The History of BXH. The Bank in The Manhattan Puzzle.

Posted by on Jul 27, 2014 in Research, The Manhattan Puzzle

BXH is one of the least well known international banks in the world. Its name is rarely mentioned in the media for one very important reason. It is discreet. It doesn’t announce its results in a flurry of conference calls and media interviews because it is the last of the great banks to remain in private hands. And it plans to remain that way. The Eternal Circle – The Symbol of BXH Because of this you will not have heard much about BXH and rather less about its history. The following information has been sourced almost exclusively from CC Birch’s “History of BXH” (1998, PT Publishing), the definitive account of the history of one of the world’s greatest (fictional) banks, written by the leading financial historian of the last one hundred years. BXH was supposedly founded in 1666 when the power to issue money was transferred to private hands in England. This allowed the English monarch to borrow gold and finance the rebuilding of London after the great fire. BXH was established as a small venture at that time with the power to issue loans in England. Subsequently William of Orange borrowed £1.2 million to finance a war against France and BXH became the main lender in the syndicate of London based bank’s that covered the loan. BXH went on to lend money to the French revolution and to Napoleon to finance his early campaigns, although it was clever enough to ensure it was paid in full just before the battle of Waterloo. However it’s bread and butter business at that time was the financing of slavers plying the triangular trade taking slaves to the Carribean, sugar to England and early industrial exports to Africa. Some have called BXH the bankers for the British Empire. However in 1845 BXH moved its headquarters to Lexington Avenue in New York City, where it still has its Americas head office. Profits from the opium trade to China were declining at that time and the latest financial instruments were being devised in New York. One instrument in particular, mass insurance policies for slaves, proved to be its greatest money spinner. By charging slave plantation owners a small annual fee for each slave they could fund payments for all slaves who absconded as well as all slaves who died through over work. It was a system that allowed the slave owner to push their slaves as hard as possible without fear of financial loss. During the Civil War BXH subsidiaries allegedly provided loans not only for the Union side, but also for the Confederate side. Many of these loans were guaranteed by plantation owners in the Southern states. In the 20th century BXH provided funding to the IG Farben corporation (the fourth largest company in the world at one time) and the Nazi party during Hitler’s time in power and later to a number...

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What will China do next?

Posted by on Jan 1, 2014 in Research, The Manhattan Puzzle

Napoleon called China a sleeping giant. “Let him sleep,” he said. “If he wakes he will shake the world.” China is waking. A new Silk Road is being planned that will see high speed trains connecting China to India, Iran and points west. The year Chinese dominance will be permanently unassailable is projected by some to be 2040, only a generation from now. By 2040 the Chinese economy, at current projections, will be a $123 trillion behemoth, three times the economic output of the whole world in 2000. An intervening Chinese downturn will slow this by a decade, maybe two, but that is all. In 2040 the average Chinese megacity dweller is projected to be living twice as well as the average Frenchman. China’s share of global GDP in 2040, projected at 40 percent, will dwarf that of the United States (14 percent) and the European Union (5 percent). So what will China look like over the next few decades? Already Ikea stores in the outskirts of Beijing struggle to keep up with the numbers of consumers swarming in the doors. This year (2014) China will have the biggest high speed rail network in the world with 800 bullet trains. That’s all very well, but what about other, less promising aspects of modern China? According to a Chinese People’s Liberation Army (PLA) Senior Colonel, Liu Mingfu, China should build the world’s strongest military and move swiftly to topple the United States as the global “champion”. “China’s big goal in the 21st century is to become world number one, the top power,” Liu writes in his popular Chinese-language book, “The China Dream”. But military power will not be the only outcome of China’s upcoming economic dominance. China will also colonize by purchase. A famous letter warning about this was published by Warren Buffet in 2004. His argument was unassailable. America had been living beyond its means. Has anything changed? China’s sustained growth is a direct result of its banking policies and specifically its approach to the financial crisis. In China the banks and the government are one. The government issues and prints its own money. In America, and in China, the supply of money is inflated by stimulus spending and monetary policy. But in China a higher percentage of stimulus spending goes into the hands of workers and consumers. Simply put, less is needed to repay government borrowing. This process, accelerating in the recent crisis, may lead to China becoming dominant even sooner than predicted above. So what can we look forward to if China does become the world’s leading power? The Government of the People’s Republic of China (PRC) supports the idea of “Asian values”. The idea that the “welfare” of the collective should always be put ahead of the rights of any individual whenever conflicts between these arise. The Government of the PRC also argues that there is...

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The Manhattan Puzzle – The Devil’s Casino for spoiled princesses

Posted by on Apr 3, 2012 in Mystery Novels, Research, The Manhattan Puzzle

It is clear from Vicky Ward’s book, The Devil’s Casino, that many of the wives of senior Lehman executives were spoiled-princesses. Prostrating themselves at the high-altar of the firm, gilding every ageing lily and fighting like Cinderella’s fat sisters were the everyday obsessions of these icons of corporate triumphalism. It’s not hard to feel a little envy, of course, when you read about the opulence (more Jimmy Choos than it is healthy to imagine) they surrounded themselves with, but outrage at the waste and self obsession follows soon afterwards. And the saddest thing is that none of these wives seems to have been happy. Jealousy, status worry and fear about your husband’s future are not confined to the middle classes. They are sentiments no less keenly felt at a high-altitude corporate camp. Of course an elevated sense of your own superiority, and plush surroundings must be a continuing compensation for them. One that all those billions, and all that risk was well worth, wasn’t it? Vanity Fair had a good article about the Devil’s Casino:...

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The Manhattan Puzzle – US Bailout costs

Posted by on Jan 2, 2012 in Research, The Manhattan Puzzle

Cost, as of end 2012, of the financial bail out in the U.S. alone: * $29 billion for Bear Stearns * $143.8 billion for AIG (this far) * $100 billion for Fannie Mae * $100 billion for Freddie Mac * $700 billion for Wall Street, including Bank of America (Merrill Lynch), Citigroup, JP Morgan (WaMu), Wells Fargo (Wachovia), Morgan Stanley, Goldman Sachs, and a lot more * $25 billion for The Big Three in Detroit * $8 billion for IndyMac * $150 billion stimulus package (from January ’09) * $50 billion for money market funds * $138 billion for Lehman Bros. (post bankruptcy) through JP Morgan * $620 billion for general currency swaps from the Fed ROUGH TOTAL: $2,063,800,000,000 Yes, over $2 trillion dollars. As of the end of 2012. That’s about $6,800 for every man, woman, and child in the U.S.A.. But there isn’t enough money available to balance the...

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