Tag: banks

Germany is indicating a potential disinclination to play the Fed game:

“I regard the huge buy-up of bonds of individual states by the ECB as legally and politically questionable. Article 123 of the Treaty on the EU’s workings prohibits the ECB from directly purchasing debt instruments, in order to safeguard the central bank’s independence,” [German President Christian Wulff] said….

The blistering attack follows equally harsh words by the Bundesbank in its monthly report. The bank slammed the ECB’s bond purchases and also warned that the EU’s broader bail-out machinery violates EU treaties and lacks “democratic legitimacy”.

The combined attacks come just two weeks before the German constitutional court rules on the legality of the various bailout policies. The verdict is expected on September 7.

It’s hard to imagine that the German court won’t just rubber stamp the blatantly unconstitutional, overtly illegal actions of the EU and ECB in the same way that the U.S. Supreme Court has seen no evil in the illegal actions of the U.S. Congress and the Federal Reserve.

However, the Germans aren’t always predictable, they do tend to be sticklers for the letter of the law, and there is no question that if the letter of the law is respected, the bailouts will be pronounced illegal. The possibility the court will do so may explain this recent market development:

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group’s implosion nearly three years ago. Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday.

Interesting times, interesting times….

S&P readies a belated upgrade to U.S. debt:

The ratings agency Standard & Poor’s said late on Monday that its president, Deven Sharma, who has become the public face of the firm in the wake of its historic downgrade on the United States’ long-term debt rating, will step down and leave the company by the end of the year. The decision by Mr. Sharma to resign comes as the ratings agency is under pressure from several fronts, including an inquiry by the Justice Department into its ratings of subprime mortgage securities and a push by activist investors to break up its parent company, McGraw-Hill….

His replacement, Mr. Peterson, 53, is currently the chief operating officer of Citibank, the banking unit of Citigroup.

I note that the one thing the New York Times does not assure us was that the management change was not the result of the recent downgrade of U.S. debt. No doubt Mr. Citibank already understands that an review of that decision and eventual restoration of AAA status is in the best interest of his continued employment.

Unless, of course, it is decided the time is right to debut the new, super-safe, guaranteed AAAA rating.

Karl Denninger puts his finger on why the bankers and their public servants are desperately pushing for inflation:

These policies are not born out of ignorance, they’re intentional frauds.

We keep hearing that we can’t have “deflation” as that’s “terrible”, but exactly who is it terrible for? It certainly isn’t terrible for the prudent saver – the Senior Citizen who has been systemically and serially financially raped by those very same “captains of finance!” Yes, it’s terrible if you took on debt you can’t afford but exactly why should you be protected from your own stupidity whether you’re that borrower or lender – and using debt to pull future earnings capacity from the future or speculate is factually stupid!

Further, is it really “deflation” when you simply reverse the inflation of the last ten years, say much the last 30? Why is it perfectly ok to steal half or more of someone’s saved money, but when they might get that stored value back it’s suddenly a national calamity to be avoided at all costs?

The answer is perfectly clear. Because those responsible for the theft are in charge and they don’t want to give up their ill-gotten gains.

I have to admit, Rick Perry’s “mistake” is the first thing he’s done that makes me want to think he might not be a complete disaster as president. (Of course, this posturing is merely for the Tea Party, in private he’s kowtowing before the Fed like all the other candidates not named Ron Paul.) But the neocons and neoclassicals were quick to leap to the defense of Ben Shalom:

On Monday, 24 hours before the Rasmussen poll would show him up 13 points on Mitt Romney after only three days in the GOP presidential race, Rick Perry made a mistake. He answered a question in an Iowa field about the Federal Reserve with a waspish threat to Ben Bernanke — something about how in Texas the Fed chairman would be “treated ugly” if he printed more money.

“Horrifying,” shrieked Binyamin Appelbaum, The New York Times’ chief Washington correspondent. The economist Nouriel Roubini raged that Perry belonged in a mental institution — after he compared the Texas governor to the Norwegian mass murderer…. Yesterday, in refusing to apologize for what he said, Perry didn’t even suggest he’d been speaking lightly. He said instead that this — Fed policy, presumably — was something about which he’s passionate.

Actually, Perry’s comment about Bernanke’s near-treason is a little careless. The man’s policies aren’t “almost” treasonous as they have without question been to the severe material detriment of the USA and given his expert PhD credentials, there can be little question that his decision to enact those policies was intentional. He has done far more harm to America and Americans than 100 bin Ladens could have ever done, and worse, he telegraphed his intention to do so before he was appointed to his present office.

The mortgage banks are doing their best to escape liability for their large-scale mortgage fraud:

They’ve trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City. No, really.

Tanks in the streets and cats living with dogs if the state governments don’t look the other way when the banks commit fraud. That’s certainly a new one. Interesting to see that they’re having to pull it out on a regular basis, isn’t it?

I guess this officially makes it a global depression:

A South Korean stock broker jumped to his death from a high-rise office amid worldwide market turmoil. The 48-year-old broker, identified only as “Seo,” sent text messages to colleagues expressing regret over severe losses, just minutes before leaping to his death Wednesday in the city of Daegu, according to Chief investigator Lee Kang-ho.

Of course, given the total lack of shame and remorse demonstrated by Wall Street in 2008 when the banks looted the American taxpayer to make up for their gambling losses, one tends to suppose they’ll probably need a little help. But we can always offer them encouragement.

Still, it’s only Greece… for now:

Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults. The boxes are so popular that the bank has doubled the rent on them in the past year – and still every day between five and 10 customers request one. This bank ran out of spares months ago. The clerk leans over: “I’ve been working in a bank for 31 years, and I’ve never seen a panic like this.”

Official figures back him up. In May alone, almost €5bn (£4.4bn) was pulled out of Greek deposits, as part of what analysts describe as a “silent bank run”.

Considering the size of the Greek economy, that’s a sizable amount.  Sarah Palin’s comments about the U.S.A. turning into Greece aside, I haven’t seen many signs of imminent U.S. bank runs, but then, it’s never a bad idea to keep an amount of ready cash and coin available. Especially of Ron Paul’s bill somehow manages to pass the House.

Rep. Ron Paul on Monday introduced legislation that would lower the federal government’s debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve.

And why not go ahead and cancel it? If the total amount of debt doesn’t matter because one person’s asset is another’s liability, then obviously canceling those debts can’t possibly matter any more than amassing them did. Since we are assured that the government’s growing debt to itself is not inflationary, then surely canceling that debt could not be deflationary.

This is, of course, shocking news given that the banks had promised – cross their heart – that they would stop doing what they originally claimed wasn’t happening:

Mortgage industry employees are still signing documents they haven’t read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures. County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as “robo-signing,” remain widespread in the industry.

The documents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks. One name, “Linda Green,” was signed almost two dozen different ways. Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted….

In Guilford County, N.C., the office that records deeds says it received 456 documents with suspect signatures from Oct. 1, 2010, through June 30. The documents, mortgage assignments and certificates of satisfaction, transfer loans from one bank to another or certify a loan has been paid off.

It’s a mystery, to be sure. In other news, car thieves announced that they are working with insurance companies to fix the problem of automotive theft, but cannot explain why it has persisted.