Tag: banks

More extend and pretend

These so-called financial reforms will do absolutely nothing to bring the nation out of the financial crisis and economic contraction. It doesn’t address outstanding debt, it doesn’t address mark-to-fantasy, it doesn’t address bank insolvency, and it doesn’t even slow down the increasing amount of bank fraud. It’s merely yet another attempt to protect the banks while deceiving the public into thinking that the government reining them in:

President Barack Obama declared victory Friday after congressional negotiators reached a dawn agreement on a sweeping overhaul of rules overseeing Wall Street….

One financial analyst, Richard Bove of Rochdale Research, said he believed the measure would have little impact because banks would find ways to hit consumers with more fees. “The good things coming out of this bill is virtually zero,” he said. “Did it help the U.S. economy? Did it solve any problems? The answer is no and no.”

Financial stocks rose in early trading Friday, as traders were relieved that banks would be allowed to continue most kinds of transactions. JPMorgan Chase & Co. rose 2 percent, while Citigroup Inc. climbed 2.1 percent.

Translation: the casino remains open.

Calling the bankers’ bluff

More and more Americans are discovering that bankers are more bark than bite:

A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by. This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.

“I tried to explain my situation to the lender, but they wouldn’t help,” said Mr. Pemberton’s mother, Wendy Pemberton, herself in foreclosure on a small house a few blocks away from her son’s. She stopped paying her mortgage two years ago after a bout with lung cancer. “They’re all crooks.”

Foreclosure procedures have been initiated against 1.7 million of the nation’s households. The pace of resolving these problem loans is slow and getting slower because of legal challenges, foreclosure moratoriums, government pressure to offer modifications and the inability of the lenders to cope with so many souring mortgages.

The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.

I wouldn’t say they are all crooks, but certainly all the big bankers are. I don’t see why anyone who has a mortgage with any bank that received TARP money should pay them so much as a single dime. It is very clear that the rule of law no matter applies in the USA, so there’s no reason why the enmortgaged masses shouldn’t follow the lead of their would-be financial masters and ignore anything that isn’t in their immediate pecuniary interests.

If your credit is already ruined, why on Earth would you continue to send what little money you have left to a collection of bankrupt thieves and scam artists.

The end of capitalism

Fresh from its successful bailouts of GM (bankrupt), Fannie Mae (-$16.3 billion in Q1), and Freddie Mac (-$6.7 billion in Q1), the Federal Reserve is joining the ECB, the BoC, the BoE, and the SNB in an attempt to preserve the European Union:

European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases as they spearheaded a global drive to stop a sovereign-debt crisis that threatened to shatter confidence in the euro….

The Federal Reserve is going to reopen a program set up during the financial crisis, to make sure foreign banks have the dollars they need, the European Central Bank announced late Sunday. The Fed will ship dollars overseas through the Bank of Canada, the Bank of England, the ECB and the Swiss National Bank. The Bank of Japan will be considering similar measures soon, the ECB said. The facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and other financial centers, the ECB said in a statement on its web site.

This isn’t about economics or the euro. This is about preventing the banks that hold sovereign debt from going under and maintaining the geopolitical order that presently sustains the global financial system. And, of course, it’s not going to work. It cannot since it is literally designed to do nothing more than soothe those problematic animal spirits when the core problem is the magnitude of the debt. The problem has always been rooted in debt. And now that genuine capitalists have no interest in purchasing Greek debt at any price and are increasingly unwilling to purchase Portuguese debt, that leaves the money planners to step in and attempt to fill in the gap with their ability to create money by “expanding the balance sheet”.

Once this belated band-aid fails in a few months, the next pitch will be to replace the various currencies with the global currency that the Economist once described as “the Phoenix”. This is an appropriate title because there should be no shortage of ashes from which the phoenix can rise.

By the way, don’t get too excited about the big, but short-term Wall Street rally that is certain to commence. No market goes straight down or straight up. And big up days are indicative of bear markets, not bull markets. This is just the reactive wave and is an artifact of the massive government intervention.

Capital controls

The EU has abandoned Europe’s Christian tradition and appears likely to drop its capitalist tradition as well:

This document is sitting in a drawer at the Directorate of Economic and Monetary Affairs in Brussels. It was written by a small cellule of EU officials in 2003 or 2004 (If I remember correctly) under prodding from Paris. It explores the legal basis for measures to stabilise the euro and EMU. After combing through the EU treaties and court judgments, it concluded that Brussels may impose “quantitative restrictions” on capital inflows. Free movement of capital in the EU is not an “absolute freedom” and could be limited in an emergency. “Should extremely disturbing capital movements endanger the operation of economic and monetary union, Article 59 EC (Maastricht) provides for the possibility to adopt restrictive measures for a period not exceeding six months,” it says.

It would be renewable every six months. Any decision would be taken by EU finance ministers under qualified majority voting, so no country could veto it.

So much for the oft-heard Europhile defense of the EU as a free market entity. This is why no government or bureaucracy should ever be permitted to have “emergency” powers. It’s rather like telling a rapist that as long as he cries “emergency” first, it isn’t rape, it’s just emergency sex.

Burning the banks

There are flames in Athens now. How long will they take to reach Wall Street and the City?

Three people died when an Athens bank went up in flames Wednesday as tens of thousands of Greeks took to the streets to protest harsh spending cuts aimed at saving the country from bankruptcy. Tear gas drifted across the city’s center as hundreds of rioters hurled paving stones and Molotov cocktails at police, who responded with heavy use of tear gas. At least two buildings were on fire. The fire brigade said the bodies were found in the wreckage of a Marfin Bank branch, on the route of the march in the city center.

