Archive | Banksters

UBS

Government as protection racket for corrupt banks

UBS

Oh goodness, more fines for banks that engaged in criminal behavior. Surely some of their executives will be going to prison, right? Ha ha ha. Of course not. With our pretend justice system, federal and state agencies pretend to enforce laws against banksters but instead settle for fines. No one is inconvenienced by criminal prosecutions, governments gets a steady cash flow, the corrupt institutions pretend to reform, and nothing changes. This is a protection racket. The government gets paid off and allows criminal behavior to continue.

Citi, J.P. Morgan, Barclays, RBS plead guilty to criminal charges, get $5.6 billion in fines. UBS avoided criminal prosecution and was fined $500 million. All the banks are no doubt very very sorry for what they did, which was get caught. But really, these fines are just a cost of doing business, so no worries for them, especially since government regulation and enforcement is basically a compliant lapdog, barking a bit, maybe snarling occasionally, but never actually biting.

As the live webcast from US AG Loretta Lynch indicates, moments ago the DOJ announced five global banks including Citi, J.P. Morgan, Barclays, RBS would plead guilty to criminal charges to conspiring to manipulate FX Prices, and would pay some $5.6 billion in combined penalties to resolve a long running U.S. investigation into whether traders at the banks colluded to move foreign currency rates in directions to benefit their own positions.

As always, the comments on Zero Hedge are sarcastic, funny, and biting.

And where does the $5B go to?
The TBTF banks! TADAAAAA!

These fines, when not accompanied by personal punishment, are simply a tax, and like all taxes are just another cost of doing business that will be passed on to their customers, or in the case of no customers, back to the taxpayer. No crime syndicate could come up with as good a scam.

Come on guys, this is victimless crime. Bankers, drug dealers and prostitutes. Just add their activity to the GDP and move along.

Aren’t DOJ fines tax-deductible?

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Eugene Debs quote

Eugene Debs. No war but the class war

Eugene Debs quote

Eugene Debs was a hardcore socialist, founder of the Wobblies, and brilliant orator. He was jailed in 1918 for opposing U.S. entry into World War I, ran for president from prison in 1920 and received 3.4%, nearly one million votes. In 1894, he was imprisoned for leading the Pullman Strike. He never stopped agitating.

What he said then still applies today.

“The Republican and Democratic parties, or, to be more exact, the Republican-Democratic party, represent the capitalist class in the class struggle. They are the political wings of the capitalist system and such differences as arise between them relate to spoils and not to principles.”

“If it had not been for the discontent of a few fellows who had not been satisfied with their conditions, you would still be living in caves. Intelligent discontent is the mainspring of civilization. Progress is born of agitation. It is agitation or stagnation.”

“I’d rather vote for something I want and not get it than vote for something I don’t want and get it.”

“Intelligent discontent is the mainspring of civilization. Progress is born of agitation. It is agitation or stagnation.”

“I am opposing a social order in which it is possible for one man who does absolutely nothing that is useful to amass a fortune of hundreds of millions of dollars, while millions of men and women who work all the days of their lives secure barely enough for a wretched existence.”

“As we have said, the bankers are for bullets—for the fool patriots that enlist at paupers’ wages to stop the bullets, while the bankers clip coupons, boost food prices, increase dividends, and pile up millions and billions for themselves. Say, Mr. Workingman, suppose you have sense enough to be as patriotic as the banker, but not a bit more so. When you see the bankers on the firing line with guns in their hands ready to stop bullets as well as start them, then it is time enough for you to be seized with the patriotic itch and have yourself shot into a crazy-quilt for their profit and glory.”

“I do not oppose the insane asylum—but I abhor and condemn the cutthroat system that robs man of his reason, drives him to insanity and makes the lunatic asylum an indispensable adjunct to every civilized community.”

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rahm

Moody’s cuts Chicago bonds to junk. Rahm Emmanuel very sad

rahm

A mayor who was in touch with reality might ponder enormous municipal debt and a downgrade to junk might be worth taking seriously and then try to come up with a plan to save his city from bankruptcy. But not Mayor Rahm Emmanuel of Chicago. No way. Instead, he set his Reality Denial Shield to maximum power and is not letting bothersome facts get in the way blaming everything except himself (and decades of mismanagement and blatant corruption) for Chicago’s increasingly perilous financial predicament.

Emmanuel, who has a well-deserved reputation for being a nasty loudmouth, said “While Chicago’s financial crisis is very real and at our doorsteps, today’s irresponsible decision by Moody’s to downgrade the city’s credit by two steps goes far beyond that reality.” Yes, Mr. Mayor, it’s all Moody’s fault for stating the obvious. Surely the best way to solve the problem is to get pointlessly combative while pretending the problem isn’t rapidly worsening. Any relation between Emmanuel and a 14-year-old boy having a fit because his parents just cancelled his World of Warcraft subscription are of course completely coincidental.

