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"What creativity can there be, when only money can buy you your next opportunity?"
Unknown free-lance film maker in Netherlands, 2014
Commentary: "Another Nail in Germany’s Economic Coffin: Commerzbank Cuts Out Jobs and Shareholders’ Profits" [09/30/16] "Hot on the heels of the Deutsche Bank debacle comes the next nail in Germany’s economic coffin. Germany’s second largest bank, Commerzbank is planning to cut almost 10,000 jobs over and will stop paying dividends to shareholders. These actions will take place over the next 4 years. When the news broke about Deutsche Bank collapsing, the German government said it will not assist the ailing bank – however, some have reported that the situation appears so dire that they may have softened. According to Die Zeit, the German financial sector is in talks with the government to have a rescue plan in place to head off a total collapse of the bank. However, Deutsche Bank and the German Finance Ministry have denied that the government would be prepared to hold a 25% stake in the bank to prop it up. “This report is false. The federal government is preparing no rescue plans. There is no reason for such speculation. The bank has said that clearly.” A member of the Finance Ministry said yesterday. (source) Concerns are rising due to the size of the fine imposed by the U.S. Treasury. Deutsche Bank is Germany’s biggest lender and is facing a $14bn (£10.8bn; €12.5bn) bill for improper selling of mortgage- backed bonds before the financial crisis of 2008. Many experts don’t feel that they would have to pay the whole fine but say that it is within the rights of the Treasury to insist the fine is paid. If this happens, there is little doubt that would lead to the total collapse of the bank in its current form. [...]" Related: "Deutsche Bank Is Going Under: Is The Real Reason Germans Were Told To Prepare For A National Crisis?" "If the most prominent bank in Germany fails, the effect on Europe will be profound, and I don’t think the United States will escape the effects. The ripples will turn into a tsunami as they travel across the Atlantic. Already, the bank’s troubles have stressed the American stock market. Angela Merkel has stated that Deutsche Bank will not be getting a bailout from the European Central Bank – the lender of last resort for European banks. The Department of Justice recently issued a $14 billion fine to the bank to settle a mortgage-backed securities probe…and the bank has no intention of paying. “Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited,” the company said in a statement early Friday in Frankfurt. “The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts.” (source) Deutsche Bank shares fell alarmingly this morning on the news that Merkel won’t support the bank. [...]"
Commentary: "The ‘Real Debate’: Secret Truth Revealed" [09/28/16] "The Elite have invested billions of dollars over a period of 60 years to create a population of semi- conscious happy consumers in the US (and are attempting to do so globally). The form changes from time to time, but the essence is the same: don't mess with the status quo. As we explain in Splitting Pennies - Understanding Forex - this is no where more obvious than financial services. In fact, a large part of the 'dumbing down' campaign is designed to make you fire from the right brain, and the reptilian brain (ribbit). That means they encourage sports, violence, and basically anything vulgar and stupid. It's not only designed to destroy your family, it's designed to destroy a civilization. And it's working! For those who are curious about this mega-brainwashing-system that went into place during the 50's and 60's and now has a complete domination over almost all aspects of American life [...] Part of this social control paradigm they've created is turning politics into a big circus-style entertainment. TRUMP fits the bill perfect here, as our entire political system has become a big reality show. Tonight's event, used to be one of much intellectual rigor. To understand what 'debate' is - read this book "Logic and Contemporary Rhetoric" - a MUST read for any intellectual, trader, thinker, or someone who enjoys to understand how things work. Modern politicians, don't bother to read this book, it will only ruin your career (you shouldn't read in fact, just practice smiling and saying what it says on the teleprompter). [...] There is practically no difference who the President is anymore. Even Trump who is like the 'Trump' card, the wildcard candidate, could not likely greatly change the Corporatocracy currently running Washington, or he'd risk imploding it and in the process bankrupting himself. Unfortunately, there isn't any 'fix' for the system, so no matter how crafty and clever candidates like Trump may seem, even Nuclear war couldn't shake the resolve of the lunatic psychopaths running the world. The only thing that could really change the system, would be mass non-cooperation (say, 100 Million people stay at home, turn off their TVs. It would cause a revolution). With the constant flow of drugs, money, and cheap entertainment, ("the spice must flow") it's guaranteed that for the current generation, the bread and games approach will work. As long as they're kept fat and happy, they're happy to line up for the slaughter.[...] The REAL Debate, doesn't happen on TV. It happens at the Federal Reserve Bank (Or, at the private Residence of some Rockefeller level bankers) - these debates involve topics such as who will be the next Fed Chairman, what country will the US invade next, and what the interest rate policy should be? (The debate about interest rates, that doesn't last long, not more than a few seconds, long enough for everyone to murmur 'agree' or 'ditto'). And here, in these private chambers, is where the REAL failure happened. Some Rockefeller sidekick, like Helicopter Ben, will have some popular warped theory about how negative rates are good to stimulate growth, so the valves should be turned on full. Fast forward almost 10 years, and the same Elite group finally realized that, economically speaking, it makes more sense to give money to people, not banks. If by strange chance, those advisors with that realization, could have been in the meeting we call The Real Debate, maybe QE wouldn't exist, we'd live in a different world, a more real world, based on real numbers and not artificially inflated data. But, we don't live in that world so it's pointless to think about. [...]"
MSM: "Wells Fargo Sued Over Firings for Missed (Illegal) Account Quotas" [09/25/16] "Wells Fargo & Co. managers were accused of fueling the creation of bogus accounts in what may be the first lawsuit by fired or demoted employees since the bank was called out by regulators. The lawsuit offers details of how low-level bankers were allegedly pushed to create at least 10 new accounts a day in a sales initiative that has blown up into a scandal and prompted U.S. lawmakers to call for Chief Executive Officer John Stumpf’s resignation. Bankers were “coached” to secretly open fee-generating accounts and often resorted to using false customer contact information on accounts so they couldn’t be traced back, according to the complaint. The bank, according to the Los Angeles suit, rewarded employees with promotions for using tactics including “sandbagging” -- opening fake accounts the day after a customer instructed the bank not to; “pinning” -- assigning personal identification numbers without customer authorization; and “bundling” -- lying to customers about limited availability of certain products in packages. While Wells Fargo fired 5,300 employees that it blamed for opening accounts without client approval, the bankers who sued Thursday said the dishonest practices were orchestrated by Stumpf. [...]"
Corbett Report: "Yellen To Trump: The Fed Is Above The President" [09/23/16] [13:36] "Welcome to New World Next Week — the video series from Corbett Report and Media Monarchy that covers some of the most important developments in open source intelligence news. After Rate Hike Fake Out, Yellen Responds To Trump and Clinton Tells Trump to Shut Up on Federal Reserve. Plus other stories like the crackdown in little neighborhood libraries. [...]"
MSM: "Clinton Foundation Took Cash From Wells Fargo" [09/22/16] "Democratic presidential nominee Hillary Clinton is joining the attack against Wells Fargo, which was fined $185 million by the federal government for opening new accounts for customers without their consent, and then charging them fees. [...] However, the Clinton Foundation has taken large sums from Wells Fargo. Last year, the St. Louis Post-Dispatch reported that the Wells Fargo Foundation had given between $100,000 and $250,000 to the Clinton Foundation. The Huffington Post adds: "Wells Fargo, both the bank and its foundation, have given generously to the Clinton Foundation over the years. The bank has given between $10,001 and $25,000, and the foundation has given between $100,001 To $250,000. In 2011, former President Bill Clinton gave a speech to Wells Fargo for $200,000." [...] “This is classic Hillary Clinton: publicly criticizing a company because it’s good politics while the Clinton Foundation quietly accepts hundreds of thousands of dollars from that same company,” said Jeff Bechdel, communications director of the conservative America Rising PAC. “If Clinton truly meant what she wrote, her letter would have been accompanied by a check from her family foundation returning the money from the company she is hypocritically complaining about.” [...]" Related: "Elizabeth Warren Slams Wells' CEO Stumpf: "You Should Resign, You Should Be Criminally Investigated" "As was widely expected, the main event during today's John Stumpf hearing before the Senate Banking Committee was the moments when anti-bank crusader, Elizabeth Warren would get to the mic. She did not hold back, and immediately launched into a full-blown attack on the one topic Americans find most disturbing: the utter lack of accountability, despite Stumpf's repeated protestations to the contrary. "Since this massive year's long scam came to light you have said 'I am accountable', but what have you done to hold yourself accountable? Have you resigned? Have you returned one nickel of the money you earned while this scandal was going on?" After Stumpf failed to respond, Warren replied in his stead: "I will take that as a no." When Stumpf confirmed that he has not fired a single senior executives, Warren slammed what he called "gutless leadership." Continuing the angry questioning, Warren said that Wells' cross-selling was designed just to "pump up the stock of Wells Fargo" and increase the value of Stumpf's stock-based compensation, and concluded by slamming Stumpf, saying he should return the money he made during the "scam" and that he should then "resign." "You should resign, you should give back the money you made while this scam was going on, and you should be criminally investigated by the Department of Justice and the Securities and Exchange Commission. This just isn't right.... The only way Wall Street will change is if executives face jail time when they preside over massive frauds." [...]" | "U.S. Lawmakers Ask Wells About Taking Back Bonuses Linked To Scam Case" "The Consumer Financial Protection Bureau and other regulators announced last week that they had reached a $185 million settlement with the bank over the scam. "...We write to ask whether the Board of Directors will invoke Wells Fargo's clawback authority to recover any of the compensation the company has provided to its senior executives, including Carrie Tolstedt, the former senior executive vice president of community banking," they wrote in a letter dated Thursday and released on Friday. The five - Massachusetts' Elizabeth Warren, Ohio's Sherrod Brown, Rhode Island's Jack Reed, New Jersey's Robert Menendez, and Oregon's Jeff Merkley - said Wells Fargo has cause to claw back money under a policy it instituted after the 2007-09 financial crisis. "These clawback provisions are designed to prevent exactly what happened with Ms. Toldstedt: Shareholders and consumers bearing the burden of bank misconduct while senior executives walk away with multimillion-dollar awards based on what the company later finds out are fraudulent practices," they wrote. Toldstedt led the bank division running the incentive program that pushed the employees to create fake accounts under real customers' names, often hurting those customers' credit scores, and received more than $20 million in annual bonuses between 2010 and 2015, they wrote. [...]"
Commentary: "Clinton, Comey, Lynch All Guilty of Concealing Money Laundering: VP at HSBC Bank" "John Cruz is your ordinary family man. He put himself through college and worked his way up the corporate ladder. He excelled at working with bank customers. He rose to the position of Sr. Vice-President of HSBC Bank. Everything was fine was until he discovered that his bank was laundering drug money for the cartels and terrorists and some of the money ended up in the hands of the elite. [...]" [Cross-Posted]
Commentary: "Thanks to Wells Fargo, Sen Warren Demanding Jail Time for Bankers" [09/19/16] "... According to Lisa Gilbert, director of the Public Citizen’s Congress Watch (PCCW) at the Consumer Financial Protection Bureau (CFPB): “The scope of the misconduct at Wells Fargo is breathtaking… The [PCCW] played a key role in uncovering the fraud, and that’s why it is outrageous that Republicans in Congress at this very moment are advancing legislation that would dismantle the agency’s regulatory and enforcement powers.” All this has inspired Senator Elizabeth Warren to write two letters, putting law enforcement on notice. The first letter Warren penned to the Department of Justice (DoJ) inspector general office, asking for an investigation into the “decision-making process by which the department chose not to prosecute so many potential cases” involving banking. Warren specifically asked to know exactly why the recommendations of the Financial Crisis Inquiry Commission (FCIC), the Congressional body tasked with understanding how the 2009 financial crash happened, were ignored. The second letter was written to the director of the Federal Bureau of Investigations (FBI), requesting the release of all documentation relating to the agency’s investigations into the FCIC’s referrals. Essentially, Warren is providing the platform for which Wall Street executives could be prosecuted for their crimes. With the 10 year statute of limitations running out, time in of the essence. [...]"
