Category Archives: Banksters

Trump is Obama’s Legacy. Will this Break up the Democratic Party?

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Michael Hudson
Naked Capitalism : March 26, 2017

Nobody yet can tell whether Donald Trump is an agent of change with a specific policy in mind, or merely a catalyst heralding an as yet undetermined turning point. His first month in the White House saw him melting into the Republican mélange of corporate lobbyists. Having promised to create jobs, his “America First” policy looks more like “Wall Street First.” His cabinet of billionaires promoting corporate tax cuts, deregulation and dismantling Dodd-Frank bank reform repeats the Junk Economics promise that giving more tax breaks to the richest One Percent may lead them to use their windfall to invest in creating more jobs. What they usually do, of course, is simply buy more property and assets already in place.

One of the first reactions to Trump’s election victory was for stocks of the most crooked financial institutions to soar, hoping for a deregulatory scythe taken to the public sector. Navient, the Department of Education’s knee-breaker on student loan collections accused by the Consumer Financial Protection Bureau (CFPB) of massive fraud and overcharging, rose from $13 to $18 now that it seemed likely that the incoming Republicans would disable the CFPB and shine a green light for financial fraud.

Foreclosure king Stephen Mnuchin of IndyMac/OneWest (and formerly of Goldman Sachs for 17 years; later a George Soros partner) is now Treasury Secretary – and Trump is pledged to abolish the CFPB, on the specious logic that letting fraudsters manage pension savings and other investments will give consumers and savers “broader choice,” e.g., for the financial equivalent of junk food. Secretary of Education Betsy DeVos hopes to privatize public education into for-profit (and de-unionized) charter schools, breaking the teachers’ unions. This may position Trump to become the Transformational President that neoliberals have been waiting for.

But not the neocons. His election rhetoric promised to reverse traditional U.S. interventionist policy abroad. Making an anti-war left run around the Democrats, he promised to stop backing ISIS/Al Nusra (President Obama’s “moderate” terrorists supplied with the arms and money that Hillary looted from Libya), and to reverse the Obama-Clinton administration’s New Cold War with Russia. But the neocon coterie at the CIA and State Department are undercutting his proposed rapprochement with Russia by forcing out General Flynn for starters. It seems doubtful that Trump will clean them out.

Trump has called NATO obsolete, but insists that its members up their spending to the stipulated 2% of GDP — producing a windfall worth tens of billions of dollars for U.S. arms exporters. That is to be the price Europe must pay if it wants to endorse Germany’s and the Baltics’ confrontation with Russia.

Trump is sufficiently intuitive to proclaim the euro a disaster, and he recommends that Greece leave it. He supports the rising nationalist parties in Britain, France, Italy, Greece and the Netherlands, all of which urge withdrawal from the eurozone – and reconciliation with Russia instead of sanctions. In place of the ill-fated TPP and TTIP, Trump advocates country-by-country trade deals favoring the United States. Toward this end, his designated ambassador to the European Union, Ted Malloch, urges the EU’s breakup. The EU is refusing to accept him as ambassador.

Will Trump’s Victory Break Up the Democratic Party?

At the time this volume is going to press, there is no way of knowing how successful these international reversals will be. What is more clear is what Trump’s political impact will have at home. His victory – or more accurately, Hillary’s resounding loss and the way she lost – has encouraged enormous pressure for a realignment of both parties. Regardless of what President Trump may achieve vis-à-vis Europe, his actions as celebrity chaos agent may break up U.S. politics across the political spectrum.

The Democratic Party has lost its ability to pose as the party of labor and the middle class. Firmly controlled by Wall Street and California billionaires, the Democratic National Committee (DNC) strategy of identity politics encourages any identity except that of wage earners. The candidates backed by the Donor Class have been Blue Dogs pledged to promote Wall Street and neocons urging a New Cold War with Russia.

They preferred to lose with Hillary than to win behind Bernie Sanders. So Trump’s electoral victory is their legacy as well as Obama’s. Instead of Trump’s victory dispelling that strategy, the Democrats are doubling down. It is as if identity politics is all they have.

Trying to ride on Barack Obama’s coattails didn’t work. Promising “hope and change,” he won by posing as a transformational president, leading the Democrats to control of the White House, Senate and Congress in 2008. Swept into office by a national reaction against the George Bush’s Oil War in Iraq and the junk-mortgage crisis that left the economy debt-ridden, they had free rein to pass whatever new laws they chose – even a Public Option in health care if they had wanted, or make Wall Street banks absorb the losses from their bad and often fraudulent loans.

But it turned out that Obama’s role was to prevent the changes that voters hoped to see, and indeed that the economy needed to recover: financial reform, debt writedowns to bring junk mortgages in line with fair market prices, and throwing crooked bankers in jail. Obama rescued the banks, not the economy, and turned over the Justice Department and regulatory agencies to his Wall Street campaign contributors. He did not even pull back from war in the Near East, but extended it to Libya and Syria, blundering into the Ukrainian coup as well.

Having dashed the hopes of his followers, Obama then praised his chosen successor Hillary Clinton as his “Third Term.” Enjoying this kiss of death, Hillary promised to keep up Obama’s policies.

The straw that pushed voters over the edge was when she asked voters, “Aren’t you better off today than you were eight years ago?” Who were they going to believe: their eyes, or Hillary? National income statistics showed that only the top 5 percent of the population were better off. All the growth in Gross Domestic Product (GDP) during Obama’s tenure went to them – the Donor Class that had gained control of the Democratic Party leadership. Real incomes have fallen for the remaining 95 percent, whose household budgets have been further eroded by soaring charges for health insurance. (The Democratic leadership in Congress fought tooth and nail to block Dennis Kucinich from introducing his Single Payer proposal.)

No wonder most of the geographic United States voted for change – except for where the top 5 percent, is concentrated: in New York (Wall Street) and California (Silicon Valley and the military-industrial complex). Making fun of the Obama Administration’s slogan of “hope and change,” Trump characterized Hillary’s policy of continuing the economy’s shrinkage for the 95% as “no hope and no change.”

Identity Politics as Anti-Labor Politics

A new term was introduced to the English language: Identity Politics. Its aim is for voters to think of themselves as separatist minorities – women, LGBTQ, Blacks and Hispanics. The Democrats thought they could beat Trump by organizing Women for Wall Street (and a New Cold War), LGBTQ for Wall Street (and a New Cold War), and Blacks and Hispanics for Wall Street (and a New Cold War). Each identity cohort was headed by a billionaire or hedge fund donor.

The identity that is conspicuously excluded is the working class. Identity politics strips away thinking of one’s interest in terms of having to work for a living. It excludes voter protests against having their monthly paycheck stripped to pay more for health insurance, housing and mortgage charges or education, or better working conditions or consumer protection – not to speak of protecting debtors.

Identity politics used to be about three major categories: workers and unionization, anti-war protests and civil rights marches against racist Jim Crow laws. These were the three objectives of the many nationwide demonstrations. That ended when these movements got co-opted into the Democratic Party. Their reappearance in Bernie Sanders’ campaign in fact threatens to tear the Democratic coalition apart. As soon as the primaries were over (duly stacked against Sanders), his followers were made to feel unwelcome. Hillary sought Republican support by denouncing Sanders as being as radical as Putin’s Republican leadership.

In contrast to Sanders’ attempt to convince diverse groups that they had a common denominator in needing jobs with decent pay – and, to achieve that, in opposing Wall Street’s replacing the government as central planner – the Democrats depict every identity constituency as being victimized by every other, setting themselves at each other’s heels. Clinton strategist John Podesta, for instance, encouraged Blacks to accuse Sanders supporters of distracting attention from racism. Pushing a common economic interest between whites, Blacks, Hispanics and LGBTQ always has been the neoliberals’ nightmare. No wonder they tried so hard to stop Bernie Sanders, and are maneuvering to keep his supporters from gaining influence in their party.

When Trump was inaugurated on Friday, January 20, there was no pro-jobs or anti-war demonstration. That presumably would have attracted pro-Trump supporters in an ecumenical show of force. Instead, the Women’s March on Saturday led even the pro-Democrat New York Times to write a front-page article reporting that white women were complaining that they did not feel welcome in the demonstration. The message to anti-war advocates, students and Bernie supporters was that their economic cause was a distraction.

The march was typically Democratic in that its ideology did not threaten the Donor Class. As Yves Smith wrote on Naked Capitalism: “the track record of non-issue-oriented marches, no matter how large scale, is poor, and the status of this march as officially sanctioned (blanket media coverage when other marches of hundreds of thousands of people have been minimized, police not tricked out in their usual riot gear) also indicates that the officialdom does not see it as a threat to the status quo.”

Hillary’s loss was not blamed on her neoliberal support for TPP or her pro-war neocon stance, but on the revelations of the e-mails by her operative Podesta discussing his dirty tricks against Bernie Sanders (claimed to be given to Wikileaks by Russian hackers, not a domestic DNC leaker as Wikileaks claimed) and the FBI investigation of her e-mail abuses at the State Department. Backing her supporters’ attempt to brazen it out, the Democratic Party has doubled down on its identity politics, despite the fact that an estimated 52 percent of white women voted for Trump. After all, women do work for wages. And that also is what Blacks and Hispanics want – in addition to banking that serves their needs, not those of Wall Street, and health care that serves their needs, not those of the health-insurance and pharmaceuticals monopolies.

Bernie did not choose to run on a third-party ticket. Evidently he feared being accused of throwing the election to Trump. The question is now whether he can remake the Democratic Party as a democratic socialist party, or create a new party if the Donor Class retains its neoliberal control. It seems that he will not make a break until he concludes that a Socialist Party can leave the Democrats as far back in the dust as the Republicans left the Whigs after 1854. He may have underestimated his chance in 2016.

Trump’s Effect on U.S. Political Party Realignment

During Trump’s rise to the 2016 Republican nomination it seemed that he was more likely to break up the Republican Party. Its leading candidates and gurus warned that his populist victory in the primaries would tear the party apart. The polls in May and June showed him defeating Hillary Clinton easily (but losing to Bernie Sanders). But Republican leaders worried that he would not support what they believed in: namely, whatever corporate lobbyists put in their hands to enact and privatize.

The May/June polls showed Trump and Clinton were the country’s two most unpopular presidential candidates. But whereas the Democrats maneuvered Bernie out of the way, the Republican Clown Car was unable to do the same to Trump. In the end they chose to win behind him, expecting to control him. As for the DNC, its Wall Street donors preferred to lose with Hillary than to win with Bernie. They wanted to keep control of their party and continue the bargain they had made with the Republicans: The latter would move further and further to the right, leaving room for Democratic neoliberals and neocons to follow them closely, yet still pose as the “lesser evil.” That “centrism” is the essence of the Clintons’ “triangulation” strategy. It actually has been going on for a half-century. “As Tanzanian President Julius Nyerere quipped in the 1960s, when he was accused by the US of running a one-party state, ‘The United States is also a one-party state but, with typical American extravagance, they have two of them’.”

