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The Rupp Report

The Rupp Report: Modesty Is Over

Jürg Rupp, Executive Editor

Every relationship -- whether in business or personal life -- is based on honesty, confidence and trust. Without these pillars of humanity, no relationship has a chance to survive in the long run. That's why the economic system started to work on a worldwide basis after the implementation of the World Trade Organization rules - in spite of the ever-so-condemned globalization.

Who Cares?
However, some people -- mainly bankers in the top league and gamblers like Bernard Madoff -- patterned their lives like a customer in a self-service store: "Just take what you want." Of course, the system failed, as every Ponzi scheme is condemned to fail, and the rest is history, brutal history. The global economic system collapsed because honesty, confidence and trust went down the drain. And who's paying the bill? Of course, not the initiators of the crisis, but the people in the street will pay the bill with their tax money and a significant reduction of their pensions. And, moreover - and this is what leaves ordinary people speechless - the same banks that cannibalized the world economy with their greed forced the governments to spend astronomical sums to stabilize the global cash flow. The US government pumped $45 billion into Citigroup only to prevent its collapse. The stock price dropped 84 percent. The list of similar actions around the world would be endless.

Some Signs Of Recovery
However, sooner or later, this money pipeline started having an impact on the lost confidence in the markets. Also, in the textile and textile machinery industry, some signals of an upswing can be registered. Fortunately, in the last few weeks, the Rupp Report was able to report some signs of recovery. Here and there, people in the textile industry mentioned a comeback of trust and confidence among their customers. Postponed projects were taken out of the pigeonhole again.

Nobody Cares
And now this: According to some news, Citigroup, which is not able to pay back the money to the government, is planning to double the base salaries of "some employees." This is amazing, as is the reason for this unbelievable move. The management of Citigroup says that they want to adjust for the loss of other compensation. Most of them, mainly brokers and dealers, will get the same payment as last year, probably as a "reward" to leave the world in pieces. Some of them will earn 50 percent more than last year. Other banks, too, are planning to do the same. Rumor has it that Goldman Sachs will pay the highest compensation in its 140 years of history.

Back To Business
The question remains the same: no confidence, no business -- at least for small and medium-sized companies. And with this signal, the banks show to the world again that they don't care, except for their own pockets. One can say the financial industry didn't learn the lesson. Probably it did, but not the governments. This incredible behavior is perhaps the move back to old business: privatize the benefit and socialize the losses.

June 30, 2009