Tag: banks

HSBC’s grand scale ID theft

It’s hardly news that the big banks are criminal organizations, but this report of grand scale identity theft for money-laundering purposes is really rather remarkable.

The global banking giant HSBC is a “criminal” operation, charges a former officer for the company’s southern New York region in a video interview with WND. John Cruz, a former vice president and relationship manager, has turned over to WND more than 1,000 pages of documents, including customer account ledgers for dozens of companies through which, he charges, the financial institution was laundering money each month….
Cruz charges that the 1,000 pages of customer account records suggest HSBC relied on identity theft to capture legitimate Social Security numbers that were then used to create the bogus retail and commercial bank accounts through which employees systematically deposited and withdrew hundreds of millions of dollars on a daily basis, apparently without the knowledge of the identity theft victims. “When an individual finds out they got a loan they never knew about, 5 percent of that loan went to the accounting firm that made up the phony tax returns, and the other 95 percent of that loan went to the manager,” he said. “One manager was involved in the transaction, another manager was involved in notarizing the transaction, and senior management was involved where they signed off permission to give the loans even when the loans get rejected by underwriting.”

It is perhaps worth noting that the Obama administration has not arrested a single banking executive despite the regular reports of large scale criminal activity by the organizations they are running.

Mailvox: the fifty trillion dollar question

KJ offers the opportunity to ask a question of some European functionaries:

The former and long-serving vice chancellor of Germany (Dr Joschka Fischer) and the EU’s High Representative for Common and Security Policy (Dr. Javier Solana) are here… debating the economic situation (and potential solutions). The Spaniard is (in summary) saying the situation is looking pretty shit right now and it could be fixed by Germany “opening up” to the rest of poorer/less-productive Europe (when pressed he confessed that includes offering up more of its – i.e. Germany’s – money).
The German is (in summary) saying the situation is looking pretty shit and what we need is to centralise and consolidate political power in Europe. Lol! 4th Reich anyone!? According to both, the Euro breaking up would just be catastrophic. We can ask questions but I don’t have the heart to ask any. It’s so depressing listening to this glossy, typical politic speak from which no straight answers can be extracted. Do you questions for the German Vice Chancellor or EU’s High Representative?

I wrote back: Yes. Since inflation or default are the only way to escape debt of this magnitude, which is the vice-chancellor’s preference? If you get a second question, ask why the successful bank defaults in Iceland have not been permitted to take place in the EU.

Completely admits that historic 1920s inflation destroyed the German middle class, and admits not a result of market developments but intentionally by German central bank to write off war debt, so accepts inflation is going to have to play its part in the current situation!! Greek default, (and kicking them out), is not an option apparently, not forthcoming as to why other than that it would be “hugely detrimental to the rest of Europe”. No luck on the second question; earlier on he had alluded to “endless lawsuits” and “serious capital restrictions” to anyone taking the opt-out of paying their debts which he implied would make that option not viable. I didn’t hear Iceland mentioned at all.

This lends further support to what most of us here have always assumed, that the central banks and governments will inflate. The question is, can they do so? This is where the question of the nature of money, and if credit is more properly considered money or simply the accounting of money, becomes the 50 trillion dollar question. Nate and I will be debating this in the reasonably near future, but I’ll leave you with this thought: given their performance over the last four years, what are the chances that the core monetary assumption of the central banks and governments is correct?

MF Global, Mark II

Ann Barnhardt says it’s time to get out of the markets entirely:

The Penson ship is going down, it appears. They were in trouble last year when MF Global happened and were looking to dump their European divisions, and they did bounce a bit after MF Global when they unloaded their Aussie holdings, but it looks like it is all but over for them. The stock is cratering, and there is chatter on the net that they are taking forever to get cash withdrawls out, posted and cleared. That’s a very bad sign. MF global was the same way in the weeks before the end. The extreme danger is that the CME is going to do with Penson what they did with MF Global and NOT backstop and keep customers liquid when the end comes. MF Global proved that the CME is no longer going to fulfill its fiduciary duty and will screw clients twelve ways from Sunday without hesitation. DO NOT get caught up in that crap. Just get out of the whole, stinking, festering, putrefied mess. Get out of the markets ENTIRELY.

If you’ve still got your money in the markets, you really need to think again. Something like 90 percent of the trading is now just machines trading with other machines. The brokers are using their customers’ money as a backstop and the regulators aren’t stopping them. You’d arguably be better off, and have a better time, simply going to Vegas and playing blackjack. No one knows when the entire mass of corruption and crap will finally melt down under its own weight, all we really know is that it’s eventually going to happen. But MF Global has taught us that there are no consequences for the financial industry’s criminal shenanigans. No one is going to stop them, most likely because everyone on the inside knows that as soon as the music stops, it all comes crashing down.

The hurricane of fraud

Matt Taibbi on Bank of America:

There are two things every American needs to know about Bank of America.

