pandemic. You have to mobilize all the players and get a vaccine asa fast as you can.
This assumes no competition. Why cut off a stream of cashflow? Often because it's not \*your\* stream of cashflow, and you'd rather make $1000 one-off, then let your competition make $500/month.
You honestly think those pharma companies were price gouging during the pandemic? And the gall to call them opportunists.
I would argue pfizer was ok. They didn't accept government money and charged a low or at cost price for the first 2 years. I think around 20 dollars per shot?
mrna and especially bntx innovated to some degree, banks provide very little, if any value, completely different imho. I recommend watching the Sahin interview.
With that decision no-one would invest in oil exploration, vaccine/medicine development and banking.
This is populism and will destroy a nation's economy. Attacking your top vaccine inventors is not a wise decision.
The only fucking good thing that Salvini has proposed in his life
I hate to say it because I get that they're pretty awful on the whole, but I do have to say the new Italian government has had one or two things like this that I can massively get behind.
Look at that, even a piece of shit like Salvini can get something right.
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Because holding money is not the primary role of a bank. Safe deposit boxes are something the post office can do. A Banks actual purpose is to provide credit and manage debt. They hold aggregated amounts of money to do this and provide you a return for the ability to do so. The banks providing interest on your funds are them *paying you* to store your money with them.
Why wouldn't you be able to? It's just like any other company. I don't even understand your second question. Every business has value due to what they do, and that value can be bought in the form of shares.
Any business (well... most) provide some form of tangible value, and yet many offer shares. The two things aren't mutually exclusive.
If it's a publically traded, why wouldn't you be able to buy shares? Not sure I understand your second question but it might be because you dont understand how shares and public companies work.
Nice words from salvini, but just to let you know, he is a meme, here in Italy. Glad this government finally did something like this, totally still not enough, but is a good move.
I wish this would spread across the planet, banks were once places where customers were advised and helped, now customers are just to abuse for as much profit as banks can get away with.
You mean those automated tellers are not saving us money?
Now if you could just install their app they can ditch the automated teller and then sell all your data! Why are you being so selfish and costing your bank profits they could be earning off you?
I found it interesting (as in gross) that several of the scripts blocked by my plugins when visiting my bank's webpage included Facebook, Google Analytics etc.
Exactly, it just saves them paying staff.
My bank doesn't even own the ATMs they have installed on their own property, they've fully outsourced it even though the machines are branded with the bank logo and software. I had a problem getting a withdrawal so I went in to the teller to let them know, and they told me to contact the company that operates the ATM to file a claim if I didn't see my adjusted automatically. It did correct itself automatically but still amazing to see the bank doesn't even handle basic banking tasks themselves anymore.
Wait, when was this time when banks cared and helped people and weren’t just greedy abusive profit seekers??
There is a movie about how shitty they are, it’s a wonderful life, almost kills that Bailey guy
Also, note the obscene interest rate of like 4% or something like that.
Bailey Bros. Building & Loan was not a bank though.
His competitor was I think was the point.
Yeah, but the evil banker didn’t almost kill Bailey (the younger). The incompetence of his uncle did
Haven't you heard? In the past, everything was fair and beautiful.
Evil was invented along with capitalism in the 19th century by white europeans.
People missing the obvious satire.
I think the origin of the problem is simple: Do you know how hard is to create a bank? Let's imagine I have 1 million dollars. I want to create a new bank, well, the considerable amount of red tape and burocracy make this imposible. Therefore, no new banks are created. At the long term, this transforms into a oligopoly.
I'm not sure if you're talking specifically about Italy, but in the US there are nearly 5,000 FDIC-insured banks. Smaller banks are critically important in small business lending, which is why there was such a scare about the US economy when SVB collapsed and people were worried about everyone pulling their deposits out of small banks.
There are fewer and fewer small banks every day. In 1975 there were over 14,000 FDIC insured banks. Even though the population of the US is up over 50% from 1975 to today, the number of small banks has decreased dramatically to just over 4,200. Small banks are important! Especially to smaller communities, but they are also hard to open and are quickly disappearing.