What made the mayor so cranky? The Illinois Supreme Court just ruled Illinois’ pension plan, perhaps the most insolvent in the country, was unconstitutional because it illegally attempted to cut existing pensions. This dumps hugely more debt on the state and Chicago and caused Moody’s to downgrade Chicago bond debt. The downgrade in turn means bondholders can immediately ask for $2.2 billion in accelerated payments. Ouch.

Mish:

Emanuel does not have a backup plan. I do.

On May 8, and in regards to the Illinois Supreme Court ruling, I stated “Today’s ruling more than ever shows the need to pass a bankruptcy law.”

And the state as a whole needs a constitutional amendment to allow pension cuts even if that only affects decisions going forward.

Apparently Moody’s agrees.

Pension cuts are ugly. Current law in Illinois and California forbids them. Both states have so much public pension liability that they cannot possibly pay it. That’s the reality. Something will have to give. And soon.

But you can bet politicians like Emmanuel already have sweet special pension deals for themselves, so why should they care what happens to schoolteachers facing retirement? Banksters made plenty underwriting these junky bond deals too. Everyone profited except the public.

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Regulatory capture

Will Wells Fargo and other banks ever face criminal charges?

Regulatory capture
Until criminal charges are brought against big banks and their employees for potentially criminal acts, banks will continue to evade the law, knowing they will merely face fines as the cost of doing business and thus be free to continue being sleazy. Wells Fargo is one of the worst, with a long list of offenses yet curiously, no one ever goes to prison. This seems to be regulatory capture, where public agencies charged with regulation or enforcing laws against an entity mostly protect the entity or impose fines instead of filing criminal charges. As an example of what should be done, when real estate and the economy of Iceland cratered, Iceland nationalized the banks and put banksters in prison.

Just recently:

Los Angeles sues Wells Fargo, alleging fraud by employees

Wells Fargo Bank employees driven by strict sales pressure issued unwanted credit cards and opened unauthorized accounts that charged customers fees and damaged their credit, according to a lawsuit filed by the city of Los Angeles.

The civil complaint filed Monday contends the largest California-based bank violated state and federal laws by misusing confidential information and failing to notify customers when personal information was breached, City Attorney Mike Feuer said at a Tuesday news conference.

Wells Fargo settles Ponzi scheme lawsuit for more than $3 million.

Thousands of victims — many of them working-class Haitian Americans from South Florida — are one step closer to receiving restitution for a Ponzi scheme that bilked them out of at least $30 million.

Wikipedia has more on the seemingly endless civil charges against Wells Fargo, including subsidiary Wachovia laundering drug money, high cost subprime loans targeting Blacks and Latinos, gouging customers, a HUD investigation, and much more.

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What Greece should do

Desperation. Greece imposes surcharges, limits on bank withdrawals

What Greece should do

What Greece should do

It’s an ominous sign when a country is so afraid of capital flight that it limits the amount of cash withdrawals and transfers and penalizes them as well with “surcharges.”Of course, smart money has already gotten its money out of the collapsing economy that is Greece, so it’ll be small and medium-sized businesses as well as the hapless populace that gets screwed, as the government siphons money from them to in a pointless ploy to pay off the banksters and avoid default.

Greece has revealed it is to introduce a surcharge for all cashpoint withdrawals and financial transactions in a desperate attempt to prevent citizens withdrawing their money from the country’s beleaguered banks.

Ministers hope the controversial move could raise as much as €180 million, which the Athens government hopes will help the country avoid defaulting on debts owed to international creditors…

Greece owes €700 million to the IMF on Monday and since it struggled to come up with €200 million yesterday, has no apparent way of making the payment. The supposed radical government has mostly been a timid lapdog, begging IMG and EU for a few small favors rather than doing what Iceland did and repudiate the debt as the sign by the protester suggests.

With Varoufakis now sidelined, talks looked set to move forward but have now stalled amid what some officials have described as intractable differences between the “red lines” adopted by the IMF and the supposedly more lenient terms favored by the EU.

As always, the comments on Zero Hedge are biting, humorous, on target.

It’s your money. Just don’t ask for it

Damn it Jim, I’m a doctor, not an ECB banker. How many times do you want me to bring that dead guy back to life?

The sooner we rip the Band-Aid off, the sooner the pain can get over.

I can’t believe there would be any Greeks with any money in a bank at this point.

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war-on-cash

Frictionless transactions also mean frictionless surveillance

war-on-cash

What better way is there for governments and corporations to track us constantly than with the increasing and irreversible trend towards frictionless transactions, where paying is done by smartphone, not cash or credit card. In some areas of Africa, smartphones are a primary way of paying for goods. However, along with this ease of usage comes positively awesome possibilities for governments to follow our every move and to dream a perhaps not so impossible dream to get rid of cash transactions.