By 2017, voters had caught on to this two-step game. But Hillary’s team paid pollsters over $1 billion to tell her (“Mirror, mirror on the wall …”) that she was the most popular of all. It was hubris to imagine that she could convince the 95 Percent of the people who were worse off under Obama to love her as much as her East-West Coast donors did. It was politically unrealistic – and a reflection of her cynicism – to imagine that raising enough money to buy television ads would convince working-class Republicans to vote for her, succumbing to a Stockholm Syndrome by thinking of themselves as part of the 5 Percent who had benefited from Obama’s pro-Wall Street policies.

Hillary’s election strategy was to make a right-wing run around Trump. While characterizing the working class as white racist “deplorables,” allegedly intolerant of LBGTQ or assertive women, she resurrected the ghost of Joe McCarthy and accused Trump of being “Putin’s poodle” for proposing peace with Russia. Among the most liberal Democrats, Paul Krugman still leads a biweekly charge at The New York Times that President Trump is following Moscow’s orders. Saturday Night Live, Bill Maher and MSNBC produce weekly skits that Trump and General Flynn are Russian puppets. A large proportion of Democrats have bought into the fairy tale that Trump didn’t really win the election, but that Russian hackers manipulated the voting machines. No wonder George Orwell’s 1984 soared to the top of America’s best-seller lists in February 2017 as Donald Trump was taking his oath of office.

This propaganda paid off on February 13, when neocon public relations succeeded in forcing the resignation of General Flynn, whom Trump had appointed to clean out the neocons at the NSA and CIA. His foreign policy initiative based on rapprochement with Russia and hopes to create a common front against ISIS/Al Nusra seemed to be collapsing.

Tabula Rasa Celebrity Politics

U.S. presidential elections no longer are much about policy. Like Obama before him, Trump campaigned as a rasa tabla, a vehicle for everyone to project their hopes and fancies. What has all but disappeared is the past century’s idea of politics as a struggle between labor and capital, democracy vs. oligarchy.

Who would have expected even half a century ago that American politics would become so post-modern that the idea of class conflict has all but disappeared. Classical economic discourse has been drowned out by their junk economics.

There is a covert economic program, to be sure, and it is bipartisan. It is to make elections about just which celebrities will introduce neoliberal economic policies with the most convincing patter talk. That is the essence of rasa tabla politics.

Can the Democrats Lose Again in 2020?

Trump’s November victory showed that voters found him to be the Lesser Evil, but all that voters really could express was “throw out the bums” and get a new set of lobbyists for the FIRE sector and corporate monopolists. Both candidates represented Goldman Sachs and Wall Street. No wonder voter turnout has continued to plunge.

Although the Democrats’ Lesser Evil argument lost to the Republicans in 2016, the neoliberals in control of the DNC found the absence of a progressive economic program to less threatening to their interests than the critique of Wall Street and neocon interventionism coming from the Sanders camp. So the Democrat will continue to pose as the Lesser Evil party not really in terms of policy, but simply ad hominum. They will merely repeat Hillary’s campaign stance: They are not Trump. Their parades and street demonstrations since his inauguration have not come out for any economic policy.

On Friday, February 10, the party’s Democratic Policy group held a retreat for its members in Baltimore. Third Way “centrists” (Republicans running as Democrats) dominated, with Hillary operatives in charge. The conclusion was that no party policy was needed at all. “President Trump is a better recruitment tool for us than a central campaign issue,’ said Washington Rep. Denny Heck, who is leading recruitment for the Democratic Congressional Campaign Committee (DCCC).”

But what does their party leadership have to offer women, Blacks and Hispanics in the way of employment, more affordable health care, housing or education and better pay? Where are the New Deal pro-labor, pro-regulatory roots of bygone days? The party leadership is unwilling to admit that Trump’s message about protecting jobs and opposing the TPP played a role in his election. Hillary was suspected of supporting it as “the gold standard” of trade deals, and Obama had made the Trans-Pacific Partnership the centerpiece of his presidency – the free-trade TPP and TTIP that would have taken economic regulatory policy out of the hands of government and given it to corporations.

Instead of accepting even Sanders’ centrist-left stance, the Democrats’ strategy was to tar Trump as pro-Russian, insist that his aides had committed impeachable offenses, and mount one parade after another. “Rep. Marcia Fudge of Ohio told reporters she was wary of focusing solely on an “economic message” aimed at voters whom Trump won over in 2016, because, in her view, Trump did not win on an economic message. “What Donald Trump did was address them at a very different level — an emotional level, a racial level, a fear level,” she said. “If all we talk about is the economic message, we’re not going to win.”[4] This stance led Sanders supporters to walk out of a meeting organized by the “centrist” Third Way think tank on Wednesday, February 8.

By now this is an old story. Fifty years ago, socialists such as Michael Harrington asked why union members and progressives still imagined that they had to work through the Democratic Party. It has taken the rest of the country half a century to see that Democrats are not the party of the working class, unions, middle class, farmers or debtors. They are the party of Wall Street privatizers, bank deregulators, neocons and the military-industrial complex. Obama showed his hand – and that of his party – in his passionate attempt to ram through the corporatist TPP treaty that would have enabled corporations to sue governments for any costs imposed by public consumer protection, environmental protection or other protection of the population against financialized corporate monopolies.

Against this backdrop, Trump’s promises and indeed his worldview seem quixotic. The picture of America’s future he has painted seems unattainable within the foreseeable future. It is too late to bring manufacturing back to the United States, because corporations already have shifted their supply nodes abroad, and too much U.S. infrastructure has been dismantled.

There can’t be a high-speed railroad, because it would take more than four years to get the right-of-way and create a route without crossing gates or sharp curves. In any case, the role of railroads and other transportation has been to increase real estate prices along the routes. But in this case, real estate would be torn down – and having a high-speed rail does not increase land values.

The stock market has soared to new heights, anticipating lower taxes on corporate profits and a deregulation of consumer, labor and environmental protection. Trump may end up as America’s Boris Yeltsin, protecting U.S. oligarchs (not that Hillary would have been different, merely cloaked in a more colorful identity rainbow). The U.S. economy is in for Shock Therapy. Voters should look to Greece to get a taste of the future in this scenario.

Without a coherent response to neoliberalism, Trump’s billionaire cabinet may do to the United States what neoliberals in the Clinton administration did to Russia after 1991: tear out all the checks and balances, and turn public wealth over to insiders and oligarchs. So Trump’s his best chance to be transformative is simply to be America’s Yeltsin for his party’s oligarchic backers, putting the class war back in business.

(read the full article at Naked Capitalism

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Court Ruling Sets Stage For Vancouver Housing Bubble Burst

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House buyer beware: Landmark B.C. court ruling will shake real-estate industry

Douglas Todd
Vancouver Sun : March 25, 2017

A B.C. Supreme Court ruling will send shock waves through the arm of the Canadian real-estate market that is powered by foreign capital, say immigration lawyers.

The ruling targets a weakness in Canadian laws that often leads foreign owners of real estate in cites such as Metro Vancouver and Toronto to claim they are “residents of Canada for tax purposes” when they are not.

The landmark B.C. decision requires notary public Tony Liu to pay his client more than $600,000 because Liu failed to adequately determine whether the Vancouver house his client was buying for $5.5 million had been owned by a tax resident of Canada.

As a result, the Canada Revenue Agency did not get paid, at the time of the sale, the 25 per cent capital gains tax it charges non-resident sellers of Canadian property on any profit they make on the sale.

So the CRA later demanded the buyer pay the $600,000 in tax. The buyer, in turn, sued Liu, arguing Liu failed to discover the seller was not a tax resident of Canada.

The CRA considers people who don’t live in the country at least six months a year and don’t pay income taxes here to be foreign property investors and speculators and thus subject to capital gains taxes.

Three Canadian immigration lawyers said the CRA tax-residency rule is often not enforced, even in over-heated housing markets in Vancouver and Toronto that are in part fuelled by offshore money.

The complex ruling published this month by B.C. Supreme Court Justice Kenneth Affleck strikes to the heart of a gaping hole in Canadian tax, immigration and property-transfer law, say the immigration lawyers.

The B.C. decision is a stark warning to real estate agents, notaries and lawyers who fail to ensure that sellers of properties are truly tax residents of Canada, said David Lesperance, a tax and immigration lawyer based in Toronto.

“This truly is a game changer,” said Vancouver immigration lawyer Richard Kurland.

“It’s a precedent. Real estate agents can now get a knock on the door from the taxman, asking for the (capital gains) taxes that should have been collected by Ottawa, because the agent failed to make adequate inquiries.”

Sam Hyman, a Vancouver immigration lawyer, said the judge’s decision alerts purchasers to “the dire consequences” of making offers on properties sold by people who may be trying to avoid capital gains tax by falsely declaring they are tax residents of Canada.

Many buyers and their agents, Hyman said, are not being diligent in making sure the seller is a physical or tax resident of Canada, while others are being “cavalier” or “engaging in wilful blindness” about it.

(read the full article at Vancouver Sun)

RELATED:
US Treasury Shows How To Fix Vancouver & Toronto Housing Markets
How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble
Vancouver’s Housing Market Money Laundering Fraud

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Banks Are Evil

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Adam Taggart
Peak Prosperity : March 17, 2017

I don’t talk to my classmates from business school anymore, many of whom went to work in the financial industry.

Why?

Because, through the lens we use here at PeakProsperity.com to look at the world, I’ve increasingly come to see the financial industry — with the big banks at its core — as the root cause of injustice in today’s society. I can no longer separate any personal affections I might have for my fellow alumni from the evil that their companies perpetrate.

And I’m choosing that word deliberately: Evil.

In my opinion, it’s long past time we be brutally honest about the banks. Their influence and reach has metastasized to the point where we now live under a captive system. From our retirement accounts, to our homes, to the laws we live under — the banks control it all. And they run the system for their benefit, not ours.

While the banks spent much of the past century consolidating their power, the repeal of the Glass-Steagall Act in 1999 emboldened them to accelerate their efforts. Since then, the key trends in the financial industry have been to dismantle regulation and defang those responsible for enforcing it, to manipulate market prices (an ambition tremendously helped by the rise of high-frequency trading algorithms), and to push downside risk onto “muppets” and taxpayers.

Oh, and of course, this hasn’t hurt either: having the ability to print up trillions in thin-air money and then get first-at-the-trough access to it. Don’t forget, the Federal Reserve is made up of and run by — drum roll, please — the banks.

How much ‘thin air’ money are we talking about? The Fed and the rest of the world’s central banking cartel has printed over $12 Trillion since the Great Recession. Between the ECB and the DOJ, nearly $200 Billion of additional liquidity has been — and continues to be — injected into world markets each month(!) since the beginning of 2016.