Max Keiser: "Lunatics & Economy" [09/19/16] [25:46] "We discuss negative interest rates, bans on cash and the one-percenters destroying dollar stores. In the second half, Max interviews James Turk of Goldmoney.com about the basket of deplorables that is the US economy. They also discuss gold standards and Special Drawing Rights. [...]" Related: "Ken Rogoff’s Government Debt Default Plan" "Ken Rogoff is by all accounts a brilliant man. The Harvard professor and former IMF chief economist is a chess grandmaster. His thesis committee included current Fed vice-chair Stanley Fischer (former head of the Bank of Israel). But like many survivors of Ivy League hoop jumping, the poor fellow appears to have emerged punch drunk. That’s the only conclusion to be drawn from Rogoff’s new book, The Curse of Cash , which, in effect, proposes a ban on paper currency. It’s terrifying piece of work, for several reasons. First, the cashless society, which Rogoff proposes in order to make it easier for the US government to confiscate private wealth, in effect, amounts to an admission that Washington can’t pay back its debts. Second, the fact that Rogoff uses the fight against “terrorism” and “crime” arguments in selling his proposals to the public - justifications which he as a mathematician should know are farcical - suggest that his arguments hide another agenda. Third, and most important, is the fact that not only would banning cash not achieve Rogoff’s objectives – it could cause irreparable harm to the dollar’s role in the American economy and as a reserve currency. Let’s look at these arguments one at a time: [...] Rogoff's “cashless society” is an elegant solution to a key problem bedeviling the Federal Reserve: with interest rates at the zero bound, the US central bank has no ammunition left to fight the next recession - because if cuts rates below zero, savers will withdraw their cash and put it under their mattresses. “In principle, cutting interest rates below zero ought to stimulate consumption and investment in the same way as normal monetary policy,” Rogoff writes. “Unfortunately, the existence of cash gums up the works.” [...] That argument is spurious at best. By now, it is fairly clear from experiences in Japan and the US since 2008 that below neutral level interest rates provide little or no net new economic stimulus. At best, easy monetary policy brings forward spending and investment from the future into the present. However, the US government and the Federal Reserve have spent, borrowed, and printed so much that there is no future left to mortgage. Rogoff, one of the country’s top economists, knows this; which is an important clue that there is much more to his proposals than meet the eye. It seems clear that Rogoff’s negative interest rate/cashless society proposal is structured to engineer a back-door US government debt default. Rogoff’s intellectually dishonest arguments: Rogoff’s recommendations would spur massive unintended consequences, some of which have already been effectively noted by James Grant in a recent WSJ/Zero Hedge piece . In a preceding WSJ commentary , Rogoff provides the US government with excellent cover to sell a cashless society/backdoor debt default to the public by invoking fights against crime, terrorism and tax evasion. “There is little debate among law enforcement agencies that paper currency … facilitates racketeering, extortion, drug and human trafficking, the corruption of public officials not to mention terrorism,” he writes. “It is no accident that whenever there is a big-time drug bust, the authorities find wads of cash.”It’s an excellent argument which will work exceedingly well with an innumerate public, that has been scared to death by public officials ranging from George Bush the Younger to Hillary Clinton and Donald Trump, but one which to a math expert like Rogoff is ludicrous on its face.[...] Econometric models: mistresses don’t compute: Another challenge that Rogoff overlooks in his econometrics models is that banning paper currencies will drive widespread acceptance of alternate forms of money ranging from crypto-currencies to precious metals, not just among underground economy even among the economic elites themselves. [...]" Note: Ken Rogoff is on this list: "JINFO: List of Economists" | "JINFO Home Page" | Who Controls America? |Ken Rogoff is on this list: Who Controls The Group Of Thirty?
Commentary: "Central Bank Digital Currencies: A Revolution In Banking?" [09/18/16] "Several central banks, including the Bank of England, the People’s Bank of China, the Bank of Canada and the Federal Reserve, are exploring the concept of issuing their own digital currencies, using the blockchain technology developed for Bitcoin. Skeptical commentators suspect that their primary goal is to eliminate cash, setting us up for negative interest rates (we pay the bank to hold our deposits rather than the reverse). But Ben Broadbent, Deputy Governor of the Bank of England, puts a more positive spin on it. He says Central Bank Digital Currencies could supplant the money now created by private banks through “fractional reserve” lending – and that means 97% of the circulating money supply. Rather than outlawing bank-created money, as money reformers have long urged, fractional reserve banking could be made obsolete simply by attrition, preempted by a better mousetrap. The need for negative interest rates could also be eliminated, by giving the central bank more direct tools for stimulating the economy. [...] The Blockchain Revolution: In a speech at the London School of Economics in March 2016, Bank of England Deputy Governor Ben Broadbent pointed out that a Central Bank Digital Currency (CBDC) would not eliminate physical cash. Only the legislature could do that, and blockchain technology would not be needed to pull it off, since most money is already digital. What is unique and potentially revolutionary about a national blockchain currency is that it would eliminate the need for banks in the payments system.According to a July 2016 article in The Wall Street Journal on the CBDC proposal: [M]oney would exist electronically outside of bank accounts in digital wallets, much as physical bank notes do. This means households and businesses would be able to bypass banks altogether when making payments to one another. Not only the payments system but the actual creation of money is orchestrated by private banks today. Nearly 97% of the money supply is created by banks when they make loans, as the Bank of England acknowledged in a bombshell report in 2014 (see link below). The digital money we transfer by check, credit card or debit card represents simply the IOU or promise to pay of a bank. A CBDC could replace these private bank liabilities with central bank liabilities. CBDCs are the digital equivalent of cash. Money recorded on a blockchain is stored in the “digital wallet” of the bearer, as safe from confiscation as cash in a physical wallet. It cannot be borrowed, manipulated, or speculated with by third parties any more than physical dollars can be. The money remains under the owner’s sole control until transferred to someone else, and that transfer is anonymous.[...] Rather than calling a CBDC a “digital currency,” says Broadbent, a better term for the underlying technology might be “decentralised virtual clearinghouse and asset register.” One novel possibility he suggests is that everyone could hold an account at the central bank. That would eliminate the fear of bank runs and “bail-ins,” as well as the need for deposit insurance, since the central bank cannot run out of money. Accounts could be held at the central bank not just by small depositors but by large institutional investors, eliminating the need for the private repo market to provide a safe place to park their funds. It was a run on the repo market, not the conventional banking system, that triggered the banking crisis after the collapse of Lehman Brothers in 2008.[...] " Related:"Bank Of England Acknowledged Creation Of Money Orchestrated By Private Banks" PDF [09/18/16] "Not only the payments system but the actual creation of money is orchestrated by private banks today. Nearly 97% of the money supply is created by banks when they make loans, as the Bank of England acknowledged in a bombshell report in 2014. [...]" See also below: "Satellite Cloud Startup Inks Deal For Space-Based Cryptocurrency Platform" [09/14/16]
MSM: "U.S. Bank CEO Warns Employees: Make Fun Of Wells Fargo And You’re Fired" [09/17/16] "It’s been a (deservedly) bad month for Wells Fargo, what with the bank being ordered to pay $185 million in penalties because employees opened millions of bogus accounts, not to mention the ongoing Justice Department investigation. It would seem like a prime time for the competition to pile on the misery and steal away customers, but the CEO of U.S. Bank is demanding his staff not give into that temptation. U.S. Bank employees were warned Thursday that under no circumstances are they to attempt to capitalize on Wells Fargo’s situation — at least publicly, The Star Tribune reports. CEO Richard Davis told investors that the company won’t tolerate employees who publicly and overtly go after Wells Fargo customers, because that’s just not how the bank does business. “So help me God, if I find a branch in one market with an orange flier that says ‘if you bank at Wells come to U.S. Bank,’ they’re going to be let go,” Davis said. [...]" Still, he expects customers to make the transition to the bank over the next few months or years. If there’s one bank that you’d expect Davis to go after, it probably would have been Wells Fargo, which was accused last year or trying to undermine U.S. Bank’s naming rights to the new Minnesota Vikings facility by allegedly “photobombing” U.S. Bank stadium with a pair of large, illuminated rooftop Wells Fargo signs.[...]" Related: See also below: "Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million" [09/13/16] ;"Wells Fargo Caught Money Laundering The Same As HSBC Bank" [09/12/16] ; "Wells Fargo's Criminality Is Only the Tip of the Iceberg for the Racketeering Practices of the Banks" [09/12/16]; "Wells Fargo: Executives Spared, 5,300 Employees Fired For Creating Millions Of Fake Accounts" [09/10/16]
Commentary: "Just Try and Steal Cryptocurrency from Space, Hackers" [09/17/16] "Bitcoin has a hacking problem. Since the digital currency’s birth in 2009, determined thieves have found some novel ways to steal massive amounts of coins—at times, hundreds of millions of dollars’ worth—from the people who rightfully own them. It’s a problem that’s led to inventive solutions, including one called “cold storage,” which involves storing funds on a device that never touches the internet, and “deep cold storage,” which takes it one step further by implementing some means to make retrieving coins even more difficult than depositing them into cold storage. A simple example would be putting the drive containing the coins into a safe that only you know how to unlock. Now, a spin-off cryptocurrency called SolarCoin wants to secure its own massive trove of tens of billions of coins (worth around $5 billion USD at half a cent each) with the deepest, coldest storage imaginable: a satellite in orbit around the Earth. [...]" Related: See also below: "Satellite Cloud Startup Inks Deal For Space-Based Cryptocurrency Platform" [09/14/16]
MSM: "HSBC Case Blows Lid Off Clintons' Offshore Empire" [09/16/16] "The arrest of the head of global foreign exchange cash trading at HSBC bank may shed new light on suspicions the Clinton Foundation has been involved in illegal offshore money-laundering operations on a massive scale. [...] The investigation into HSBC currency trader Mark Johnson and associate Stuart Scott for their alleged role in a “conspiracy to rig currency benchmarks” by front-running customer orders has escalated to the point where the Department of Justice is threatening to tear up a 2012 agreement to fine HSBC a historic $1.9 billion for money-laundering violations in lieu of criminal prosecutions. At issue is whether or not HSBC has honored the 2012 deferred-prosecution agreement in which the bank agreed to establish internal review procedures to catch and punish potentially criminal activities by employees." The bank’s failure to discipline the two currency traders will make it difficult for HSBC to convince law- enforcement authorities that the massive Hong Kong-headquartered bank has complied with the 2012 agreement. An internal investigation in 2013 cleared them of any wrongdoing regarding a $3.5 billion currency trade that U.S. prosecutors now believe was criminally fraudulent. [...] HSBC money trail leads to Clintons: After the HSBC currency traders were arrested, WND conducted an investigation of the bank’s connections to the Clinton Foundation, uncovering a massive offshore financial network involving tens of thousands of transactions that extend far beyond HSBC. [...] On Feb. 10, 2015, the London Guardian reported $81 million from seven wealthy international donors flowed to the Clinton Foundation through controversial Swiss tax-free HSBC accounts maintained in Geneva, as revealed by leaked HSBC files obtained by French newspaper Le Monde. The evidence has been passed to the International Consortium of Investigative Journalists, the Guardian, BBC Panorama and more than 50 other media outlets around the world. Breitbart reported in April that key Clinton financial partners, including Canadian mining executive Frank Giustra and the Chagoury family of Nigeria, made use of the controversial Panama-based law firm Mossack Fonseca to move assets around the world. [...] Breitbart noted Giustra is one of the Clinton Foundation’s largest contributors, donating more than $25 million, while the Chagoury family in Nigeria has committed $1 billion to the Clinton Global Initiative. This led WND to begin an extensive investigation into the major leak of offshore banking documents, known as the “Panama Papers,” a giant leak of more than 11.5 million financial and legal records from the files of the Mossack Fonseca law firm that was archived by the International Consortium of Investigative Journalists. The Panama Papers database contains information on some 214,000 offshore entities connected to people in more than 200 countries and territories. It reveals major financial institutions, including HSBC, involved in the creation of hard-to-trace companies in offshore havens that form a complex international network involved in tax evasion and money-laundering schemes.[...] Offshore transactions: In a series of searches of the ICIJ Panama Paper’s database of leaked documents, WND has uncovered tens of thousands of transactions that surface for Bill Clinton under his own name as well as for various shell companies he has created using his initials, WJC. Searches of the names Hillary Clinton and Chelsea Clinton uncovered tens of thousands of additional offshore transactions via offshore investment companies established for both. Additionally, tens of thousands of offshore transactions are recorded in searches for the Clinton Foundation and its various subsidiaries, including the Clinton Global Initiative and the Clinton Health Access Initiative. The surfaced transactions tied to the Clinton family begin to appear in 1989 and extend through 2015, when the ICIJ database of Panama Papers offshore leaks was published. Transactions linked to the Clinton Global Initiative have occurred in countries such as Panama, the British Virgin Islands, the Cayman Islands, British Anguilla, the Bahamas, Switzerland, Hong Kong, the United Kingdom, the Isle of Man, Liechtenstein, Guernsey, Jersey, Malta, Luxembourg, Monaco, Gibraltar, Russia, Ukraine, Estonia, Lithuania, Latvia, Turkey, Cyprus, France, Belgium, Italy, Canada, China, Taiwan, United Arab Emirates, Jordan, Lebanon, Egypt, Israel, Singapore, Thailand, Mauritius, Ecuador, Guatemala, Uruguay, Dominican Republic, Brazil, Colombia, Chile, Samoa and Vanuatu, as well as various “undisclosed” and “undetermined” locations.[...]"
