THE Alchemists, by Washington Post economics reporter Neil Irwin, is a compelling account of the global financial crisis through the eyes of the world's central bankers. Although the book is subtitled Inside the Secret World of Central Bankers I wouldn't call it a hostile account of events. Irwin is simply stating facts when he describes the huge power held by unelected central bankers, the best known of which is US Federal Bank secretary Ben Bernanke.
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But as Irwin notes, even with the world's central banks creating huge amounts of money out of thin air, "the fifth year of the crisis . . . (2012) looked a lot like the first".
Then again, things must be going pretty well in Australia, I hear some people say, because, otherwise, how could the Commonwealth Bank turn in a record $7.8 billion profit?
Looking at the results posted on the stock exchange, the bank is doing well in almost every area. Although revenue from ordinary activities was down 5 per cent to $44.8 billion, profits rose by 8 per cent. Interestingly, the only sector of its results to go backwards was "business and private banking" (private banking being for high-net worth individuals, otherwise known as rich people). Profits there fell from $1.513 billion in 2012 to $1.488 billion this year.
I'd rather live in a country with a strong banking system than one with crumbling banks, and we are often told how strong our system is compared with the rest of the world.
So I was mildly surprised to read in the Financial Times this week that Fannie Mae - one of the US mortgage providers whose reckless sub-prime lending helped create the global financial crisis - recently returned a net quarterly profit of $US10 billion ($11 billion). That's no misprint. It's $US10 billion of profit in three months.
And it's a similar situation with American International Group or AIG, the massive "too big to fail" insurer that was bailed out in 2008 to the tune of $US182 billion ($200 million) by the US Treasury and Federal Reserve.
Today, AIG is well and truly back in the black. It has paid back the loan, its most recent quarterly profit was $US2.7 billion ($2.96 billion) and its shares are trading at close to $US50 ($54.85) each.
Given where both AIG and Fannie Mae had been a few years ago, you'd think people would be happy, wouldn't you?
And I do hope this is an "only in America" situation, but court cases are under way in relation to both companies, with investors now attacking the government for bailing the companies out.
In AIG's case, former chief executive Maurice Greenberg, who owned about 12 per cent of the company at the time of the bailout, is in the US Court of Federal Claims arguing that when the Treasury took 80 per cent of the shares at the time of the bailout it violated the US constitution, which says the government cannot take private property "without just compensation".
Over at Fannie Mae, a group of former shareholders have lodged a suit saying the government "bullied and coerced" the board into its bailout/takeover and trampled the private property rights of shareholders in the process.
The cases are being treated seriously and a judge has ordered Fed chairman Bernanke to answer questions from Greenberg's lawyers.
The Fannie Mae profits, especially, look extraordinary in light of the state of the US economy. Here, I am indebted to Forbes writer, Richard Lehmann, who reminds his readers that the biggest buyer of Fannie Mae mortgages is the Fed, which is buying $40 billion a month in mortgage-backed securities at prices that give Fannie Mae its "profits".
As Lehmann says, General Motors wouldn't be able to sell dud cars to a subsidiary at inflated prices and claim an instant profit.
But the US Fed, he says, has "no bottom line reporting, so we will never know" the truth of its accounts.
Like I said before, only in America. I hope.