Tag: banks

The first shots are fired

However, at the moment, it’s not violence, merely very loud political protest:

Rifle shots were fired early Monday into the Athens offices of Greece’s conservative party, which leads the fragile coalition government, causing no injuries but intensifying a wave of political violence in the debt-wracked country. 

Remember, the US is actually worse off than Greece, by some financial measures.  The only significant difference is that Greece can’t print money because the ECB won’t permit it, while the US can’t print money because the Fed won’t permit it.

I suspect these are the first shots to be fired in the great wave of political dissolution that is about to sweep over the world.

Obamateach and the post-college tax

After all, you didn’t build that university degree:

Student Loan debt in the U.S. recently crossed the $1 trillion mark,
with a good chunk of that owed to the U.S. government. In an attempt to
streamline the whole process, a soon-to-be-introduced bill would replace
the current system of debt collection with automatic payroll deductions
tied to the borrower’s income.

I wonder how long it will be before it will become illegal to pay for your own college, thus allowing Washington to tap directly into your paycheck perpetuity as compensation for the government investment in your K-16+ education.  We already have a working model for free education with the Obamacare model.  Obamateach is the obvious next step educational for a society moving rapidly Forward! into the 21st century.

Imagine what they’d find in New York

It sounds as if the Kabul Bank was an exemplary example of Western-style banking:

Afghan and American officials had for years promoted Kabul Bank as a prime example of how Western-style banking was transforming a war-ravaged economy. But the audit, prepared this year for Afghanistan’s central bank by the Kroll investigative firm, gives new details of how the bank instead was institutionalizing fraud that reached into the hundreds of millions of dollars and obliterated Afghans’ trust after regulators finally seized the bank in August 2010 and the theft was revealed.

Going further than previous reports, the audit asserts that Kabul Bank had little reason to exist other than to allow a narrow clique tied to President Hamid Karzai’s government to siphon riches from depositors, who were the bank’s only substantial source of revenue.

At one point, Kroll’s investigators found 114 rubber stamps for fake companies used to give forged documents a more legitimate look. And the auditing firms used by the bank never took issue with loan books that were “almost entirely fraudulent,” Kroll found, recommending that the Afghan government explore suing the last such auditor, A.F. Ferguson & Co., a private Pakistani firm with a franchise under PricewaterhouseCoopers.

What, one wonders, is the Federal Reserve’s reason to exist other than to allow a narrow clique to siphon riches from the American people?  Given the observable facts in evidence, it certainly can’t be the stated purpose of guaranteeing stable prices, much less the ex post facto rationale of assuring full employment.

At least the Kabul Bank had external audits, however fraudulent they were.  The Federal Reserve can’t even claim as much.

End the pretense

The UK’s central banker, Mervyn King, finally admits what was always apparent.  One wonders how long it will take Helicopter Ben to do likewise:

Warning that the next generation may have to live with the consequences of
past excesses “for a long time to come”, he said Britain’s banks needed to
drop the “pretence” that their debts will be repaid.

“I am not sure advanced economies in general will find it easy to get out of
their current predicament without creditors acknowledging further likely
losses, a significant writing down of asset values, and recapitalisation of
their financial systems,” he said.

“Only then will it be possible to return to a more normal provision of the
vital banking services so crucial to an economic recovery… Just as in
2008, there is a deep reluctance to admit the extent of the
undercapitalisation of the banking system in parts of the industrialised
world.”

He compared the situation to the “pretence that debts could be repaid” in the
1930s and added: “We must not repeat that mistake.”

They’ve already made the critical mistake, which was failing to shut down the UK’s zombie banks and attempting to prop them up with massive amounts of money printing, government-incentivized lending, and stock market pumping.  But further financial raping of the economy for the benefit of the banks isn’t going to restore them or the economy to health.

The first debate

He says it like it’s a good thing:

Obama has always relied on the big money men in private, while
disparaging them in public.  But what happens when he comes up against
one of them in the most public way possible?  Now we know the answer, and it ain’t pretty. The president appeared small and petulant and reactive.  Romney looked presidential and secure and proactive.