Max Keiser: "End Game Nears As Central Banks Buying Up Gold Mining Companies" MSM [09/14/16] "When you watch mainstream media or listen to central bankers, gold is constantly deemed to be the redheaded stepchild of the investment industry. Just that alone, is unbelievable, considering that gold has been one of the best performing investments of the 21st century. On December 31st, 1999, gold closed at $290.25. As of today it is trading at $1327.80. That is a percentage gain in the last 16 years of 357% [...] And so, it was with great interest… shock actually… that I came across this headline, “Switzerland and Norway Begin to Massively Accumulate Precious Metals Mining Shares“.[...] It outlines how the central banks of both Norway and Switzerland have been buying up nearly $1 billion worth of gold mining stocks! Well, isn’t that interesting! The moves of these banks are noteworthy not for their strategies, but because they are indicative of the perilous state of the world’s financial and monetary systems. Central banks have sold gold regularly over the years, probably as part of a larger propaganda campaign to convince the public that gold and silver don’t matter anymore. (And there’s another reason I will get to in a moment.) If central banks are starting to become so worried about the state of the world economy that they are willing to reverse an obvious manipulative meme, that’s something to take quite seriously. For central banks to buy gold in 2016 is akin to what we have often called a Jubilee Jolt – a surprise move that emphasizes the seriousness of the crisis that is now upon us. Certainly, these purchases go against the grain of traditional – modern – central bank investment activism. The Swiss central bank, for instance, campaigned against a Swiss referendum to back the franc with gold, but now seems to be far more supportive of the yellow metal."[...] Of course, other central bank gold transactions are shrouded in mystery. Both France and Germany recently wanted to repatriate gold from the US and ran into a good deal of difficulty doing so. And when it comes to the US itself, the size of the nation’s gold stock remains similarly mysterious. In fact, for decades, there has been speculation that US gold supposedly doesn’t exist, or that what remains is gold of a most inferior kind. It is impossible to say with any surety what resides in Fort Knox because no audit has taken place for more than half-a-century. But now pressure may rise on the US government to confirm gold holdings. [...] As Zero Hedge reports: "Both banks are being reported to have printed close to $1 billion dollars of fiat money as of recently. This should come as no shock to anyone, as this is all Central Banks know how to do – print money. What is more stunning, however, is where they immediately moved these funds. You guessed it right – into precious metals. They know that the physical precious metals market is limited, tight, and scarce. They also know that if they simply printed $1 billion worth of fiat money out of thin air and moved it into physical, then they would risk blowing the market apart, sending prices potentially catapulting higher. Since they are not yet willing to face the wrath of the other Central Bankers around the world, they did the next best thing. They bought shares in the gold mines themselves.[...] It should be clear to anyone who examines the position of the BRICS closely – especially China – that Western powers have played an extraordinary role in elevating the industrial might of these countries. The idea of course is to facilitate further globalism and eventually world government. But presumably not all central banks are eager to support this strategy at the expense of their own solvency. In other words, central banks may have been content to sell gold in the past, but now faced with an oncoming financial hurricane they are having second thoughts – as well they should. In fact it may have occurred to central bankers that the solvency of their own institutions has been purposefully jeopardized because a global central bank will likely have little need for local and regional ones. [...]"
Commentary: "Satellite Cloud Startup Inks Deal For Space-Based Cryptocurrency Platform" [09/14/16] "In what may be the oddest news I report on this year, an organization offering cryptocurrency to promote solar power generation has signed a deal to purchase data center capacity in space in order to secure its blockchain wallets from hacking. The SolarCoin Foundation—a "global rewards program" for solar power generators launched in 2014 that awards blockchain currency for each megawatt-hour of electricity generated—has agreed to acquire orbital data storage capacity on the satellite-data centers of SpaceBelt, the planned orbital data communication, processing, and storage service from satellite startup Cloud Constellation. [...] In an interview with Ars in May, Cloud Constellation CEO Scott Sobhani explained that SpaceBelt would consist of a network of satellites linked by laser communications, providing a 10-gigabit dedicated orbital network backbone. The satellites, operating in a mix of relatively low orbits, would also provide a cross-connect for a variety of existing satellite communications frequencies. SpaceBelt will apparently include a "unique blockchain technology," according to a press release announcing the deal with SolarCoin, that somehow secures blockchain wallets better by putting them in space.[...] "SolarCoin will be able to provide its customers with an inviolable record of their transactions, and parties can be recorded and viewed via the internet," a Cloud Constellation spokesperson said in the company's statement on the deal. "[SolarCoin Foundation] will purchase space on the SpaceBelt network to securely host its Cold Storage Vault and protect its $5 billion treasury of SolarCoin currency. When operational, SolarCoin will be the first currency transaction sent to and from space." Just exactly how putting blockchain wallets on storage aboard orbiting satellites will make them more secure than blockchain wallets in terrestrial data centers is not clear (other than making physical access a bit more difficult, of course). The wallets will still be accessible, albeit with somewhat higher latency, via the Internet. It's also not clear who exactly will be spending or accepting the $5 billion in megawatt-hour SolarCoins. But the companies say that the space-based blockchain transaction system will be in service by late 2018.[...]"
MSM: "Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million" [09/13/16] "In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay. Tolstedt is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.” On Thursday, Richard Cordray, the head of the CFPB, had a different take, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law,” said Cordray. “They are a violation of trust and an abuse of trust.” A spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.[...]" Related: See below
Interviews: "Wells Fargo Caught Money Laundering The Same As HSBC Bank" Dave Hodges [09/12/16] [51:33] "The MSM has not offered any explanation as to why the phony accounts were opened in the first place. The only thing that makes any sense is that these fake accounts were being to obscure criminal behavior. Namely, I am speaking specifically about money laundering. [...]" Related: Related: "Wells Fargo's Criminality Is Only the Tip of the Iceberg for the Racketeering Practices of the Banks" [9:54] "Wells Fargo fired 5,300 employees for opening millions of fake accounts. As John Cruz, former Senior V.P. of HSBC Bank would point out, that in all of these cases there is money laundering from drug trafficking and illegal gun-running.[...]" See also below
MSM: "Wells Fargo: Executives Spared, 5,300 Employees Fired For Creating Millions Of Fake Accounts" [09/10/16] "A customer fraud probe cost 5,300 Wells Fargo employees their jobs - but regulators stopped short of pointing any fingers at the bank's executives. Under intense pressure to hit sales targets, employees opened additional bank accounts and credit cards for customers without their consent, using fake email addresses and forged signatures in a widespread practice that will now cost Wells Fargo a record $185million fine. Investigators acknowledged systemic problems like the lack of oversight but failed to hold high-level executives responsible as they received hefty paychecks and accolades for creating growth. Wells Fargo was worth just shy of $300billion, making it the world's most valuable bank in the world according to figures released last year. [...] The bank was known for it's ability to 'cross-sell' or get customers to sign up for more and more accounts, which attracted the financial backing of Warren Buffett's Berkshire Hathaway. [...] Buffett's firm is the largest owner of Wells Fargo with a 9.5% stake in the bank [...] According to a criminal complaint filed in California, the bank largely targeted checking account customers, pushing them into taking savings, online or credit accounts which would charge fees. Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint. A 2013 LA Times investigation found a culture that left some employees desperate to reach quotas, whether it was forging signatures or begging family members to open additional accounts. In some cases, employees created fake email addresses and pin numbers to create more accounts, and customers were charged for overdraft fees after their money was moved without their consent. A former bank manager Rita Murillo told the paper: 'We were constantly told we would end up working for McDonald's. 'If we did not make the sales quotas…we had to stay for what felt like after-school detention, or report to a call session on Saturdays.' [...] In total, a consulting firm hired by Wells Fargo to investigate the fraud found more than two million deposit accounts that may not have been authorized. Wells Fargo ended up firing 5,300 employees over the last few years, but top executives have been largely saved from the chopping block. CEO John Stumpf was paid $19.3million in 2015 and has been awarded several 'Banker of the Year' awards from industry organizations, CNN reported." David Carroll, the senior executive vice president of Wealth and Investment Management, was paid $9.05million, according to the news website. His department 'achieved a number of important strategic objectives, including ... growth in loan balances and deposits,' a Securities and Exchange Commission filing cited by CNN stated. A Wells Fargo spokesperson told CNN the terminations affected 'both managers and team members'. The CFPB has fined the bank $185million, the largest penalty levied since the organization was created in 2011 in the wake of the financial crash. The bank has also agreed to pay more than $5million in restitution to customers. Of that money, $2.6million is in refunds for fees applied to products that customers may not have requested, according to the bank. The bank has since lowered sales goals, restructured employee incentives and instilled a system of oversight, the LA Times reported. [...]"
MSM: "John Podesta’s Ties To Russian And Saudi Money" [09/10/16] "The Podesta Group, a top-tier D.C. lobbying firm, has reached out to the Justice Department regarding allegations of impropriety. The claim is that the Podesta Group lobbied for the Centre for a Modern Ukraine, a pro-Russian organization that once employed former Trump campaign manager Paul Manafort. Podesta Group is the brain child of Democratic nominee Hillary Clinton’s campaign manager John Podesta. While he allegedly hasn’t participated in the firm’s lobbying efforts for years now, his brother Tony Podesta is acting chairman. Tony Podesta receives $140,000 a month from the Saudi government, as The Daily Caller previously reported. According to a government filing, Tony Podesta personally manages the Saudi account for the firm. He is also a top contributor to the Clinton campaign and is responsible for bringing in big donors for Hillary. [...]"
MSM: "Clinton Tells Trump To 'Shut Up' On Federal Reserve" [09/10/16] "Zero Hedge notes: " Desperate to change the narrative from her coughing fit, Hillary Clinton has come out swinging at Trump’s comments about how The Fed’s low interest rates have created an “artificially strong stock market,” exclaiming that presidents and candidates should not comment on Fed actions, showing he should not be president. [...] In other words, the president is subservient to the chairman of the Federal Reserve, not the other way around as most people think (or those who bother to think about it). The president nominates the chair and vice-chair of the private bankster cartel masquerading as a federal agency. He also appoints the seven members of the Board of Governors who are then confirmed by the Senate and serve fourteen-year terms. If you think about it, the Federal Reserve decides who will be president. Clinton donors include Goldman Sachs, JP Morgan, Citigroup, and other financial institutions. [...] “In 1903 Banker’s Trust was set up by the Eight Families,” writes Dean Henderson. “Benjamin Strong of Banker’s Trust was the first Governor of the New York Federal Reserve Bank. The 1913 creation of the Fed fused the power of the Eight Families to the military and diplomatic might of the US government. If their overseas loans went unpaid, the oligarchs could now deploy US Marines to collect the debts. Morgan, Chase and Citibank formed an international lending syndicate.” The “eight families” are bankster dynasties, an oligarchy. They own most of the shares of the Federal Reserve and include the Rothschild Bank, the Warburg Bank, the Lazard Brothers, the Israel Moses Seif Bank, the Kuhn Loeb Bank, Goldman Sachs, JP Morgan, and Lehman Brothers. The chair of this cartel reports to Congress twice year on the Federal Reserve’s monetary policy objectives and members of Congress—most notably Ron Paul—have criticized monetary policy but this has virtually zero effect on the Fed’s decisions.[...]" Related: "Ron Paul: Donald Trump Wants To Audit The Federal Reserve, The "Secret Society" Loves Hillary" | "US Has ‘False Economy’ & Artificial Stock Market – Trump"
Commentary: "China Challenges US Dollar Hegemony, Seeks New Global Financial Order" [09/09/16] "During the first Annual Summit organized by the Asian Infrastructure Investment Bank (AIIB) in Beijing, China has shown her intention to take over the global leadership in infrastructure investment. By the end of this year, AIIB would have more than 100 members, making it the first lending institution in multilateral loans in history, under the control of the most important emerging countries. Yet, it is expected that she makes the decision of dropping off the Dollar, as it is the only way to break away from US hegemony in international finance. [...] China is already ahead of the US in the race of financing infrastructure at the global level. International Finance is going through transformation, in spite of the strong resistance by the powerful American controlling power. Last year, high officials from Washington had tried to sabotage the launch of the Asian Infrastructure Investment Bank – AIIB, but failed to do so. In fact, countries that had formerly declared their allegiance to the US government, namely Germany, France, Italy, UK, had, at the end of the day, taken the decision to join the new multilateral lending institution promoted by Beijing. President Barack Obama could not imagine that the AIIB would have got the support of more than fifty countries within a few months. Without a doubt, China is accelerating US decline across the globe. In April 2015, Larry Summers, former Secretary of Treasury under Bill Clinton, declared that the successful call made by the AIIB represented the most dreadful blow to the US hegemony. « Last month will be remembered as the time where US have lost their role as gatekeeper of the World Economic System », he said. [...]"