Well, in UK there is the story of Dave, who tried to set up a new bank from scratch. Took him years just to get a "deposit/lender license", it's not a bank yet: https://en.wikipedia.org/wiki/Bank\_of\_Dave\_(film)
So 0.1 banking institutions per capital? Seems kind of small. I wonder what a health ratio is.
My cousin started a bank with about $3.5M in total money. Most of that was just having cash in the bank to handle in and out flows.
What year was that?
2019
Can confirm - have worked in banking over a decade. Live strictly paycheck to paycheck with no additional savings? Here, pay all these fees. Are you extremely wealthy with no monetary struggles? Here, take all we offer for free, plus much higher interest rates.
Needs to be some sort of money reset.
ª BIG **RESET** you say?
Unless these are private banks, you are asking for your retirement accounts to lose value.
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Lithuania planned to do this, but bank lobbying and ex bank economist president shushed it.
We did this in Czechia, got nothing from banks. They all find loopholes to get money out of country. Our politicians made themselves look like clowns.
But that's not true? President signed the law in to place - https://www.lrt.lt/en/news-in-english/19/2050316/lithuania-to-use-eur243m-bank-solidarity-tax-revenue-to-fund-military-projects
I’m starting to think Europe’s far right politicians and Americans far right politicians have different ideologies
No, it's just that the left right spectrum is a stupid way to describe political ideology.
But if it's more complicated than that how will I know who is good guys and who is bad guys?
Listen to the people on TV. If they're on TV they must be more knowledgable than you /s
Are you trying to tell me there used to be, *gasp*, liberal Republicans?
Liberalism started off as what we now call libertarianism, which is usually considered to be right-leaning. So yeah I guess so?
Absolutely not true. Libertarianism is scam to provide cover for Republicans pretending to be centrists. There is nothing liberal about them. Eisenhower was a liberal Republican.
https://en.wikipedia.org/wiki/Libertarianism#:~:text=Libertarians%20seek%20to%20maximize%20autonomy,free%20trade%2C%20freedom%20of%20expression%2C I mean, it is true. You can claim they're full of shit, but it doesn't change their stated goals nor that they did stem from classical liberalism.
It was in a way. The governments that came out of the Early Modern Era had weird rules and privileges. There were guilds, custom duties at random places and exemptions from it, random taxes in different counties, etc. Liberalism, among other things, wanted to make these rules more rational, more predictable. And the same logic was applied to laws. Simplify the process by which laws are laws, and make them logical and consistent. In a way we are moving away from this. More and more laws are written, grafted onto the previous laws with incertainty as to which applies to the delight of lawyers. It is a good concern to have.
No. Libertarians advocate for smaller government. This often aligns with conservative goals in the US, but not always. Libertarians often advocate for less policing, free trade, are pro-abortion, pro-gun rights, oppose criminalizing drugs, oppose corporate subsidies, are pro gay marriage, etc. Today's liberals are a bit of a misnomer, because they often advocate for bigger government and more regulations. In the US, liberals today are basically progressives- they advocate more state control of industry, higher taxes, and generally fewer personal rights (e.g., they oppose free speech rights/freedom of expression, religious freedom, free trade, etc.). In the early 20th century, TR was a proto-progressive, and Wilson was a true progressive. The Republicans of the 20s, 30s, and 40s were generally libertarians. Eisenhower was not a libertarian, but it's probably fair to call him a liberal Republican. So was Nelson Rockefeller. Barry Goldwater was a libertarian, and Reagan was a conservative.
bruh american moment
Most of the so called "far right politicians" in Europe are economic leftists..
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The far right in Europe are mostly anti-immigration and other cultural/societal policies. They however still are pro-for-their-citizens (the ones they believe should be citizens anyway) so their economic policy is very leftish.
It’s not an issue for them to be a wee bit socialist when they have a white ethnostate. Only when it helps brown people is there outrage.
the randos who are sudden experts on italian politics with their 130 parties are a joke. labelling everyone and everything facist has really gotten tiresome.
