Archive | Banksters

Obama Retirement Fund: The Trans Pacific Partnership

Obama is pushing the Trans Pacific Partnership harder than anything before. The TPP is viciously anti-Democratic noxious turd of an agreement that essentially 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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Securitized bond slop based on subprime auto loans

Banksters securitizing garbage subprime loans again

Securitized bond slop based on subprime auto loans

Securitized bond slop based on subprime auto loans

Bottom dweller lenders are foaming at the mouth to make even more highly dicey auto loans to those with abysmal or non-existent credit scores. These toxic loans are then sliced, diced, securitized by investment banks and sold to greedyheads lusting for high yields. This is precisely the same derangement that led to the housing crash, when junk mortgages were used in junk bond securities.

Back then, the bond rating agencies cheerfully ok’ed most any kind of slop because they were making money from it too. Now Fair Isaac of FICO fame is helping this doomed process by inventing new credit scores for those who don’t have no credit records or whose credit records have been mauled by bankruptcy or collection agencies. Not to worry, Fair Isaac plans to give as many as 53 million former deadbeats sparkly new credit ratings so they can pay 24% interest for a car they probably can’t afford. Such a deal.

Check the securitized slop in the image. FICO 544. Expected loss 26.5%+, APR nearly 24%, with no doubt steep fees and penalties for late payments.

But wait! Auto title loans are even sleazier and despicable than subprime auto loans and often have balloon payments that either get the borrower deeper into debt or they lose the car.

The loans are advertised as one-month or fixed-fee loans, but Pew found they’re anything but. The average borrower took out a $1,000 loan, and wound up paying $1,200 in fees through the next year.

A typical borrower, Pew found, makes $30,000 a year or less and struggles to pay household bills at least half the time.

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Carnival barker

Hey, want to buy IPO stock in unprofitable, debt-ridden GoDaddy

Carnival barker

The primary people making money on the GoDaddy IPO today will be those selling stock and investment banksters getting fees. GoDaddy has been around for 18 years, has never made money, and, thanks to the vultures who took it private, has a mountain of debt. The vultures will sell their stock to you, walk away with a tidy profit, and I’m guessing, won’t much care what happens to GoDaddy after that.

Another blemish on its financials, however, is its mountain of debt, consisting of $1.4 billion. This, of course, is a function of the company being bought out by private equity. GDDY will be using at least some of the proceeds of the IPO to pay down some of the debt it agreed to take on as part of the $2.5 billion buy-out in 2011.

Thus, much of the IPO money will go for paying down debt, not on the company itself. Such a deal.

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8631889823_48c97e00cf_bitcoin

Wall Street technology will run new bitcoin exchange

Small exchanges and independents in bitcoin are about to get steamrollered by well-financed big players. Nobel, which has tentacles from our favorite vampire squid deep within it, will be powered by NASDAQ technology. Another deep-pockets exchange, Coinbase, is partially backed by NYSE and is the first regulated US bitcoin exchange. I’m guessing neither exchange will allow money to mysteriously vanish, as has already happened on too many other bitcoin exchanges and marketplaces.

However, regulation and anonymous transfer of money do not play well together. At some point governments will demand a transparent bitcoin paper trail so they can monitor and prevent money laundering and sales of illicit goods. When that happens, how does cryptocurrency continue being truly anonymous?

When I first heard the news that Nasdaq technology will be powering the Noble bitcoin exchange, which was founded by former Goldman Sachs head of electronic trading platforms John Betts, my immediate reaction was, “This is big.”

Coinbase announced in January that it had raised a massive $75 million round of funding that included the New York Stock Exchange (NYSE) among the investors. Two weeks later, the company launched the first regulated US bitcoin exchange with NYSE as a “partner.”

Once the banksters get into bitcoin in a big way, it’s game over for the small fry.

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Ideas

All our great ideas are dead or dying

ideas

When ideas that guide nations are no longer valid or have been corrupted, then new ideas must (and will) replace them. Without them, institutions, government, and societies begin to crumble. That’s what we’re seeing now. Few have respect for big government or big business today. Most everyone assumes both lie to us, that government spies on us continually and too many businesses are sleazy and dishonest. A lot of this is because the social contract is breaking down, a belief in working towards a common good is vanishing as the ideas that once guided us no longer seem valid.

The current vacuum will be filled. Maybe by new ideas. or maybe by violence.

Here’s a tiny question. Are we idearupt? As in: bankrupt of great ideas?

Go ahead. Name me an “ism” that still works.

I’ll wait.

Conservatism? #LOL. Liberalism? #lol. Capitalism, or what’s left of it? Sure, maybe for billionaires.