The first is that it’s corrupt. This bank has systematically defrauded almost everyone with whom it has a significant business relationship, cheating investors, insurers, homeowners, shareholders, depositors, and the state. It is a giant, raging hurricane of theft and fraud, spinning its way through America and leaving a massive trail of wiped-out retirees and foreclosed-upon families in its wake.

The second is that all of us, as taxpayers, are keeping that hurricane raging. Bank of America is not just a private company that systematically steals from American citizens: it’s a de facto ward of the state that depends heavily upon public support to stay in business. In fact, without the continued generosity of us taxpayers, and the extraordinary indulgence of our regulators and elected officials, this company long ago would have been swallowed up by scandal, mismanagement, prosecution and litigation, and gone out of business. It would have been liquidated and its component parts sold off, perhaps into a series of smaller regional businesses that would have more respect for the law, and be more responsive to their customers.

But Bank of America hasn’t gone out of business, for the simple reason that our government has decided to make it the poster child for the “Too Big To Fail” concept. Because it is considered a “systemically important institution” whose collapse would have a major, Lehman-Brothers-style impact on the economy, two consecutive presidential administrations have taken extraordinary measures to keep Bank of America in business, despite a staggering recent legacy of corruption schemes, many of which were simply overlooked by regulators.

The frightening thing is that this isn’t rhetorical exaggeration. The real case is almost surely much worse than Taibbi paints it. And he asks a very pertinent question of so-called conservatives.

“When did we make it the job of the taxpayer to buy failed companies, and rescue companies from their own bad decisions? How is that conservative?”

Green shoots redux

The IMF’s Lagarde announces “economic spring is in the air“:

A couple of weeks ago, I sat on the speakers’ podium during the opening panel of the Euromoney Bond Investors’ Congress in London. Together with leading industry experts, including senior ratings agencies’ officials, we engaged in a detailed discussion of the contentious aspects of the Greek debt debacle and the fate of the eurozone.

The audience was “top drawer; the room packed with 500 of the world’s biggest bond market participants; the combined assets under management measured in the trillions of dollars.

“Who thinks the upcoming Greek bail-out will be the last, drawing a line under the eurozone’s sovereign debt crisis?” asked the senior Euromoney staffer chairing the panel. “Put your hands up”.

Delivered with a serious demeanour, this was exactly the right question. So deadly was the inquiry, and so germane, that the mood in the room grew uneasy, barely camouflaged by an outbreak of coughing. Scanning this ultra-influential audience, I saw rows of delegates cowed, keeping their eyes locked forwards but staring down slightly, not daring to look elsewhere.

Not a single hand was raised. Not a single hand among hundreds of the world’s leading bond market practitioners was stirred to support a debt swap now presented as the key to the world economy shaking off the post sub-prime torpor and taking us into the sun-lit uplands of sustainable global growth.

On Friday, Greece pressed ahead with the largest sovereign debt restructuring in history. By “securing adequate participation” from the private sector, Athens avoided a big, disorderly default in late March. Holders of €172bn (£143bn) of the €206bn of eligible bonds agreed to take part in the write-down, or 83.5pc. Participation has since risen to 95.7pc after the Greek government triggered retrospective “collective action clauses”, forcing objecting investors to play ball.

This deal was “voluntary”, in the words of one market wag, “in the same way confessions were voluntary during the Spanish Inquisition”. In other words, unless this deal was agreed, bond-holders faced ending-up with nothing at all. Under the current terms, investors swap their bonds for new ones worth 53.5pc less and with easier repayment terms for Greece.

So, Greece has defaulted, despite all of the assurances to the contrary. So, the next question is, who is next? And, of course, how long until Germany pulls the plug on the EU project. Also, there is this to consider: “With the addition of the new IMF/EU loans of $172 billion and the revelation of the guaranteed debt at $107 billion Greece now has $279 billion of new and hidden debts.”

Secretary of the Treasury arrested?

This is certainly an interesting and unexpected development. I have absolutely no idea what it signifies, but it does appear as if the massive pyramid of cards is looking increasingly flimsy of late.

Nope, old news. Business as usual. Dow 13,000! Nothing to see. Move along, move along…. And if at first, second, and third you don’t succeed, try, try again!

Ah, just loan them some more money

Greece will be fine. A little bureaucratic red tape is no hindrance to business. The Greek economy is merely a little light on liquidity, otherwise it would be growing like gangbusters.

As e-commerce continues to gain ground apace abroad, and even Greeks seem to be warming to the idea of Internet shopping, opening an online store based in Greece is no job for the fainthearted. “An online store is more complicated than a regular store basically because of the way payments are carried out,” explained Fotis Antonopoulos, one of the co-founders of www.oliveshop.com, which sells olive oil-based products such as cosmetics, mostly to foreign markets.

Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector’s office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.