Mobile payments are becoming common in other parts of Africa: 17 million Kenyans use them, out of a working-age population (15 or older) of 25 million. What’s happening in Africa – getting rid of cash – is every government’s dream: no more anonymous transactions. It would end the underground economy, black markets, or smuggling. Small-time tax evaders would lose an important tool. Eliminating cash would be useful in the war on drugs or terror, or in any other such “war” on products or strategies. Even “anonymous” virtual currencies have to pass through internet service providers and leave a digital trail, unlike cash. If only cash could be eliminated!

With smartphones, all transactions happen from one device, which makes surveillance so much easier.

Opinions are divided over whom to distrust more: governments or corporations. But one thing we know: mobile payments and the elimination of cash, a quantum leap for Somalis in their quest for modern life, will also make life a lot easier for governments and corporations in their quest for the perfect surveillance society.

Paranoia? I think not. The war on cash is already happening. JP Morgan is restricting the use of cash in safe deposit boxes. At least one Swiss bank is refusing, under some circumstances, to transfer funds, apparently because they just don’t want to.

It is undoubtedly a huge red flag when in one of the countries considered to be a member of the “highest economic freedom in the world” club, commercial banks are suddenly refusing their customers access to their cash. This money doesn’t belong to the banks, and it doesn’t belong to the central bank either.

Naked Capitalism has ten “spine-chilling quotes” about the war on cash, much of which is being done by raising the terrorism flag. Terrorists use cash to buy things. Therefore, cash is evil and must be eliminated, along with any semblance of personal or financial privacy.

1. Kenneth Rogoff (from the intro to his paper The Costs and Benefits to Phasing Out Paper Currency):

“Despite advances in transactions technologies, paper currency still constitutes a notable percentage of the money supply in most countries… Yet, it has important drawbacks. First, it can help facilitate activity in the underground (tax-evading) and illegal economy. Second, its existence creates the artifact of the zero bound on the nominal interest rate.”

In other words, cash (not money) is the source of all evil and must be destroyed because governments can’t trace its every movement, and it represents a limiting factor on central banks’ ability to continue their insane negative-interest-rate experiment.

But wait, there’s more.

The “War on Cash” is heating up. Louisiana has outlawed paying cash for second hand goods, under the pretense that criminals sell stolen goods for cash. France outlawed paying more than €1000 for anything, and you cannot get more than €200 from an ATM.

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Obama Retirement Fund: The Trans Pacific Partnership

Obama is pushing the Trans Pacific Partnership harder than anything before. The TPP is viciously anti-Democracy noxious turd of an agreement that lets corporate interests overrule and even sue governments should their precious profits be in any way imperiled. Yes, TPP really is that bad. Oh, I’m sorry Sovereign Government, but we here at Amalgamated Chemicals will be suing you because you banned our cancerous additive. And the government will have no recourse.

When Obama says the terms of TPP are freely available and that it “gets on my nerves” when people say otherwise, he’s flat-out lying. Only parts of TPP has been leaked, the rest is still secret.

Sen. Sherrod Brown says his caucus has been “talked to, approached, lobbied, and maybe cajoled by more cabinet members on this issue than any [other] issue since Barack Obama has been president. And that’s just sad.”

Obama made his bones by completing the Wall Street bailout.  Now, before he finishes his term, he wants to give the people who can make him filthy rich after he’s no longer President a big fat slobbery kiss that will make them billions.  This may well be, to him, the most important thing he’s done in his entire presidency.

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Martin O'Malley

Martin O’Malley: Reform the system or face pitchforks

Martin O'Malley

Martin O’Malley, former governor of Maryland, may run for the Democratic nomination. He opposes TPP, is to the left of Hillary (admittedly not difficult to do) and says we will either make things fair in this country again or pitchforks are coming, a completely accurate statement. Historically, when inequality reaches grotesque proportions, when the monied class insists upon looting a country with abandon and politicians are mostly corrupt, then inevitably there will be major reform, like Teddy Roosevelt did with his trust busting, or serious social unrest and / or revolution. Contrary to the fevered dreams of those on the far left or far right, revolution is not always a glorious thing but rather can lead to rivers of blood and other unpleasant situations. (OTOH, this country was founded in violent revolution, so there is a precedent for it.)

So, what’s needed is real reform, says O’Malley. I agree.

Economic inequality:

There are two ways to go forward from here, and history shows this. One path is a sensible rebalancing that calls us back to our tried and true success story as the land of opportunity. The other is pitchforks.

History affords no other paths. We’re either going to sensibly rebalance and do the things that allow our middle class to grow, that expands opportunities and allows workers to earn more when they’re working harder. Or, we’re going to go down a very, very bad path.

