Neela Debnath
The Independent: 18 May 2014

An activist in Chile has burnt documents representing $500 million (£300 million) worth of student debt during a protest at Universidad del Mar.

Francisco Tapia, who is also known as “Papas Fritas”, claimed that he had “freed” the students by setting fire to the debt papers or “pagarés”.

Mr Tapia has justified his actions in a video he posted on YouTube on Monday 12 May, which has since gone viral and garnered over 55,000 views.

In the five-minute video the artist and activist, translated by the Chilean news site Santiago Times, he passionately says: “You don’t have to pay another peso [of your student loan debt]. We have to lose our fear, our fear of being thought of as criminals because we’re poor. I am just like you, living a s**tty life, and I live it day by day — this is my act of love for you.”

He confessed he destroyed the papers without the knowledge of the students during a takeover at the university demanding free higher education.

According to the video’s description, Mr Tapia was at the protests when he hatched the plan to wipe the student debt by stealing the papers. It goes on to say that he wanted to create a work of art to reflect the problem of student debt plaguing the nation.

(read the full article at The Independent)

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Max Keiser
RT: May 14, 2014

Two big, macabre stories came out of Wall Street recently: the rash of banker deaths by apparent murder and/or suicide, and speculation that bank CEOs themselves are behind the trend to cash in on the insurance.

It turns out that banks take out life insurance policies on their employees, and those policies pay out death benefits to the banks – not the families. In other words, to add to the banks’ other crimes, they appear to also be involved in the “suicides” and deaths of their own, as a way to fatten their bottom line and bonuses.

Should we be surprised by this banker-on-banker death scam? After all, wasn’t this what 9/11 was all about?

A new book by James Rickards, ‘The Death of Money’ (read: ‘Death of Bankers’), opens with a timeline starting three days before the 9/11 attacks on the Twin Towers and describes them from a first-person account from inside the CIA, which was monitoring trading on airline stocks (specifically ‘put options’), from traders who were profiting from the 9/11 disaster.

Jim Rickards is both a Washington insider and a Wall Street insider. He’s a hedge fund manager and a lawyer who, amongst other roles, advised the government during the collapse of Long Term Capital Management (LTCM), as well as during the release of the hostages during the Iran Hostage Crisis of 1981. If anyone has the inside track on the Wall Street-Washington corridor of corruption, it’s Mr. Rickards. And in his new book, he provides an eyewitness account of 9/11 insider ‘terror trading’ that was missing from the government’s own report. Rickards is an unimpeachable source, and he has done a great service by blowing the whistle on this scandal, at least partially.

I’ve interviewed Jim Rickards on my show ‘Keiser Report’ many times and spent time with him personally comparing notes from our Wall Street days. One topic that often comes up is ‘Drexel.’ We were both working on Wall Street during the collapse of Drexel Burnham Lambert and the Ivan Boesky scandal – a seminal moment in establishing the modern, post-regulatory environment on Wall Street, where virtually anything goes and laws are either ignored, rewritten, or created on the spot to manage and profit from the avalanche of insider trading, market manipulation, back room dealing, larceny, forgery, extortion, and other crimes that are the hallmarks of American finance today. When talking about finance scandals, all roads lead back to Drexel and it provides common ground to start a conversation amongst Wall Street veterans.

Both Rickards and I agree that judging by the price action and volume in the options market ahead of the 9/11 attacks, it was clear we were witnessing insider trading. I was one of the biggest producing option brokers when I worked on Wall Street, keep in mind, so I am very familiar with that market. The put options before the disaster were trading like you would expect them to do after a disaster, not before. It was very obvious that advanced knowledge of the attacks was circulating amongst traders. The options market was in fact screaming insider trading, and brokers and bankers were talking about it in the days leading up to the attacks.

Rickards’ information timeline in his book almost exactly mirrors the stories I was hearing at the time, when talking to brokers who had heard of, and in some cases were trading, based on this rumor of an impending airline disaster.

Rickards quotes Buzzy Krongard in his book, deputy chairman of the CIA, who was also the former head of Alex Brown – a firm that factors significantly in the story. I used to work for Buzzy at Alex Brown and I still keep in touch with my former colleagues, some of whom were ‘buzzing’ about the action in airline puts. Additionally, a company I started in Los Angeles, a dot-com, had been sold to a Wall Street broker just a few months before the attacks and the company had relocated their acquisition to the top floor of the World Trade Center. I was in touch with employees who were also ‘buzzing’ about the put option frenzy in airline stocks, and they cited Alex Brown as the source of the rumors. (They were ironically speculating on their own demise, as we were to find out later).

Coyly, Rickards wants us to believe that the original ‘terror traders’ – the original airline put option buyers – started buying put options somewhere other than Washington DC or Wall Street. Without much by way of explanation, he suggests that there is no way of knowing for sure where these trades originated, who did the trades, or how to track them. This of course is wrong. All trades are cleared via the OCC (Option Clearing Corporation) and are routed in ways that leave a paper trail that is easily examined and reconstructed. Why is Rickards evasive on these points? Take a close look again at his resume; he is not going to point the finger at the CIA even though there is overwhelming evidence to suggest the trades originated there. So be it. We can read between the lines. To highlight just one obvious point missing in his narrative: millions of dollars worth of profits from 9/11 insider trading still sit uncollected in an Alex Brown account (now owned by Deutsche Bank) in Baltimore, just down the road from the CIA’s HQ at Langley.

Rickards claims these trades originated “by unknown traders working overseas somewhere,” and this is clearly a dodge. But let’s focus on the fact that Rickards at least has repudiated the government’s claim that there was no insider trading at all. For this I take my hat off to him.