MSM: "DOJ Threatens To Rip Up HSBC’s “Get Out Of Jail Free” Card" [09/08/16] "Back in July the DOJ filed charges against two HSBC FX traders, Mark Johnson (global head of cash FX) and Stuart Scott, for "conspiring to rig currency benchmarks" and specifically for front-running customer orders (see "HSBC Global Head Of FX Cash Trading Arrested At JFK Airport"). Mark Johnson was the first person to be charged in the DOJ’s three-year investigation into foreign-exchange rigging at global banks. The DOJ complaint alleged that in 2011, Johnson and Scott purchased Pound Sterling for HSBC proprietary accounts in an effort to front-run a $3.5BN Pound Sterling purchase by an HSBC client. The front-running effort apparently netted HSBC an $8mm profit. Now US prosecutors are threatening to take the unprecedented action of ripping up the "deferred-prosecution agreement" signed with HSBC back in 2012 over questions as to why the two FX traders were not disciplined. HSBC admitted in 2012 that it helped Mexican drug cartels launder money and did business with Iran and other sanctioned nations. To avoid charges, it signed the DPA, which required it to improve its internal controls and submit to an outside monitor. Any action to now void the DPA by the U.S. DOJ would allow for criminal charges against the HSBC and restrict the bank's access to certain financial activities in U.S. markets. According to Bloomberg, [...]"
MSM: "Goldman Sachs Bans Top Employees From Donating To Trump: Report" [09/08/16] "Investment bank Goldman Sachs has banned its high-ranking employees from contributing money to certain campaigns including that of U.S. Republican presidential candidate Donald Trump, according to reports in Politico and Fortune. The online politics magazine reported Tuesday that the bank had expanded its political restrictions to partners of the firm. It cited an email that was sent out last week by the bank telling its employees about its rules on political activities. Politico reported Goldman sent an email saying that beginning September 1, partners would not be allowed to engage in political activities or make "contributions to candidates running for state and local offices, as well as sitting state and local officials running for federal office." [...]The policy change is meant to prevent employees from violating pay-to-play rules and to minimize damage to the firm's reputation from any potential violations. Pay-to- play schemes involve campaign contributions or other payments made by investment advisers to state and local government officials in an attempt to influence the awarding of lucrative public contracts, according to the U.S. Securities and Exchange Commission. Goldman Sachs was not immediately available for comment when contacted by CNBC. The penalty for failing to comply with this rule can include fines and a temporary ban on the firm from conducting business with governmental clients, Politico reported. The email cited by Politico does not mention Trump's name but the business magazine Fortune said it had obtained a copy of the memo in which Goldman specifically mentions the Trump-Pence campaign as one partners cannot support any longer. Banned donations include those to any federal candidate who is also a current state or local official, Fortune reported. This would rule out the Trump/Pence ticket, it noted. Pence is the sitting Governor of Indiana. Fortune also noted that the rules ban donations to politicians running for state or local offices, as well as donations to state officials who are seeking federal office. Democratic presidential candidate Hillary Clinton currently doesn't hold office and vice presidential candidate Tim Kaine is a U.S. senator and wouldn't be subject to the rules. [...]"
Commentary: "Australia’s PM, Ex-Goldman Sachs Banker, Warns G20 To 'Civilize' Capitalism" [09/08/16] "Leaders of the world’s 20 largest economies have been warned that they must “civilize capitalism” as they seek to revive economic growth and address growing public scepticism about the benefits of free trade and globalisation. Officials present during closed-door sessions said US president Barack Obama, UK prime minister Theresa May and her Australian and Canadian counterparts emphasised the need to placate public discontent. According to the officials, Australian prime minister Malcolm Turnbull, a former Goldman Sachs banker, warned his peers of the need to “civilize capitalism”. One G20 official said there was a high “degree of awareness” among heads of government that globalisation could be thrown into reverse. “It has taken the rise of populists across the world for them to realise this,” he said. “If we do not address the issue of fairness, [it] could endanger the global economy.” Before the two-day meeting, the US government argued that a “public bandwagon” was growing to ditch austerity in favour of fiscal policy support. [...] Obama wants to placate public discontent and Turnbull wants to “civilize capitalism”. Instead of trying to “civilize capitalism”, I suggest we try capitalism and free markets instead of massive amounts of QE, central bank sponsored wealth inequality schemes, bank bailouts, and manipulations of every asset class on the planet, coupled with free handouts to millions of refugees at the expense of everyone else."[...]"
Commentary: "The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst" [09/07/16] "Do you remember the subprime mortgage meltdown from the last financial crisis? Well, this time around we are facing a subprime auto loan meltdown. In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances. Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way. Delinquency rates are up by double digit percentages, and major auto lenders are bracing for hundreds of millions of dollars of losses. We are a nation that is absolutely drowning in debt, and we are most definitely going to reap what we have sown. The size of this market is larger than you may imagine. Earlier this year, the auto loan bubble surpassed the one trillion dollar mark for the first time ever… Americans are borrowing more than ever for new and used vehicles, and 30- and 60-day delinquency rates rose in the second quarter, according to the automotive arm of one of the nation’s largest credit bureaus. The total balance of all outstanding auto loans reached $1.027 trillion between April 1 and June 30, the second consecutive quarter that it surpassed the $1-trillion mark, reports Experian Automotive. [...] The average size of an auto loan is also at a record high. At $29,880, it is now just a shade under $30,000. In order to try to help people afford the payments, auto lenders are now stretching loans out for six or even seven years. At this point it is almost like getting a mortgage. But even with those stretched-out loans, the average monthly auto loan payment is now up to a record 499 dollars. That is the average loan size. To me, this is absolutely infuriating, because only a very small percentage of wealthy Americans are able to afford a $499 monthly payment on a single vehicle.[...] Just like with subprime mortgages, people are being taken advantage of severely, and the end result is going to be catastrophic for the U.S. financial system. Already, auto loan delinquencies are rising to very frightening levels. In July, 60-day subprime loan delinquencies were up 13 percent on a month-over-month basis and were up 17 percent compared to the same month last year. Prime delinquencies were up 12 percent on a month-over-month basis and were up 21 percent compared to the same month last year. We have a huge crisis on our hands, and major auto lenders are setting aside massive amounts of cash in order to try to cover these losses. [...]"
MSM: "With Obama Humiliated, Leaked G-20 Draft Reveals More Fiscal, Monetary Stimulus Coming" [09/04/16] "Of course, the big news of this weekend's G-20 event was neither the summit, nor the communique, but the unprecedented and prearranged snub by China targeting president Obama, who after an unexpected show of solidarity on Saturday over the global effort to address climate change, was humiliated by China when Obama arrived at Hangzhou Xiaoshan airport, when as reported earlier, first the receiving China delegation made sure there was no staircase for Obama to exit the plane and descend on the red carpet; the president of the world's most powerful nation was thus forced to use an emergency exit for his final arrival in China as commander in chief. Then, around the time Obama was exiting through the emergency staircase, a Chinese official attempted to block national security adviser Susan Rice and Deputy National Security Adviser Ben Rhodes after they lifted a blue rope holding back press and walked to the other side of it, closer to Obama. A member of the Chinese delegation began shouting at White House staff, demanding the pool leave the arrival scene. A White House official said Obama was our president and Air Force One was our plane and that the press was not going to move from the designated area. The Chinese official angrily responded "This is our country. This is our airport." [...] The scandals continued later, with members of the Chinese and US delegations coming close to throwing punches at each other: as we previously reported, two Chinese officials - one working to assist the American delegation - had to be physically separated after trying to hit each other outside an event. As the WSJ adds, "the Chinese barred Mr. Obama from including his traveling press contingent in his motorcade. The hosts also have refused a White House request for a joint press conference with Mr. Xi, and they plan to block Mr. Obama’s solo press briefing from airing live on Chinese television." In short, the fate of G-20 meeting was fixed: no matter what was decided, it would forever be remember as the event where China snubbed the US president in an unprecedented fashion one final time.[...] In any case, thanks to Bloomberg, according to the leaked draft G-20 communique, global leaders "should make full use of a range of policy options, including fiscal as well as monetary measures, to revive economic growth that still falls short of desired levels." In other words, even more global debt, even more liquidity injections by central banks, even higher asset prices, even more social discontent, nationalistic passions and populism.[...]"
Interviews: "Wall Street Vultures Descend On Debt-Ridden Puerto Rico" [09/04/16] "Déborah Berman-Santana (DBS): Colonies exist so that the colonizer will benefit economically and politically. Since the U.S. invaded and occupied Puerto Rico in 1898, it has extracted profit in numerous ways: First, through converting it into a sugar colony. After World War II Puerto Rico was transformed through “Operation Bootstrap” into a special economic zone to benefit U.S. corporations under the guise of “development via export-led industrialization.” As a captive market, Puerto Rico also became the home to the most Wal-Marts per square meter in the world. Finally, Puerto Rico’s colonial “neither U.S. state nor independent state” political status allowed the U.S. bond market to give special exemptions to investors, which has brought Puerto Rico to its current debt “crisis.” During the 1930s, the anti-imperialist congressman Vito Marcantonio sponsored a study which revealed that since 1898, U.S. corporations had extracted as much as $400 billion in profits from Puerto Rico. Recently, independent researchers in Puerto Rico have estimated that since the 1950s, more than half a trillion dollars has been extracted from Puerto Rico. Both estimates encompass the free usage of Puerto Rican resources and the restriction, via U.S. cabotage laws, requiring all imports and exports to use U.S. merchant marine ships and U.S. crews. It would not be an exaggeration to say that the U.S. has taken more than a trillion dollars away from its colony, which certainly dwarfs Puerto Rico’s $73 billion public debt. [...] MPN: How did this ongoing exploitation contribute to the present-day “debt crisis” in Puerto Rico, and what has been the role of Washington, Wall Street, and the “vulture funds” in perpetuating this crisis? [...] DBS: With the eventual elimination of industrial tax incentives beginning in the 1990s, Puerto Rico’s governments increasingly looked to loans to balance its budget and continue practices of rewarding political cronies with contracts for large infrastructure projects. Subsequently, President Clinton’s elimination of the Glass-Steagall Act allowed for investment bankers to increasingly engage in bond market speculation. Puerto Rico received “triple exemption” because of its colonial status, which meant that every pension fund and every municipal and state government, among others, bought Puerto Rico bonds, ignoring the fact that its economy began shrinking once the special industrial exemptions were completely eliminated in 2006. Election of a protégé of the Koch Brothers, Luis Fortuño, as Puerto Rico’s governor in 2008 resulted in a “bitter medicine” law that eliminated tens of thousands of public jobs, which accelerated the descent of an economic recession into a depression. By 2011 the major credit agencies began degrading Puerto Rico’s ratings, with the result that it increasingly resorted to short-term, high interest loans similar to “payday loans.” Bondholders increasingly unloaded their Puerto Rico bonds in the secondary bond market, which were then swooped up by vulture funders such as Paul Singer and John Paulson – often at 10 to 20 percent of the bond’s value. Today, these vulture funders possess up to 50 percent of Puerto Rico’s public debt, and are the creditors who are least willing to renegotiate the terms of the loans. They have been the major lobbyists for the Congressional law known as “PROMESA” that recently became law.[...]"
MSM: "Physical Delivery Of Gold At Deutsche Bank Appears To Have Been Compromised" [09/02/16] "In the latest stunning development involving a documented failure of a bank to deliver physical gold when demanded, yesterday we reported that according to German website godmode-trader.de, a client of the Xetra-Gold Exchange-Traded Commodity was told the fund's designated sponsor, Deutsche Bank, would be unable to deliver the requested gold. This was contrary to the explicit reps and warranties made explicitly in the Xetra-Gold's prospectus, which said that investors are entitled to the delivery of the certified amount of physical gold at any time, and proudly added that "since the introduction of Xetra-Gold in 2007, investors have exercised this right 900 times, with a total of 4.5 tons of gold delivered." [...] Baron's conclusion: "the "right" for actual delivery at Xetra-Gold is theoretical: physical delivery is only possible if the respective bank branch also cooperates. Suspicious gold investors should consider Xetra-Gold as another form of paper gold and not as a physical gold investment." Our take is slightly different: while we already know that physical delivery at Deutsche Bank appears to have been compromised, according to the Deutsche Boerse response, the ability of any and every other bank in Germany to deliver gold is now likewise questionable. This begs the question: where is all the physical gold? [...]"
MSM: "Stanley Fischer's Bizarre Justification For Negative Rates" [09/01/16] "With over $13 trillion in global bond yields trading in negative territory as a result of central banks' negative rates policies, leading bank profits to tumble and forcing savers in both Japan and now Germany to pull their money out banks and put into safe deposit boxes in their homes, there is little doubt that NIRP has been a failure: even such establishment financial outlets as the WSJ admit as much. Which is why when listening to today's Stanley Fischer interview on Bloomberg TV with Tom Keene, one particular section caught our attention, namely the Fed Vice Chairman's attempt to justify negative rates and how, despite all the evidence to the contrary, "negative rates seem to work in today's world." We found the following exchange fascinating: [...]" Related: "Fed’s Fischer Says Negative Rates 'Seem To Work' In Today’s World" [4:03] Federal Reserve Vice Chairman Stanley Fischer said negative interest rates seem to be working in other countries, while reinforcing that they aren’t on the table in the U.S. While the Fed isn’t “planning to do anything in that direction,” the central banks using them “basically think they’re quite successful,” Fischer said Tuesday on Bloomberg Television with Tom Keene in Washington. He reiterated that Fed rate increases will be data dependent without giving a specific timeline. Fischer’s comments on negative rates come days after Chair Janet Yellen left the subject out of a speech on the future U.S. monetary policy toolkit, suggesting that they’re not an option that’s up for discussion at the Fed. Fischer is a former Bank of Israel governor and a prominent figure in international economics, so his remarks constitute an important acceptance that the unconventional and often controversial policy might be working in other jurisdictions.[...]