Trans-Pacific Partnership

Yeah, I do oppose it. What’s wrong with it is first and foremost that we’re not allowed to read it before our representatives vote on it. What’s wrong with it is that right now what we should be doing are things that make our economy stronger here at home. And it’s my concern that the Trans-Pacific Partnership, this deal is a race to the bottom, a chasing of lower wages abroad, and I believe that that does nothing to help us build a stronger economy here at home.

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"I am not a crook"

Ex-IMF president Rodrigo Rato arrested on criminal charges

"I am not a crook"

“I am not a crook”

Spain, unlike the US, is getting serious about arresting bankster criminals. Rodrigo Rato, former vice-president of Spain, former president of the IMF, and former president of Bankia, has been indicted on serious criminal charges including tax fraud, money laundering, and embezzlement.

His real crime apparently was stealing from the central government, and that is just not forgivable for the 1%. Fleecing the people is quite permissible if you are an autocrat, but stealing from the government and central banks is not. When Rato was arrested, hordes of media were present to watch his perp walk. Clearly, he will be broken and humiliated. He is also facing bankruptcy as well as prison.

He had returned to Madrid from Geneva, where he’d been trying to hide his money, flew coach, and was heckled by passengers the entire way. Good. When will the US indict its obvious bankster criminals and when will the US public harass, not exalt them? Hopefully soon.

The IMF presidency is no longer a guarantee of judicial immunity. That two of the last three IMF chiefs have seen the inside of a jail cell system – one for alleged rape, the other for financial crimes – is the perfect indictment of the moral state of the current financial system. Indeed, the current occupant of the position, Christine Lagarde, allegedly was herself deeply implicated in the Bernard Tapie affair, although she was eventually assigned the status of “assisted witness.”

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corruption

Presidential campaign. 18 months of escalating corruption

corruption

Brace yourself. The 2016 presidential campaign will be the nastiest, most corrupt ever, filled with billionaires backing their candidates, and little or no discussion of issues. Instead, vicious attack ads with fill the air as a lapdog mainstream media reports on the horse race, and not the issues. MSM makes huge money from political advertisements. They aren’t about to do anything that might jeopardize that profit stream, and thus are part of the corruption. And if you think billionaires will donate huge sums to candidates without expecting financial rewards in return then you are terminally deluded if not compromised yourself.

Apologists for the political corruption squeal golly shucks, that’s just how the system is, and while it may be broken, we are forced, forced I tell you, to work within it and grovel for money from the wealthy who look at politicians as potential profit streams. Besides, the Other Side are Bat Demons from Hell Who Must Be Stopped. Once we stop them, then perhaps we can think about removing the corruption of money from politics. But not until then. Right.

Oh, isn’t that cute, Ted Cruz has his own billionaire now funding him. Hillary Clinton has several, including a Walmarrt heiress and George Soros. Jeb Bush, in a genuinely cynical ploy, is asking big donors to not give more than $1 million, for now, to avoid the impression he might somehow be beholden to them.

“The dominance of a few key people early on is not a productive thing for the campaign or for Jeb Bush,” Rick Hohlt, a veteran Republican fund-raiser, commented on the instruction to set a million-dollar lid for the first 100 days of the campaign. There will be time for less restraint about eye-popping donations as the election approaches.

It just takes a random billionaire to change things. Democracy can take a hike. A hedge fund billionaire who hates icky taxes likes Ted Cruz.

“It just takes a random billionaire to change a race and maybe change the country,” Potter said. “That’s what’s so radically different now.”

Mercer’s hedge fund, Renaissance Technologies, “recently faced an unflattering congressional investigation, the results of which indicated that it used complex and unorthodox financial structures to dramatically lower its tax burden.”

I’m guessing Mercer wants these troublesome tax issues to disappear and what better way to do that than have your own pet president. The ROI on this could be awesome.

Billionaire Walmart heiress Alice Walton, billionaire philanthropist Jon Stryker, and billionaire progressive global financier George Soros were among the wealthy donors who helped raise over $4 million last year for the “Ready for Hillary” super PAC, newly released public filings reveal.

And that was just in 2014. Her big money push starts today.

All of this is hideously corrosive to democracy and to a campaign where actual issues are discussed. This country has serious problems now, none of which, I predict, will be discussed in any meaningful way amid the flood of money for the rich to candidates, to benefit themselves. Yes, the contributions are legal. However their effect is corrupting to both those giving them and those receiving them.

And, oh yeah, Wall Street would be happy with either Hillary Clinton or Jeb Bush. I guess they see two as mostly being the same.

“If it turns out to be Jeb versus Hillary we would love that and either outcome would be fine,” one top Republican-leaning Wall Street lawyer said over lunch in midtown Manhattan last week. “We could live with either one. Jeb versus Joe Biden would also be fine. It’s Rand Paul or Ted Cruz versus someone like Elizabeth Warren that would be everybody’s worst nightmare.”

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