While Republicans are quite reasonably celebrating the fact that Romney demolished a hapless Obama sans teleprompter in the debate – disproving once again the notion that Obama is a supergenius master of rhetoric – they don’t seem to be thinking through the obvious implications of what they are witnessing.  Obama has never been more than a tool of those who have financially raped the nation.  Romney is one of the financial rapists.

How can anyone imagine Mitt Romney has any intention of fixing the very problems that he helped foster and from which he profited so massively?

Obama’s bag boy gets off

Corzine is officially deemed above the law:

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.

Remember that excuse the next time you’re facing an audit. Just tell them it was the result of “chaos and porous risk controls” and that will eliminate any possibility of legal wrongdoing.

The end of the US banking system

Ann Barnhardt explains why it is time to not only get one’s assets out of the US financial markets, but the US banks as well.

What this [Sentinel ruling] means is that even if Jon Corzine is somehow dragged into court by private citizens, because you know damn good and well that the Justice Department will never, ever touch him, Corzine now has a legal precedent, likely from a bribed or otherwise coerced Federal Appeals Court, explicitly stating that an FCM can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to their own monies, no matter what the law says, or what legal assurances, claims or guarantees are made to that customer about their funds held with an FCM or any other brokerage or depository institution. The “secured” party at the front of the line will always be the mega-bank who made the fraudulent loan using the stolen customer funds as collateral.

In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.

For the love of God, I don’t know what more there could possibly be to say to snap you people out of your normalcy bias trance. You have GOT to get ALL MONIES out of the financial system NOW. This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.

The court has ruled that once your money passes out of your PHYSICAL POSSESSION, and I mean PHYSICAL possession, it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you. Do you comprehend this? The entire system is utterly devoid of any integrity or genuine security and is breaking down catastophically before our very eyes. You HAVE to comprehend that your money sitting in an account is no longer legally yours. You have to force your brain to process and comprehend this, no matter how incomprehensible it may seem. IT IS OVER. This is Marxist hell. We have arrived.

This ruling and precedent will be used by every brokerage, every bank, every insurance company and every pension fund to deny you your money when the financial system finally collapses, be it on Monday, or be it two years from now.

This is the Reuters article to which she is referring. The reason the ruling is so disastrous is that it grants all depository institutions ownership of the funds on deposit with it. While this is a logical continuation of the Bankers First and Foremost policy we’ve been seeing from the federal government since 2008, it is burning down the village and salting the earth upon which it stood in order to save it, because there is now absolutely no sound reason to keep your money in a US bank.

Now, obviously, no banks are going to be dumb enough to take this ruling and run with it… unless it is a matter of their own survival. But the fact remains that a bank deposit is now legally considered no different than a gift from you to the bank, and depositors are now entirely dependent upon the bank’s good will to spend its money on their behalf.

I tend to suspect this ruling will be reversed upon appeal once the Powers That Be realize that saving the personal fortunes of Corzine and other failed bankers isn’t worth the price of destroying the US banking system. But if not, it should cause the largest banking run the world has ever known. I say “should” rather than “will”, because as we know, most people are idiots and will probably continue blithely assuming that it doesn’t matter what the fine print and the court rulings say, they’ve got a receipt showing they put their money in the bank, and money in the bank is safe, by definition.

On the other hand, I find this ruling particularly intriguing because I have observed that one can anticipate events, to a certain degree, by seeing through which hoops the elite institutions force the federal government to jump. While they wouldn’t have any reason to take such risks for Corzine and company, it would make a great deal of sense to do so if they are anticipating a U.S. financial collapse in the near-to-middle term.

For example, we can safely assume Romney will win the election November on the basis of the Goldman Sachs contributions. “Four years ago, employees of New York-based Goldman gave three-fourths of their campaign donations to Democratic candidates and committees, including presidential nominee Barack Obama. This time, they’re showering 70 percent of their contributions on Republicans.”