Concepts and Practices: "PayPal Stops Payment Because Payee's Memo Included The Word 'Cuba'" [09/01/16] "Earlier this year, we discussed how a Treasury Department watchlist under the purview of the Office of Foreign Assets Control was mucking up all kinds of legitimate business because some partakers in said business had scary sounding (read: Islamic) names. Everyone began referring to this watchlist as a "terrorist watchlist", as most of the stories concerned people, including American citizens, who either have names that are close to the names of terrorist suspects worldwide or because certain banks can't tell when someone is writing the name of their dog in the memo section, mistaking that name for the name of an Islamic terror group, because why not? But as it turns out, this hilariously frustrating example of bureaucratic ineptitude isn't limited to global terrorism. It also apparently applies to decades old embargo rivalries, too. Mark Frauenfelder details a wonderful story about how his wife, a book editor, used PayPal to pay for a book review about Cuba, only to have the payment suspended and the notices from PayPal begin to fly. [...]"
Commentary: "Soros Is Clinton's Biggest Financial Backer" [08/29/16] [3:59] "Emails leaked from billionaire George Soros’ Open Society Foundation show the level of influence he has on foreign affairs. Soros has donated over $30 million to Hillary Clinton, making him her largest financial backer. The mainstream media, however, has been silent about the leak. RT America’s Alexey Yaroshevsky has the report. [...]" Related: "Top 3 Revelations From The Soros Hack" [3:03] "In this video, Rachel Blevins looks at the top three most shocking revelations from the hack on the Open Society Foundation, an organization sponsored by liberal billionaire and Clinton donor George Soros. [...]"
Political Corruption: "UBS Whistleblower Exposes 'Political Prostitution' All The Way Up To Obama" [08/27/16] "Birkenfeld's book about the UBS Swiss banking investigation, Lucifer's Banker, is published in October. [...] UBS, the world's largest wealth manager, is facing embarrassment over fresh revelations going back to the tax investigation that led to the collapse of Swiss banking secrecy. Two significant events are looming before UBS. The first is the possibility of a public trial in France, featuring UBS whistleblower Bradley Birkenfeld, concerning historic tax evasion allegedly orchestrated by the bank. That could happen this year. The other is the publication this October of Birkenfeld's scathing new book, Lucifer's Banker, which covers his time at UBS." [...] The tax evasion controversy, which was first highlighted in 2005, subsequently involved the US Department of Justice, the State Department and Internal Revenue Service. It was prompted by disclosures made by Birkenfeld that UBS had helped wealthy US citizens evade taxes using offshore financial vehicles and Swiss- numbered accounts. In 2009, UBS paid $780m (£588m, €693m) to US authorities to avoid prosecution. Birkenfeld served 31 months in prison for one count of conspiracy to abet tax evasion by one of his clients. After he was released he was paid a record $104m by the IRS for helping recover unpaid taxes. However, Birkenfeld has since said that he was systematically prevented from giving testimony in open court – but this may be about to change thanks to the French authorities.[...] Birkenfeld claims there was a glaring conflict of interest involving then Senator Barack Obama, which essentially placed him on the UBS payroll. He said UBS was an enthusiastic fundraiser for Obama for his 2008 election campaign and senior executives at the bank bundled campaign contributions. Bundlers are expected to raise in excess of $500,000 each for the US president's re-election effort. UBS also advised the president on investments and strategy for the country. Birkenfeld states that when he gave testimony about UBS to the Senate Committee in late 2007, Senator Obama was conspicuously absent. Birkenfeld said: "When I went to give this information to the US Senate Committee they provided me a subpoena to testify, as the DOJ refused to do this. At this time Senator Obama was an active member of that committee and he never showed up for any of those hearings. Not one. "But at the same time he was taking millions of dollars from UBS in campaign contributions. That's the ultimate conflict of interest because he should have been there helping to investigate UBS on behalf of the American taxpayers, but instead he was taking money from UBS. I call it political prostitution. He is taking millions of dollars from a criminally corrupt bank in direct violation to his oath of office." "Why wasn't I allowed to testify in public? They stopped it. Why wasn't I allowed to testify at Raoul Weil's trial? They stopped it. I had to fight to go find the French magistrate to help them. "We are dealing here with the corruption of US government and people like Barack Obama and the corruption of big banks like UBS. These are people that have really betrayed their country." [...]"
Commentary: "Finance Is Not the Economy" [08/26/16] "Abstract: Conflation of real capital with finance capital is at the heart of current misunderstandings of economic crisis and recession. We ground this distinction in the classical analysis of rent and the difference between productive and unproductive credit. We then apply it to current conditions, in which household credit — especially mortgage credit — is the premier form of unproductive credit. This is supported by an institutional analysis of postwar U.S. development and a review of quantitative empirical research across many countries. Finally, we discuss contemporary consequences of the financial sector’s malformation and overdevelopment. [...] Why have economies polarized so sharply since the 1980s, and especially since the 2008 crisis? How did we get so indebted without real wage and living standards rising, while cities, states, and entire nations are falling into default? Only when we answer these questions can we formulate policies to extract ourselves from the current debt crises. There is widespread sentiment that this crisis is fundamental, and that we cannot simply “go back to normal.” But deep confusion remains over the theoretical framework that should guide analysis of the post-bubble economy. [...] The last quarter century’s macro-monetary management, and the theory and ideology that underpinned it, was lauded by leading macroeconomists asserting that “The State of Macro [economics] is Good” (Blanchard 2008, 1). Oliver Blanchard, Ben Bernanke, Gordon Brown, and others credited their own monetary policies for the remarkably low inflation and stable growth of what they called the “Great Moderation” (Bernanke 2004), and proclaimed the “end of boom and bust,” as Gordon Brown did in 2007. But it was precisely this period from the mid-1980s to 2007 that saw the fastest and most corrosive inflation in real estate, stocks, and bonds since World War II. Nearly all this asset-price inflation was debt-leveraged. Money and credit were not spent on tangible capital investment to produce goods and non-financial services, and did not raise wage levels. The traditional monetary tautology MV=PT, which excludes assets and their prices, is irrelevant to this process. Current cutting-edge macroeconomic models since the 1980s do not include credit, debt, or a financial sector (King 2012; Sbordone et al. 2010), and are equally unhelpful. They are the models of those who “did not see it coming” (Bezemer 2010, 676). In this article, we present the building blocks for an alternative. This will be based on our scholarly work over the last few years, standing on the shoulders of such giants as John Stuart Mill, Joseph Schumpeter, and Hyman Minsky.[...]"
Commentary: "Jacob Rothschild Warns His Own Central Banking System Is Failing and Buys Gold" [08/24/16] "Of course, he’s not “officially” on top in the “most wealthy” lists… but that is because the Rothschilds have been experts in hiding their wealth for centuries. When Jacob’s great-great-great-great grandfather, Mayer Amschel Rothschild, died in 1812, his will explicitly stated that no public inventory of his estate was to be published and that no legal action was to be taken with regard to the value of the inheritance. It’s also been suggested that the Rothschilds use private, unrecorded, limited partnerships to accumulate wealth (you know, like all the ones in the Panama Papers). By the end of the 19th century it was estimated that the Rothschild family controlled half the wealth of the world. No one can prove it of course, but it seems likely. You can see their fingerprints on many current events. In fact, their family has likely caused and financed both sides of nearly every war since and control virtually every central bank (to see a full list of all their crimes against humanity click here). And so, when Jacob Rothschild says that he is buying gold because the central banks are out of control, you have to laugh. He and his family have been in control of the world’s central banks for centuries. [...]" Related: "WikiLeaks: Rothschild Billion Dollar Money Laundering Plot In Africa" "A newly discovered Wikileaks cable shows that the Rothschilds were involved in a billion dollar money laundering scheme in Africa. The classified cable from the Public Library of US Diplomacy published by WikiLeaks exposes Rothschild Bank “advising” a “secret and corrupt” billion dollar transaction in order to create a “massive money laundering scheme” in Senegal and crash the struggling nation’s economy. The secretive Rothchilds are rarely in the news and never publicly rebuked by governments, however the classified cable discovered by Your News Wire reveals that a US diplomatic official clearly referred to the actions of Rothschild Bank as “corrupt” and the transaction as “indefensible.” The Rothschild-driven deal involved the Senegalese state selling off Sonatel, the national telecommunications company and most profitable public resource, in return for $1.2 billion. The US government were led to believe the sale was corrupt and the funds would be used to create a “massive money laundering scheme” to benefit the Senegalese elite – specifically former President Abdoullah Wade’s son Karim Wade – and Rothschilds Bank. [...]"| "Rothschild: "This Is The Greatest Experiment In Monetary Policy In The History Of The World
MSM: "Hungary Becomes First European Country To Ban Rothschild Banks" [08/24/16] "Back as early as 2013, Hungary began to put in motion the process of kicking out the International Monetary Fund (IMF), and agreed to repay the IMF bailout in full to ensure they would get rid of the New World Order bankster cartel. Neonnettle.com has reported that Gyorgy Matolcsy, the head of Hungary’s CentralBank, penned a kindly written letter asking the Managing Director, Christine Lagarde of the International Monetary Fund, to close the office as it is no longer needed in the country. The IMF is well known for making demands that hurt tax payers and the economy when demanding their loans to be paid, and it seems Prime Minister, Viktor Orban, is ready to prove that the country can go it alone and has no need for what many consider one of the most corrupt institutions in existence today. Hungary formerly borrowed €20 billion to avoid becoming insolvent during the economic crisis that was orchestrated by the highest levels of the banking industry back in 2008. But, like many other stories, the relationship between the debtor and the debtee has not been a smooth one. Many citizens criticized the Prime Minister for making this notoriously bad decision in order to win the election, which was due in 2014 but some believe it was due to pressure from the shadow government who can be very persuasive.For those who don’t know, the IMF is considered to be one the key structures in the New World Order and a key chess piece in the Rothschilds game of global domination. So this is a massive victory. Not just for Hungary but for the entire world. It suggests the elite are finally beginning to lose their stronghold and gives hope for a new dawn. Iceland also joined Hungary in 2014 when it paid back its $400 million loan before its due date after the collapse of the banking sector in 2008 and Russia, famous for not bowing down to the Western puppeteers, freed itself back in 2005. The statement that these three countries have made in gaining financial independence is reputed to be the first time a European country has stood up to the international fund, and the banker elite which control it, since Germany did so back in the 1930s. [...]"
Flashback: "Soros Plots European Order Coup: EU Will Disintegrate, Rise Again Under “New Marshall Plan" June 2016 [08/24/16] "In perfect order out of chaos fashion, the elite are now showing their hand. [...] The panic over Brexit has given George Soros, and his powerful friends, the perfect excuse they need to intervene. As Michael Snyder reported in the lead up to the vote, Soros has been calculating a few moves ahead: Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU. “If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said. So, that is what he would be shorting on. Weeks ahead of the Brexit vote, George Soros meanwhile reportedly moved some 37% of his stocks into gold – meaning that he made a fortune as others were taken in by the economic consequences of the European divorce. Yet Soros and Lord Rothschild were among those who wrote in advance of the event – warning of the destruction that would result from an attempt to leave the European Union – and now they are watching it burn. (Their phoenix plan to create order from the ashes is a necessary counter- balancing act to this destruction. [...] The Solution: A new European superstate under control of the bankers [...]"
