Can you think of another industry where all the players have made the same mistakes at the same time to the same degree. And more than that, can you think of another industry where
the major players have been working so closely with each other that they have put their companies at risk?
Let’s look at the evidence. In the US and UK in 2008 ALL of the major banks needed to be bailed out at the same time. Can you think of another industry where all the major players have been in this position? For example can you imagine all of the major car companies (Toyota, Honda, Nissan, Infiniti, Audi, BMW, VW, GM, Ford, Hyundai etc) in the USA all teetering on the edge of bankruptcy at the same time? Or maybe all the food retailers teetering on the edge of bankruptcy at the same time?
It is a highly unlikely scenario and I would go as far as to say impossible unless these companies were acting in the same manner at the same time to the same extent ie only if all these separate companies were centrally controlled and/or coordinated.
And then we have the issue of contagion. so not only have these banks and financial institution been operating in the same way they have also be co-operating with each other so much that they have put their own businesses at risk.
Can you imagine VW coming and saying that if Opel goes bankrupt it is going to destroy us as well? Or in the USA did you hear Ford coming out and saying if GM goes bankrupt it is going it is going to bring Ford down as well.
If you did I am sure questions will be asked regarding cartel like behaviour, collusion etc etc. Ford would have massively benefited from GM going under as would be normal. But not it appears, in the banking industry. Banks want their competitors to survive to help them survive. Does this sound like a cartel or just a flat out monopoly?
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