The state of the kleptocracy

Barry Ritholtz provides a useful summary of the crimes committed by the financial sector, complete with links and sources:

Laundering money for drug cartels. See this, this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis)

Laundering money for terrorists

Engaging in mafia-style big-rigging fraud against local governments.

Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide.

Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts

Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them.

If it is not eminently clear that there is no rule of law whatsoever in the USA, this should suffice to prove it. It should come as no surprise that financial crime and corruption are on the upswing, as it has become increasingly obvious, even to those who don’t pay any attention to the financial sector, that the entire system is a criminal enterprise run by short-sighted financial gangsters. However, since they’re fast running out of other people’s cows to milk, as exhibited by the fact that less than one-third of the people who owe $1 trillion in school loans are repaying anything, the whole structure appears to be rapidly approaching collapse.

Some say it will end in fire (inflation), others in ice (deflation). But either way, it will end.

In the meantime, be sure to start a corporation and hire yourself before committing any crimes. Then fire yourself, and tell the police that you are no longer with the company when they come to investigate. They will then turn the matter over to the appropriate regulatory agency, which will fine the corporation about five percent of the profit you made from your illegal acts. This is what passes for criminal justice in America circa 2012.

Another day, another whitewash

It doesn’t seem to matter how much the banks steal or how much fraud they commit, no one ever goes to jail:

Regulators delivered the first blow in a major investigation into whether big banks had improperly set key interest rates that affected how consumers and companies borrowed money around the world.

On Wednesday, Barclays agreed to pay $450 million to resolve accusations that it had tried to manipulate rates to benefit the bank’s own bottom line. At the height of the financial crisis, regulators say, the big British bank reported bogus figures that in some cases had influenced a benchmark for student loans, credit cards and mortgages.

The Barclays deal, struck with regulators in Washington and London and the Justice Department, caps a multiyear investigation that yielded one of the largest regulatory penalties tied to the financial crisis. The settlement is the first in a series of potential cases against other financial firms, including HSBC, Citigroup and JPMorgan Chase….

Some of the most troubling actions, regulators say, occurred between 2007 and 2009. As bank financing costs rose to new highs after the collapse of Lehman Brothers, regulators worried that firms might have submitted low interest rate figures that underpin Libor, making their financial positions look stronger. Amid speculation that the bank was struggling to raise money, Barclays’ senior management asked employees to lower the rates submitted to the Libor committee, according to the regulatory filings. Management wanted the bank’s rates in line with rivals.

The way these things are reported is always in a manner suggesting that there were some complex financial details that are hard to understand or report accurately, but the LIBOR-fixing was pretty simple. Barclays and the other banks simply reported false prices, claiming to have loaned money at higher rates and borrowed money at lower rates than they did, depending upon what served their interest at the time. Since the interest rate is determined by this activity, that activity was fraudulent and affected anyone borrowing money at that time.

An assistant attorney general says: ““For this illegal conduct, Barclays is paying a significant price.” But once more, no criminal charges. So, the message is clear. Commit all the fraud you like. Commit all the crime you want. Steal without hesitation or remorse. If you’re caught, you’ll merely be fined pennies on the dollars you stole. So when you read about the corruption in Rome and other historical societies, don’t deceive yourself into thinking that Man has progressed in any way beyond the technological. It’s no different, and in fact, as Jean-Jacques Rousseau once pointed out, the Romans abided by their own laws better than any other historical society, and far more than Americans do.

A billion here, a billion there

JPM misplaces a bit of money:

JPMorgan Chase disclosed in a regulatory filing on Thursday that a trading group had suffered “significant” paper losses in a portfolio of credit investments. The troubles at the unit, the so-called chief investment office that makes trades to balance the bank’s assets and liabilities, could weigh on the bank’s broader earnings. The corporate group, which includes the C.I.O. group, is expected to lose $800 million in the second quarter, although the final results will depend on the market and other activity, the company said in the filing. Previously, JPMorgan had estimated that the group would report net income of roughly $200 million.

How long will it be before the first giant US bank is nationalized? Before the end of the year? Before the election?