Concepts and Practices: "China and Russian Currencies Break Away From Dollar System" [08/22/16] "Russia leaves the Dollar based monetary system and adopts a system of Sovereign Currency. The implications are phenomenal! [...] “In 1990 the first priority of Washington and the IMF was to pressure Yeltsin and the Duma to “privatize” the State Bank of Russia, under a Constitutional amendment that mandated the new "Central Bank of Russia", like the "Federal Reserve" or "European Central Bank", be a purely monetarist entity whose only mandate is to control inflation and stabilize the Ruble. In effect, money creation in Russia was removed from state sovereignty and tied to the US dollar.” [...] “The Stolypin club report advises to increase the investment, pumping up the economy with money from the state budget and by the issue of the Bank of Russia”. Putin decided to follow the Stolypin club advice as the new monetary policy of the country." [...] Here’s an excerpt from yet another recently published article "The Nationalization Of The Ruble" (translated from Russian) describing how the ruble may now evolve: [...] You can also see an article "Putin Greenlights Economic Nationalists Who Oppose Current Liberal Globalist Policies" that goes into this issue more deeply and claims that Putin has in mind backing a portion of the ruble with gold as well. (We should note there are claims the ruble is backed by gold already.) The dramatic – historical – Russian currency changes (if these articles are accurate) seem a little difficult to discern in full at this moment, but obviously things are changing fast. And they are changing for China’s “money” as well. In fact, some have speculated China and Russia could launch a joint, gold-backed currency (here, see bottom of article). At the beginning of October, the yuan joins the IMF’s SDR basket (here). This means that major international institutions can issue bonds payable in yuan (actually RMB, the Chinese external currency). And that is just what has happened already. The World Bank is issuing a large yuan/RMB tranche and this will be the first of many (here). [...] Investors who want to place funds in RMB rather than dollars will use the new yuan/RMB-based instruments. The US will continue to print dollars but those dollars may not find a home abroad so easily. Instead they may circulate back into the US economy creating significant price inflation. The US was able to do so much damage domestically and abroad because of its virtually unlimited spending power. It’s been able to prosecute endless, horrible wars and imprison up to five percent of its adult population at any one time. Now things are changing. Between the Russian announcement and yuan/RMB convertibility, the US will gradually have more trouble printing money at will. Perhaps the corrupt military-industrial complex will be impelled to shrink and large-scale social programs like the wretched Obamacare will have more difficulty with funding as well. [...] Related: "The Nationalization Of The Ruble" "This is a translation from Russian of an article by Nikolay Starikov, who addresses problems of Russia’s national economic development within the current global financial system. The article is not structured as logically as I usually prefer and the author’s suggestions require further analysis, but still it provides some fresh, out-of-the-box thinking, the main feature of which is the realization that the highly-promoted global financial system of our time prevents national economic development of entire countries. [...]" | "Putin Greenlights Economic Nationalists Who Oppose Current Liberal Globalist Policies"
Concepts and Practices: "How Predatory Payday Lenders Plot to Fight Government Regulation" Vice [08/21/16] "Months before a federal agency proposed a new rule threatening the profits of exploitative payday lenders across America, the industry's leaders gathered at a posh resort in the Bahamas to prepare for war. At the March strategy session, Gil Rudolph of Greenberg Traurig, one of several law firms working with the lenders, described the coming storm this way: "It's like a tennis match. Every time you hit a ball, hopefully it comes back. Our job is to hit the ball back hard." Most of us have a vague sense that corporate America doesn't like being told what to do, but rarely do we get a front-row seat into how the playbook for resisting federal regulation is written. VICE has obtained exclusive transcripts of this year's annual meeting of the Community Financial Services Association of America (CFSA), the payday lending industry's trade group, at the Atlantis Paradise Island Resort. That's where lenders were taught exactly what it might take to beat back an existential threat to their business. Payday loan customers typically borrow about $350 for a short-term deal, usually until their next paycheck. As a condition of the loan, they generally give the lender access to their bank account to extract fees of between $10 and $30 for every $100 borrowed. If borrowers can't pay the loan when it comes due, they can roll over into another loan, triggering more fees and getting trapped in what critics call a cycle of debt. The average payday or auto-title loan (where the customer uses their car as collateral) carries an annual percentage interest rate between 300 and 400 percent. This June, the federal Consumer Financial Protection Bureau (CFPB) proposed that payday lenders can only issue loans to people they expect to actually be able to pay them back—while also meeting their other financial obligations. The number of additional loans would also be capped, and a 30-day cooling off period established to help prevent that vicious debt cycle, among other changes. The industry decried the rule when it went public, highlighting a government simulation suggesting that 69 to 84 percent of storefront short-term payday loan volume would fall, potentially devastating their business. But the transcripts show lenders were already discussing how to prevent the rule from taking effect at the Atlantis back in March. [...] For starters, the industry plotted to bombard the Consumer Bureau with comments and studies suggesting regular people would be the real losers—even if their own oversized profits were obviously the focal point. "The bureau has illustrated its knee-jerk hostility to this industry," said Noel Francisco of corporate defense firm Jones Day. "So it is critical to point out the flaws... and include all of the evidence showing the enormous benefits that payday loans have to offer the consumers who use them."[...]" Note: The 'industry', which is a racket, 'plotted' [conspired] ... all the elements for a Federal RICO prosecution seem to be there.
Concepts and Practices: "UK: Two More Banks Start Charging Select Clients For Holding Cash" [08/20/16] "Last weekend, when we reported that Germany's Raiffeisenbank Gmund am Tegernsee - a community bank in southern Germany - said it would start charging retail clients a fee of 0.4% on deposits of more than €100,000 we said that "now that a German banks has finally breached the retail depositor NIRP barrier, expect many more banks to follow." Not even a week later, not one but two large banks have done just that. Overnight, the Irish Times reported that Bank of Ireland is set to become the first domestic financial institution to pass on the ECB's negative rates to customers for placing their money on deposit with the bank. The newspaper has learned that Bank of Ireland, which is 14% owned by the State, has informed its large corporate and institutional customers that it plans to charge them a negative rate of -0.1% for deposits of €10 million or more starting in October. [...] As with all other banks, initially only a small group of customers will be affected by the charge and while the bank has indicated that it has no plans to levy a negative interest rate on either personal or SME customers, increasingly more banks are lowering the threshold of eligibility (for example, the German community bank is now charging those with only €100,000 in the bank: low long until the minimum required balance is €10,000 or lower). However, as the Irish Times notes, this will be the first time an Irish-owned institution has applied a negative interest rate on deposits, breaking the long-held tradition of a bank paying customers to hold their money. A spokesman for Bank of Ireland said its policy was not to comment on its pricing but “we keep all our rates under review”. [...]"
MSM: "Private Prison Stocks Crash On News DOJ To Phase Out Their Use" [08/19/16] "Shares of GEO and CXW are crashing to multi-year lows after The Washington Post reports that The Justice Department says it will end the use of private prisons. [...] "As we noted previously, "States now have quotas to meet for how many Americans go to jail. Increasing numbers of states have contracted to keep their prisons at 90% to 100% capacity. This profit-driven form of mass punishment has, in turn, given rise to a $70 billion private prison industry that relies on the complicity of state governments to keep the money flowing and their privately run prisons full, “regardless of whether crime was rising or falling.” As Mother Jones reports, “private prison companies have supported and helped write … laws that drive up prison populations. Their livelihoods depend on towns, cities, and states sending more people to prison and keeping them there.” Private prisons are also doling out harsher punishments for infractions by inmates in order to keep them locked up longer in order to “boost profits” at taxpayer expense. All the while, the prisoners are being forced to provide cheap labor for private corporations. No wonder the United States has the largest prison population in the world at a time when violent crime is at an all-time low." [...] And now, it appears this cronyism is coming to an end..." [...]"
MSM: "Global Central Banks Dump U.S. Debt At Record Pace" [08/18/16] "Global central banks are unloading America's debt. In the first six months of this year, foreign central banks sold a net $192 billion of U.S. Treasury bonds, more than double the pace in the same period last year, when they sold $83 billion. China, Japan, France, Brazil and Colombia led the pack of countries dumping U.S. debt. It's the largest selloff of U.S. debt since at least 1978, according to Treasury Department data. "Net selling of U.S. notes and bonds year to date thru June is historic," says Peter Boockvar, chief market analyst at the Lindsey Group, an investing firm in Virginia. U.S. Treasuries are considered one of the safest assets in the world. A lot of countries keep their cash holdings in U.S. government bonds. Many countries have been selling their holdings of U.S. Treasuries so they can get cash to help prop up their currencies if they're losing value. The selloff is a sign of pockets of weakness in the global economy. Low oil prices, China's economic slowdown and currencies losing value are all weighing down global growth, which the IMF described as "fragile" earlier in the year. [...]"
MSM: "Soros Nearly Doubles Down Bearish Bet Against S&P 500" [08/17/16] "Billionaire investor George Soros, who rose to fame and fortune by betting against sterling in 1992, on Monday showed his latest hand: nearly doubling down on his bearish bet against the market. The 86-year-old’s fund, Soros Fund Management LLC, disclosed in a regulatory filing it had increased its bet against the S&P 500, the main index used to measure big-stock performance in the U.S., and holds put options on roughly four million shares in an exchange-traded fund that tracks the index. That is up from “puts” on 2.1 million shares as of March 31. Meanwhile, Soros’s fund also cut sharply its position in gold, selling off the bulk of the shares it had bought last quarter in Barrick Gold Corp., the world’s largest gold producer, and cutting sharply its position in a gold-backed ETF set up by the World Gold Council. [...]"
MSM: "Inside George Soros Plotting to Control the World Bank" [08/16/16] "An impressive 2,576 files of internal documents belonging to the Open Society Foundations was dumped on the internet by DCLeaks on Saturday. OSF was founded by billionaire lefty activist George Soros. The documents offer a deep look into the inner workings of Soros operations. A quick perusal of some of the documents shows the massive reach of Soros organizations and the various methods used to influence key global organizations, such as the World Bank. The many directions by which OSF attempts to influence the World Bank, at every level, is simply stunning. [...]" Related: "Secret Elites: Why Forbes’ Rich List Excludes World’s 'Richest' Families"
MSM: "Overcapacity Strife: Hedge Fund Industry Declining On Insufficient Returns" [08/11/16] "Adding to the lingering disinvestment in economies around the world, the looming bust in global hedge funds might unravel by the year-end, potentially signaling a yet another recession. Hedge funds, one of the most prominent types of financial market participants and institutionalized investors, are projected to decline in numbers by the year-end for the first time since the 2008 crisis, affecting the volume and composition of global capital flows, according to the recent research undertaken by the London-based bank, Barclays Plc.[...] Current sentiment among investors generally falls in line with the bank's outlook, offering two explanations for the hedge funds' demise amidst the still-growing, albeit slowly, global economy. Either there are too many hedge funds, or they have become too big to be feasible amid the lack of money-making opportunities, the outcome is a decline in capital allocation throughout the globe in the short-term, further hampering growth prospects. According to Barclays' estimate, by late 2016, some 340 hedge funds will cease to exist internationally, a 4 percent decline compared to late 2015. Previously, the industry had grown steadily since 2009, when the scale of contraction was the same 4 percent, while in 2008, some 11 percent of hedge funds closed throughout the globe. In July, there were a total of 10,007 hedge funds operating worldwide, according to a monthly report by the research firm Hedge Fund Research. Meanwhile, Barclays expects 340 of these to close before the year-end." [...]"
MSM: "Global Economic Stagnation Fuels Financial Instability" [08/09/16] "Last week’s decision by the Bank of England (BOE) to undertake what it called “an exceptional package of measures” to counter the impact of the UK vote to quit the European Union, coupled with poor US growth figures, underscores the worsening situation for the global economy. [...] An article published Sunday in the New York Times pointed to some of the longer-term trends reflected in what it called “the low-growth world.” It was not a new phenomenon, but had been in evidence for the past 15 years. From 1947 to 2000, gross domestic product (GDP) in the US per person rose by an average of 2.2 percent a year. Since then, the average has been only 0.9 percent, with Europe and Japan growing at even slower rates.[...] The Times article provides statistics indicating the devastating impact of this global stagnation on working-class living standards. It states: “In the year 2000, per-person GDP—which generally tracks with the average American’s income—was about $45,000. But if growth in the second half of the 20th century had been as weak as it has been since then, that number would have been only about $20,000.[...] The chief factor in the ongoing stagnation, both in the US and throughout the world’s major economies, is the fall in investment. In the US, it declined by 9.7 percent in the second quarter, the third straight quarterly decline. In Europe, investment levels are estimated to be running about 25 percent below where they were before the financial crisis of 2008. The impact of the decline is reflected in the paltry growth rate in the euro zone—just 0.3 percent in the second quarter. The decline in investment over the past eight years is an expression of an ongoing downturn in the rate of profit. While the average rate of profit remains positive, enabling major corporations to accumulate cash, these firms fear that further investment will not bring a positive return. Consequently, instead of using their cash balances for productive investment, they have been deploying them in financial operations, such as mergers and share buy-backs. While such activities can benefit the bottom line of the individual firm, they signify the growth of parasitism from the standpoint of the economy as a whole. [...]"
MSM:"UK National Health Service Forced To The Brink Of Financial Collapse" [08/09/16] "The National Health Service (NHS) in England is facing a “colossal financial challenge” and “cannot deliver the required services to patients and maintain standards of care within the current budget.” This is the damning conclusion of “Impact of the Spending Review on health and social care,” a report released July 23 by the House of Commons Health Select Committee. It underlines the parlous state of NHS finances due to endless cuts and indicates that the health service is facing an existential crisis. [...]"