With their first-in-line access to this money tsunami, as well as their stranglehold on the financial system that it all runs through, the banks are like a parasite feasting from a gusher on the mother-lode artery.

It should come as little surprise that, with all this advantage they’ve amassed, the banks have enriched themselves and their cronies spectacularly. They have made themselves too big to fail, and too big to jail. Remember that their reckless greed caused the 2008 financial crisis, and yet, in 2009, not only did bankers avoid criminal prosecutions, not only did the banks receive hundreds of billions in government bailouts, but they paid themselves record bonuses?

And the bonanza continues unabated today. By being able to borrow capital for essentially free today from the Fed, the banks simply lever that money up and buy Treasurys. Voila! Risk-free profits. That giveaway has been going on for years.

Couple that with the banks’ ability to push market prices around using their wide arsenal of unfair tactics — frontrunning, HFT spoofing and quote stuffing, stop-running, insider knowledge, collusion, etc — the list is long. James Howard Kunstler is dead on: we don’t have a free market anymore. Instead, we have rackets, run by racketeers. The rest of us are simply suckers to be fleeced.

Nobel Prize-winning economist Angus Deaton recently agreed:

Income inequality is not killing capitalism in the United States, but rent-seekers like the banking and the health-care sectors just might, said Nobel-winning economist Angus Deaton on Monday.

If an entrepreneur invents something on the order of another Facebook, Deaton said he has no problem with that person becoming wealthy.

“What is not OK is for rent-seekers to get rich,” Deaton said in a luncheon speech to the National Association for Business Economics.

Rent seekers lobby and persuade governments to give them special favors.

Bankers during the financial crisis, and much of the health-care system, are two prime examples, Deaton said.

Rent-seeking not only does not generate new product, it actually slows down economic growth, Deaton said.

“All that talent is devoted to stealing things, instead of making things,” he said.

As further proof, let’s look at this data recently obtained by Zero Hedge. In the past 4 years, JP Morgan’s in-house trading group has had exactly 2 days of losses.

That’s not trading. Trading involves uncertainty and risk. This situation has none. It’s an extraction process — siphoning value from the market day after day with ironclad dependability.

And it’s not just a few dollars here and there. In 2016, JP Morgan’s daily average trading revenues were $80 million. Per day! That’s nearly $20 billion for the year.

So if not “trading”, what should we call it when a bank can extract tens of billions of dollars a year from the markets, with no downside risk? “Sanctioned theft” sounds about right.

Because for every trade there is a buyer and a seller. If JP Morgan is the winner every day, who is losing? Turns out, it’s the big pools of “dumb money” that don’t have the cheat codes for the system the way the banks do. These are the pension funds, the index funds, the retirement accounts — the aggregated money of all the ‘little people’ out there. Little people who don’t have visibility into how they’re being constantly fleeced; nor do they have agency to do anything about it even if they did.

So yeah, “theft” feels like a pretty accurate term.

And it’s reached the point where the banks don’t even care about hiding it anymore. If you had a nice inside racket going on, wouldn’t you at least pretend to hide your advantage, to avoid drawing attention? Not the banks. They’re either too proud or too obtuse to conceal it. Look at our string of perfect trading days! Look at our record bonuses!

These boasts fall on the ears of everyday American’s as the modern version of Let them eat cake!

And just like the out-of-touch French monarchs, the banks have positioned themselves as the enemy of the public. For as I claimed at the beginning of this article, a tremendous amount of the injustice in this country can be laid at the feet of the banks directly, or indirectly via the Federal Reserve.

Are you a senior who can’t afford to retire because you can’t live off your fixed-income savings? Thank the Fed’s 0% interest rates for that.

Are you a millennial who can’t afford to buy a home? Again, thank the Fed’s policy of suppressing interest rates and thereby blowing another housing bubble.

Are you struggling to get out of poverty? Are you finding it hard to remain in the middle class? Whatever your income, are you having to work harder and harder to just stay in the same place? See here how the Fed’s money printing, and the banks’ first-position access to it, has created the most concentrated imbalance of wealth in our country’s history.

Are you frustrated with how our lawmakers seem to serve corporations instead of the people? Listen to this mind-blowing podcast of how gobs of lobbyist money, much of it provided by Wall Street, dictates how our politicians legislate.

Whether it’s social equity, the security of your job or retirement, your day-to-day existence, or the fairness of the laws we live under — our fate is currently in the hands of the banks. And, of course, should their behavior trigger another meltdown of the global economy — something we warn about often here at PeakProsperity.com — we’ll have them to thank for that, too.

Yes, the banks are going to keep writing the rules in their favor; and yes, there’s little agency any of us has individually to do much about it. But as a society, we need to start addressing the dire situation we’re in honestly and openly. By whatever path, we have granted the banks far too much control over our lives, and they are taking gross advantage of that. Exactly like a parasite, the banking system is siphoning off our wealth and limiting our freedoms and future prospects — all for the benefit of an elite few.

That’s wrong. It’s immoral. And it’s Evil.

It’s far beyond time to call a spade and spade. The path to change always begins with an accurate assessment of the problem. We need to start using accurate language — like “evil” — when discussing the harm we’re being subjected to. We need to make it clear to our elected officials and to our communities that we understand what the banks are doing and that we find it unacceptable.

We need to make the criticism specific and personal. To JP Morgan CEO Jamie Dimon. To Fed Chair Janet Yellen. We need to turn up the heat on the perpetrating decision-makers, so that the borg-like structure of the banking system no longer serves as a deflective shield to scrutiny and criticism. These people need to feel the disapproving stares when speaking to the public. They need to hear the disdainful boos, and see their faces on the protest signs and nightly media reports.

And if you yourself work in the financial system, I’ll be blunt. You’re part of the problem. Just like my former classmates, I’m sure you’re a very nice person in many ways — but you’re complicit in the banks’ rapaciousness.

I know it’s not pleasant to hear, or admit. I worked for an investment bank for a few years early on my career. I was part of the problem, too.

But we have a choice, both as individuals and as a society, to align our actions with our values. It’s not always easy. And likely not as profitable if you indeed end up leaving the financial industry (as I can tell you from personal experience). But it’s the only way we’ll ultimately gain back control of our destiny.

(read the full article atpeak prosperity)

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Donald Trump Works For Wall Street, Not Russia

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Michael Krieger
Liberty Blitzkrieg : March 16, 2017

The evidence is overwhelming and indisputable at this point. Donald Trump is a phony, who has given his administration over to Wall Street crooks even more enthusiastically than his predecessors, and his predecessors were very enthusiastic.

I’ve written about this many times, and I warned throughout the campaign that my biggest fear was Trump is far too cozy with the finance industry, fake populist statements aside. His latest hire for the number two position at the Treasury Department once again proves the point.

As David Dayen reports in his excellent article at The Intercept, Donald Trump Isn’t Even Pretending to Oppose Goldman Sachs Anymore:

The continuity of Wall Street’s dominant role in American politics — regardless of what party sits in power or how reviled the financial industry finds itself across the country — was perhaps never more evident than when Jake Siewert, now a Goldman Sachs spokesperson, on Tuesday praised the selection of Jim Donovan, a Goldman Sachs managing director, for the No. 2 position in the Treasury Department under Steve Mnuchin, himself a former Goldman Sachs partner.

America will never recover until this is dealt with, and Trump has made it perfectly clear he will not deal with it.

“Jim is smart, extraordinarily versatile, and as hard-working as they come,” Siewert gushed. “He’ll be an invaluable addition to the economic team.”

The punch line? Siewert was counselor at the Treasury Department to Timothy Geithner, as well as a White House press secretary under Bill Clinton.

The ubiquity of Goldman Sachs veterans across numerous presidencies throughout history, both Republican and Democratic, has been well documented. But Donald Trump sold himself as something different, an economic nationalist determined to rankle Wall Street. He even ran campaign ads savaging bankers like Goldman CEO Lloyd Blankfein for their role in a “global power structure.”

That populist smokescreen is long gone now.

Mnuchin and Donovan are just two of five Goldman expats in high-level positions on Trump’s team. Steve Bannon spent a limited time at Goldman Sachs, but White House assistant Dina Powell, who headed the bank’s philanthropic efforts, and National Economic Council director Gary Cohn, Goldman’s former president, had higher-ranking positions for a longer period. Jay Clayton, Trump’s nominee for the Securities and Exchange Commission, was a partner for Goldman’s main law firm, Sullivan and Cromwell.

White House Chief of Staff Reince Priebus reportedly blocked Donovan from Treasury initially, amid fears of an image problem with too many “Goldman guys.” But Donovan got the post anyway.

You know it’s bad when Reince thinks there are too many Goldman baby squids around.

Even in areas where populist sentiment was seen as pre-eminent, Trump has reportedly succumbed to the Wall Street advance. A dramatic piece in the Financial Times described a “civil war” within the White House over trade, pitting Trump’s hard-liners like Bannon and trade policy adviser Peter Navarro against the likes of Cohn. It stated that Navarro was being sidelined, with Cohn taking a larger role in the negotiations over NAFTA, and with foreign leaders working through the National Economic Council rather than Navarro in trade talks. AFL-CIO official Thea Lee said in the story, “It appears the Wall Street wing … is winning this battle.”

At the NEC, Cohn hired Andrew Quinn, a chief negotiator for the Trans-Pacific Partnership, to coordinate international trade and development. A stewing Breitbart News called Quinn “the enemy within.”

Drain the swamp baby.

Banks have celebrated since Trump’s election, composing the lion’s share of the “Trump bump” in stock prices. Goldman Sachs shares have risen from $181.92 on Election Day to around $250 today, an increase that accounts for as much as one-fifth of the total rise in the Dow Jones Industrial Average over that period.

It’s now completely obvious that the Trump administration has been hijacked by Wall Street, so where’s the resistance? When it comes to the self-proclaimed leaders of this “resistance,” the corporate media and the Democratic Party, the resistance is nowhere to be found. They’re simply too busy focusing on invented Russia conspiracy theories to deal with the provable conspiracy right in front of their faces. I find that quite curious.

It doesn’t take much critical thinking to immediately discover why. Russia fear-mongering is the perfect way to superficially oppose Trump, without actually opposing him. Corporate media and Democrats don’t dare focus on Trump’s Wall Street embrace because Wall Street owns their asses too. That’s the dirty little secret here.

While that’s bad enough, the only reason Trump is actually able to get away with such an obvious betrayal and lack of swamp drainage, is because his supporters allow him to. His power resides in his base, and if his base shrugs as he sticks a knife in their backs, then he’ll continue to stick the knife in.

