Archive | Banksters

Debt restructuring terrifies central banks because it exposes insolvency

crater closeup

Often, if an entity can’t make bond payments, the payments are restructured. Not so with the Eurozone. Banksters their want their pound of flesh, even if it hurts the economy at large and pauperizes countries. Greece is a perfect example of bankster greed and selfishness. Big banks and central banks have loaned money to Greece to pay back previous loans. Most of the money flows back to banksters who are terrified their corrupt house of cards will come crashing down on them. Little if any of the money helps Greece.

Here’s why they are terrified. Sovereign debt bonds are used as collateral for big banks to do highly leveraged trades. If these bonds tank in value, which is what would happen in a restructuring, then their balance sheets and pretend solvency vaporizes.

Draghi won’t let this happen because he, like all Central Bankers in the world, is concerned about one thing: the bond bubble.

Globally, the bond bubble is $100 trillion in size. And sovereign bonds (the ones the EU doesn’t want to restructure) are used as the senior most collateral backstopping the big Eurozone banks’ derivatives portfolios.

Thus ANY debt restructuring in the EU would almost immediately blow up the large Eurozone banks because you’re talking about tens of trillions of Euros’ worth of trades having requiring margin calls/ new collateral arrangements.

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Yanis Varoufakis, new Greeek Finance Minister, is genuine radical. Good


May Greece and Varoufakis now do what Iceland did, repudiate the debt and jail some banksters. The purpose of the forced austerity in Greece is to bail out German banks and has nothing to do with helping Greece. Renegotiating bond debt is common when borrowers can’t msake payments – except when mostly insolvent banks knowingly bought garbage debt and need to pretend the bonds will still be repaid.

Varoufakis says:

“Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer. What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony.”

From his blog.

Today, the people of Greece gave a vote of confidence to hope. They used the ballot box, in this splendid celebration of democracy, to put an end to a self-reinforcing crisis that produces indignity in Greece and feeds Europe’s darkest forces.

The people of Greece today sent a message of solidarity to the North, to the South, to the East and to the West of our continent. The simple message is that the time for crisis-denial, retribution and finger-pointing is over. That the time for the reinvigoration of the ideals of freedom, rationality, democratic process and justice has come in the continent that invented them.

Greek democracy today chose to stop going gently into the night.

Greek democracy resolved to rage against the dying of the light.

The Guardian:

Greece’s new leftist prime minister, Alexis Tsipras, is set to announce his anti-bailout government, with the post of economics minister – chief negotiator with the country’s international creditors – going to a radical economist who has described austerity programmes as “fiscal waterboarding”.

With Greece set on a collision course with Europe over the Syriza-led government’s plans to reverse draconian belt-tightening and renegotiate the country’s massive debts, Yanis Varoufakis, who calls himself an “accidental economist”, confirmed in a radio interview that he would take up the key position.

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Venezuela nears default. Maduro spouts useless platitudes

Venezuela food line

Venezuela food line

Venezuelans hoping for concrete plans from Maduro about their escalating financial crisis instead got mindless blather. He said “God will provide” after a ten day worldwide trip begging for money and higher oil prices. He got neither. Venezuela faces $11 billion in bond payments this year it cannot possibly make. An economy mismanaged for years has been devastated by low oil prices. There are huge lines everywhere for basic supplies and food.

Banksters and other bottom dwellers will be happy to feast on whatever carrion they can find. As for Venezuelans, they face increasingly desperate times.

The Venezuelan economy is in tatters with higher than 64 percent inflation and dwindling foreign reserves. Protests like those that paralyzed the country last February are beginning to sprout up again. Maduro’s decision to essentially maintain business as usual – in his speech last night he accused opposition politicians of planning a coup and avoided an explicit devaluation of the currency – signaled to Venezuelans and the world that he’s not willing to face the country’s ailing economy head on.

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Banksters hover while Venezuela starts circling the drain


When Venezuela runs of of money to pay debt and import goods, which will happen soon, it becomes prey for banksters across the planet. Venezuela’s sovereign debt default is coming. Ominously, there are huge lines everywhere there now for food and basic supplies, if they can even be found. Inflation is soaring. The economy is imploding. Financiers and other countries will be looking to scavenge, looking for pennies on the dollars deals. And Venezuela will be in no position to say no.

Give a thought to the people there who are just trying to get by and didn’t ask for any of this.


Credit Default Swaps are essentially insurance on bonds, big money deals between private parties, done to hedge risk or speculate. The CDS spread is the premium paid by the buyer to the seller for guaranteeing the bonds, and is measured in hundredths of a percent. US bonds have a spread of 18 or 0.18. Venezuela has a spread of 5714 or 5.314%, the highest of any country, by far.