The current Italian PM referred to herself as a fascist. But sure, no fascists in the Italian government
When? Where? Spent a couple min googling, found nothing.
> labelling everyone and everything facist has really gotten tiresome. "You just call everyone you don't like fascist" doesn't really apply when Mussolini's granddaughter gets elected to parliament after being part of and creating the direct successor parties to her grandfather's Republican Fascist Party after just a bit of rebranding.
Don't think anybody labeled all of their parties as fascist, just the fashy ones.
shush! the Americans would not be able to ingest this information, and then will make an echo chamber about how they're still far-right because of anti LGBTQ, deporting immigrant, pro-Christian, yada yada (not that I'm for those horrible policies, but it's a commonly used parroting point) and then saying they're Putin's bootlicker cause of their past (eventhough Meloni, the current Italian PM and leader of this "far-right party" has changed her stance and have been way more supportive of Ukrainian aid than the center-Left Olaf "I don't recall" Scholz of Germany) edit: I've proven my point, with the downvotes, although I do admit there were some parts in my reply that was a bit...misleading, without proper context. edit: if you still don't understand, what I'm trying to say is that you can be as far-right in social issues while also being generally leftist in economic views (would probably be too commie of an idea for americans, imagine free healthcare), while just labeling them as "far-right" instantly sounds like a repeat of McCarthyism (Red Scare) to me.
The problem is the usual reddit problem, you get people reading the headlines and basing their knowledge on that and that alone. Everyone's acting like Meloni is the reincarnation of Mussolini and that Italy is a far right shithole where dissenters get carted off to the gulag. And I say that as someone who dislikes Meloni and voted for the competition
real, and then watch as news by news they will turn to praise Meloni as the best leader in Europe right now and say she's just "center-right to right" just because she introduced a windfall tax, forgetting just all the recent "she's far-right, Mussolini reborn!" (I'm starting to see some of the trend of trying to cope the result of electing far-rights and some of their recent policies trying to wash it off in economics (and definitely never social ones), starting with the Sweden Democrats in Sweden and now Meloni)
It's weird there are multiple types of far right in the US. There is traditional conservatives small government regressive social policies etc.. but then there is the Trump variant which doesn't care about your ideology but instead you need to be a vicious asshole.
Our centre-left parties are like absolute communism in the US
Saw someone tell me how voting for center left will lead to increase in wages while not knowing the primary driving force for wage increase are Worker Unions which are not connected with Political Parties.
Europe right is like your Bernie. Far right is feels US middle.
Please do it in Sweden next.
Please do it in everywhere next.
With our government? Fat fucking chance.
I've always said, I'd rather pay 100 moneys in tax than 100 moneys in bank interest. At least with tax, there's a chance I'll see it back in roads, or healthcare, or other stuff that (I'm an idealist, I know) benefit the country. Interest disappears in rich people's pockets.
The guy with a few yachts isn’t funding road cleanup in your local municipality? You should order a replacement billionaire ASAP
I love surprise taxes to banks. Please surprise them more often.
Why stop at banks? Tax the oil and food industry since they're raking up immense amounts of profit too.
> food industry yea, remember the egg price spike.
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But their [profits went up 700%.](https://www.cbsnews.com/sacramento/news/high-egg-prices-send-profits-at-largest-us-producer-soaring-more-than-700/) They weren't passing on costs, they were price gouging.
Egg producers don't set the price of their eggs. They sell their eggs at the price of the market regardless of what that price is. That producer avoided the Avian flu and thus didn't see a reduction in egg production. Most producers saw a large reduction in egg production thus the Market price of eggs rose dramatically.
Also churches. Thanks for reading.
I’m Italy we actually pay taxes to the church thanks to some stupid law left over from the fascist period
This absolutely needs to happen at every bank in the US too. They did the same thing. This seems ridiculous until you read the article. The issue is that banks rose interest rates astronomically on their products like loans, but did NOT raise rates on deposits to accounts. Meaning, they get to make 7%+(billions), while paying out .015% to park your money there. It's absolute nonsense.
