Tag: banks

The first of many

This six hundred-count indictment is exactly what the Obama administration was hoping to prevent with its $20 billion wrist slap of the banking industry:

The 606-count indictment alleges that the two title officers, Gary Trafford and Gerri Sheppard, directed employees under their supervision to forge their names on foreclosure documents, then notarize the forged signatures, so that it appeared that the pair actually signed the documents.

The pair then allegedly directed the employees to file the fraudulent documents with the County Recorder’s office in Clark County, Nevada. The grand jury found “probable cause” that the alleged scheme “resulted in the filing of tens of thousands of fraudulent documents … between 2005 and 2008,” said Nevada Chief Deputy Attorney General John Kelleher.

This is all the result of the banks attempting to fraudulently fill in the blanks caused by their attempt to evade the county title system. And, as Karl Denninger has noted, this should be the first of many, many more prosecutions of banking executives and their employers.

Noch einmal

The Bank of England is warning that we’re back in two-two-two thousand and eight:

The eurozone crisis has left UK banks unable to raise the funding they need to make loans to businesses, evoking the spectre of the crunch that followed the collapse of Lehman Brothers. And on one critical measure — the cost of insuring banks against going bust — lenders are already facing tougher conditions than at the height of the crunch, the Bank said.

For the benefit of those who don’t speak Central Bank, “on the brink of a credit crunch” means “we expect there to be a serious financial crisis within months”. In the spring of 2008, the bankers I knew were all talking endlessly about the tightening of credit and the senseless calling of major credit lines. And we all know how that turned out in the fall.

Speaking of wholly owned

Goldman Sachs conquers Europe:

As Greece, Italy and the European Central Bank appointed new leaders in the midst of the worsening Euro crisis, observers rushed to find something that might link the cost-cutting crusaders. And it seems the scrutinisers have found a connection in the form of Goldman Sachs. The new president of the European Central Bank, Mario Draghi, Italy’s new prime minister, Mario Monti, and the new Greek prime minister Lucas Papademos all reportedly have the US investment bank as a common denominator.

And Monti has just set the whispers going by refusing to appoint a single elected official to his new cabinet. So, Italy now has an unelected leader buttressed by an unelected consigliere. Fortunately, Goldman has no such undue influence in the United States… wait a minute.

The banker’s president

Who would have thought Obama would turn out to be as wholly owned as John McCain?

President Obama dearly wants to seal a deal in which the nation’s largest banks toss over a few bales of cash — $20 billion to help with foreclosure relief — and the state attorneys general agree not to pursue sprawling and explosive legal cases against the banks.

Mr. Schneiderman and Attorney General Beau Biden of Delaware, joined by a few others, say no. Banks, they say, should disgorge more documents, testify more precisely and prove more completely that they own millions of mortgage notes. These rebel attorneys general want the banks to hand over more than $200 billion, which would enable the government to write down tens of millions of mortgages.

But in the end, their argument is elemental: Wouldn’t the nation benefit from knowing the truth about the behavior of banks and bankers?…

[T]he Obama administration has Shaun Donovan, secretary of housing and urban development; the economic adviser Gene Sperling; and Attorney General Eric H. Holder Jr. dialing liberals, activists and bloggers, urging them to pressure the rebellious attorneys general to forgo emotionally satisfying inquiries and take the deal.

Take the deal? It’s absurd on its face. Notice how desperate the banks are to close the doors on their past actions. Anytime someone is delighted to pay a $20 billion fine, you have to ask yourself what they are so eager to put behind them. It’s not just mark-to-market or Europe that will cause them to implode, it’s also their criminal activity. This combination of factors means that the big banks are eventually going to go down sooner or later, the only significant question is which blow will prove to be the lethal one.

It’s fascinating to see this perspective being presented in the New York Times, of all places.

The fearful foundations of the Fourth Reich

I wrote that a few years ago in a column about TARP. But things are arguably even worse in Europe, where the bankers have forced two non-democratic changes in government in Greece and Italy. But don’t think things can’t go from bad to worse; the normally sane Ambrose Evans-Pritchard is freaked out to the point that he is calling for diplomatic and economic war rather than simply allowing the whole debacle to collapse under its own weight.

In Italy they have already made matters worse. I doubt that much will change with “technocratic governments” in either Greece and Italy, yet immense damage has been done to democratic accountability. The EU Project has become both dangerous and insane….

You cannot allow the biggest bankruptcy in history to run its course – with calamitous domino implications – before all options have been exhausted.

One can only guess what is happening in the great global centres of power, but it would not surprise me if US President Barack Obama and China’s Hu Jintao start to intervene very soon, in unison and with massive diplomatic force. One can imagine joint telephone calls to Chancellor Angela Merkel more or less ordering her country to face up to the implications of the monetary union that Germany itself created and ran (badly).

Yes, this means mobilizing the full-firepower of the ECB – with a pledge to change EU Treaty law and the bank’s mandate – and perhaps some form of quantum leap towards a fiscal and debt union.

In other words, because the EU is an evil financial empire on the verge of collapse, the US and China should intervene, prop it up, and help it transform itself into the literal Fourth Reich. Since Evans-Pritchard has generally been an intelligent and reasonable observer of past EU antics, the hysterical nature of this column should suffice to demonstrate the extraordinarily dangerous nature of the situation.

And he’s wrong. The bankruptcy is going to happen no matter what measures are taken. The financial media has learned nothing from 2008. Desperately delaying the necessary surgery is not going to improve the chances that the patient will survive.