(read the full article at liberty blitzkrieg)

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More Canadian bank employees admit deceiving clients; All 5 banks implicated

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‘We are all doing it': Employees at Canada’s 5 big banks speak out about pressure to dupe customers

Erica Johnson
CBC News: March 15, 2017

Employees from all five of Canada’s big banks have flooded Go Public with stories of how they feel pressured to upsell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

The deluge is fuelling multiple calls for a parliamentary inquiry, even as the banks claim they’re acting in customers’ best interests.

In nearly 1,000 emails, employees from RBC, BMO, CIBC, TD and Scotiabank locations across Canada describe the pressures to hit targets that are monitored weekly, daily and in some cases hourly.

“Management is down your throat all the time,” said a Scotiabank financial adviser. “They want you to hit your numbers and it doesn’t matter how.”

CBC has agreed to protect their identities because the workers are concerned about current and future employment.

An RBC teller from Thunder Bay, Ont., said even when customers don’t need or want anything, “we need to upgrade their Visa card, increase their Visa limits or get them to open up a credit line.”

“It’s not what’s important to our clients anymore,” she said. “The bank wants more and more money. And it’s leading everyone into debt.”

A CIBC teller said, “I am expected to aggressively sell products, especially Visa. Hit those targets, who cares if it’s hurting customers.”

(read the full article at CBC)

RELATED :
Canadian bank employees admit to breaking the law for fear of being fired
Canadian bank employees disclose that “job is now to set people up for financial failure”

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US Treasury Shows How To Fix Vancouver & Toronto Housing Markets

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AlternativeFreePress.com

Canada has a money laundering problem, and it has been causing real estate prices in Toronto & Vancouver to soar to ridiculous levels. More than half of B.C.’s most expensive homes are owned by secret shell companies. Of course, this is not a problem exclusive to Canada.

In February 2016, the United States Treasury’s FinCEN enacted “GEOGRAPHIC, ANTI-MONEY-LAUNDERING, TARGETING ORDERS of 2016″, and as a result found that half the real estate being purchased was with illicit funds. John Tobon, U.S. Homeland Security Investigations Deputy Special Agent in Charge for South Florida, told the Miami Herald in January. “We come across real estate being purchased with illicit funds once every other case.”

Within U.S. markets where the anti-money laundering efforts have targeted, prices have started to drop significantly:

Manhattan Apartment Prices Continue To Slide

Manhattan Luxury Housing In Freefall: J.Crew CEO Slashes Tribeca Loft Price By Over 40%

Miami luxury condo prices take a plunge

SF home prices see big drop in January

The US crack down seems to be working, hopefully The Government of Canada acts soon.

Source:
Feds: “We Come Across Real Estate Being Purchased With Illicit Funds Once Every Other Case”

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Canadian bank employees admit to breaking the law for fear of being fired

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Erica Johnson
CBC News : March 10, 2017

A CBC report earlier this week about TD employees pressured to meet high sales revenue goals has touched off a firestorm of reaction from TD employees across the country — some of whom admit they have broken the law at their customers’ expense in a desperate bid to meet sales targets and keep their jobs.

Hundreds of current and former TD Bank Group employees wrote to Go Public describing a pressure cooker environment they say is “poisoned,” “stress inducing,” “insane” and has “zero focus on ethics.”

Some employees admitted they broke the law, claiming they were desperate to earn points towards sales goals they have to reach every three months or risk being fired. CBC has agreed to conceal their identities because their confessions could have legal ramifications.

TD insists all its employees are to follow the company’s code of ethics, but many employees who contacted Go Public said that’s impossible to do given the sales expectations.

“I’ve increased people’s lines of credit by a couple thousand dollars, just to get SR [sales revenue] points,” said a teller who worked for several years at a TD branch in Windsor, Ont.

He admits he didn’t tell the customers, which is a violation of the federal Bank Act.

Another teller with over 20 years’ experience at an Ontario TD branch said she has increased customers’ overdraft protection amounts without their knowledge, and increased their TD Visa card limits on the sly — all to earn units towards her sales revenue target.

Many TD workers wrote to say they are on medical leave, suffering from anxiety and/or depression because of the constant pressure to upsell customers.

One teller on sick leave described how a manager stood behind her three times a day, pushing her to sell more.

“They just really stress you out and say, ‘You’re not doing good. I need you to do double the amount you’ve been doing.’ I couldn’t sleep. I’d be thinking … ‘What can I do tomorrow to try and get sales?'”

She admits to upgrading customers to a higher-fee account without telling them.

“Because that gives us sales revenue. And the customers don’t have to sign for it.”

[…]

TD employees tell Go Public the pressure to deceive customers extends beyond front-line staff to workers handling wealth management.

“We do it because our jobs are at stake,” said one financial adviser in Ontario.

She admits she acted in her own interest rather than that of her clients after being put on a Performance Improvement Plan — a program that involves coaching and could result in termination of employment — because she wasn’t meeting her sales targets.

“I have invested clients’ savings into funds which were not suitable, because of the SR [sales revenue] pressure,” she said. “That’s very difficult to admit. I didn’t do this lightly.”

A former TD financial adviser in Calgary says he would downplay the risk of products that gave him a big boost towards his quarterly goal.

“I was forced to lie to customers, just to meet the sales revenue targets,” he said.

“I was always asked by my managers to attach unnecessary products or services to the original sale just to increase the sales points — and not care if the customer can afford it or not.”

A financial adviser who worked for six years in Nanaimo, B.C., before quitting says “people eventually snap, or lose all sense of themselves and do anything to close sales.”

“I have had multiple conversations with branch and district managers. These conversation lead to my being asked if I was still the right fit for the job.”

(read the full article at CBC)

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Canadian bank employees disclose that “job is now to set people up for financial failure”

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Erica Johnson
CBC: March 6, 2017

Three TD Bank Group employees are speaking out about what they say is “incredible pressure” to squeeze profits from customers by signing them up for products and services they don’t need.

The longtime employees say their jobs have become similar to that of the stereotypical used car salesman, as they’re pushed to upsell customers to reach rising sales revenue targets.

They say there has always been a sales component to the job, but the demand to meet “unrealistic” quarterly goals has intensified in recent years as profits from low interest rates have dropped and banks became required — after the financial meltdown of 2008 — to keep more capital on hand to protect against a downturn in the market.

“I’m in survival mode now,” says a teller who has worked at TD for more than 15 years, “because it’s a choice between keeping my job and feeding my family … or doing what’s right for the customer.”

She and the two managers who contacted Go Public have worked more than 50 years combined at the bank. CBC has agreed to conceal their identities and location because they are worried about being fired.

“When I come into work, I have to put my ethics aside and not do what’s right for the customer,” says the teller.

Documents provided to Go Public show the teller’s sales revenue goals have more than tripled in the past three years.

“You don’t know what it’s like to go to bed at night, knowing your job is now to set people up for financial failure,” says the teller, her voice cracking.

Go Public has heard from TD tellers in several Canadian cities who say they quit their jobs because the pressure to push products was so extreme.

“I was made to feel as if I was committing a huge wrong for looking out for the best interests of my customer over the interests of the bank,” says Dalisha Dyal, who worked as a TD teller in Vancouver for four years.

Another TD teller says the relentless pressure to meet sales numbers is so severe, the teller is currently on a medical leave.

The three bank employees who initially contacted Go Public explained how tellers upsell customers: when a customer keys in a PIN at the teller counter, a gold star lights up on the teller’s computer screen, indicating that “Advice Opportunities Exist.”

When a teller clicks on the star, products and services the customer hasn’t purchased pop up, such as overdraft protection, credit card or line of credit.

Each time a teller gets a customer to sign up for one of those options, it counts towards meeting their sales targets.

“Customers are prey to me,” says the teller. “I will do anything I can to make my [sales] goal.”

(read the full article at CBC)

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The US stock market is highly overvalued. Here’s why…

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Simon Black
sovereign man : February 23, 2017

This is really starting to get out of control.

No doubt you’re familiar with the S&P 500, the stock index that measures the performance of the largest US companies.

And as we’ve discussed before, one of the most important benchmarks in measuring whether stocks are overvalued or undervalued is the Price/Earnings, or P/E ratio.

Looking back through more than a century of financial data, the long-term average P/E ratio for the S&P 500 has been about 15.

As of yesterday afternoon, the P/E ratio for the S&P 500 stock index reached 26.5.

That’s high– more than 75% higher than the long-term average.

More importantly, since the 1870s, there have been a total of THREE periods in which the average stock P/E ratio was above 26.5.

The first time was around the Panic of 1893.
The second was around the 2000 dot-com crash.
And the third was around the 2008 financial collapse.

See the pattern? Whenever financial markets get overheated, bad things tend to happen.

It’s also important to consider that economic growth worldwide has been slowing.

Global trade growth, for example, is at its lowest level since the financial crisis.

And in the United States in particular, GDP growth was just 1.6% in 2016.

In fact the US economy has gone 11 straight years without seeing 3% GDP growth.

Slow economic growth is generally negative for corporate profits, so it’s difficult to imagine phenomenal earnings with such tepid economic growth.

As an example, HSBC is one of the largest banks in the world with operations in dozens of countries.

Two days ago the bank announced that profits had plunged 62% due to slow growth and uncertainty around the world.

That brings me to another major indicator of the stock market– something known as the “Buffett Valuation”.

The Buffett Valuation looks at the total value of the stock market relative to the country’s GDP.

Warren Buffet has called this ratio “probably the best single measure of where valuations stand at any given moment.”

Right now, for example, the total size of the US stock market according to Federal Reserve data is $22.6 trillion.

Meanwhile the total size of the US economy is $18.8 trillion.

This puts the Buffett valuation at around 1.2, meaning the stock market is about 20% larger than the entire US economy.

Historically speaking, this is expensive. Stock markets start getting into trouble when the ratio surpasses 1.0.

(The Buffett ratio was 1.11 before the 2008 crash…)

On top of everything else, as we discussed yesterday, many of the largest companies in the US have been artificially inflating their stock prices.

They’re taking on billions of dollars in debt to pay out phony dividends and buy back their own shares.

As an example, I just read an article in a major financial publication that General Motors is the “best” stock to buy.

Really?

General Motors made $16.5 billion from its ongoing business operations in 2016.

But they had to spend an incredible $29 billion in capital expenditures just to sustain the business.

So GM’s Free Cash Flow was negative.

It was similar in 2015.

In order to make ends meet, GM increased total debt by an incredible $40 BILLION over the last two years.

This is seriously the best deal in the market?

None of this adds up.

Look, I don’t have a crystal ball. And if there’s one thing that’s consistent about financial bubbles, it’s that they can last longer than anyone expects.

So, yes, it’s possible prices go much higher.

But is it worth the risk in light of such obvious data?

(read the full article at sovereign man)

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Trump proves he is a tool for Wall Street after all

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Extreme Vetting, But Not for Banks

Matt Taibbi
February 3, 2017: Rolling Stone

Donald Trump, the man who positioned himself as the common man’s shield against Wall Street, signed a series of orders today calling for reviews or rollbacks of financial regulations. He did so after meeting with some friendly helpers.