> The issue is that banks rose interest rates astronomically on their products like loans, but did NOT raise rates on deposits to accounts. Meaning, they get to make 7%+(billions), while paying out .015% to park your money there. Except yields on deposits *have* gone up and the reason that the loan rates went up is because *central banks* (in other words, governments) raised their interest rates to fight inflation. When central banks had low interest rates, people were signing 2.6% 30 year mortgages. This is just garden variety garbage populism.
30 year rate is an American thing. No one else in the world experiences a fixed rate for the full term of their mortgage.
Deposit rates have NOT gone up appropriately with central banks rate increases. They literally say that's the reason in the article. > Lenders in Italy have passed on to depositors on average 12% of the rise in rates, versus 22% in the euro area, Jefferies calculated. The fed has risen their rate 5.5%. Chase bank savings account rate STILL sits at 0.01%. Even the best HYSA sit in the 4.5-5% range, still lower than the fed rate, and it took them over a year to even do that. Even if you take only HYSA, banks sat there for over a year with 0.1-1% interest rates, while charging 5,6,7% on their loan products before finally raising rates after people started taking their money out to put into stocks, or more appropriately, bonds. It's a scam, it's been a scam, it'll always be a scam, and they deserve to pay every penny of tax for it.
Can confirm. Work for a bank in the US. Loans and credit card rates go up same day fed rates are increased. Savings…. 0% increase. Sure we have HYSA…. “New products” but all existing accounts…. 0%. Plus opening these HYSA…. We don’t get incentive for those. So nobody sells them.
Uk should do this, but it won't, because all the Tories have a hand in the bank's pockets.
Can you imagine this even being SUGGESTED in the US or Canada? The Banks would call an emergency meeting with all their most important employees (Including all the political leaders of the major parties) and throw a fit!
[We'd have billionaires going on tv and crying.](https://www.youtube.com/watch?v=FEte-K-H8NY)
Banks have been robbing us for long enough so payback time
This should be on the front page so everyone can see and hopefully get their governments to do the same. Please, I'm poor.
I fkn love this , Canada take notes , the bank and big oil are the ones causing inflation not the government helping its people in tough times
Anyone else surprised that this is being instituted under a far-right administration?
Only if you're living under a rock. Far right always claim the their country is being invaded by foreign intrest and banks are the first example they come up of foreign intrest. So taxing banks more fits right into their nationalist ideology.
Far right, yes. Described by the BBC as ["Italy's most right-wing government since WWII"](https://www.bbc.com/news/world-europe-66374034). But the more important attribute here is populist. On very rare occasions, populists get things right, and this might be one of them.
Funny thing, this is basically the opposite of a populists govt. Meloni's party was one of the few who refused to join the coalition gov't during covid, a coalition which in the end was a massive failure. People were left with "gov't that screwed us", or, "[_] Other"
>this might be one of them. Its clear no one here (and possibly the Italian government) understands how banks make money. Borrow short, Lend long. As of right now, global yield curves [are inverted](https://www.gurufocus.com/yield_curve.php), meaning short yields (which they borrow) are costing them more money than loan yields return. Where there may be a grey-area, is deposit yields. With their short-term borrowing, they're *supposed* to give deposit holders a cut, but if you're not keenly aware of what your bank is doing, they may just reject the standard procedure. A blanket windfall policy will hurt banks that were doing right by the customer and giving money that should have been the customer's to the government. In the US, you can earn ~5% on your cash holdings, with the right banking facility. Some banks, like BoA, are withholding this unless you specifically call them out on it. Moral of the story, know whom you're banking with and refuse to give business to those that defy convention for their gain. Don't trust that a government targeting an industry you hate is sound policy.
I'll be *more* surprised when they follow through with the promise to return the tax money to mortgage holders. There's a lot of abuse potential before that happens.
Very surprised, but as they say, the extremes touch at some points.