WND column

Transfer or Tea Party?

Most Americans opposed TARP. They saw no reason to use taxpayer money for bailing out the very financial institutions that had been parasitically feeding off them for decades. But America is not a democracy. It is no longer even a representative democracy. The banking bailout, the GSE bailout and the subsequent automotive bailout were all rammed down the unwilling throats of the American public by the Goldman-controlled Treasury Department with the help of the Bush administration and congressional Democrats. It was rather like a doctor forcing a rape victim to pay for her own chemotherapy because it would benefit her rapist.*

Bipartisan support for the bailout made it clear to all and sundry that at the end of the day, the supposed divide between the Republican and Democratic parties is an imaginary one. Republicans and Democrats are nothing more than a unitary bank party.

*I know this makes no sense. That’s the point. Neither did the bailouts.

The EU’s democracy deficit widens

No referendum for you!

A statement from Prime Minister George Papandreou scrapping the referendum on the $178 billion European bailout package has been provided to the Associated Press. “The referendum was never an end in itself,” Papandreou said. “We had a dilemma – either true assent or a referendum. I said yesterday, if the assent were there, we would not need a referendum.”

It won’t make any difference. The question isn’t whether it’s all going to come crashing down, it’s just a question of which of the many straws upon the camel’s back will be that does the trick.

My expectation is that once people realize they are not only being railroaded, but don’t even have the opportunity to protest, we’re going to start seeing the revival of the Red Brigades soon. As I told the DC radio guy who interviewed me this afternoon, it’s not the crash that concerns me, that’s inevitable and I’m just hoping to stay buckled in and enjoy the ride. It is what comes after and how the popular fury will be channeled that is worrisome.

If I was an elite strategist, that’s what I’d have focused on for the last two years, not wasting the time on playing King Canute.

A skeptic shows he’s a sucker

Whenever you encounter atheists claiming to be skeptical, rational, logical, and intelligent, you can be relatively confident that they will soon demonstrate that they are absolutely nothing of the sort. Consider these two contradictory claims from SkepticBlog:

1. “SkepticBlog is a collaboration among some of the most recognized names in promoting science, critical thinking, and skepticism.”

2. “Why has no one from Wall Street gone to jail for the financial meltdown? Bill Maher has asked this question several times on his HBO show Real Time. I have asked many experts myself, including economists, lawyers, and Wall Street traders. Answer: no one went to jail because they didn’t break any laws.”

Now, I rather liked Michael Shermer’s “The Mind of the Market” when I reviewed it a while back, but this post is almost astonishingly stupid and is so demonstrably clueless that I very much doubt Shermer has genuinely asked a single expert about this. One need look no further than the mainstream media to know that the Obama administration broke the law. Ben Bernanke broke the law. Henry Paulson broke the law. Every single “too big to fail” bank broke the law. Every bank that registered a mortage with MERS broke the law and evaded county taxes. Karl Denninger has a little list of four of the most obvious and egregious examples.

Shermer then goes on to ask “What, exactly, did these Wall Street people do that was so wrong?” That’s quite simple. Fraud, theft, forgery, money laundering, and tax evasion.

And after this preposterous demonstration of willful stupidity, the “skeptic” Shermer declares that “the government should regulate Wall Street more”. Right, because the answer to government regulators failing to enforce the law is obviously more government regulation. That’s some fine criticial thinking right there, isn’t it?

Shermer should know better. I know for a fact that he’s not as economically illiterate as this post makes him look, but it shows that he is demonstrably inept when it comes to logic. Keep this performance in mind when you consider the value of the science he is promoting and the legitimacy of his arguments concerning atheism.

EU crackdown or crackup

Most likely the former followed by the latter. The EU leaders can blather about the sanctity of the euro and inviolate nature of the Union all they like, but neither threats nor promises can salvage the situation. Their problem is that they can’t keep the Fourth ReichUnion together while continuing to drain the masses dry in order to bail out the bankers. To put the situation in context, imagine the various U.S. states had had the option to opt out of participating in TARP. Why would people in Texas ever choose to materially reduce their standard of living so that Washington could prop up Goldman Sachs and Bank of America and keep them in business? As usual, the bond yields tell a more informative story:

Greece 2-year 92.980% One year ago: 9.784%
Portugal 2-year 19.112% One year ago: 3.521%
Italy 2-year 5.455% One year ago: 1.966%
Spain 2-year 3.872 One year ago: 2.069%

In other words, the Greek default is certain regardless of what happens with the “bailout” or the proposed referendum. Portugal will probably default too, sooner or later. Italy is looking increasingly problematic, while Spain actually appears to be doing relatively well.

Arab Spring in Libya

Once again, the neocons have supported the expansion of popular and democratic Islam:

Mustafa Abdul-Jalil, the chairman of the National Transitional Council and de fact president, had already declared that Libyan laws in future would have Sharia, the Islamic code, as its “basic source”….

Mr Abdul-Jalil went further, specifically lifting immediately, by decree, one law from Col. Gaddafi’s era that he said was in conflict with Sharia – that banning polygamy. In a blow to those who hoped to see Libya’s economy integrate further into the western world, he announced that in future bank regulations would ban the charging of interest, in line with Sharia. “Interest creates disease and hatred among people,” he said.

So, how is this in the American national interest, exactly? And actually, if you think about it, what is the real difference between formally banning interest, as Abdul-Jalil has directed, and reducing the interest rate to zero, as Bernanke, King and Trichet have done.