Flashback: "EU Parliament: UKIP Rep Godfrey Bloom Exposed FTT Scam & Central Banking Crooks" [08/09/16] [3:19] "Speaker: Godfrey Bloom MEP, UKIP (Yorkshire & Lincolnshire), Europe of Freedom and Democracy (EFD) group - EU Parliament, 23 May 2012 [...]" Related: "Bloom Is Given The Soviet Treatment (Full Version With Farage & 2nd Expulsion) 2010" [14:59] Note: Always a blast watching these people mess with the EU sequentials ...
Concepts and Practices: "Ken Shishido on Fiat Money vs. Bitcoin" Corbett Report [08/09/16] [17:09] On a long enough timeline the value of all fiat drops to zero. Joining us today for a quick tour of the history of monetary devaluation and how it can be avoided is Ken Shishido of the Tokyo Bitcoin Meetup Group. " [...]"
Max Keiser: "Keiser Report: Great Period of Instability (E950)" [08/07/16] [25:39] "We discuss the ‘Great Period of Instability’ and the $24 trillion rollover risk as interconnected disasters in the global economy. Max then talks to Reggie Middleton in Bryant Park, NY, about there being no such thing as negative interest rates and how the German taxpayer will go broke before Deutsche Bank does. Max talks to Valentin Schmid of the Epoch Times about the trillions of bad debts in the Chinese banking system and what plans the Peoples Bank of China has for dealing with it. [...]"
MSM: "Actuarial Establishment Tries to Suppress Explosive Paper on Public Pensions" [08/07/16] "America’s slow-motion public pension train-wreck (by some estimates, the shortfall currently exceeds $3 trillion) has been kept in motion for years by deeply dishonest accounting practices employed by state and local governments, which presume unrealistically that pension funds can consistently earn white-hot annual returns approaching eight percent. So it’s disappointing, but not particularly surprising, that the actuarial establishment moved to suppress a report pointing this out. Pensions and Investments reports: The American Academy of Actuaries and the Society of Actuaries Monday abruptly disbanded its longtime joint Pension Finance Task Force, objecting to a task force paper challenging the standard actuarial practice of valuing public pension plan liabilities. “This paper (is) being censored by the AAA” and SOA, said Edward Bartholomew, who was a member of the former task force, in an interview. “They didn’t want it to get out.” Others who were members of the task force also said in interviews the two actuarial groups are trying to suppress publication of the paper. [...]"
MSM: "Oil Under $40: That's Where Sovereign Wealth Funds Resume Liquidating" [08/07/16] "After several months of aggressive selling of stocks in late 2015 and early 2016, the culprit for the indiscriminate liquidation and concurrent market swoon was revealed when it emerged that the seller was not only China (which was forced to sell USD-denominated reserves to offset a surge in capital outflows following the Yuan devaluation), but also Sovereign Wealth Funds belonging to oil-exporting countries, who were dumping billions in risk assets to offset the collapse of the price of oil, which in turn exacerbated current account and budget deficits. Among the prominent sellers was Norway and Saudi Arabia, arguably the biggest casualties of the death of the Petrodollar to date, as well as Abu Dhabi, Kuwait and most other SWFs, listed on the tabel below: [...] No matter the cause, the biggest benefit of this oil surge is that the same SWFs which were actively selling stocks in early late 2015 and early 2016 put their liquidation on hold as oil rose above $40. And in this illiquid, low volume market, the absence of a determined seller is all that it took to push the S&P to all time highs, and as of Friday's close, just shy of 2,200, a level which even sellside brokers such as Goldman believe is effectively in bubble territory and in the 99% percentile of all overvalued metrics. However, just a few weeks later we are now back in a crude bear market, with oil briefly dipping under $40, on the back of concerns about a gasoline glut and fears that the resurgent dollar will further pressure oil. Worse, with oil returns back to the $40 range and threatens to accelerate the move to the downside, it also brings back with it the specter of SWF liquidations, because as JPM's Nikolaos Panigirtzoglou points out in his latest weekly note, that's where the wealth fund selling returns. [...] So for all those curious where stocks are going next, the simple answer is: keep an eye on what oil does next.[...]"
MSM: "BofA: "45% Of The Global Bond Market Is Now Compromised By Central Bank Buying" [08/07/16] "The market’s attention this week was focused on the Bank of England’s decision to purchase £10 billion in corporate bonds over the next 18 months. By doing so Mark Carney, like Draghi, has opened up a Pandora's box, since ultimately corporate debt is nothing more than post-petition equity, and all it would take to make the BOE (or ECB) an activist stakeholder in an legal process is for the obligor to go bankrupt. Consider the following scenarios. [...]"
MSM: "Bank Of England Cuts Interest Rates To 0.25% With GDP Downgrade" [08/05/16] "Interest rates have been slashed to a new historic low of 0.25 per cent and the Bank of England has pushed the button on another £170 billion of monetary stimulus to stop the economy sliding back into recession in the wake of the UK’s Brexit vote. Unveiling its most drastic set of GDP growth forecast downgrades in its modern history, the Bank said the UK economy will virtually grind to a halt in the wake of the Brexit vote – coming perilously close to another recession. The Bank’s forecasts include the positive impact of today’s stimulus package, implying the UK economy would otherwise have returned to recession this year for the first time since the 2008-2009 financial crisis. [...]"
MSM: "Goldman Sachs Subpoenaed For Connection To Global Corruption Ring" [08/03/16] "The investigation focuses on compliance with the US Bank Secrecy Act, an act that requires domestic financial institutions to “assist U.S. government agencies to detect and prevent money laundering.” Goldman is being investigated specifically regarding the $2.5 billion in profits it earned from 1MDB bond sales, which were “diverted from the fund to shell companies controlled by influential figures in Malaysia and Abu Dhabi,” reports the Wall Street Journal. It isn’t just U.S. authorities looking into the matter. Singapore’s central bank stated Saturday that it too is investigating. [...]"
MSM: "The IMF Confesses It Immolated Greece On Behalf Of The Eurogroup" [08/02/16] This week began with a debate in Greek Parliament called by the Official Opposition (the troika’s main, but not only, domestic cheerleaders) for the purposes of, eventually, indicting me for daring to counter the troika while minister of finance in the first six months of 2015. The troika who had staged a bank run before I moved into the ministry, who had threatened me with bank closures three days after I assumed the ministry, and who proceeded to close down our banks, now moved to charge me with… bank closures and capital controls. Like a common bully, the troika proved immensely keen to blame its victims, and to violate and vilify anyone who dares resist its thuggery. [...] And then, to complete this week’s drubbing of the troika, the report by the IMF’s Independent Evaluation Office (IEO) saw the light of day. It is a brutal assessment, leaving no room for doubt about the vulgar economics and the gunboat diplomacy employed by the troika. It puts the IMF, the ECB and the Commission in a tight spot: Either restore a modicum of legitimacy by owning up and firing the officials most responsible or do nothing, thus turbocharging the discontent that European citizens feel toward the EU, accelerating the EU’s deconstruction. [...] While I was in the ministry, negotiating with such folks, the troika-friendly (or should I say troika-dependent) press was arguing that I am not fit to conduct these negotiations because I had dared insinuate that, from 2010 to 2014, the IMF, the ECB and the Commission had been fiscally waterboarding Greece, causing an unnecessary Great Depression as a result of their thuggish imposition of macroeconomically incompetent policies. The establishment press were claiming that a finance minister of a small, bankrupt nation which is being waterboarded by the high and mighty troika functionaries cannot afford to say, in public or in private, that his small, bankrupt nation was being waterboarded.[...]"
Commentary: "Deutsche Bank Profit Plunges 98% As Outlook For “World’s Riskiest Bank” Darkens" [07/29/16] "The biggest and most important bank in the biggest and most important country in Europe continues to implode right in front of our eyes. If you follow my work regularly, you probably already know that I issued a major alarm about Deutsche Bank last September. Subsequently, Deutsche Bank stock hit an all-time low. Then I sounded the alarm about Deutsche Bank again back in May, and once again that was followed by another all-time low for Deutsche Bank. And then I warned about Deutsche Bank again in early June, and you can probably imagine what happened after that. Over the past year, this German banking giant has literally been coming apart at the seams, and in so many ways it is paralleling exactly what happened to Lehman Brothers back in 2008. Today, we got some more bad news from Deutsche Bank. Compared to the exact same period last year, profits were down 98 percent. A nearly 100 percent drop in net income spooked a lot of investors, and Deutsche Bank shares got hit hard on Wednesday. Of course Deutsche Bank shares are already down by more than half over the past 12 months, and the financial sharks can smell blood in the water. [...]"
Commentary: "Panama Papers: Offshore Firm Helped Billionaires Plunder Africa" [07/28/16] "The plunder of Africa is only the tip of the iceberg, said the investigation: in total, more than 1,400 companies involved in resource extraction were listed in the Mossack Fonseca files. [...] Mossack Fonseca, the offshore law firm at the heart of the Panama Papers leak, helped politicians, their families and businessmen rob Africa of billions of dollars, according to a new investigation. The International Consortium of Investigative Journalists, which published the leak along with dozens of international media, found that 44 of 54 African countries have a total of at least 37 mining, oil and mineral companies connected to offshore accounts. Their research, published Sunday, focuses on a case in Algeria, where Farid Bedjaoui, nephew of a former Algerian foreign minister, arranged US$275 million in bribes through offshore companies to award US$10 billion oil contracts.[...] Twelve of the 17 companies he used were created by Mossack Fonseca in a “crossroads of illicit financial flows,” according to Italian investigators. Algeria lost an estimated US$1.5 billion annually to tax dodging, bribery, corruption and criminality between 2004 and 2013, according to Global Financial Integrity. Tax avoidance also deprives Africa of more than US$50 billion yearly, estimates the United Nations. The offshore law firm was also involved in dozens of lawsuits and allegations of wrongdoing across the continent, especially with companies —often not African—involved in resource extraction. Offshore protections allow those involved to exploit natural resources without paying taxes, to dodge prosecution for corruption and money laundering and to continue environmentally destructive practices with little oversight. “Companies may be given access to lucrative extractive projects because their owners are politically connected, or because their owners are willing to engage in questionable deals aimed at generating quick profits for a few rather than benefits for wider society,” said Fredrik Reinfeldt, head of the Extractive Industries Transparency Initiative, to ICIJ. The anonymity allows the companies to “hide behind a chain of companies often registered in multiple jurisdictions.”[...] South Africa and Ghana’s AngloGold Ashanti, one of the world’s biggest gold producers, had 27 subsidiaries created by Mossack Fonseca, who insisted to the ICIJ that they follow “both the letter and spirit of the law.” The Democratic Republic of Congo and Nigeria were also heavily cited in the research. “Every dollar siphoned through dirty deals and corruption to offshore tax havens makes the livelihood and survival of the average African more precarious,” said Nigerian President Muhammadu Buhari at an anti-corruption summit a month after the Panama Papers were released. At least three Nigerian oil ministers and two former governors have been charged with money laundering. The plunder of Africa is only the tip of the iceberg, said the investigation: in total, more than 1,400 companies involved in resource extraction were listed in the Mossack Fonseca files.[...]"
MSM: "UK: Natwest Bank May Start Charging Customers To Hold Cash" [07/28/16] " NatWest has said it may start charging customers to hold cash if the economy takes a tumble. The bank warned more than one million of its customers it could introduce negative interest rates if that were to happen. This would mean customers are effectively paying the bank to hold their savings. A letter said the change would only affect business and commercial customers. It said: “Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging interest on credit balances.” A spokesman for the taxpayer funded bank, whose parent is the Royal Bank of Scotland, said there were no current plans to charge personal account holders. But there are fears the move could see savers remove their money from the bank – and that other banks could follow suit. Pensions expert Baroness Altmann told the Daily Telegraph: “Negative rates would be very dangerous, especially for ordinary savers.[...] “The danger is many people will just think, I’m going to put the money under the mattress. That could have security risks, especially for older people. “You don’t want your life savings out of the bank, you want them somewhere safe. “But if the bank is going to charge you for keeping your money, and every day you have it there it is worth less and less, you can see why people would say, I’m not going to do that.” Earlier this month, the Bank of England’s Monetary Policy Committee voted to keep the base rate at 0.5%, where it has been since March 2009. But Bank of England governor Mark Carney has hinted that the central bank may slash interest rates over the summer months from this already historic low.[...]"