Here’s how CNBC described the crowd of Wall Street CEOs Trump received, before he ordered a review of both the Dodd-Frank Act and the fiduciary rule requiring investment advisors to act in their clients’ interests:

“Trump also will meet at the White House with leading CEOs, including JPMorgan’s Jamie Dimon, Blackstone’s Steve Schwarzman, and BlackRock’s Larry Fink.”

Leading the way for this assortment of populist heroes will be former Goldman honcho Gary Cohn, now Trump’s chief economic advisor.

Dimon, Schwarzman, Fink and Cohn collectively represent a rogues’ gallery of the creeps most responsible for the 2008 crash. It would be hard to put together a group of people less sympathetic to the non-wealthy.

Trump’s approach to Wall Street is in sharp contrast to his tough-talking stances on terrorism. He talks a big game when slamming the door on penniless refugees, but curls up like a beach weakling around guys who have more money than he does.

The two primary disasters in American history this century (if we’re not counting Trump’s election) have been 9/11 and the 2008 financial crisis, which cost 8.7 million people their jobs and may have destroyed as much as 45 percent of the world’s wealth.

The response to 9/11 we know: major military actions all over the world, plus a radical reshaping of our legal structure, with voters embracing warrantless surveillance, a suspension of habeas corpus, even torture.

But the crisis response? Basically, we gave trillions of dollars to bail out the very actors who caused the mess. Now, with Trump’s election, we’ve triumphantly put those same actors back in charge of non-policing themselves.

In between, we passed a few weak-sauce rules designed to scale back some of the worst excesses. Those rules presumably will be tossed aside now.

Trump’s “extreme vetting” plan for immigrants and refugees is based upon a safety argument – i.e., that the smallest chance of a disaster justifies the most extreme measures. Infamously this week, administration spokesdunce Kellyanne Conway resorted to citing a disaster that never even happened – the “Bowling Green Massacre” – as a justification for the crazy visa policy.

This makes Trump’s embrace of the Mortgage Crash Dream Team as his advisory panel for how to make Wall Street run more smoothly all the more preposterous.

The crisis was caused by the financial equivalent of open borders. Virtually no one was monitoring risk levels or credit worthiness at the world’s biggest companies.

The watchdogs who are supposed to be making sure the morons on Wall Street don’t blow up the planet all failed: the compliance people within private companies, the so-called self-regulating organizations like the NYSE, and finally the government agencies like the OCC and the OTS.

These companies are now so enormous that they can’t keep track of their own positions. Also, in sharp contrast to the propaganda about what brainy people they all are, many of them lack even the most basic understanding of the potential consequences of deals they might be making.

The leadership of AIG, for instance, basically had no clue how its derivatives portfolio worked, despite the fact that they had $79 billion worth of exposure. Similarly, then-CEO Chuck Prince of Citigroup told the Financial Crisis Inquiry Commission that a $40 billion mortgage position “would not in any way have excited my attention.” Both companies ended up needing massive bailouts.

Not only can they not keep track of their own books, they already blow off regulators whenever they get the chance. Take JPMorgan Chase’s “London Whale” episode, in which some $6.2 billion in losses in one portfolio accumulated practically overnight. In that case, Dimon simply refused to give the federal regulators routine, required reports as to what was going on with his bank’s positions, probably because he himself had no idea how big the hole was at the time.

“Mr. Dimon said it was his decision whether to send the reports to the OCC,” a regulator later told the Senate.

This is the same Jamie Dimon about whom Trump said today, “There’s nobody better to tell me about Dodd-Frank than Jamie Dimon, so thank you, Jamie.”

The enduring lesson of the financial crisis is that in markets as complex as this one, the most extreme danger is in opacity. The big problem is that these egomaniacal Wall Street titans want markets as opaque as possible.

This is why they want to get rid of the fiduciary rule, because they don’t think it’s anyone’s business if they choose to bet against their clients (as Cohn’s Goldman famously did), or overcharge them, or otherwise screw them.

They don’t want to have to submit to even the most basic capital requirements, or be classified a systemically important company, or have to keep their depository businesses separate from their gambling businesses, or have to have a plan for dissolution if they melt down, or really deal with any intrusions at all.

(read the full article at Rolling Stone)

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Trump Keeps Swamp Full of Goldman Sachs Scum

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‘The swamp is Goldman Sachs': how the bank is rewarded for putting profits over people

Sarah Jaffe
The Guardian : January 18, 2017

In a persistent drizzle on 17 January, a group of protesters swathed in green ponchos unfurled tarps and sleeping bags on the sidewalk in front of Goldman Sachs’ high-rise building on the West Side highway in New York City. A few of them wore handmade swamp creature masks; others bore signs with the swamp creatures on them. A light-board sign declared the bank “Government Sachs”.

The protest was the beginning of a multi-day camp-out aiming to stay on the sidewalk outside the investment bank until the inauguration of Donald Trump, and to bring people affected by the bank’s policies to the doorstep of some of the world’s richest people – some of whom will belong to the Trump administration.

“It’s about highlighting the lie that was told to millions of people in this country, the lie that Trump was draining the swamp. If we really want the swamp to be drained, we have to do it ourselves and we’re doing it by going to Goldman Sachs,” says Nelini Stamp of the Working Families party.

As the crowd of about 100 people set up camp, the police erected barricades around them but mostly held off as the crowd moved from chanting “The swamp is getting deeper! The swamp is Goldman Sachs!” to a series of speak-outs from the crowd about the bank’s connection to payday lending, the economic crisis in Puerto Rico, foreclosures and more.

For Jean Sassine, who lost his job and nearly lost his home during the 2008 financial crisis, fighting the influence of the big banks in Washington is personal. He became a member of community organization New York Communities for Change (NYCC) six years ago as a way to fight back, and for him the Goldman action “means trying to wake people up that these are the people who were part of the big crisis in 2008, that Steven Mnuchin was called Mr Foreclosure at OneWest and Goldman Sachs. Do you want Mr Foreclosure to be secretary of the treasury?”

The organizers targeted Goldman Sachs because, as Stamp explains, the bank “is a pipeline to government”. Through Democratic and Republican administrations, she notes, Goldman Sachs in particular has fed its bankers into high-ranking government positions – if Mnuchin is confirmed as treasury secretary, Trump will be the third of the past four presidents to have hired for that job from Goldman’s ranks. To Stamp, particularly in the post-financial crisis era, this means the bank is being rewarded for its involvement in subprime mortgages and the financial instruments created to profit from them.

On that front, says Renata Pumerol of NYCC, it is important to confront the power brokers directly as well as the elected officials who work with them. Calling them “Government Sachs” is a way to highlight the level to which they have captured Washington and influence policy that benefits themselves.

As for the occupation itself, the tactic obviously brings echoes of Occupy Wall Street, but Pumerol says that this demonstration differs in its specific demands – to halt the appointment of Mnuchin as well as fellow Goldmanites Gary Cohn, Anthony Scaramucci, Dina Powell and Steve Bannon. Also, she notes, this action is led by people of color and people who have been directly affected by Goldman’s actions.

“It’s an interesting circle of life for someone like myself, who was involved with Occupy,” Stamp adds, “to see this fake crony populism of ‘draining the swamp’ while the swamp is actually continuing to be filled.”

For many of the people involved in the Government Sachs action, it seemed obvious that Trump’s promises to drain the swamp were less than genuine. But for Richard Robinson, they resonated and led him to vote for the president-elect.

The 60-year-old veteran and truck driver from Utah lives on social security after a work accident nearly killed him and pushed him into medical retirement. Out of work, he says, he found himself “sitting at home feeling worthless, didn’t feel like I was accomplishing anything”. A friend suggested he get a hobby, and, he laughs: “I became an activist, I guess.”

Robinson lives in a manufactured home community, and through forming a group called MH Action to deal with the issues that he and his neighbors faced, he began to get in touch with other people working on similar issues around the country.

Robinson’s community is owned by a multistate corporation that also owns apartment complexes in New York and Chicago, which helped him get in touch with NYCC. “These companies are buying communities, buying apartment complexes and their business model is not acceptable to me. It’s to raise rents as quickly as possible and decrease maintenance of the communities, and that’s not a good business model for America,” he says.

His vote for Trump, he says, was based on the assumption that because the president-elect was not a career politician, “maybe things would be run differently in Washington”. But the number of Wall Streeters and ultra-wealthy in the administration has him frustrated, and brought him to New York in protest. “He actually hit Hillary Clinton over meeting behind closed doors with [Goldman Sachs] and now I believe he was meeting with them at the same time. He’s appointed them so quickly that I’ve got to believe at the same time he was campaigning hard on Hillary Clinton for meeting with them behind closed doors, I believe he was doing the same thing.”

Nomi Prins, former managing director at Goldman Sachs turned journalist and author of All the President’s Bankers, says that rather than make sincere promises Trump simply attacked weaknesses, taking advantage of widespread anger at Wall Street to score points against first his Republican opponents and then Clinton. Mnuchin, she points out, was his finance adviser the whole time. “There were more apparent Wall Street connections through Hillary Clinton because of the foundation, the speeches and because of Bill Clinton that were real,” she says, “but these are bipartisan relationships; Wall Street is a bipartisan opportunist.” (That relationship is visible in New York City, where Alicia Glen, formerly of Goldman Sachs, serves as deputy mayor to Bill de Blasio.)

That bipartisan relationship, and the bipartisan anger at the power of finance, is what makes it so important to target the banks and lay groundwork for white working-class communities to come together with communities of color to fight, Pumerol says. Adds Sassine: “It is clear that they are ready to raid the American people as opposed to benefiting. Government is supposed to be for the benefit of the people, whether you believe in small government, big government, it’s supposed to be for the benefit of the people.”

(read the full article at the guardian

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Newt Gingrich Admits – Donald Trump No Longer Wants to ‘Drain the Swamp’

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Michael Krieger
liberty blitzkrieg : December 21, 2016

Not that he ever wanted to, but here’s Newt Gingrich admitting what many of us already knew regarding Donald Trump’s fake populism.

Politico reports:

President-elect Donald Trump campaigned on a promise to “drain the swamp” in Washington of corruption, but now that he’s preparing to move into the White House, Newt Gingrich said the Manhattan real estate mogul is looking to distance himself from that message.

“I’m told he now just disclaims that. He now says it was cute, but he doesn’t want to use it anymore,” the former House Speaker and close Trump adviser said of the “drain the swamp” message in an NPR interview published Wednesday morning. 

Trump’s Cabinet and other high-level appointments seem to have deviated somewhat from his “drain the swamp” message. After attacking Democrat Hillary Clinton regularly throughout the campaign for being too close to Wall Street banks, Trump has put three former Goldman Sachs executives in prominent White House positions, including Steven Mnuchin as treasury secretary, Steve Bannon as chief White House strategist and Gary Cohn as the director of the National Economic Council.

