Study Confirms Huge Concentration Of Corporate Ownership – One Super Corporation Runs The Global Economy


The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue (Image: PLoS One)

Revealed – the capitalist network that runs the world (New Scientist, Oct. 19, 2011):

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

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Credit Suisse Buries European Banks, Sees Deutsche Bank And 65 Other Bank Failing Latest Stress Test, €400 Billion Capital Shortfall

Credit Suisse Buries European Banks, Sees Deutsche Bank And 65 Other Bank Failing Latest Stress Test, €400 Billion Capital Shortfall (ZeroHedge,Oct. 13, 2011):

A day after Credit Suisse killed the Chinese bank sector saying that the equity of virtually the entire space may be worthless if NPLs double, as they expect they will to about 10%, the Swiss bank proceeds to kill European banks next. Based on the latest farce out of Europe in the form of the third stress test, which is supposed to restore some confidence, it appears that what it will do is simply accelerate the flight out of everything bank related, but certainly out of anything RBS, Deutsche Bank, BNP, SocGen and Barclays related. To wit: “In our estimation of what could be the “new EBA stress test” there would be 66 failures, with RBS, Deutsche Bank, and BNP needing the most capital – at €19bn, €14bn and €14bn respectively. Among the banks with the highest capital shortfalls, SocGen and Barclays would need roughly €13bn with Unicredit and Commerzbank respectively at €12bn and €11bn. In the figure below we present the stated results. We note RBS appears to be the most vulnerable although the company has said that the methodology, especially the calculation of trading income, is especially harsh for them, negatively impacting the results by c.80bps.” Oops. Perhaps it is not too late for the EBA to back out of this latest process and say they were only kidding. And it gets even worse: “We present in this section an overview of the analysis which we published in our report ‘The lost decade’ – 15-Sep 2011. One of our conclusions was that the overall European banking sector is facing a €400bn capital shortfall which compares to a current market cap of €541bn.” Said otherwise, we can now see why the FT reported yesterday that banks will be forced to go ahead and proceed with asset firesales: the mere thought of European banks raising new cash amounting to 75% of the entire industry’s market cap, is beyond ridiculous. So good luck with those sales: just remember – he who sells first, sells best.

And the scary charts:

1. Capital Shortfalls under Stress Test part Trois (9% min. CET1 ratio)

War Against Rating Agencies Begins: Italy Prosecutor Seizes Moody’s, S&P Documents

The War Against The Rating Agencies Begins: Italy Prosecutor Seizes Moody’s, S&P Documents (ZeroHedge, Aug 4, 2011)

And so the war against the rating agencies is now official as a floundering Europe does anything in its power to scapegoat anyone and everyone, starting with its natural sworn enemy of course, the rating agencies.

According to Reuters,

Italian prosecutors have seized documents at the offices of credit rating agencies Moody’s and Standard & Poor’s in a probe over Suspected “anomalous” Fluctuations in Italian share prices, a prosecutor said on Thursday.

Ah yes, it is Moody’s fault that Unicredit, Intesa, Fiat and pretty much all other Italian companies now close limit down at least once a day. Either way, this is sure to end well. We will bring you more as we see it.

Italy Burning, Undergoing Slow Motion Crash, With Bank After Bank Getting Halted

The Vespa Has Crashed Into The Mountain: Italy Burning (ZeroHedge, Aug 1, 2011):

Italy undergoing a slow motion crash, with bank after bank getting halted, first Intesa, then Monte Paschi, and most recently, main bank Unicredit.

The FTSEMIB is now down a whopping 5.5% from intraday highs, led by the financial sector which may or may not last the week absent another EFSF expansion as we have speculated before.

Of course, should that happen, Italy becomes a liability and not a funder, meaning the proportional obligations of Germany and France will surge, just as we explained two weeks ago.

And more bad news: the spread between the 10 year Italy – Bund just hit an all time wide of 349, +16 bps on the session, as Italy CDS are now trading 328, +12, and Spain is 9 bps wider to 374.

Time for bailout #3, this time to rescue Italy, then Belgium and Spain, then France and the UK, until finally the Fourth Reich, in the darkness, shall bind them.

General Italy

And just the country’s top (and we use that term loosely) banks:

Libya: Oil Companies Plan Evacuations

Flashback:

BLAIR’S FOND FAREWELL TO GADDAFI (Mirror):

TONY Blair bids a fond farewell to former foe Colonel Gaddafi yesterday. He flew in on the Libyan leader’s private jet for the meeting in the middle of the Sahara desert.

The pair, now firm friends after Mr Blair helped Libya return to the
international fold, shook hands warmly and smiled.

He added: “It is now a very productive relationship for us. It’s an example of a situation where 10 years ago it would have been impossible for me to speak to Col Gaddafi, to a situation where the relationship is a close one. I find him very easy to get on with.



Blair, Gaddafi and the masonic handshake


Gaddafi, Berlusconi and the masonic handshake


Sarkozy, Gaddafi and the masonic handshake


Gaddafi, Obama and the masonic handshake

(New York Times) LONDON — Global oil companies said Monday that they were making plans to evacuate employees in Libya after some operations there were disrupted by political unrest. Libya holds the largest crude oil reserves in Africa, and the moves drove some stock prices down and a crucial oil benchmark to a three-year high.

The largest and most established foreign energy producer in Libya, Eni of Italy, said in a statement that it had begun repatriating “nonessential personnel” and the families of its employees.

The Norwegian energy company Statoil, which operates in Libya in partnership with Repsol of Spain and Total of France, said that it would close its office in Tripoli and that a handful of foreign workers were leaving. “The safety of our personnel is our main priority,” said a spokesman, Bard Glad Pedersen.

OMV of Austria, which produces about 34,000 barrels of oil a day in Libya, said it planned to evacuate 11 workers and their families, leaving only essential staff.

The Organization of the Petroleum Exporting Countries ranks Libya No.7 among its members, with 4.4 percent of OPEC’s proven crude oil reserves. Libya exports most of its oil to Europe, with Italy its biggest customer, according to the United States Energy Information Administration.

Shares in Eni and OMV dropped Monday, while the price of Brent crude, an important benchmark for oil traded in London, jumped $3.22 a barrel, or 3.2 percent, to settle at $105.74, before spiking above $108 in after-hours dealing. It was the highest level since 2008.

“We’re concerned, and of course we’d like to see a solution sooner rather than later,” said Jason Kenney, an analyst with ING Financial Markets. “It’s very difficult to see how this is going to go. The oil price will be volatile.”

The British oil company BP, which has only exploration operations in Libya, said it was planning to evacuate some of its 40 foreign workers, mostly from Tripoli, where the unrest spread Sunday. It also said it had suspended preparations for a drilling project because employees of a contractor had been evacuated.

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