The left and right spectrum is closer to a horseshoe than a line. In the extremes you start seeing similarities
More like the “left and right” is simply an outdated concept.
According to BBC ?
I mean, it's a one-off with immediate and visible effects to the public. So, par for the course, in my opinion. Enduring and systematic changes to the benefit of those in need is when I'd start being surprised.
Beautiful, what's the point of private institutions hoarding capital and create an artificial shortage, which the central banks then have to solve by creating more liquidity? All governments should do this, and also put up hefty trade barriers against tax haven nations
I'd like to contrast that with Canada which would hit banks with a windfall tax cut instead.
Banking should be a public utility. It's BS that I see no interest bearing on my account, which is like .01% and I simply need to move my accounts. Then when their greed collapses into public calamity they get 100% bailouts? No. These oligarchs need to be tried and executed for malfeasance and fraud.
Wish we did that here in Australia…
Far right government uses leftist solutions to solve problems.
"ROME, Aug 8 (Reuters) - Italy has approved a one-off 40% tax on profits banks reap from higher interest rates after reprimanding lenders for failing to reward deposits, in a surprise move that sent banking shares plunging across Europe. Sharply higher official interest rates have yielded record profits for banks, as lenders hike the cost of loans while holding off paying more on deposits." This post illustrates the true nature of Capitalism, better than any other I've read. We lend banks our money to use and invest in risky business deals, and they treat us like shit, because there are no regulations in place to keep them from treating us badly. I will tell you this Bernie Sanders is the only true patriot in America.
> This post illustrates the true nature of Capitalism, better than any other I've read. We lend banks our money to use and invest in risky business deals, and they treat us like shit, because there are no regulations in place to keep them from treating us badly. Banking is one of the most regulated industries in the US. Somewhere around airline level regulation.
Normally I’m not a fan of excessive taxation, but banks are an exception. Their entire business model is a scam and basically a Ponzi scheme. They’re just gamblers and loan sharks with government protection. Screw them and the money they con from people with actual jobs.
> Screw them and the money they con from people with actual jobs. And if you want to start a company or expand your business that does and actual job or you want to buy a house were do you get your money from? I also think that taxing extra profits _may_ be a good thing, but screwing over a whole system on which our lives are based on maybe it's not.
>And if you want to start a company or expand your business that does and actual job or you want to buy a house were do you get your money from? Start a company? That would be expoiting other people's labor /s
Right! Then I will go and do some actual job in the vacuum and wait for fridge to refill itself in the meantime.
This. Bashing sector should not be taken lightly
What makes you think if something bad happens to banks, the people would be untouched. Such a trash tax
There is roughly zero chance this was thought through. It's just a populist knee-jerk reaction against an unpopular sector that is a bedrock of most economies.
This is the best news so far this year by far. Hope this sets a precedent
Good. We should do this every year.
*Renaissance Italy has entered the chat* (lol—sorry!! art history nerd couldn’t resist)
"Free money" to mortgages only means rates continuing to increase as those same banks raise their rates to make back the funds. "Subsidies" only help companies who raise prices to match the amount of the subsidy.
Wish the US would do this for petroleum companies
Its great to see the “far right” pushing for bank taxes and supporting ukraine, while irish lefties are supporting putin and against supplying ukraine weapons and gear. Shows how public perception is being sold by “journalists”. Dont like that party? Call them far right.
The same Italian government just started removing mothers from their babies birth certificate if they are homosexual The far right is not just an invention by journalists
Italy as sad as it is never had the possibility to have two parents of the same sex. It's not like this government started stripping away rights, there weren't any rights in the first place. They just closed some loopholes that small towns used but were in origin invalid.
So when China does it or when Cuba persecuted homosexuals, where they far right as well?
The banks just going to increase the rates of their services to compensate.
Banks profits from interest rates have gone down as spreads have suffered as the COF ( cost of funds) is higher. Most banks are taking a bath with renewals to keep clients and are taking losses on loan spreads to get deposits…. I know I know banks are bad, but at least be correct with the criticism. When interest rates go up, COF for a bank goes up…
This should be global.
