Category Archives: Banksters

Banksters, Corporate Welfare

Central Banking and the Greatest Con Job in the History of Finance

Zero Hedge: May 9, 2015

One of the greatest con jobs in history was convincing ordinary people that Central Bankers care about the “economy” or Main Street.

Aside from the complete lack of relevance that Main Street has for Central Bankers from a professional perspective (more on this in a moment), when do you think was the last time that Janet Yellen or her ilk spent an evening with non-banker/financial types? Years ago? Decades ago?

Yellen lives in a super-affluent, gated part of Washington DC. And even within that subset of the US population she lives in a higher echelon: her entourage of security annoys her wealthy neighbors… though I suspect part of the annoyance stems from jealousy.

Regard professional significance… why would Janet Yellen care about ordinary people? They’re just data points in her financial models. Ordinary people didn’t place her at the Fed (the big banks did). And they didn’t place her as Fed Chair (the financial/ political elite did… with the express intent of gaining future favors).

Think of it this way… imagine there was a super cartel of English Professors who controlled what words you or I could use in daily conversation. These individuals literally could change the structure of the human language if they wanted… removing words or adding words at random.

Now imagine that they randomly pick out a low level English Professor who they elevate to being the face of their organization. Do you think this professor would give a damn about how her decisions/ words affected speech? She literally was made one of the most powerful people in the world by this cartel.

This is case worldwide. Most Central Bankers came up from the Too Big To Fails or Primary Dealers (or they are academics like Yellen or Banenke who get their first taste of the “real world” when they’re literally running the financial system).

Literally their entire personal net worth… their professional clout… and their sense of accomplishment was derived from working at these organizations.

And somehow they’re supposed to give a hoot about Joe the Plumber or Bob the Boilermaker? They don’t even deal with those people face to face when they have a problem with their homes. “Hello this is Mario Draghi… the man who controls the currency in your economy… could you please come fix the sink?”

This is why Yellen, Draghi and the like can say with a straight face that maintaining ZIRP or NIRP benefits the economy. It’s why they can spent trillions to bail out/prop up banks without batting an eyelid. It’s why no one who committed fraud went to jail. It’s why lying and cheating in the financial system is allowed… even applauded… because the ones lying and cheating are the same people who picked out/ promoted the regulators.

And this is why we’re heading for another Crisis… one that will be even bigger than 2008. The fraud that caused 2008 was not solved. Instead it was allowed to spread into the public sector. Today most Central Banks are sporting leverage ratios that would put Lehman Brothers (pre-crisis) to shame.

(read full article at zero hedge)

Banksters, Corporate Welfare

No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements

Charles Hugh Smith
Of Two Minds: May 5, 2015

Despite the PR about how corporate profits benefit widows and orphans, this vast wealth is concentrated in the top 1% and the top 5%.


I am honored to share a remarkable data base of Corporate Fines and Settlements from the early 1990s to the present compiled by Jon Morse. Here is Jon’s description of his project to assemble a comprehensive list of all corporate fines and settlements that can be verified by media reports:
“This spreadsheet is all the corporate fines/settlements I’ve been able to find sourced articles about, mostly in the period from the 1990’s up to today (with a few 80’s and 70’s). This is by far the most comprehensive list of such things online. At least that I could find, because the lack of any decent list is what made me start compiling this list in the first place.”

What struck me was the sheer number of corporate violations of laws and regulations–thousands upon thousands, the vast majority of which occurred since corporate profits began their incredible ascent in the early 2000s–and the list of those paying hundreds of millions of dollars in fines and settlements, which reads like a who’s who of Corporate America and Top 100 Global Corporations.

I encourage you to open one of the three alphabetical tabs at the bottom of the spreadsheet on Google Docs and scroll down to find your favorite super-profitable corporation.

Many have a long list of fines and settlements, and many of the fines are in excess of $100 million. Many are for blatant cartel price-fixing, not disclosing the dangers of the company’s heavily promoted medications, destroying documents to thwart an investigation of wrong-doing, etc.

In other words, these were not wrist-slaps for minor oversights of complex regulations— these are blatant violations of core laws of the land.


As you can see in the chart of corporate profits, enormous wealth has been concentrated in the hands of corporate managers and owners since 2002. This alignment with the start of the Federal Reserve’s easy-credit policies is not coincidental.

Despite the PR about how corporate profits benefit widows and orphans, this vast wealth is concentrated in the top 1% and the top 5%:

I asked Jon for his views on the meaning of this mind-boggling list of corporate malfeasance, price-fixing and other wrongdoing in terms of the concentration of wealth: here is his response.

As for the connection to the concentration of wealth: I see two ways in which they are related, the first one is pretty direct and that is the increasing size of the settlements. You will notice that as the settlement date gets later the average size gets much larger. Corporate profits after tax (without IVA and CCAdj) from 1st quarter to 1947 to 4th quarter 2014 went from $21,900,000,000 to $1,837,500,000,000 which is a 8290% increase, even from 1st quarter 1980 to 4th quarter 2014 went from $211,600,000,000 to $1,837,500,000,000 which is a 768% increase.