Once they climbed the crazy mountain of Greek bureaucracy and reached the summit, they faced the quagmire of the bank, where the issue of how to confirm the credit card details of customers ended in the bank demanding that the entire website be in Greek only, including the names of the products.

I wish everyone who still believes that government can provide the solution to anything, including the very small number of tasks that the U.S. government is Constitutionally responsible for carrying out, was forced to open an online store in Greece before being permitted to vote.

By the time the Germans have finished looting Greece, it will probably be necessary for Greeks to have their stool samples manually extracted by American TSA agents contracted out to the IMF before they are provided with their licenses to collect a daily subsistence ration.

Corruption USA

Another pass at a banking whitewash:

A multistate settlement with five large U.S. banks over foreclosure practices would include as much as $17 billion in mortgage debt forgiveness and loan modifications and take three years to complete, according to a letter describing the deal. The draft letter to stakeholders from state attorneys general outlines an agreement among large mortgage servicers, states and the Department of Justice, which are continuing talks to finalize the proposal.

Servicers, including Bank of America Corp., JPMorgan Chase & Co. (JPM), and Wells Fargo & Co., would also have to provide as much as $3 billion in refinancings, enabling borrowers to secure new loans “at today’s historically low rates,” according to the letter. Another $1.5 billion would be distributed to about 750,000 borrowers who have lost their homes to foreclosure, according to the letter.

States that sign on to the agreement would get “immediate payments” to fund consumer protection and foreclosure prevention efforts.

All 50 states announced almost 16 months ago they were investigating bank foreclosure practices following disclosures that faulty documents were being used to seize homes. Officials from a group of state attorneys general offices and federal agencies, including the Justice Department, have since negotiated terms of a proposed settlement with the nation’s largest mortgage servicers.
‘Robo-signing’

The agreement holds banks accountable for “wrongdoing on robo-signing and mortgage servicing.” It allows state and federal prosecutors to continue to pursue securities cases and other claims. Individuals would not be barred from filing their own lawsuits, and the settlement includes “absolutely no criminal immunity for any individual who violated the law.”

In other words, a slap on the wrist, a few new loans, and the attorneys general will magically make all the title fraud go away. This costs the banks nothing, as most of the “mortgage debt forgiveness” consists of bad loans the banks were going to have to write off anyhow. The net result is rather like telling a bank robber that he has to repay a few dollars each time he holds up a bank… except the behavior of the banks is far more criminal than that of the average bank robber.

The real point of the loan modifications and the new loans is to generate new paperwork and ensure that the banks have proper title to the properties to replace the titles they destroyed in utilizing the MERS system to avoid local taxes. If you figure an average county transfer fee of around $750, that means the local taxes successfully evaded by the banks were around $562,500,000 for the foreclosed properties alone.

Shut them down

One State attorney general has fired a legal broadside:

Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as “MERS certifying officers,” have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.

The lawsuit further asserts that the MERS System has effectively eliminated homeowners’ and the public’s ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman.

Not a bad start. Now it’s time for the other 49 States to stop playing the White House’s attempt to retroactively whitewash the giant system of fraud, drop the “settlement talks”, and pin these criminal bastards to the wall for their attempt to destroy the private property system. MERS was always completely illegal and it is absolutely ridiculous that it wasn’t shut down in the beginning.

However, so long as these cases remain civil, not criminal, it’s very unlikely that any true justice will be served.

Romney = President Goldman Sachs 2.0

The usual suspects have their sticky little fingers all over the supposed alternative to Obama too:

When Bain Capital sought to raise money in 1989 for a fast-growing office-supply company named Staples, Mitt Romney, Bain’s founder, called upon a trusted business partner: Goldman Sachs, whose bankers led the company’s initial public offering. When Mr. Romney became governor of Massachusetts, his blind trust gave Goldman much of his wealth to manage, a fortune now estimated to be as much as $250 million.

And as Mr. Romney mounts his second bid for the presidency, Goldman is coming through again: Its employees have contributed at least $367,000 to his campaign, making the firm Mr. Romney’s largest single source of campaign money through the end of September. No other company is so closely intertwined with Mr. Romney’s public and private lives except Bain itself.

I know I am shocked, SHOCKED, to learn that there is gambling taking place in the Washington establishment. It will be interesting to hear how all of the Romney Republicans who rightly deride Barack Obama as President Goldman Sachs will respond to the news that their favored candidate is owned by precisely the same corporation.

And it’s not as if Newt Gingrich is any better, being a Freddie Mac tool. You can complain about Ron Paul’s shortcomings, real and perceived, all you like. But the fact of the matter is that if you don’t support him, you are supporting more of the exactly the same thing that Obama is presently providing.

One could, of course, argue with the numbering system. There is a reasonable case to be made that George W. Bush was actually President Goldman Sachs 1.0, courtesy of his Secretary of the Treasury, Henry Paulson.