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Subprime auto loan defaults rising sharply


Financial vultures are making dicey subprime auto loans and default rates are rising sharply. Combine this with student loan defaults and plunging oil prices putting people out of work and we could be heading towards another financial crisis no one could ever possibly have predicted.

Over 8.4% of subprime auto loans taken out in the first quarter of 2014 were already delinquent by November, according to an analysis of Equifax data by Moody’s Analytics for the Wall Street Journal. That’s the highest rate of early subprime delinquencies since Financial-Crisis year 2008.

Auto sales have been a big force in boosting retail sales, consumer spending, manufacturing, transportation (trucking, railroads), and service activity. So when the auto subprime bubble pops, it won’t take down the financial system; but it will hit the broader economy.

Let’s hope – knowing that hope is not a strategy – that it doesn’t pop in synch with another debt-fueled economic miracle, now imploding, the shale oil and gas boom. Because that would knock down in one fell swoop the two major growth industries that have largely been responsible for whatever “recovery” we’ve had in the US.

And if you’re fortunate enough to own your car, the title loan industry will be happy to gouge you with interest rates from 80-500%. One would think governments would regulate such gouging, charging rates that loan sharks used to go to prison for but no such luck. Title loan companies finance what they can sell the car for and don’t care if you default. They just sell the car and make money in the process.

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Why Jeb will beat Hillary


Leftist Donkey Mountain thinks Republican soft cop Jeb Bush will beat Democratic ice queen Hillary Clinton in 2016, mainly because Democrats are hugely overconfident and Hillary has such high negatives. The right will rally hard around Bush. The left will not rally around Clinton because she has done nothing for them.

This is certainly in the realm of possibility. However, if it’s Bush vs Clinton, there will be multiple third party and independent runs on both sides, which will greatly complicate the horse race. A presidential race now has to be all about the horse race. What would CNN do if a campaign actually covered substantive issues and their talking heads actually had to analyze issues? However CNN is safe, neither major party candidate will talk about issues. Both are beholden to and members of the plutocrat bankster class, whose interests they defend and protect to the detriment of the rest of us.

Democrat narrative for 21016 presidential campaign.

Will Hillary Clinton still be the most admired women in America six months deep into the campaign? Will wall-to- wall coverage of her robotically calculating, condescending, transparently cynical politicking still warm the hearts of Americans? It won’t, and half the country will view her just like they viewed Ann Romney: an arrogant and entitled aristocrat who thinks the little people smell.

Republican narrative for 2016.

That bullshit narrative might look something like this: Jeb Bush, A New Kind of Conservative, Nobly Fighting to Redeem His Family’s Name.

From then on, it will be Nurse Ratched Hillary (Is she too old to be president? Does she have health problems she’s not disclosing?) versus the Smart Bush, who’s wife is Hispanic and who ain’t his big brother’s kind of conservative. Come home, normal Americans, it’s safe to vote Republican again.

The bullshit outcome.

In the battle of the bullshit media narratives, Noble Son will beat Inevitable Queen Hillary, regardless of what the polls say right now. But Hillary and the Democrats will go on believing their own hype. They’ll seek out every poll result and focus group that reinforces the notion that Hillary is unstoppable, conclude she has it sown up, and then play prevent defense and lose.

Let’s hope there are significant third party and independent runs, since this will force discussion of issues, such as endless war and not enforcing rule of law against banksters – something Jeb and Hillary both support.

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Venezuela nearing sovereign bankruptcy. Destabilization coming


Financial vultures and destabilzation teams are watching Venezuela’s mostly self-inflicted death spiral. The plunging price of oil has hugely worsened that country’s already precarious situation. Simply put, it has obligations it cannot meet, is selling anything it can, and making up shit to pretend things are ok.

The country – desperate to give the impression that it is not terminally insolvent and still has some foreign reserves left – ordered its Central Bank to dramatically change the rules, in a step “that enables them to count a whole new set of ‘assets’ as potential international reserves including “stones” and “precious metals held in their vaults on behalf of foreign financial institutions.”

No, you can’t pretend something you don’t own is an asset. No one will believe you anyway. The chart shows the soaring BPS spread between bid and ask on Venezuela credit default swaps. By contrast, the US spread is 19. In a CDS, the seller guarantees to pay debt of the buyer if they default and receives a payment for doing so. A spread of 3100 is insanely high and indicates vanishing trust that the country can meet its obligations.

From the comments:

Ukraine has no more gold, so strategically, Venezuela still has something to be looted, I think a destabilization will begin occuring to the south of us.

TPTB will then loot the repatriated gold and move it back into more friendly vaults with their greedy little mitts.

Well, the CDS oddsmakers have Venezuela #1, Ukraine #2, and the Grand Duchy of Evil (Muskovy) #3. Sounds about right to me. Ukrainians are in the middle of a war and thus have a rally round the flag moment going to stretch out their agony. Venezuela is spending its last remaining cookie jar money on swimming lessons for rodents.