The second link is less direct. With the increases in concentration of wealth there has been a culture of idolizing wealth, one example is how prosecutors no longer find it appropriate to put banker’s and CEOs in jail. I think one side-effect of the culture changing has been an increased willingness to break the law to increase profits.

The settlements with the banks along with the ongoing investigations have shown that virtually every market is being manipulated; the stocks, metals markets, LIBOR, FOREX, everything. The companies would only break so many laws if they felt they would have a reasonable chance of getting away with it; they would also need a reason to do it, which is provided by the infinite growth model our economy is based on.

Thank you, Jon, for compiling a tremendously important and valuable database of corporate fines and settlements, and for connecting this staggering list of violations to the cultural worship of maximizing private gains at any cost. I am reminded of socio-economist Immanuel Wallerstein’s description of the current world-system of central-state/private-corporation collusion as “a particular historical configuration of markets and state structures where private economic gain by almost any means is the paramount goal and measure of success.”

Wallerstein and four colleagues explored the future of this wealth-concentration/maximizing private gain model in Does Capitalism Have a Future? (Oxford University Press, 2013).

Please consider these charts:

(view the full article including remaining charts at Of Two Minds)

Banksters, Corporate Welfare, Geopolitics/War, Privacy, Tyranny

Frankly My Dear, I Don’t Give a Damn

First Rebuttal : May 4, 2015

I find it shocking how often I have people tell me the Constitution is out of date and is no longer relevant or necessary.  Then there are the vast majority of people that think about the Constitution the same way they think about religion; it makes us feel good to believe in it and we’ll even worship it on a holiday or two   The reality is that those who seem to get very worked up to the point that they are willing to act in defense of the Constitution even against the highest levels of government make up a very small minority of Americans.  This is a real problem.

You see if people gave a damn the government couldn’t get away with negating the Constitution.  But the vast majority of people just don’t give a damn and so the government very easily provides ridiculous and false legal sounding arguments to explain away why they have become a higher law than the Constitution. Now I’ve tried to understand why it is that we Americans are so damn apathetic about everything the government and government officials do.

Let me give a couple examples for which our apathy just boggles my mind.   We know they took us into wars on false pretenses resulting in the wrongful deaths of thousands of American soldiers and hundreds of thousands of innocent civilians and yet we’ve prosecuted no one.  Hell they’ve admitted to hacking into millions of our home webcams and downloading videos and pictures of us in our most private moments and maintaining those downloads on government servers and then sharing these files with foreign governments.

But because today’s American is simply a shell of a citizen none of the criminal atrocities creates even a stir from us.  Sure we all read about these atrocities and we are angered in the moment but it passes rather quickly and we fall back into our self induced ignorant bliss.  Only two things can get Americans to formidably rise up.  The first is a very direct and immediate impediment to our comfort.  For example try cutting back on the monthly social welfare checks.  You’ll have riots.   The second way is if the mainstream media relentlessly instructs us to be upset about a particular issue.  Outside of that there is absolutely nothing the new American won’t move past like water off a duck’s back.

What we’re finding out is that, and it sounds slightly over-dramatic but isn’t at all, unless we are willing to fight and die to win back the freedom our forefather’s fought and died to secure for us and all future generations we will continue to feel our chains grow heavier and shorter.  The simple reason is because our government is very much willing to kill to keep its ever encroaching control.  A free population is the antithesis to a political class.  And make no mistake the American federal government is the largest and most powerful group of aristocrats the world has known.

This group of traitors (and I mean that in the very technical sense of the word) not only behave according to a separate set of laws they have actually gone so far as to legislate a separate set of laws.  This in itself is a direct breach of the very Constitution they swear to defend.  Their intent is clear and that my friends is treason.  They are directly negating the very basis of the American concept for their own personal self interest and they are doing so by defrauding American citizens into believing their intent is to represent the will of their constituents.  Treason, Treason, Treason!  What else would you call it?

Now are you ready to fight and die to win the freedoms back for your children and grandchildren?  Hell No!  No, not at all!  And that’s kinda the problem because again the government is willing to kill to ensure your kids and grandkids don’t have the freedoms Americans were guaranteed.  The fuck of it is Americans have become so damn brainwashed that despite the founding fathers telling us explicitly our government would end up enslaving the rest of us to solidify their own power and wealth we ignore it. These were the guys that figured out the British were effectively enslaving us and decided to rise against it and create the greatest damn nation the world has ever known.  They literally created fucking America!!!  I mean holy shit, imagine having that on your CV.  And we pay them no mind, like they’re bat shit crazy and not relevant in our intellectual new world.

Today’s legislators rarely discuss the founding fathers or the Constitution beyond the very thin idea that they know we expect them to defend it.  That is, like freedom and apple pie, they love it during the campaign cycle.  However, ask them why then they continue to legislate against the Constitution and well they don’t want to talk about the Constitution anymore.  And we the people ,like apathetic morons , buy into the bullshit they feed us because we simply don’t care.  It’s to the point they can pretty much do anything knowing they can bullshit us with any damn nonsense that pops into their swollen heads.  And so they do things like hack into our webcams, take nude pictures of us and send them to foreign governments and tell us it’s for our own good.  We don’t give a shit because 1. it doesn’t impede our immediate comfort and 2. the press isn’t telling us it’s something to be concerned about.