You can add socialism and communism to that, as both generally end up with authoritarian buttheads at the top looting the system too. None of our systems are working effectively.

We’re living through a kind of implosion. Not just of institutions—that much is obvious. But a collapse of institutions that was detonated by an implosion.

Of ideas.

Yesterday’s ideas about how to organize societies and economies simply don’t work anymore

And so we’re left in a vacuum.

Without guiding ideas, institutions implode, the citizenry gets pissed off and cynical, and it all spirals downward.

And already from that witches cauldron is rising the smoke. Of violence, animosity, extremism, hatred. Which will eventually, if the fire is left untended, kindle into a wildfire of war.

These wars could be really nasty populist uprisings, wars against other nationalities and cultures, extreme xenophobia, wars for resources due to the planet being plundered.

Or we could find some new ideas.

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Fracking: borrowed money, junk bonds, and napalm down wells?

What could possibly go wrong with financing fracking with with junk bonds? I mean, fracking means prosperity forever and this boom was supposed to be endless. Except for when the price of oil crashes and overly-leveraged drilling companies can’t make debt payments. Then they file for bankruptcy and all those junk bonds, which can sometimes  be used as leverage for other dicey “investments” crater in value, causing unexpected and unintended consequences. The bankruptcies have just started too…

One company, American Eagle Energy, couldn’t even make its first interest payment! Junk bonds like theirs are probably nearly worthless now, and were bought by bond funds and may even be in your retirement fund. Woo-hoo!

One thing we know already: after years in the desert, restructuring advisors are licking their chops.

The company has $13.6 million in negative working capital, only $25.9 million in cash, and its $60 million revolving credit line has been maxed out.

But here is the thing: the company sold these bonds last August! And this was supposed to be its first interest payment.

It’s the new waterless fracking method! How environmentally-friendly is that? Oh, wait…

A week later, GASFRAC filed for bankruptcy in Alberta, where it’s based, and in Texas – under Chapter 15 for cross-border bankruptcies. Not long ago, it was a highly touted IPO, whose “waterless fracking” technology would change a parched world. Instead of water, the system pumps liquid propane gel (similar to Napalm) into the ground; much of it can be recaptured, in theory.

Gotta love those theories. Or it could be the company was just a sleazy hustler selling snake oil to the rubes. I hope you don’t have to drink water that was near the napalm wells or have any of their now worthless bonds in your retirement accounts or investment funds.

But hey, the investment banks made good money underwriting this slop. And they probably shorted the bonds long ago.

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step-right-up

Michael Lewis on Flash Boys, one year later

step-right-up

High Frequency Trading corrupts the US stock market because big traders get prices before everyone else, which allows them to step up front of trades, raise or lower the price as needed, then make a quick profit. This happens in milliseconds. Flash Boys documented these sleazy doings in understandable language so that the public could understand how they are being fleeced.

Lewis writes about what is happening one year after the book was published. HFT is still corrupting the market. However Wall Street knows it is being watched and monitored. Fines have been imposed. Everyone knows their crooked game will be over soon enough. Remarkably, you and I, the small investor (and you may be invested through mutual funds or a pension) have a major inside ally. Goldman Sachs, yes the Vampire Squid itself, is in the forefront of reform, and the biggest user of IEX, a new exchange that cannot be gamed.

I like his analogy of HFT as a slumlord desperately trying to appear above reproach.

In the past 11 months, the U.S. stock market has been as chaotic as a Cambodian construction site. At times the noise has sounded like preparations for the demolition of a hazardous building. At other times it has sounded like a desperate bid by a slumlord to gussy the place up to distract inspectors. In any case, the slumlords seem to realize that doing nothing is no longer an option: too many people are too upset.

One of the largest fund managers found that HFT cost them one-third of 1 percent on every trade. Over the course of a year, this amounted to $240 million swept off the table by Wall Street parasites who provide no value or services.

A poll of institutional investors in late April 2014, conducted by the brokerage firm ConvergEx, discovered that 70 percent of them thought that the U.S. stock market was unfair and 51 percent considered high-frequency trading “harmful” or “very harmful.” And the complaining investors were the big guys, the mutual funds and pension funds and hedge funds you might think could defend themselves in the market.

Everyone needs to get involved.

That some minority on Wall Street is getting rich by exploiting a screwed-up financial system is no longer news. That is the story of the last financial crisis, and probably the next one, too. What comes as news is that there is now a minority on Wall Street trying to fix the system. Their new stock market is flourishing; their company is profitable; Goldman Sachs remains their biggest single source of volume; they still seem to be on their way to changing the world. All they need is a little help from the silent majority.

Because it is indeed time to declare war on Wall Street.

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