Demonstrators chanting “thieves, thieves” attempted to break through a riot police cordon guarding Parliament and chased the ceremonial guards away from the Tomb of the Unknown Soldier in front of the building.

Now, what is the point of “saving the country” from bankruptcy? Will Greece simply cease to exist if it goes bankrupt? Does a junkie die when he is no longer permitted to keep purchasing narcotics from his pusher? The molotov-throwing rioters chanting “thieves” appear to have a more accurate perspective on the global financial system than the hand-wringing editorial writers at the Wall Street Journal. Not a correct one, mind you, but one that is nevertheless more accurate. Don’t get me wrong, I’m not looking forward to the chaos since it isn’t going to be fun for anyone who isn’t young, male, unprincipled, and heavily armed. But it certainly isn’t going to be averted or ameliorated by stealing more money from the public and handing it over to bankers.

I just want to know one thing. Where is the techno remix? And as for Max Keiser, well, you can’t help but think of Chuck D listening to him lay down that heavy rap.

An interesting note relating to the connection of today’s Greek riots to the historical Cinco de Mayo from Wikipedia: “In late 1861 Napoleon III, Emperor of the French, under the Treaty of London (1861) sent troops to Mexico, alongside Spanish and English forces, to collect debts owed by a previous Mexican government. President Benito Juárez had announced the annulment of these debts, and vowed to pay nothing to European powers. Napoleon’s troops occupied the port city of Veracruz on December 8, 1861…. The Battle of Puebla, May 5, 1862, was a single, important victory for the Mexican people over the occupying French Army.”

Given the general European disarmament, I can only conclude that bin Laden will soon be spotted in Athens, thereby requiring an immediate invasion and occupation.

WND column

Bigging up failure

The president of the European Central Bank, Jean-Claude Trichet, told Forbes that global governance is extremely necessary if we want to prevent another financial crisis. … It is his belief that through global governance, the resiliency of the global financial system can be assured, noting that ultimately it was governments’ use of taxpayer’s money, equivalent to around 25 percent of GDP on both sides of the Atlantic, that prevented another catastrophic great depression from occurring.
– “ECB president favors global governance,” Forbes, April 29, 2010

It should come as no surprise to the informed observer that the central bankers of the world are now beginning to openly push for global governance. The current plight of the euro has amply demonstrated the untenability of monetary union without political union. Without the power to enforce government policy on Greece, the most the Franco-Germanic mandarins of the European Union can do is threaten to withhold bailout money from the International Monetary Fund and the EU member states. This impresses the Greek political and financial elite, but no one else in Greece, and violent protests are already erupting across the country at the mere mention of IMF-imposed financial austerity measures.

For, as one young Greek man correctly asked, why should the youth of Greece be forced to pay for the financial misdeeds of their parents and grandparents?

WND column

Too Evil to Live

While much of the world news at the end of last week was focused on the sky-borne ash that has brought international air travel to a near standstill, another volcano erupted that may have more significant ramifications for the future of the American people. At last, at long last, the Securities and Exchange Commission announced it was going to take action against one of the bankster organizations responsible for the 2008 financial crisis. In fact, it was filing a lawsuit against the political capo dei tutti capi of Wall Street, Goldman Sachs.

The whores rush to defend Goldman

William D. Cohan leaps to defend the Vampire Squid. And surprise, surprise, he also owns Goldman stock:

Goldman also was not above working with a client like Paulson to structure a security — for a fee — that Paulson could then short. Would those European banks not have bought Abacus if they had known that Paulson had helped select what went inside it? Possibly. But no one forced them to buy Abacus. And if the housing market had soared for a few more years, and Paulson and Goldman had lost billions instead of making billions, would the S.E.C. have filed a lawsuit against Abacus’s investors?

These might not be the most popular questions to be asking right now, but until we get the answers we can’t assume Goldman’s guilt.

There are no words sufficiently contemptuous to describe this insufferable little [expletive deleted] and his pathetic attempt to play defense attorney on the Vampire Squid’s behalf. How dare he try to exonerate Goldman by claiming the market could have gone against them! Because we all know very well what happened when the market DID go against them… they were bailed out by the federal government. Not only were they bailed out, but they were permitted to magically transform their legal corporate identity so that they could be bailed out!

It’s at times like these that one can understand the initial popularity of the French revolutionary excesses. One knows better than to think any good would come of it, and even so, one would almost find oneself ready to welcome La Terreur so long as the insufferable bankers with their interminable self-justifications are sent to the guillotines.

Cohan conveniently omits that no one forces little old ladies to invest in financial scams either, and yet the petty con men who scammed them are still prosecuted for fraud.

Your money is perfectly safe

No doubt those who believe Obama is hiding his past because he has nothing to hide will conclude that the U.S. banks must be perfectly healthy if they are so vehemently determined to prevent the disclosure of the money they borrowed from the Federal Reserve:

The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.

Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.

The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”

Now that was a professional segue. Please don’t try it at home without first taking the necessary precautionary measures. So, here is my question. If the banks are so determined to fight this disclosure and if their general counsel is publicly declaring that the release of this information could be reasonably expected to cause a bank run, then what in the world are Americans doing still leaving their money in those banks? Are they waiting for the guy to spell it out for them in interpretive dance or something?