The danger of being apathetic until it impacts our immediate day to day is that we allow the government to take away all the freedoms we are not currently using.  What I mean by that is we so far have not had to face what it means to be powerless and in chains.  But only because we haven’t yet ventured out far enough so as to reach the end of our chains.  Like a sleeping dog that isn’t aware he’s been shackled until he wakes and tries to chase a bird, we are asleep and unaware of the shackles placed around our ankles.

Some will say “wait, it isn’t apathy it is a trade off between safety and freedom”.  But the truth is freedom and safety are not conflictual we’ve only been led to believe so.  Fear has replaced freedom here in America and that is not by chance but by strategy of a government that has its own agenda, separate from its oath to uphold and defend the Constitution.  So while we should have prosecuted these recent governments for treason we’ve instead rewarded them the rights of dictatorship.

The Constitution is our freedom keeper but once the Constitution is made subordinate the precedent is set and in our legal system precedence is king.  The strength in the Constitution is just that, it’s strength.  Once we allow an exception to the Constitution’s superseding authority it no longer has any authority.  Unfortunately that exception has already been made.  With it, the destruction of the Constitution and the end to a guaranty of freedom.  Our corrupt government has created ‘legislation’ providing them a legal basis to imprison us without due process.  This is a fact.

This desecrates one of the most important axioms of America, in fact, due process is the very idea we are sold to spend $1 trillion per year fighting multiple simultaneous major theatre wars.  Yet here at home it no longer exists.  But remember our loss of due process is for our own good.  Giving a federal legislator or policy maker absolute discretion over our fate is in our best interest.  You and I have agreed with these propositions.  And you and I will have to adhere to being placed in prison for life if that is the will of our president or any delegate who will benefit by accusing us of being a national security threat.

Just by the fact the threat exists fulfills its objective.  People will not want to bring attention to themselves and thus will avoid protesting the wants of those who now have the authority to impede their freedom.  That in itself impede’s their freedom.  This is the one thing I really wish people could see.  What seem like issues too narrow or small to get worked up over are just marks of the snake bite.  Two very small holes in the skin but those holes are the gateway for the real killing agent to spread and overtake the whole system.

In March alone our beefed up and militarized public service workers killed more than 180 citizens they were meant to serve and protect on American soil.  That makes them an infinitely higher risk to our safety than the foreign terrorists to whom we’ve handed our Constitution.  That’s exactly what we’ve done.  If you listen to the terrorists’ videos that was their goal.  They wanted to end the freedom and free will that America seems to be jamming down the throats of societies around the world.  And so they won the moment Americans accepted to trade away its freedoms for safety.  That was their goal and they have achieved it.

Let’s look at Edward Snowden’s situation to see how one loses one’s freedom.  Snowden is a man that knowingly sacrificed his own freedom to expose the corruption and criminality of our policy makers and their respective agencies.  He is also a citizen that has been deemed a threat to national security.  Why would a man who exposed the criminal enslavement of Americans and citizens around the world be deemed a terrorist rather than a hero??  Because he is a threat to the power and control and really the entire system of those who can now legally classify him as a threat, removing his right to due process.

In effect, these political criminals can now legally lock away any prosecutor at will.   This is a gross conflict of interest and the hero that exposed this conflict of interest is now a victim of it.  Edward Snowden not only informed America, he recognized that he would be the first example so that Americans would see, first hand, the sort of corruption that has infected our system.  I can only infer he made himself known because he believed seeing it actually happen would get Americans to rise up and correct the moral transgression.  And what did we the people do in response to Snowden’s incredibly brave and patriotic action?  Absolutely nothing!!!  We force this hero to live in exile.  We don’t even demand the corruption to stop.  We do nothing.  How very American of us.  And why do we do nothing?  Because it doesn’t impede our immediate comfort and the media hasn’t told us we need to be concerned about the issue.

The lives of Americans have become so easy and so secure that we no longer recognize living in a utopia of freedom comes not with costs but with obligations.  We seem to believe that paying taxes indemnifies us of our real obligations as citizens who have been handed a beautiful gift and who are responsible for passing on that precious gift to future generations of Americans.   And that is a mistake that will have historians writing of us as we write of Eve in the garden of Eden.  Our lack of principles resulting in the suffering of all future generations having destroyed a gift we obviously didn’t deserve.

source: first rebuttal
emphasis: zero hedge

Banksters, Corporate Welfare

Why Canada’s economy is headed off the cliff

Vikram Mansharamani
PBS : March 27, 2015

Canada is in the midst of a unprecedented housing boom that seems likely to bust. I was recently in Canada and noticed a schizophrenic oscillation between housing exuberance and oil-price despair. What did it mean for the Canadian economy’s outlook? Upon returning to the US, I did some research. What I found leads me to the conclusion that Canada is now among the most vulnerable large economies in the world. Here’s why.