As I highlighted in the recent post, The Election Never Ended:

As Anthony Scaramucci, a hedge fund manager and top adviser to Trump, as well as a former Goldman Sachs banker himself, put it Thursday: “I think the cabal against the bankers is over.” 

Indeed, as we all know, U.S. government economic policy has been essentially handed over to Goldman Sachs during this transition period. Must be a reward for its most recent settlement for rigging yet another market.

Reuters reports:

Goldman Sachs Group Inc will pay a $120 million penalty to resolve civil charges that it attempted to manipulate a global benchmark for interest rate products known on Wall Street as “ISDAFIX,” U.S. derivatives regulators said Wednesday.

The case against Goldman Sachs, brought by the Commodity Futures Trading Commission, was the latest in a series of broad investigations into manipulation by big banks of a variety of global benchmark rates.

To date, the CFTC has imposed penalties of over $5.2 billion stemming from these probes, which include Libor and Euribor, foreign exchange benchmarks, and the U.S. Dollar International Swaps and Derivatives Association Fix, or USD ISDAFIX.

A number of banks have also resolved parallel criminal charges related to the manipulation of various global benchmarks.

Goldman Sachs, which was also accused by the CFTC of making false reports on the benchmark rate, will settle the case without admitting or denying the charges.

Penalties don’t change the behavior of white collar criminals. Jail sentences would, but we don’t see any of that when it comes to bank execs.

(full article at liberty blitzkrieg)

UPDATE: Trump is still using the phrase, denies that he was ever going to stop… but the swamp has certainly not been drained.

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Report Confirms Canada’s Housing Market Money Laundering Fraud

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AlternativeFreePress.com

Mainstream media has finally gotten to the truth: Vancouver’s real estate market is rife with money laundering. Back in February we compiled Vancouver’s Housing Market Money Laundering Fraud. In March, How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble…In September Globe & Mail Investigation confirms rampant fraud, money laundering, and tax evasion in Canada’s housing market did a great job highlighting some of the issues, and now mainstream media has, finally, put all the pieces together…

More than half of B.C.’s most expensive homes owned by secret shell companies spurring money laundering fears

By Sam Cooper
December 9, 2016: Vancouver Sun

Almost half of Vancouver’s 100 most expensive homes are bought using shell companies or other financial tools that obscure who the identity of the true owners, a report from anti-corruption group Transparency International says.

The report, which focuses on money laundering and tax evasion vulnerabilities in Canadian real estate through a study of Vancouver luxury homes, slams Canada for failing to close home-ownership loopholes related to shell companies, trusts and nominees.

The report also concludes the prevalence of non-transparent ownership in B.C. luxury real estate makes it impossible to measure how much offshore cash is invested in B.C. homes, even though B.C. is attempting to collect data on foreign ownership.

“An influx of overseas capital is one of several causes of rising property prices, (in Vancouver and Toronto) but the extent and impact of foreign investment remains unknown since very little data is collected on property owners,” the report says. “Individuals can use shell companies, trusts and nominees to hide their beneficial interest in Canadian real estate.”

(read the full article at calgary herald)

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Investigation confirms rampant fraud, money laundering, and tax evasion in Canada’s housing market

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Out of the shadows

by Kathy Tomlinson
Globe & Mail : September 10, 2016
[emphasis AlternativeFreePress.com]

Demetre Lazos says he couldn’t just stand by and watch real-estate speculation, as he puts it, destroy his city.

Convinced that his boss, a local speculator, was dodging taxes and misleading lenders, he decided to act, approaching both the police and the Canada Revenue Agency (CRA) to divulge what he knows. Mr. Lazos, who has built luxury homes in Vancouver for three decades, offered documented evidence of possible fraud and tax evasion.

And yet, as he tells it, both the cops and the tax men blew him off: A CRA official who met him in the lobby of the agency’s downtown office told him to write to Ottawa; at Vancouver police headquarters, he was advised to call the Crime Stoppers hotline. (He did, he says, and got no results.)

“I am very angry at the system,” says Mr. Lazos, who has since quit his job. “I love this country – and it is my country – but I think we are Mickey Mouse.”

And so, next, he came to The Globe and Mail and, over the course of several months, delivered a large, and disturbing, cache of documents that expose how speculators can maximize – and conceal – their profits.

As a result of Globe investigations into Vancouver’s supercharged real-estate market, others have come forward, too, including a federal tax auditor, as well as an accountant who says he regularly files tax returns for wealthy clients who buy and sell houses – and appear to declare far less than they earn. “Canada,” he says, “is like a Swiss bank account” for his clients.

Ottawa says it is studying the issue, and B.C. has brought in a tax on foreigners who buy residential real estate in Vancouver. But those who see firsthand how real estate is traded like stocks and bonds say this isn’t nearly enough. “We have governments that are not doing their job,” argues Mr. Lazos, who acquired his inside knowledge while working for Jun Gang Gu, also known as Kenny Gu, a former civil servant originally from Nanjing, near Shanghai.

Mr. Gu came to Canada in 2009 under Ottawa’s now-defunct immigrant-investor program, which gave permanent residency to applicants who agreed to lend a significant amount of money to the federal government. He started out here as a developer, but the documents show that his business evolved to buying homes – using other people’s money– and then flipping them. His deals are financed with investor money from China and mortgages issued to those investors by Canadian banks.

The papers that Mr. Lazos provided The Globe paint a fascinating picture, revealing a network of players – local and foreign – who are parking money in Canadian real estate. They also show how loopholes and lax oversight make it easy for the speculators to play the system – and profit tax-free – by obscuring their ownership and earnings, all the while treating the properties as commodities, not homes.

    Hidden ownership</ul>

    Many people assume that speculators flip homes very quickly, but Mr. Gu and others have created a unique market in which they hold properties long enough for them to rise significantly in value. The Globe has examined numerous transactions involving properties held for years while prices in the city rose as more investors bought in. Some properties were developed, some rented out, and others left vacant.

    Mr. Gu did not respond to several requests for an interview, but Chinese-language contracts with his clients provide key insights into how his system works.

    Translated for The Globe, they show that Mr. Gu, or his companies, are hidden – the legal term is “beneficial” – owners of certain properties, even though absentee foreign clients bankroll everything from the down payment and mortgage payments to property-related taxes and other expenses. The homes and mortgages are registered in the names of his clients, their companies or spouses.

    The financing Mr. Gu’s companies receive from those clients comes in the form of loans that are not taxable, and that fall within what’s known as “shadow banking” – an unregulated system that has exploded in popularity in China, and now appears to be getting a toehold in Canada. Such “peer-to-peer” loans, as they are also called, sidestep banks entirely, and promise lenders significantly higher returns than they can get elsewhere.

    Mr. Gu’s lender clients earn their wealth primarily in China, while coming and going from Vancouver, according to Mr. Lazos. Records show that they give Mr. Gu power of attorney to facilitate everything through his small, nondescript Vancouver office, but his stake in the properties remains hidden. And although he is not licensed to broker mortgages or manage investments, records suggest he does both.

    Those records also link him and his clients to activity involving at least 36 properties over the past five years. Yet Mr. Gu, 45, paid next to nothing in taxes last year, while millions of dollars flowed through his business and personal accounts.


      ‘Unless it changes, this will get worse’

    An in-depth look at five of his deals this year reveals that he sold the properties for a cool $5-million more, in total, than he paid for them. One of those homes sat vacant for three years, in a city where many people can’t find a place to live. (The documents include two orders from the city to clean up the site.)

    In addition, Mr. Gu has billed some clients up to $1.2-million, per property, for “management” and “commissions,” in the last two years. Over that same period, he and his wife have moved large sums of money between their bank accounts, up to $600,000 at a time. As well, Mr. Gu made credit-card payments totalling $310,000 in a brief period. The family’s vehicles include a BMW and a Mercedes.

    Tax returns, among the documents, show that Mr. Gu, now a Canadian citizen, reported personal income of $45,865 last year. His wife, Min Tang, reported $23,612.

    And yet, Ms. Tang recently bought a brand new house in West Vancouver – one of Canada’s richest municipalities, known for its mansions and stunning views – for $2.1-million. She listed her occupation on the title as “homemaker.” And she didn’t need a mortgage. Records show she bought the property from one of Mr. Gu’s clients – and for significantly less than the market value for other homes in the upscale area.

      ‘Pervasive and systematic’

    Mr. Gu’s three corporations all reported losses, in unaudited financial statements ending last year. Photocopies of some cheques made out to his companies – a fraction of the total – show that those companies received a minimum of $7.6-million in large payments between 2014 and 2016, many marked as “loans” from clients.

    When Mr. Gu flips a property, his contracts stipulate that lender clients get back what they put in, plus a set return – 15 per cent in one instance. After the mortgage and the bills are paid, Mr. Gu keeps whatever is left, which, in some cases, appears to be hundreds of thousands of dollars.

    According to legal and tax experts, this arrangement would allow him to avoid taxes, because the properties are not in his name. Mr. Gu can also maximize financing, because individual clients applying for mortgages, ostensibly to buy the homes, can borrow more money collectively than Mr. Gu could if he tried to finance properties on his own.

    On the tax front, records suggest that the clients classify some of the properties as their principal residences, even though they do not live in them. That’s despite the fact that Canadian rules stipulate that a taxpayer cannot call a home a principal residence and sell it tax-free, unless they purchased it to live in it, and didn’t sell it within the same year.

    “If you are buying and selling these homes as a business practice, that is business income and it’s taxable,” says Toronto-area accountant David Cramer, one of several experts The Globe consulted while reporting this story. He suggests that both Mr. Gu and his clients should be declaring that income. “If these guys paid proper taxes, these transactions would not go on as they do,” he explains. “It wouldn’t be nearly as profitable as it is.”

    Tax lawyer Jonathan Garbutt estimates that the tax revenue lost through such activity is massive, particularly in pricey Toronto and Vancouver. “I think this is yet another example of non-enforcement of penalties under the law. It’s pervasive and it’s systematic,” Mr. Garbutt says. “Unless it changes, this will get worse. We will have a corrupt system.”

      ‘This has become a huge mess’

    While many Canadians have come to resent the impact of foreign buyers on the real-estate market, the documents suggest that Mr. Gu pocketed much more than his clients did on some of his deals.

    In one contract involving a rental property, his client was guaranteed a return of one per cent a month for paying the down payment and property-transfer tax upon purchase. Mr. Gu would collect the rent and pay the mortgage, then keep the rest of the profits when the duplex sold.

    Mr. Gu sold the property two years later for $850,000 more than he paid for it, because the market price had jumped by that much. But according to the terms of the contract, his client stood to receive less than $90,000 of that windfall.