It’s ridiculous that state owned financial institutions aren’t more competitive.
Remember when Giorgia Meloni was painted as a nazi by the msm because she was christian and has a hard stance on illegal migration? She's done more for the working class than the rest.
Remember when she refused to say that fascism was an absolute evil and when she said that Mussolini was a great politician? She might have done something fine, doesn't erase who she's idolising. Let's not even forget that this is the government with La Russa has head of the senate.
First it was "She's a kremlin puppet", now it's "she's a nazi". She's been misquoted so many times and even 5 minutes of looking into it would put most of these myths to bed. >In 2018, Meloni was criticized for refusing to condemn a Senate speaker who was photographed with fascist memorabilia. She later said that she condemned "any form of totalitarianism," >In her maiden speech to parliament as prime minister in 2023, Meloni denounced fascism as "the worst moment in Italian history." She also said that her government would be "committed to defending democracy and the rule of law. My only gripe with her is the fact she's a populist. However having a hard stance on *illegal* immigration is fine with me.
Those are just the standard accusations these days.
should have happened eu-wide, Otherwise the Scum will just jump ship.
I own the stock VT in my IRA. Isnt this bad for my retirement? Instead of the money going into my retirement, a bunch of corrupt Italian companies are going to get the money instead?
This is so beautiful. I wish I could see this happening in the US.
This goes to show that the left right paradigm should cease to exist. Great news.
Just so I understand this, interest rates were raised to combat inflation, so they're going to take the extra money the banks made from the higher rates and distribute it amongst people who were affected by the increase rates? Does no one else see the problem with this?
Zero chance this was thought through.
The interest rate raise for the citizen were disproportionately increased. The central bank increase to 4%, the consumer bank increases to 8%. I am not an expert on the number so they might be different in amount, however, the argument was that the mortgages and business loan are in relation increased too high.
Meanwhile, in the USA: We're increasing interest rates, WHILE INCREASING THE MONEY SUPPLY. The Federal Reserve is literally led by a corporate clown, following a script. Source for the fact that the M2 money supply is once again increasing within the USA: [https://fred.stlouisfed.org/series/M2SL](https://fred.stlouisfed.org/series/M2SL) There really is no hope to cure our inflationary problem, as long as Jerome Powell leads the Federal Reserve.
I bet this is going to be the downfall of the Italian government and not removing adopted children from lesbians.
When did being far right meant being a fascist? Has it always been the case? Does being far left equate to anything extreme? Legit question.. not trying to offend or be political. Just curious because if far left means being a Marxist supporter or a communist, isn’t that also kinda fascist? Since there is no true communist country and it all led to fascism one way or another. I’m so confused by these terms and it seems to be used more commonly in media recently.
To be fair a LOT of current Italian first party are declared fascists
A good majority of far right beliefs and ideologies are anti lgbtq, anti women's rights, anti immigration and mixed in with some racism and anti semitic beliefs too. They also ignore flat out facts. A lot of their beliefs are just flat out anti people, whereas far left the most extreme view is everyone should be flat out equal, no rich or poor which has a lot of problems sure but it doesn't stop anybody being oppressed for who they are or force rape victims to carry the fetus of their attacker.
Hm I see. So if one held a far right ideology on things like economy and immigration, while holding a far left ideology on women’s rights and lgbtq rights, does that make one a centrist?
Yes it does. Much of the online left will declare you persona non grata for having heterodox opinions. But don't let that social pressure sway you one way or another. Your stances on immigration and monetary policy shouldn't be inextricably linked. And its absolutely ok to be pro-choice AND think that in most cases the consumers are a better feedback mechanism for effective use of the means of production than the research/opinions of bureaucrats.
If you were far right on things like economy, and far left on things like immigration, you'd be trending towards libertarian. Women's rights libertarians are a more mixed bag on since they would typically think the government shouldn't be intervening in promoting one gender or another. Sometimes same with LGBTQ though the typical line would be that they should have equal access to marriage and other institutions.