First, household credit. The seemingly conservative Canadian population has been voraciously consuming debt at a breakneck pace. Total household debt (C$1.82 trillion) now exceeds GDP (C$1.6 trillion), approximately C$1.3 trillion of which was for residential mortgages (Click HERE). Further, household debt is now >160% of disposable income – meaning it would take ~20 months for a family to pay off its debt if interest rates were 0% and they spent 100% of their disposable income to do so. Uh oh! The consumer clearly seems stretched, so much so that McKinsey recently suggested Canadian financial instability driven by a rapid consumer slowdown was not unlikely (click HERE).

Second, housing prices. Home prices continue their basically uninterrupted rise that began in the mid-late 1990s. Unlike the United States real estate markets, which have corrected, Canadian prices continue to rise.   Detached single-family homes in Toronto now average more than C$1 million and Vancouver is now deemed the second least affordable city in the world (click HERE) – thanks to Chinese buyers (who are themselves facing a slower economy). Take a look at the following chart of US and Canadian housing prices in real terms since 1990.

Slide1

It’s interesting to note that the data in this chart is updated through the summer of 2014 (click HERE), and we know that prices have risen since then. In fact, the Bank of Canada even suggested in December that housing prices were overvalued by as much as 30% (click HERE). The IMF has also sounded warnings.

Third, crude oil. The impact of lower oil prices is rippling through the economy at breakneck speed. Since 2011, Alberta, the oil-rich home of the oil sands, was responsible for more than 50% of all jobs created in Canada. It has literally been the locomotive of job creation pulling Canada forward. It’s now in reverse. Employment growth has stopped in Alberta and is now shrinking. According to construction industry association BuildForce, Alberta is likely to see sustained job losses for the next three years at a minimum (click HERE). Further, because Alberta drew workers from all over the country, any provincial slowdown will have national ramifications on unemployment and consumer confidence (click HERE).

Finally, craziness. Yup, not sure how to better categorize what I’m about to say. Here’s the situation, as told to me by Seth Daniels of JKD Capital, one of the most astute Canada-watchers I know. Seth told me that there is now a booming private mortgage market in which ordinary citizens are borrowing from their home equity lines to lend money to desperate borrowers. Specifically, he noted “a homeowner acts as a subprime lender by drawing a HELOC at ~3% interest-only, and lends it to a subprime borrower at 8-12% for one year (interest only).” I honestly didn’t believe him when he first mentioned this to me, but I then confirmed it myself (click HERE).   In fact, if you’re a Canadian and interested, here’s a sales pitch from one vendor (click HERE). It’s only a matter of time before this shadow mortgage banking market slows, and the ramifications are likely to be enormous.

wile-e-coyote-falling-off-cliff

Net net, the ending of the Canadian credit binge, combined with an oil-driven economic slowdown, is likely to crush consumer sentiment.  In this Loonie tune, it seems our Crazy Canadian Coyote has run off the cliff, his feet are still moving, but he has yet to look down. He’s suspended in air, and it’s only a matter of time until gravity exerts its force.

Originally posted at:
http://www.mansharamani.com/navigating-uncertainty/crazy-canadian-credit-confronts-crude-eh/

http://www.pbs.org/newshour/making-sense/why-canadas-economy-may-be-headed-off-the-cliff/

—

Alternative Free Press -fair use-

Banksters, Corporate Welfare, Geopolitics/War, Tyranny

Quebec students are fighting for you

Jon Parsons
theindependent.ca : March 27, 2015

It seems like only yesterday the 2012 Quebec student movement rocked the streets of Montreal, and now they’re at it again.

The basis for the current strike is the same as its predecessor: opposition to austerity and neoliberalism. Over the last few years student groups in Quebec have consistently organized massive demonstrations in an impressive show of strength and commitment, and so it seems correct to understand the present student strike more as an intensification of a protracted struggle.

At the same time, there has been a proliferation of militant student protest throughout the global West. Occupations and demonstrations are continuing on a number of campuses, such as the London School of Economics, and University of Amsterdam, and University of Arts London, and University of Melbourne, to name a few. The grievances are strikingly similar to those expressed in Quebec – austerity, tuition fees, neoliberalism.

Outside the global West, significant and ongoing student movements are taking a stand in Honduras, Mexico, Hong Kong, and Myanmar, to name a few.

There has arguably not been such widespread student unrest since the famous student-led protests of 1968, and, at least in the West, Quebec students have been on the frontlines of the fight, enduring police brutality, subversion, and constant obfuscation in the mainstream press.

The student fight is your fight, too

The province of Newfoundland and Labrador has until recently weathered the effects of the 2008 global financial crisis, but with a significant deficit and growing debt, the provincial government has indicated that austerity measures will come into force in short order. Many things are “on the table,” including increased tuition at Memorial University, among other measures common to austerity economics.

At the same time, recent studies have shown that Newfoundland and Labrador is one of the least politically engaged provinces in Canada, in terms of both formal and informal politics. NL has one of the lowest overall voter turnouts (around 53 per cent) as well as the lowest youth voter turnout of any province (around 29 per cent).