    Documents show some of Mr. Gu’s clients also pay very little tax in Canada, despite having significant cash flow and assets. For example, in 2014, records show that client Shen Lin Zhang paid $2,594 in Canadian taxes on $59,711 in reported income, while his “homemaker” wife owned and lived in a Vancouver house worth $2-million.

    In the same period, Mr. Zhang sold another house worth $3-million and backed the purchase of two more, worth almost $4-million, in deals facilitated by Mr. Gu. Documents show that Mr. Zhang also owns foreign property and has almost $3-million in Canadian and Chinese banks.

    Mr. Lazos says that Mr. Zhang earns his living in China. His CRA tax filing shows he is not a Canadian citizen, but he claims in it that he’s a B.C. resident. That allows him or his family members to classify any Canadian property as a principal residence and not report the profit when they sell.

    Mr. Zhang declined The Globe’s request for an interview.

    A Chinese-Canadian accountant in Vancouver estimates that he has filed tax returns for 1,000 clients just like Mr. Zhang in the past five years. He does not want to be named because he fears repercussions, but says the CRA is partly to blame for lost revenue, because it doesn’t require taxpayers to report the sale of any principal residence.

    “Every one of [those client families] has more than one house – two, three, four, sometimes more,” he says. “They don’t have to tell me. The CRA says they don’t have to tell anybody.”

    The accountant says that people like Mr. Zhang who work abroad but declare on their Canadian tax returns that they are residents of Canada are legally required to report their worldwide income as well. He says that most, however, do not, and because those financial records are in China, they are impossible to check.

    “They say, ‘I just want to pay around $5,000 in tax. How much does that work out to be in income?’ he says. “And then they say, ‘I have this much interest income from money I deposit with the Canadian bank or the company or whatever.’ That’s it.”

    “I have in my hands people who claim to be residents. They never live here for more than a month of the year,” he says. “These people can be buying and selling homes and claiming to be a resident all the time without getting into any trouble. The CRA doesn’t look to find out.”

    In fact, he believes the problem is so huge that the government should overhaul the tax code to get rid of the principal-residence exemption in its current form, which he acknowledges would be a very unpopular move. And one that would be a political non-starter: If the exemption were removed entirely, millions of Canadians would face the prospect of going deeply into debt – or, at minimum, forfeiting a major portion of their planned retirement incomes.

    Another Vancouver accountant told The Globe that she and her colleagues see questionable real-estate transactions all the time, which they believe have contributed to skyrocketing prices. “This has become a huge mess. You have no idea how angry I am,” says Corina Ciortan. “A generation of people has been screwed. It’s so obvious. Everyone I work with is so angry because there is a select group of people who have profited from this.”

    Federal figures reviewed by The Globe and confirmed by the tax agency show that auditors discovered $14.3-million in unpaid taxes from 339 individuals and companies last year through increased scrutiny of flips and other real-estate transactions in Vancouver.

    A CRA auditor who came forward to The Globe with concerns about enforcement said that that is barely scratching the surface of the dodging going on. “CRA will catch very few people, because the [inexperienced] auditors … have no idea of foreign income and how individuals hide income,” says the auditor, who requested anonymity, for fear of being fired.

    Management has known of this issue for at least three years but did not want to pursue the real-estate flips, because most of the auditees were Chinese in descent. They were scared of being racist … I can confirm this fact, based on meetings held.”

    In a statement sent to The Globe, the CRA said that 2,203 files related to real estate were audited last year in Ontario and B.C., and that the agency plans to do “as many or more” next year. “The Canada Revenue Agency takes non-compliance very seriously, and is committed to protecting the fairness and integrity of the tax system,” it says.

      Richer banks, poorer Canadians

    In addition to holes in the tax system, speculators like Mr. Gu also rely heavily on Canadian financial institutions to give their clients multimillion-dollar loans. “They are using this money temporarily – to make more money – instead of using their own money,” Mr. Lazos says. “Then prices go up. We are making the bank richer and the Canadians poorer.”

    Correspondence in the documents that Mr. Lazos supplied suggests that lenders think they are approving mortgages for his investor clients, not for Mr. Gu. If lenders are in the dark, experts say, they may be unwittingly violating anti-money-laundering laws, which require them to know detailed information about all their clients – which, in this instance, should include Mr. Gu.

    “If the client defaults, who are they going to collect from? Because they don’t know who the beneficial owner is of these properties,” says Christine Duhaime, an expert on anti-money-laundering laws. “The bank thinks it’s complying with anti-money-laundering laws in knowing its client, but it isn’t. No bank likes being lied to.”

    E-mails in the records show that RBC questioned Mr. Gu when it realized mortgage payments from a bank client were coming from Mr. Gu’s business account, but let it continue after the client gave his permission for the payments to continue. The Globe asked RBC about this; it declined to comment.

    (read the full article including images at Globe & Mail)

    Related articles:

    How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble (March 10, 2016)

    Vancouver’s Housing Market Money Laundering Fraud (February 6, 2016)

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Clinton Emails Confirm NATO Destroyed Libya to Prevent African Gold-Backed Currency

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CoNN
ANONHQ : January 29, 2016

Hillary’s emails truly are the gifts that keep on giving. While France led the proponents of the UN Security Council Resolution that would create a no-fly zone in Libya, it claimed that its primary concern was the protection of Libyan civilians (considering the current state of affairs alone, one must rethink the authenticity of this concern). As many “conspiracy theorists” will claim, one of the real reasons to go to Libya was Gaddafi’s planned gold dinar.

One of the 3,000 Hillary Clinton emails released by the State Department on New Year’s Eve (where real news is sent to die quietly) has revealed evidence that NATO’s plot to overthrow Gaddafi was fueled by first their desire to quash the gold-backed African currency, and second the Libyan oil reserves.

The email in question was sent to Secretary of State Hillary Clinton by her unofficial adviser Sydney Blumenthal titled “France’s client and Qaddafi’s gold.”

From Foreign Policy Journal:

“The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered ‘Francophone Africa.’

“Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency.”

And here is the section of the email proving that NATO had ulterior motives for destroying Libya:

“This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).

“(Source Comment: According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya. According to these individuals Sarkozy’s plans are driven by the following issues:

a. A desire to gain a greater share of Libya oil production,

b. Increase French influence in North Africa,

c. Improve his internal political situation in France,

d. Provide the French military with an opportunity to reassert its position in the world,

e. Address the concern of his advisors over Qaddafi’s long term plans to supplant France as the dominant power in Francophone Africa)”

Ergo as soon as French intel discovered Gaddafi’s dinar plans, they decided to spearhead the campaign against him- having accumulated enough good reasons to take over.

Sadly, Gaddafi had earlier warned Europe (in a “prophetic” phone conversations with Blair) that his fall would prompt the rise of Islamic extremism in the West. A warning that would go unheeded; what’s a few lives in France and Libya, if the larger goal lines the pockets of politicians and the elite so much better after all?

SOURCE: ANONHQ(cc)

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Central bankers don’t have things under control

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Doug Noland
Credit Bubble Bulletin : January 23, 2016

Global markets were too close to dislocating this week. Wednesday saw the S&P500 trade decisively below August lows. Japan’s Nikkei 225 Index sank to test November 2014 lows. Emerging stocks fell to six-year lows, with European equities at 13-month lows. Wednesday also saw WTI crude trade below $27 (sinking almost 7%), boosting y-t-d losses to 25%. Credit spreads were blowing out, and currency markets were increasingly disorderly. Early Thursday trading saw the Russian ruble down 5.3% (at a record low vs. dollar), with Brazil’s real also under intense pressure. The Hong Kong dollar peg was looking vulnerable. The VIX traded to the highest level since the August “flash crash,” while the Japanese yen traded to one-year highs (vs. $). De-risking/de-leveraging dynamics were quickly overwhelming global markets.

Something had to be done…

Bloomberg adjusted its original Friday morning headline, “Global Stocks Charmed by Draghi Effect as Oil Rallies With Ruble,” to “Global Stocks Charmed by Central Banks as Oil Jumps, Bonds Fall.” Draghi did have some help. The People’s Bank of China (PBOC) injected $61 billion of liquidity into the system, the “most in three years.” China’s Vice President assured the markets that Beijing will “look after” Chinese stock investors. There was also talk of added stimulus from the Bank of Japan (BOJ) and a much more dovish Fed. The markets interpreted a feistily dovish Draghi as evidence that global central bankers had assumed crisis-management mode.

The markets will now have six-weeks to ponder whether Draghi can deliver. Even assuming that he successful drags ECB hawks along, it’s not easy to envisage how an additional $10 billion or so of QE will have much impact on (bursting) global Bubble Dynamics. An emphatic Draghi was, however, certainly capable of reversing global risk markets that were increasingly positioned/hedged for bearish outcomes. Over the years we’ve witnessed powerful short squeezes take on lives of their own, repeatedly giving the global Bubble an extended lease on life. And while bear market rallies tend to be the most spectacular, at this point I expect nothing beyond fleeting effects on the unfolding global Bubble unwind. Draghi is a seasoned pro at punishing speculators betting against Europe.

The media fixates on “corrections,” “bottoms” and “bear markets.” Of late, there’s been some comparison of the current backdrop to previous periods, most notably 2008/09 and 2000. I have no desire to try to leapfrog other bearish commentary. My objective is always to present an analytical framework that assists in understanding the extraordinary world in which we live and operate.

Going back to 2009, I’ve referred to the “global government finance Bubble” as the “Granddaddy of All Bubbles.” I am these days more fearful than ever that this period has indeed been the terminal phase of decades of serial Bubbles. Bubble excess made it to the heart of contemporary “money” and Credit – central bank Credit and government debt. This period also saw a historic Bubble engulf the emerging markets, including China. It encompassed stocks, bonds, derivatives and financial assets generally – virtually everywhere. Central bankers “printed” Trillions out of thin air.

Today’s predicament is becoming increasingly apparent: as the current global Bubble deflates and risk aversion takes hold, there is both a lack of sources of reflationary Credit and insufficient economic growth potential necessary to inflate an even bigger reflationary global Bubble. With confidence in central banking waning and the monstrous Chinese Bubble faltering, there is confirmation in the thesis that a most prolonged period of inflationary financial Bubbles is drawing to a close.

The collapse of the Soviet Union coupled with the Greenspan Fed’s push into activist central banking ushered in what was almost universally accepted as an epic victory for free-market capitalism. Too much of this was a quite powerful illusion. U.S. finance was becoming increasingly state-directed. The Fed manipulated interest-rates and the shape of the yield curve. The Washington-based GSEs moved to completely dominate mortgage Credit. The massive U.S. “too big to fail” financial conglomerates came to dictate securities and derivatives-based finance – and market-based finance monopolized the real economy. And each faltering Bubble ensured more aggressive central bank “activism” – lower rates, greater market intervention and increasingly outlandish talk of “helicopter money” and the government printing press.