Anyone who can is getting their money out of Venezuela into a different currency.

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Bitcoin supposed anonymity easily broken, researchers discover


A supposedly secure  system for sending untraceable money across the planet turns out to be not secure at all. Why it’s enough to make one put on their tinfoil hat of conspiracy and wonder WTF? Who benefits from this? Not Bitcoin users, that’s for sure.

Bitcoin has an undeserved reputation for security. It has repeatedly hacked and compromised. Now this. IP addresses for Bitcoin transactions can readily be obtained, with minimal amounts of time and effort, university researchers say. I’m guessing others figured out this gaping hole in Bitcoin “security” too and have already taken advantage of it.

Researchers at the Laboratory of Algorithmics, Cryptology and Security of the University of Luxembourg have shown that Bitcoin does not protect user’s IP address and that it can be linked to the user’s transactions in real-time. To find this out, a hacker would need only a few computers and about €1500 per month for server and traffic costs. Moreover, the popular anonymization network “Tor” can do little to guarantee Bitcoin user’s anonymity, since it can be blocked easily.

The basic idea behind these findings is that Bitcoin entry nodes, to which the user’s computer connects in order to make a transaction, form a unique identifier for the duration of user’s session. This unique pattern can be linked to a user’s IP address. Moreover, transactions made during one session, even those made via unrelated pseudonyms, can be linked together. With this method, hackers can reveal up to 60 percent of the IP addresses behind the transactions made over the Bitcoin network.

Software patches written by the researchers are currently under discussion with the Bitcoin core developers.

Would these be the same Bitcoin core developers that have consistently released buggy code that is easily compromised?

Cryptocurrencies may well have a long life ahead of them – after the amateur hour that is Bitcoin has been replaced with a system that is genuinely robust and anonymous.

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NYT: We don’t need no stinking rule of law against banksters


The New York Times shows its true loyalties by defending the Obama Administration’s refusal to criminally prosecute corrupt bankers. Thousands of banksters went to prison during the S&L crisis of the 1980’s. Hardly any have during the Obama Administration. That’s because DoJ pointblank said it wouldn’t prosecute because it might upset the banking system. God forbid wealthy financiers be held accountable for their many crimes, which include money-laundering, rigging financial markets. and ignoring inconvenient laws. A major upset is precisely what the international banking system needs.

The even worse news from Dudley and the Obama administration, which the NYT has scrupulously avoided informing its readers, is about Dudley’s admission at the Senate hearing that the Obama administration deliberately blocked the prosecution of elite bank frauds.

Fortunately, the Huffington Post made Dudley’s confession its lead.

“‘We were not willing to find those firms guilty before, because we were worried that if we found them guilty, that could somehow potentially destabilize the financial system,’ Dudley said. ‘We’ve gotten past that and I think it’s really important that we got past that.’”

Even Professor Cochrane, the U. Chicago economist that detests regulation, now admits that runs cause financial crises and that runs are typically driven by fraud. “Not for nothing have most runs been sparked by an accounting scandal or fraud.” There is nothing more destabilizing to a financial system than fraud by elite bankers that is immunized by their political allies.

Our banking system is corrupt at its core. The government is a captured, complaingt entity. But you already knew that.

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24% of millenials with student loans expect debt forgiveness


Nearly one quarter of millenials with student loans are living in a dream world where they expect banksters and the government someday will swoop in and, poof, their crushing load debt will be disappeared. Good luck with that kids. In the meantime, they can forget about buying that first starter house. Wouldn’t a better idea be to learn a skilled trade? After all, skilled trade jobs like being a plumber can never be outsourced to India. The work is generally steady and the pay can be quite good. This certainly beats amassing debt that will take years to pay off.

Average student debt for class of 2012 was nearly $27,000. For he class of 2014 it is estimated to be $33,000. That’s a sharp rise. Universities push the loans as they continually raise tuition. Banksters slice and dice the loans into arcane securities, with everything guaranteed by the government. Everyone makes money except for students, who often can’t find the jobs they were hoping for, so they move back home with their parents, delay getting married and buying a house.

Of course, with a slow job market, many millenials are going back to college, incurring debt, then using the money to pay living expenses, a desperation strategy that will not end well.

It appears the concept of no consequences is now deeply embedded in the American society. As Student loan debtloads surge ever higher – and opportunities grow ever lower – NBC News reports a rather stunning 24% of Millennials said they expect their loans will ultimately be forgiven, according to study released Wednesday by Junior Achievement and PwC US. That helps to explain why delinquency rates are at record highs – aside from the massive debtloads and no high-paying jobs – as students see bankers rigging every market in the world with little to no consequence, one can only imagine the lessons being learned.

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