The reasons for this are many and varied, and it is not my intention to assign blame. Nonetheless, there is an overwhelming sense of complacency, perhaps apathy, with regard to politics in the province, and especially so for youth.

In light of this, it is nothing of an exaggeration to say that Quebec students are fighting for us all, as they are the only significant force in the country opposing austerity and neoliberalism, and the only ones who seem to understand the importance of popular protest. Quebec students are showing us all how it’s done, both in terms of tenacity and in terms of organization, as Ethan Cox explains in Ricochet.

(read the full article at theindependent.ca)

—

Alternative Free Press -fair use-

Banksters, Corporate Welfare, Tyranny

Bank of Canada, Finance Minister, and Others Face Lawsuit for Alleged IMF Conspiracy

Matthew Little
Epoch Times : March 19, 2015

[…] despite the government’s best efforts to have this case thrown out, it’s going ahead after winning an appeal that overturned a lower court’s ruling to have it tossed and surviving a follow-up motion to have it tossed again.

The government has one more chance to have it thrown out through an appeal at the Supreme Court, but that has to be filed by Mar. 29 and that looks unlikely.

That means the Committee on Monetary and Economic Reform (COMER) is going to have its day in federal court.

This little think-tank alleges that the Bank of Canada, the Queen, the attorney general, the finance minister, and minister of national revenue are engaging in a conspiracy with the International Monetary Fund (IMF), the Financial Stability Board (FSB), and the Bank for International Settlements (BIS) to undermine Canada’s financial and monetary sovereignty.

No major media have covered this story. That could be because of the powerful vested interests the suit targets, as Rocco Galati, the lawyer trying the case, suggests. Or it could be because portions of the statement of claim read like something one might have pulled out of the dark corners of some Internet conspiracy forum.

It wasn’t. These are serious people with wide, factual knowledge of the financial and monetary system. And their lawyer is no slouch.

Galati has a reputation for winning unlikely lawsuits. The Globe and Mail’s justice writer Sean Fine once called Galati Canada’s “unofficial opposition” for his propensity to have the government’s edicts tossed out in court.

One recent high-profile win saw Galati block the Conservative’s appointment of Justice Marc Nadon to the Supreme Court with a suit he won in March last year.

Toronto-based COMER and its fellow plaintiffs Ann Emmett and William Krehm are suing over fundamental changes to the Bank of Canada’s role that were made in 1974 when the bank stopped making loans to the government.

The Bank of Canada (BoC) was founded in the Great Depression and played a major role loaning money to the government. It helped finance Canada’s war effort during World War II and could loan money to the government, without interest, if it chose to do so. Any profits the BoC made were returned to the government minus the Bank’s operating expenses. That last point remains the case today, with $1.7 billion sent to the Receiver General annually.
No National Debt?

COMER alleges that by no longer providing these loans, the Bank and others named in the suit have forced the government to finance budget deficits by borrowing from private markets and paying hundreds of billions of dollars in interest. Last year, $28 billion—over 10 percent of the federal government’s $277 billion in expenditures—went to servicing the debt.

That’s more than what was spent on National Defence ($21.5 billion) and nearly as much as the Canada health transfer ($30.5 billion).

The Bank of Canada Act allows, or as COMER alleges—requires—the BoC to give the federal government loans up to a total value of one-third of the government’s predicted annual revenues. For provincial governments it is a quarter of those revenues. The loans have to be repaid within the first quarter of the next fiscal year. At that point, the government just needs to pay back the loan with incoming revenues, and take out another loan to make up any deficit.

The benefit of that is no national debt, according to Galati. However, there is a risk of inflation if too much money is poured into the economy. Some economists argue that any arrangement where central banks loan money directly to their national governments invariably leads to runaway inflation.

Galati disagrees, pointing out that the government can borrow as much as it wants from private markets and inflation is manageable.

The suit alleges that the BoC stopped providing these loans at the behest of the IMF, BIS, and FSB so private interests could benefit, presumably from interest paid on the national debt.

Galati predicts the government will try to delay the suit, but if it goes ahead, he said the facts will be borne out.

“A lot of the facts are not in dispute, believe it or not. They just don’t want this case heard.”

Galati plans to call the BoC governor, the finance minister, and others to testify if the case goes ahead.

The Bank can’t comment on the case directly because it is before the courts, said a spokesperson, though it did provide background materials on the Bank’s history.

How Money Works

The nature of money and debt is at the heart of the lawsuit COMER has filed. Representatives from the group told the Epoch Times that few people understand how money is created.

One might wonder, therefore, how much money the Bank of Canada has, and how the government can borrow from the country’s own central bank.

This is where conspiracy theory meets the cold hard facts—that the vast majority of the money in Canada’s economy was created by bankers with the push of a button. The BoC can do that also.

When someone takes out a mortgage, the borrowed money does not come from someone else’s savings. Instead, the money is created in that instant through the trick of double entry bookkeeping. The bank records the loan on one side as a liability, and the debt owed to the bank as an asset.