With the bursting of the mortgage finance Bubble, the Fed and global central banks resorted to desperate measures – reckless “money” printing, manipulation and market liquidity backstops. Along the way, virtually the entire world adopted U.S.-style market-based finance and policymaking. The process culminated with communist China adopting U.S.-style finance. So long as inflating financial markets were supportive of central planner objectives, everyone could pretend it was a move toward free markets.

What began with Greenspan’s early-nineties covert bank recapitalization evolved into Bernanke’s foolish policy to openly inflate risk markets with new central bank Credit. Amazingly, U.S. inflationism took the world by storm.

The issue today goes much beyond a stock market correction, a bear market or even global financial crisis. Contemporary central banking has failed. Theories have failed. Doctrine has failed. The inability to spur self-sustaining economic recovery has been a major issue. Yet, from my perspective, the critical failure has been the incapacity to generate general price inflation. The delusion has been that central bankers would always enjoy the capacity to inflate away excessive debt levels. Bubbles needn’t be feared, not with central banks “mopping” up with reflationary monetary stimulus. And for quite a while it seemed that “enlightened” contemporary inflationist doctrine had it all figured out.

Central bankers and market-based finance are a dangerous mix. Over the years, I have referred to market-based finance as the most powerful monetary policy transmission mechanism in the history of central banking. Greenspan could inflate the markets – and the entire system – with inklings of a 25 bps rate cut. Later it took Dr. Bernanke Trillions – the dawn of “whatever it takes,” and markets rejoiced.

Central banks around the world abused their newfound power and the power of financial markets. And for seven years egregious monetary inflation has been used specifically to inflate global securities markets. And “shock and awe,” “whatever it takes,” and “push back against a tightening of financial conditions” all worked to ensure the markets that central bankers would no longer tolerate crises, recessions or even a bear market.

For seven long years, risk misperceptions and market price distortions turned progressively more severe. Inflating securities markets around the globe became, as they do, self-reinforcing. “Money” flooded into the markets – especially through ETFs and derivatives. Trillions flowed into perceived safe equities index and corporate debt instruments. With central bankers providing a competitive advantage for leveraging and professional speculation, the hedge fund industry swelled to $3.0 TN (matching the $3 TN ETF complex). Wealth effects and the loosest financial conditions imaginable boosted spending, corporate profits, incomes, investment, tax receipts and GDP – not to mention M&A, stock repurchases and financial engineering.

But this historic wealth illusion has been built on a foundation of false premises – that central bank monetization can inflate price levels and spur system inflation necessary to grow out of debt problems; that securities markets should trade at higher multiples based upon contemporary central banker capacities to spur self-reinforcing economic recovery and liquid securities markets; that 2008 was “the hundred year flood.” In reality, central bankers inflated history’s greatest divergence between global securities prices and economic prospects.

Global markets have commenced what will be an extremely arduous adjustment process. Markets must now confront the harsh reality that central bankers don’t have things under control. Risk premiums must rise significantly – which means the destabilizing self-reinforcing dynamic of lower securities prices, faltering economic growth, uncertainty, fear and even higher risk premiums. This means major issues for global derivatives markets that have inflated to hundreds of Trillion on misperceptions and specious assumptions. I’ll assume Draghi, Kuroda, Yellen, the PBOC and others resort to more QE – and perhaps they prolong the adjustment period while holding severe global crisis at bay. But the global Bubble has burst. And if QE has been largely ineffective in the past, we’ll see how well it works as confidence in central banking withers. Perhaps this helps explain why global financial stocks now trade like death.

Excerpted from credit bubble bulletin

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Trudeau nearly triples Harper’s climate corporate welfare commitment

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AlternativeFreePress.com

A couple weeks ago Prime Minister Justin Trudeau made an additional five-year $2.65-billion contribution to help multinational corporations develop countries under the guise of fighting climate change. The $2.65-billion is in addition to the $1.5 billion of corporate welfare contributed by the previous Conservative government.

While Trudeau campaigned on a slogan of “real change”, so far it’s billions in handouts to corporations, as usual.

The climate change fund is a scam, positioned as channeling money “to poor countries to help them adapt to climate change”, it may sound nice, but typically this money is loaned to poor countries with significant strings…

In Confessions of an Economic Hit Man, John Perkins describes how he would convince the government leaders of underdeveloped countries to accept huge loans they could never pay off. He explains how those countries were then pressured politically so much that they were effectively neutralized and their economies crippled. Perkins describes the role of an Economic Hit Man as “a highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign “aid” organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.”

These international agreements seek to destroy nations sovereignty, they attempt to override laws of local, regional and national governments.

While we do need to take our impact on the planet seriously, we can’t allow ourselves to be manipulated… In 1990 The Club of Rome published The First Global Revolution, where they outlined how they would create or exaggerate environmental threats with the intention of manipulating the public into giving up their sovereignty to one world government:

The common enemy of humanity is man.
In searching for a new enemy to unite us, we came up
with the idea that pollution, the threat of global warming,
water shortages, famine and the like would fit the bill. All these
dangers are caused by human intervention, and it is only through changed attitudes and behavior that they can be overcome. The real enemy then, is humanity itself.

This climate agreement is being presented under the guise of rich countries helping countries in need, but really it is countries already in debt, getting into more debt, in order to get other countries into debt.

The “rich” countries are not really rich when you consider their debt, every dollar of aid given is borrowed with interest owing and compounding. Increasing debt and devaluing the dollar.

The “developing” countries can certainly use help, but the strings attached to this type of help will leave them with more debt than they can handle. This will leave them vulnerable to exploitation and allow corporations to pillage resources.

This article borrowed heavily from our previous article:
Harper commits Canada to contribute corporate welfare

Written by Alternative Free Press
Creative Commons License
Trudeau nearly triples Harper’s climate corporate welfare commitment by AlternativeFreePress.com is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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The IMF forgives Ukraine’s debt to Russia

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Michael Hudson
The Saker: December 9, 2015

On December 8, the IMF’s Chief Spokesman Gerry Rice sent a note saying:

“The IMF’s Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors. We will provide details on the scope and rationale for this policy change in the next day or so.”

Since 1947 when it really started operations, the World Bank has acted as a branch of the U.S. Defense Department, from its first major chairman John J. McCloy through Robert McNamara to Robert Zoellick and neocon Paul Wolfowitz. From the outset, it has promoted U.S. exports – especially farm exports – by steering Third World countries to produce plantation crops rather than feeding their own populations. (They are to import U.S. grain.) But it has felt obliged to wrap its U.S. export promotion and support for the dollar area in an ostensibly internationalist rhetoric, as if what’s good for the United States is good for the world.

The IMF has now been drawn into the U.S. Cold War orbit. On Tuesday it made a radical decision to dismantle the condition that had integrated the global financial system for the past half century. In the past, it has been able to take the lead in organizing bailout packages for governments by getting other creditor nations – headed by the United States, Germany and Japan – to participate. The creditor leverage that the IMF has used is that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments.

This has been the system by which the dollarized global financial system has worked for half a century. The beneficiaries have been creditors in US dollars.

But on Tuesday, the IMF joined the New Cold War. It has been lending money to Ukraine despite the Fund’s rules blocking it from lending to countries with no visible chance of paying (the “No More Argentinas” rule from 2001). When IMF head Christine Lagarde made the last IMF loan to Ukraine in the spring, she expressed the hope that there would be peace. But President Porochenko immediately announced that he would use the proceeds to step up his nation’s civil war with the Russian-speaking population in the East – the Donbass.

That is the region where most IMF exports have been made – mainly to Russia. This market is now lost for the foreseeable future. It may be a long break, because the country is run by the U.S.-backed junta put in place after the right-wing coup of winter 2014. Ukraine has refused to pay not only private-sector bondholders, but the Russian Government as well.

This should have blocked Ukraine from receiving further IMF aid. Refusal to pay for Ukrainian military belligerence in its New Cold War against Russia would have been a major step forcing peace, and also forcing a clean-up of the country’s endemic corruption.

Instead, the IMF is backing Ukrainian policy, its kleptocracy and its Right Sector leading the attacks that recently cut off Crimea’s electricity. The only condition on which the IMF insists is continued austerity. Ukraine’s currency, the hryvnia, has fallen by a third this years, pensions have been slashed (largely as a result of being inflated away), while corruption continues unabated.

Despite this the IMF announced its intention to extend new loans to finance Ukraine’s dependency and payoffs to the oligarchs who are in control of its parliament and justice departments to block any real cleanup of corruption.

For over half a year there was a semi-public discussion with U.S. Treasury advisors and Cold Warriors about how to stiff Russia on the $3 billion owed by Ukraine to Russia’s Sovereign Wealth Fund. There was some talk of declaring this an “odious debt,” but it was decided that this ploy might backfire against U.S. supported dictatorships.

In the end, the IMF simply lent Ukraine the money.

By doing so, it announced its new policy: “We only enforce debts owed in US dollars to US allies.”

(read the full article at The Saker)

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Europe Cracks Down On Bitcoin, Virtual Currencies To “Curb Terrorism Funding”

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ZeroHedge : November 20, 2015

European Union countries are preparing to crackdown on virtual currencies such as bitcoin, and anonymous payments made online and via pre-paid cards “in a bid to tackle terrorism financing after the Paris attacks, according to a draft document.”

Just a week after the Paris terrorist attack, showing a dramatic ability for coordinated work by a continent that is known for anything but, today EU interior and justice ministers are gathering in Brussels for a crisis meeting called after the Paris carnage of last weekend. This happens days after the European Commission already announced it would make procurement of weapons across Europe virtually impossible, if only for citizens who wish to obtain protection legally.

According to Reuters, the justice minister will urge the European Commission, the EU executive arm, to propose measures to “strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards,” draft conclusions of the meeting said.

Conveniently, Reuters reminds us that “Bitcoin is the most common virtual currency and is used as a vehicle for moving money around the world quickly and anonymously via the web without the need for third-party verification. Electronic anonymous payments can be made also with pre-paid debit cards purchased in stores as gift cards.”

But no more: “EU ministers also plan “to curb more effectively the illicit trade in cultural goods,” the draft document said.”

And with all of Europe sliding ever deeper into negative rates, and where a ban on cash bank notes is an all too realistic possibility, the easiest mechanism to evade the ECB’s creeping financial oppression is about to be made illegal.

Finally, there was no word about the true source of terrorism funding: those mysterious “third parties” which keep pumping the Islamic State with hundreds of millions in cash in exchange for its crude oil. Perhaps Europe is so unwilling to dig down into this most important question (which as we said last night nobody is willing to ask) because it either already knows the answer, or realizes that the people implicated just may be some of the wealthiest and most respected Europeans, and the resulting stench could spread all the way to the various unelected politicians and ex-Goldmanite central bankers?

(read the full article at ZeroHedge)

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