Today in the New Zealand media there is much talk about the record profit figures just released by Westpac bank, in both the New Zealand market and also in Australia.

These are not just little profits, but massive ones, earned at a time when the majority of countries and average citizens alike are struggling to survive, let alone understand what is actually going on with the global economy.
We are not suggesting that we understand this system ourselves by any means, but there is some very interesting information around, which, if you follow the rabbit hole, is very disturbing.

Westpac today reported a 41% rise in annual cash earnings for its New Zealand division - whilst 41% seems like a lot, it is not until you see what the figure that 41% is of that the real shock comes. The actualised, annual cash earnings for the year was $454 million in the 12 months ended Sept. 30, mainly gained off the back of a series of fatter interest rate margins due to the decline in the global cost of credit the banks purchase and a bigger share of the lending market.
Westpac CEO George Frazis said Westpac NZ boosted home lending credit growth by 2.4 percent in the year, beating the market’s annual growth of 1.2 percent, while the bank’s business lending book grew 2.5 percent, ahead of the 0.1 percent contraction in the total market.

This profit announcement for Westpac NZ comes on top of the news earlier this year that its New Zealand CEO, George Frazis, is earning a salary of $NZ 5.8 million a year.

Westpac is not alone – BNZ announced an 11.5% increase in annual net profit after tax last week, with other banks coming out with their figures over the coming days.

The banking industry is a funny old thing, and when you start scratching the surface behind the economics of it all, you may find yourself feeling awoken from a dream to discover that you are actually in a lucid nightmare all along! Best to diffuse it all with some comedy.

See it is not so bad. They have options.
So do we.

The options open to the average citizen are fairly minimal. We have collectively been railroaded into a system that makes us completely reliant on banks, and unreal "electronic" money, based on currency that is also "unreal" to a degree, but more about that later.

To get a real good look deep inside the books of a bank, check out the report released to investors from the corporate division of the Westpac Group over the last couple of days.
< http://www.westpac.com.au/docs/pdf/aw/ic/2011_Full_Year_Results_Template.pdf >
Copy and paste it into a new window people, and be prepared for a web based pdf to open. It is 72 pages long and quite a read, but if you are that way inclined go for it, the detail is impressive, and transparent for all to see. Banking is big business, and even on the highly condensed information that is publicly available you can immediately see that it is a very profitable business.

New Zealand’s cash earnings contributed 5.5 percent to the group’s total cash earnings of A$6.3 billion.

The group’s net profit rose 10 percent to A$7 billion in the 12 month period. Not so bad for a business that simply buys and sells something that is really at the heart of it just a concept that we collectively agree on, through our choice or not.

The Global Economic Meltdown - how it effects all of us.

What seems to be occurring at the moment within the global, "western" economy is well outside the realms of understanding of most people. It is far too complicated and we are not given the necessary tools, or education, to even begin to understand what is actually going on, let alone some of the jargon.
You could literally give yourself a large headache getting into the nuts and bolts of various economic models, and the implications on each of us.
At the moment, as Europe faces yet another credit crisis with Greece backing out of another IMF induced austerity plan (what does this actually mean?), the term Quantitative easing has been chucked around, as has the "recapitalisation of the European Banking sector".
But what do these terms actually mean?

Best we look at John Clarke and Bryan Dawe again - it is by far the best way to get an understanding. As much as this is a comedy sketch, the cold reality that they are talking about is very real.

Budgets? As we approach another round of general elections economic policy is becoming a talking point.

The dire predictions of the coming crisis.

It has been suggested, for many years that we have always been heading for this crisis that is unfolding. Here is a great clip from 2008 with our dear friend, mathmatician Benoit Mandelbrot, warning of a system that is failing.

Here is some lovely conspiracy theory related to global banking and the impending doom faced.

The Greek Crisis - "lets put down the Ouzo"....

Once again, the best overview is done with a smile on the face of those giving the bad news. Clarke and Dawe have got one of the best takes on all of this - done with a trademarked dry sense of realism. Some classic lines in this clip!

and another nice overview.

Getting back to the mainstream view of the situation, check out these interviews and see if you can make as much sense of it as you did from the Clarke and Dawe clips!

Here is an overview and background of the Greek Crisis via guerrilla economist Max Keiser's youtube channel. This report comes from Feb 2010, and gives a background to the situation that we are seeing today. Full of economic jargon but wait for the revelations about government fraud towards the end!

Part 2.

Finally if you want to become really alarmed - from 2008 - the predictions of what is just on the horizon. Remember that when they are talking about mortgages they are actually talking about people's ability to service debt, and this really only applies as a problem when the cost of living is rising disporpotionally to the wage rates - in simple terms people just cannot afford to live on what they where budgeting for. Paint this however you want,but from personal experience we have seen quite a substantial rise in the cost of food, fuel and power over the past 2 years whilst wage rates have certainly not risen to the same degree.
This next clip talks about the mortgage crisis, but most significantly about what happens with those funds once they leave the mortgage market and the debt gets onsold as investment...