Banks keep the system humming along smoothly by shuffling these balance sheets around each day. If they are short, they borrow from each other on the overnight market at the rate set by the BoC.

As long as everyone pays their loans, the systems works pretty well and basically creates wealth out of thin air. But if banks loan money to people who can’t repay it, the whole system falls apart. That is essentially what happened in the 2007 subprime mortgage debacle that brought on the global recession.

There is one problem with the system, according to its critics: interest. And if you are a government, that interest is significant.

Significant portions of COMER’s suit, including a tort portion seeking damages, were thrown out in those earlier rulings, though Galati said they could be amended and filed again. Both he and the government have until next week to file appeals of the previous ruling.

And even elements of his central argument were questioned in those earlier rulings which weighed, among other things, if the case had any chance of success. But courts are required to err on the side of permissiveness when deciding on motions to strike, as well as assume the facts claimed in the suit are true.

And so with the case set to move forward, Canadians could be in for a fascinating look at how our monetary system works and what role international financial bodies like the IMF play in Canada’s monetary and fiscal policy.

It’s not often a government has to defend itself against a conspiracy suit in court. This one promises to be interesting.

(read the full article at Epoch Times)

—
Alternative Free Press -fair use-

Banksters, Corporate Welfare

Ten Reasons Why There Will Be Another Systemic Financial Crisis

Robert Lenzner
Forbes: December 8, 2014

1. The financial system is a fragile and complex network of financial relationships that has built into it a tendency for periodic disturbances that can produce “huge, unanticipated changes,” which at times spin out of control into a catastrophe as took place in 2008. This is the thesis Harvard professor Niall Ferguson put forth in his 2012 book The Great Degeneration, How Institutions Decay and Economies Die, a must-read for all economists, stock pickers and investment bankers. Fragile, as in “a system prone to crash,” says Andrew Haldane, today the chief economist of the Bank of England. “Lending within the financial system… raises inter-connectivity in the system, thereby amplifying systemic risk.” Ben Bernanke, former Fed chairman, puts the quandry in a pithy manner: “Assets are observable,” he says,” but the whole story is not observable.”

2. Wall Street is a highly concentrated politically powerful industry while the regulators of Wall Street are a highly fragmented group of institutions like the Fed, the SEC, the Treasury and the FDIC unused to working in tandem with each other. The financial system’s complexity of operations and nontransparent web of interconnections means that the worrisome problems of the financial institutions always slip below the regulatory radar.

3. The next crisis is bound to involve the Too Big To Fail Banks that have highly leveraged their hold on 68% of the banking industry’s deposits. As Federal Reserve Board Vice-Chairman Stanley Fischer has put it, “We should never allow ourselves the complacency to believe we have put an end to TBTF.” In short, real lasting financial stability requires reducing the system’s degree of concentrated risk in a mere handful of giant institutions that may be Too Big To Manage and Too Big To Regulate as well as Too Big To Fail. The dangerous bottom line: there is no pragmatic method that readily comes to mind that involves breaking up the TBTF banking system while maintaining a market-based financial system, according to former Treasury Secretary Timothy Geithner.

4. No one understands the derivative risk positions of the Too Big To Fail Banks, JP Morgan Chase, Citigroup, Bank of America, Goldman Sachs or Morgan Stanley. There is presently no way to measure the risks involved in the leverage, quantity of collateral, or stability of counter-parties for these major institutions. To me personally they are big black holes capable of potential wrack and ruin. Without access to confidential internal data about these risky derivative positions the regulators cannot react in a timely and measured fashion to block the threat to financial stability, according to a National Bureau of Economic Research study.

5. The Dodd-Frank legislation does not reform Wall Street. Rather it preserves the system that existed prior to the 2008 crisis, according to Martin Wolf of the Financial Times of London. According to former Treasury Secretary Tim Geithner, “The goal of financial reform was to make the system safe for failure. It wasn’t to prevent the failure of individual firms that take on too much risk, but to make the aftershocks of failure less threatening to the system as a whole.” Most importantly, Dodd-Frank amended the Federal Reserve Act of 1913 to prohibit the central bank from bailing out an insolvent financial institution on the verge of bankruptcy. It can only lend or inject capital if the bank is solvent. According to Harvard economist Larry Summers the Fed is simply not capable of understanding even when a member bank becomes insolvent.

6. The Fed’s monetary policy model at present does not take into consideration any factual or numerical input from events either in domestic financial markets or global markets. This lack of input means the Fed will always have trouble spotting a bubble that is developing out of speculation in the financial or commodity markets.

7. Nor does the Fed have any oversight powers over the Shadow Banking System, which amounts to $75 trillion worldwide of financial activities by non-banks that in 2008 triggered runs on the system that threatened its stability. Shadow banking, which runs the gamut from money market mutual funds to short term repurchase financing agreements, commercial paper and other aspects of investment banking, are activities that can trigger panicky runs on the financial system. Shadow banking is also inherently fragile due to the lack of a central bank safety net or the deposit insurance that supports bank deposits. The whole inter-relationship between shadow banking and traditional banking is not very well understood. In short, shadow banking increases the likelihood that systemic risk will be triggered from the breakdown and gaps that exist between it and traditional banking.