For some, the 9/11 story has faded into history and they consider it not terribly interesting anymore, but I think it’s important to keep in mind the ruthlessness of bankers on Wall Street today who are now apparently killing each other for the insurance money and who, we can now say with some certainty, were trading options to cash in on their own deaths on 9/11.

(read the full article at RT)

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Washington’s Blog: May 2, 2014

Energy Prices Manipulated

The U.S. Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in  California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.

Pulitzer prize-winning reporter David Cay Johnston notes today that Wall Street is trying to launch Enron 2.0:

The price of electricity would soar under the latest scheme by Wall Street financial engineers to game the electricity markets.

If regulators side with Wall Street — and indications are that they will — expect the cost of electricity to rise from Maine to California as others duplicate this scheme to manipulate the markets, as Enron did on the West Coast 14 years ago, before the electricity-trading company collapsed under allegations of accounting fraud and corruption.

The test case is playing out in New England. Energy Capital Partners, an investment group that uses tax-avoiding offshore investing techniques and has deep ties to Goldman Sachs, paid $650 million last year to acquire three generating plant complexes, including the second largest electric power plant in New England, Brayton Point in Massachusetts.

Five weeks after the deal closed, Energy partners moved to shutter Brayton Point. Why would anyone spend hundreds of millions of dollars to buy the second largest electric power plant in New England and then quickly take steps to shut it down?

Energy partners says in regulatory filings that the plant is so old and prone to breakdowns that it is not worth operating, raising the question of why such sophisticated energy-industry investors bought it.

The real answer is simple: Under the rules of the electricity markets, the best way to earn huge profits is by reducing the supply of power. That creates a shortage during peak demand periods, such as hot summer evenings and cold winter days, causing prices to rise. Under the rules of the electricity markets, even a tiny shortfall between the available supply of electricity and the demand from customers results in enormous price spikes.

With Brayton Point closed, New England consumers and businesses will spend as much as $2.6 billion more per year for electricity, critics of the deal suggest in documents filed with the Federal Energy Regulatory Commission.

That estimate will turn out to be conservative, I expect, based on what Enron traders did to California, Oregon and Washington electricity customers starting in 2000. In California alone the short-term market manipulations cost each resident more than $1,300, a total burden of about $45 billion.

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Public Citizen characterized the Energy partners explanation for the shutdown as absurd:

In the world of business, a firm announcing that an asset purchased just 5 weeks ago is actually uneconomical to operate would be called incompetent, and such a firm would have difficulty attracting capital and staying in business. But the managing partners of Energy Capital Partners are a highly sophisticated all-star crew of former Wall Street financiers: four of the five managing partners are Goldman Sachs veterans, and the firm’s vice-presidents and principals are alumni of JP Morgan, Morgan Stanley, Bank of America, Credit Suisse and other financial powerhouses. These are not your run-of-the-mill owners and operators of power plants. They are Wall Streeters highly motivated to exploit the intricacies of power markets to make as much money as possible for their Cayman Islands-based affiliates.

The record is clear that artificially reducing supply to jack up prices was the plan of Energy partners from the get-go. The strategy is obvious from auction records, as explained by Robert Clark of the Utility Workers Union of America Local 464.

“Almost immediately after acquiring ownership of the Brayton Point Power Station late last year,” Clark said, “[Energy partners] intentionally withheld all of Brayton Point’s capacity from [auction] for the purpose of reducing capacity supply and intentionally raising the market prices” that Energy partners and its competitors could charge for other New England generating capacity they already owned.

As shown below, Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books.

Interest Rates Are Manipulated

Bloomberg reported in January:

Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.

RBS Securities Japan Ltd. in April pleaded guilty to wire frauda s part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation, according to court filings. U.S. District Judge Michael P. Shea in New Haventoday sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department Justice Department.

Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for lenders including RBS, Barclays Plc, UBS AG and Rabobank Groep.

RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.

Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit their own trading positions.

To put the Libor interest rate scandal in perspective:

• The big banks have conspired for years to rig interest rates … upon which $800 trillion in assets are pegged

• This was the largest insider trading scandal ever … and the largest financial scam in world history

• Local governments got ripped off bigtime by the Libor manipulation

• Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is still being manipulated. No wonder … the fines are pocket change – the cost of doing business – for the big banks

Indeed, the experts say that big banks will keep manipulating markets unless and until their executives are thrown in jail for fraud.

Why? Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”. As Nobel prize winning economist Joseph Stiglitz noted years ago:

“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.

The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”

Experts also say that we have to prosecute fraud or else the economy won’t ever really stabilize.

But the government is doing the exact opposite. Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing.)

Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements.

Because of this failure to prosecute, it’s not just interest rates. As shown below, big banks have manipulated virtually every market – both in the financial sector and the real economy – and broken virtually every law on the books.

And they will keep on doing so until the Department of Justice grows a pair.

Currency Markets Are Rigged

Currency markets are massively rigged. And see this and this.

Derivatives Are Manipulated

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed: through gamed self-reporting.

Oil Prices Are Manipulated

Oil prices are manipulated as well.

Gold and Silver Are Manipulated

Gold and silver prices are “fixed” in the same way as interest rates and derivatives – in daily conference calls by the powers-that-be.

Bloomberg reports:

It is the participating banks themselves that administer the gold and silver benchmarks.

So are prices being manipulated? Let’s take a look at the evidence. In his book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012.

For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets.

Commodities Are Manipulated

The big banks and government agencies have been conspiring to manipulate commodities prices for decades.

The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.

And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year.  More from Matt Taibbi, FDL and Elizabeth Warren.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

(Read the full article at Washington’s Blog)

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