8. Wall Street pressure has awed its government overseers into a deadly form of “regulatory capture” especially as regulators lack the resources, the motivation, and in the last resort, the knowledge, to keep up with the main players in the financial hierarchy, according to Martin Wolf, author of The Shifts and the Shocks, a recent book on the 2008 financial crisis.

9. There has been very little progress on building an international framework to resolve failed financial firms, according to a House of Representatives report prepared by the Republican staff of the Financial Services Committee published in July 2014. Christine Lagarde, Managing Director of the International Monetary Fund, described this absence of a cross-border regime for resolving large banks as “a gaping hole in the financial architecture” in a May 27, 2014 speech. Or as Treasury Secretary Jacob Lew put it in December 2013, “the failure of Lehman Brothers demonstrated that the absence of cooperation between domestic and foreign authorities to resolve a financial company can endanger the global financial system.”

10. The United States has experienced periodic financial panics or crises since its founding. From 1792, 1837, 1873, 1893, 1907 to 1929 and more recently 2000-2002 and 2008-2009 there have been bank closings, bankruptcies, massive stock market sell-offs and painful recessions. Many financial problems are hidden in the plumbing of the financial markets, which are not transparent and make the financial system exceptionally vulnerable. To some extent we are always flying blind. That is why we should have a serious fear of the unknown. As former Treasury Secretary Tim Geithner puts it, “financial crises cannot reliably be prevented.” Its impossible to predict how and when the next financial crisis will occur. We can’t count on fallible central bankers to stop financial booms before they become dangerous, because by the time the danger is clear, it’s often too late to defuse the problem. There is a Black Swan tail risk in our future some day. We just don’t know when and how it will happen. ” There is no mechanism for determining when there actually is a crisis” says Yale economist Gary Gorton in his 2012 book “ Misunderstanding Financial Crisis Why We Don’t See Them Coming.”

(read the full article at : Forbes

Banksters, WTF

Prince Andrew is named in underage sex lawsuit

Abby Ohlheiser
Washington Post: January 2, 2015

Prince Andrew was named this week in an ongoing lawsuit brought by a group of women who claim they were trafficked to the world’s rich and powerful as part of an alleged underage “sex slave” ring run by American investment banker Jeffrey Epstein.

The allegation, found in a court filing this week, prompted Buckingham Palace to issue an unusual statement to the Guardian, noting that the allegation surfaced in “long-running and ongoing civil proceedings in the United States to which the Duke of York is not a party.” The statement continues: “As such we would not comment in detail. However, for the avoidance of doubt, any suggestion of impropriety with underage minors is categorically untrue.”

As part of a 2008 plea deal with prosecutors, Epstein spent 13 months in prison on a state charge of soliciting prostitutes. According to unsealed documents pertaining to that deal, Epstein was the subject of a federal investigation probing allegations that the powerful figure abused dozens of underage girls at his Palm Beach mansion. The deal effectively allowed him to avoid potential federal charges stemming from the investigation.

The lawsuit, filed in 2008 by two anonymous alleged victims, charges federal prosecutors with violating a statute by not consulting with them before finalizing the plea deal. The latest filing is a motion to expand that existing case to include the allegations of two more women.

Those women named Prince Andrew, Alan Dershowitz and other powerful associates of Epstein as participants in the alleged sexual abuse ring. It’s the first time the Duke of York’s name has appeared in a court document alleging that he sexually abused Epstein’s alleged victims.

But as the Guardian’s reporting makes clear, this isn’t the first time the Duke of York’s name has been linked publicly to the allegations against Epstein: Prince Andrew was friends with Epstein for years — before, during and after the banker served time in prison. In 2011, responding to a statement from one of Epstein’s former employees, Prince Andrew told Vanity Fair that he never attended any of the notorious pool parties at Epstein’s Palm Beach mansion and denied having contact with the alleged victims. He allegedly ended his friendship with Epstein at some point that year.

In the new motion, “Jane Doe #3″ says she was “forced to have sexual relations with this Prince when she was a minor in three separate geographical locations,” including in British socialite Ghislaine Maxwell’s apartment in London; during an “orgy” on Epstein’s island in the U.S. Virgin Islands; and in New York.

“Epstein instructed Jane Doe #3 that she was to give the Prince whatever he demanded and required Jane Doe #3 to report back to him on the details of the sexual abuse,” the document says. Maxwell is a friend of Epstein’s who is named as a co-conspirator in the suit.

(read the full article at Washington Post)

—
Alternative Free Press -fair use-

Banksters

Canada’s housing market is due for a major correction

The Bank of Canada says home prices could be overvalued by as much as 30 per cent, but it continues to believe the market is headed for a soft landing. Housing could be overvalued by 30 per cent, Bank of Canada warns (The Star, December 10, 2014)

Slumping oil prices are likely to impact Calgary’s real estate market in the coming year, causing home prices to slow their rapid acceleration in Alberta’s largest city, according to a report by realtor group Re/Max. Slumping oil prices to hit home prices in Calgary in 2015: Re/Max (Financial Post, December 10, 2014)

Calgary housing starts tumbled in November, with experts warning plunging oil prices could further slow new home construction in the region.
Calgary housing starts fall in November (Calgary Herald, December 8, 2014)

It looks increasingly like the party is over for Toronto’s residential construction frenzy, while Calgary’s real estate market is taking a breather in the face of plummeting oil prices. Housing starts in Toronto fell 34 per cent in November, compared to the same month a year earlier, according to data from Canada Mortgage and Housing Corp. Meanwhile, StatsCan reported Monday that the value of building permits issued in the city fell 11 per cent in October, compared to a year earlier. Condo construction was particularly hit hard, with multi-family housing starts plummeting 46 per cent over the past 12 months. Toronto, Calgary Housing Markets Show Signs Of Slowdown (Huffington Post, December 8, 2014)

A post-recession housing boom, fuelled by record-low borrowing costs, has prompted some analysts to warn a bubble may be in the works. … The IMF saw signs of over valuation in single-family homes, especially associated with high-end buyers, but said tighter mortgage insurance rules, reduced affordability and the construction of multi-family units appeared to have contained price growth in other market segments. … “The balance of risks is modestly tilted to the downside for the Canadian economy,” the IMF said, pointing to the possibility of faster-than-expected tightening of global financial conditions and a further fall in oil prices.”…“Deeper downside risks to growth involve a combination of external shocks that are amplified by high household balance sheet vulnerabilities and a sharper-than-expected correction in house prices.” IMF can’t stop worrying about Canada’s so-called housing bubble (Financial Post, November 26, 2014)

Of course the only reason the correction didn’t occur years ago is that Canada’s banks received a bailout of “$114 billion in cash and loan support between September 2008 and August 2010. They were double-dipping in not only two but three separate support programs, one of them American.” The Big Banks’ Big Secret (Canadian Centre for Policy Alternatives, April 30, 2012)

$114 billion only delayed the problem and made it larger.

Alternative Free Press -fair use-

Banksters, Corporate Welfare

Banksters laughing at slap on wrist for foreign exchange rigging – Now it’s back to “business as usual”

Mega Banks Are Fined for Foreign Exchange Rigging – Now It’s Back To “Business as Usual”

Michael Krieger
Liberty Blitzkrieg: November 12, 2014

Far from chastening the world’s biggest currency trading firms, the multi-billion dollar fines levied by regulators on Wednesday are more likely to draw a line under the affair and gradually allow a return to business as usual.

A year into a wide-ranging industry probe into charges that banks routinely fleeced clients over currencies, industry observers and politicians were frustrated by a deal they said showed the affair will end just with fines rather than any reform of what they say is the Wild West of financial markets.

– From the Reuters article: Banks pay up and carry on after FX fines

[…]

Absolutely nothing will change despite mega banks once again being caught in extraordinarily unethical behavior. [Reuters] admits the mega banks are essentially allowed to self-regulate in this market and will continue to do so. […]

But in essence, Wednesday’s rulings put the foreign exchange market, long “self-regulated” by banks and people who provide services to banks, well on the way to seeing off any risk of a new era of overarching global regulation.

“It seems to be business as usual — banks blow up, pay fines, and we move on. They just seem to be inventing new ways to break the rules,” said Mark Garnier, a former City financier and Conservative member of the UK parliamentary committee charged with overseeing finance.

They have fallen over themselves to play ball with the regulators and, given the complicated technical and financial nature of the probe, lawyers and consultants employed by banks have done much of the actual investigative work.

“The banks have been allowed to investigate themselves,” one source familiar with the investigation told Reuters. “The investigated decide what they want to investigate, what they admit to, and how much they will pay.”

Meanwhile, Bloomberg (the media outlet) provided some snippets from the crooked traders’ chatrooms. Here are a few:

Traders worked together to “whack” the market, called themselves a “cartell” and congratulated each other for a job well done, according to transcripts released by regulators today.

“Ok, i got a lot of euros,” a currency trader at JPMorgan Chase & Co. said in an undated 3:51 p.m. message to his counterpart at Citigroup Inc. A minute later he says, “tell you what, lets double team it.”

In another excerpt, traders at Citigroup, JPMorgan, and UBS debate whether to invite a fourth into a private chat room. “Are we ok with keeping this as is .. ie the info lvls & risk sharing?” the UBS trader asks at 7:49 a.m.

A minute later the JPMorgan trader tries to ensure that the new member puts the interests of the group first. “You know him — will he tell rest of desk stuff — or god forbin his nyk…” referring to New York colleagues.

The Citigroup trader then chimes in, “yes — that’s really imp[ortant] q[uestion] — dont want other numpty’s in mkt to know,” according to the transcripts, which added the wording clarification.

“But not only that,” the trader added. “Is he gonna protect us like we protect each other against our own branches?”

You can’t make this stuff up.

No jail sentences, no reduction in criminality. This isn’t rocket science.

(read the full article at Liberty Blitzkrieg)