Concepts and Practices: "Florida Judge: ‘Bitcoin Isn’t Money Because It Can’t Be Hidden Under A Mattress’" [07/27/16] "A Judge found that cryptocurrency, which is based on verified encrypted transactions that are recorded on a public ledger, did not constitute “tangible wealth” and “cannot be hidden under a mattress like cash and gold bars. [...] In a landmark decision, a Florida judge dismissed charges of money laundering against a Bitcoin seller on Monday following expert testimony showing state law did not apply to the cryptocurrency. Michell Espinoza was charged with three felony charges related to money laundering in 2014, but what appears to have helped to clear him of any and all wrongdoing was testimony given just a few weeks ago by an economics professor. “This is the most fascinating thing I’ve heard in this courtroom in a long time,” Miami-Dade Circuit Judge Teresa Mary Pooler said after hearing Barry University professor Charles Evans present evidence during a May hearing that Bitcoin was more akin to“poker chips that people are willing to buy from you,” according to the Miami Herald.[...] Evans was given $3,000 in Bitcoin by defense attorneys for sharing his expertise, the newspaper reported. Judge Pooler found the cryptocurrency, which is based on verified encrypted transactions that are recorded on a public ledger, did not constitute “tangible wealth” and “cannot be hidden under a mattress like cash and gold bars,” reported the Herald. Pooler added that Bitcoin was not codified by government, nor backed by any bank. “The court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money,” Pooler wrote in her decision. “This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” she added.[...]"
Commentary: "Hillary Clinton Is In Deep Trouble: "Hordes Of Wall Street Executives" Descend Upon Philly" [07/26/16] "...Banking and fake free trade deals are two topics that get Americans animated across the ideological spectrum, and by selecting Tim Kaine, Hillary is not so subtly telling her donors not to pay attention to any anti-establishment rhetoric that may come out of her mouth during the campaign. She signaling that she knows the status quo has her back, and she has theirs. Unsurprisingly, the oligarchs and their lobbyists who run the show and craft policies behind the scenes have gotten the message loud and clear. How can I be so certain? Let me give you a few examples. [...] Make no mistake about it, if you think the Obama administration represents a bunch of oligarch-coddling banker puppets, you ain’t seen nothing yet. But there’s more. Incredibly, the DNC has decided it would be wise to have billionaire New York City oligarch, Michael Bloomberg, speak at the convention. This is a man with extraordinarily deep ties to big finance, a man who was a fierce proponent of “stop and frisk” while mayor of NYC, and the biggest Wall Street apologist alive. Yet this is the man Hillary Clinton’s team is parading out as some sort of hero. [...] Despite Trump winning the Republican nomination, despite him now leading Hillary in the polls, they still don’t get it. The idea that Wall Street cheerleader and billionaire oligarch Michael Bloomberg has any appeal to the 73% of Americans who think the country is headed in the wrong direction is absolutely preposterous. But the clueless state extends to those who are not merely Hillary Clinton sycophants.[...]"
Commentary: "G-20 Meeting Ends With Rising Discord Between China And US" [07/25/16] "Over the weekend, the Group of 20 convened in yet another meeting in Chengdu, China, where they reiterated a long-running pledge to use all policy tools to help boost confidence and growth, but instead of emphasizing monetary policy the group said they would focus on fiscal and structural measures. Then again, since incremental fiscal stimulus would likely result in additional central bank monetization in order to avoid a steep selloff in government bonds and risk a yield spike, what the G-20 really did is set the stage for even more central bank-funded deficit spending, aka soft helicopter money. [...] "The global economic recovery continues but remains weaker than desirable," finance ministers and central bank governors said in a joint communique at the close of a two-day gathering in Chengdu, China Sunday. They clearly did not believe that the S&P at record highs is indicative of a US, or global, economy that is firing on all cylinders. Incidentally, neither does the BIS which a month ago warned about the dangers of overheating asset prices as a result of unprecedented global monetary stimulus.[...]"
Commentary: "End Of An Era: The Rise And Fall Of The Petrodollar System" [07/24/16] "“The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. The sooner the better.” -- Ron Paul [...] The intricate relationship between energy markets and our global financial system, can be traced back to the emergence of the petrodollar system in the 1970s, which was mainly driven by the rise of the United States as an economic and political superpower. For almost twenty years, the U.S. was the world’s only exporter of petroleum. Its relative energy independence helped support its economy and its currency. Until around 1970, the U.S. enjoyed a positive trade balance. Oil expert and author of the book “The Trace of Oil”, Bertram Brökelmann, explains a dramatic change took place in the U.S. economy, as it experienced several transitions: First, it transitioned from being an oil exporter to an oil importer, then a goods importer and finally a money importer. This disastrous downward spiral began gradually, but it ultimately affected the global economy. A petrodollar is defined as a US dollar that is received by an oil producing country in exchange for selling oil. As is shown in the chart below, the gap between US oil consumption and production began to expand in the late 1960s, making the U.S. dependent on oil imports." [...]"
MSM: "IMF Chief Lagarde To Stand Trial In €400mn Payout Case - Court" [07/24/16] "IMF chief Christine Lagarde must stand trial for her role in a €400 million payout case while she was French finance minister back in 2008, France's highest appeals court has ruled. Lagarde is accused of “negligence” which “resulted in a misuse of public funds by a third party,” the Cour de Cassation, one of France's courts of last resort, said in a statement on Friday. The IMF board, in the meantime, said the organization is confident that Lagarde is able to carry out her duties effectively following the ruling.News that the IMF chief may face a negligence trial in France had been circulating in the media for several years. [...] Bernard Tapie, a former owner of Marseilles football club, was awarded €400 million ($440 million) compensation in a lawsuit against the French bank Credit Lyonnais, which he accused of undervaluing his stake in multinational sportswear company Adidas. Lagarde, who was former President Nicolas Sarkozy’s finance minister at the time, sent the case to arbitration and ratified the payout.[...]"
MSM: "Bank Of England Urge Central Banks To Create Their Own Digital Currencies" [07/21/16] "In a research paper published on Monday, John Barrdear and Michael Kumhof, economists at the Bank of England, call for central banks to issue their own digital currencies, along the line of Bitcoin. They based their advocacy on the idea that “reductions in real interest rates, distortionary taxes, and monetary transaction costs” would boost the economy of the US, for example, by, get this, a permanent 3%. Part of their argument is based on the view that central bankers using digital currency would have a more effective tool to tame financial booms and busts. This flies in the view of Austrian school business cycle theory, which views the actual creation by a central bank of money (and thereby credit) as the epicenter of the problem. A digital currency that could be expanded and contracted by a central bank does nothing to eliminate the misallocations and potential threat of raging price inflation that occur from Federal Reserve money supply manipulations. What a digital currency would do is make it easier for government to track everyone's transactions. Thus. expanding the surveillance state. [...]"
MSM: "Top HSBC Manager 'Arrested In New York'" [07/21/16] "A senior HSBC executive has reportedly been arrested in New York for his alleged role in a conspiracy to rig international currency markets. Mark Johnson, HSBC's global head of foreign exchange cash trading in London, was arrested at John F. Kennedy International airport on Tuesday, according to media reports. HSBC was one of six banks fined by UK and US regulators over their traders' attempted manipulation of foreign exchange rates in November 2014. HSBC has so far declined to comment. [...]" Related: "HSBC Bankers Are First Individuals Charged in U.S. Currency Case" "Federal agents surprised an HSBC Holdings Plc executive as he prepared to fly out of New York’s Kennedy airport around 7:30 p.m. Tuesday, arresting him for an alleged front-running scheme involving a $3.5 billion currency transaction in 2011. Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was held in a Brooklyn jail overnight and will appear in court Wednesday, according to prosecutors. The U.S. unsealed a complaint against him and Stuart Scott, the bank’s former head of currency trading in Europe, making them the first individuals to be charged in the long-running probe. The arrest and charges are a coup for the Justice Department, which has struggled to build cases against individuals in its investigation into foreign-exchange trading at global banks. U.S. prosecutors once had so much confidence in the quality of evidence they were gathering thanks to undercover cooperators that in September 2014, then-Attorney General Eric Holder said he expected charges against individuals within months. The U.K. Serious Fraud Office also found it difficult to make cases against currency traders and announced in March that it was dropping its efforts. [...]"| "HSBC: Over 87,000 Jobs Cuts And Counting" Note: HSBC .. same company AG Loretta Lynch and FBI director Comey worked at. More stories on HSBC below on this panel.
MSM: "Ireland To Prosecute Top Banker Who Destroyed Their Economy —Hiding In The U.S." [07/21/16] "United States citizens feel helpless against both the 100 year old wall street banking cartel and easily bought political elections. Juxtapose Ireland… where their countrymen are taking down those who are responsible for destroying their lives and livelihood. Former Irish Bank leader, David Drumm, has been extradited from the U.S. and brought in front of a Dublin District Court Magistrate to face charges for his part in the 2008 financial crisis felt round the world. The former chief executive of Irish Anglo Bank was found in Boston in late 2015 and arrested. Iceland’s move to hold the bankers criminally accountable has led the way for Ireland to do the same. Drumm faces 33 criminal charges that include fraud, forgery, misleading management reporting, unlawful lending, falsifying documents, and false accounting.[...] As expected, Drumm is far from talking truth and is denying any wrongdoing regardless of the fact that his actions are linked to financial transactions prior to the collapse of Anglo, according to the Irish Times. Prosecutors fear his “capacity to marshal significant sums” of money adds to the possibility Drumm could easily disappear into the hidden recesses of the global community. Prosecutors consider Drumm a flight risk based on the fact that he sought to hide within the United States. Based on his behavior, the court only allowed him to post bail based on the stringent condition that he must forfit his passport, which is currently being held by the Gardaí (Garda Síochána, or Irish Police).[...]"
Commentary: "Wall Street Angry That Donald Trump Says “Restore Glass-Steagall Act" [07/21/16] "On July 18th, Rob Nichols, the President of the American Bankers’ Association, which is controlled by the mega-banks, struck back against Republican Presidential candidate Donald Trump. Nichols criticized Trump’s insistence to restore the Democratic U.S. President Franklin Delano Roosevelt’s top reform of the U.S. economy, the Glass-Steagall Act, which prevented another taxpayer bailout of Wall Street firms for their gambling losses — it was the law President Bill Clinton with overwhelming Republican support in 1999 repealed. Trump is committing himself against that Clinton-Republican repeal of FDR’s law. Trump insists it be restored so that there won’t be a repeat of the Bush-Obama Wall Street bailout. ABA chief Nichols told Morning Consult, “America’s banking industry is well poised to fuel economic growth and job creation,” and so they should continue to be supported by the government. He called Trump’s stand to restore Glass-Steagall “a return to Depression-era regulation that would restrain banks’ ability to drive our economy forward. All of our bank regulatory agencies have agreed that Glass-Steagall would not have prevented the crisis or the housing market collapse.” Many economists disagree with the ABA on that, and have called for restoration of the Glass-Steagall Act. [...] The major newsmedia and politicians refer to Glass-Steagall for its supposedly capping bank-size, but it never actually did any such thing: it instead separated commercial banks (lenders to consumers and businesses) from investment banks (stockbrokers and other market-makers for the sale of financial gambles) and from insurers (which take on the risks that other financial firms avoid). It never established any cap on bank-size. [...]"
MSM: US Industrial Production Declines For 10th Straight Month" Ø Hedge [07/16/16] "Following a 0.3% decline in May, Industrial Production rose 0.6% in June (better than the 0.3% rise expected) but year-over-year remains lower (-0.7%) for the 10th straight month. This is the longest non-recessionary streak of industrial production declines in US history. Gains on the month were driven by motor vehicle assembly (which is ironic givenm near-record inventories), but Q2 ended with a decline of 1.0% - the 3rd quarterly decline in a row (not experienced without a recession).[...]" Related: "NY State Manufacturing Index Unexpectedly Drops As New Orders Tumble, Labor Conditions Deteriorate" Ø Hedge
Commentary: "Global Banks Race To Displace “City Of London” Turns Into Feeding Frenzy" [07/14/16] "As global banks begin scouting for a new European base in the wake of last month’s Brexit vote, it appears that the City of London’s glory days as the world’s most important financial center may be numbered. City-based banks and hedge funds are worried about losing their passporting rights, which grant them full access to the EU’s financial markets. They’re also concerned that the UK might lose its special authorization to clear transactions in euros. “In theory, extending third-country AIFMD passporting to the U.K. after Brexit should be straight-forward,” Matt Huggett, a partner at law firm Allen & Overy in London, told Bloomberg. “In practice, it will be a political decision with an uncertain outcome. Many managers would like to safeguard themselves beforehand and set up offices in places like Luxembourg and Dublin.” In true beggar-thy-neighbor fashion, many of Europe’s most prominent capitals are bending over backwards to provide global banks with the perfect enticements to lure them away from The City. As the New York Times puts it, “The race is on to be the new London.” Spain’s capital, Madrid, has spent the last couple of weeks frantically ruffling its feathers in an attempt to attract the attention of not only banks but also the European Banking Authority, one of the EU’s most important (but currently London-based) financial regulatory bodies. It’s not as absurd as it may sound. Madrid already boasts the cheapest corporate tax regime in Spain and will no doubt be prepared to drop rates even further to accommodate some of the world’s biggest banks. As JP Morgan banking analyst Kian Abouhossein notes, office space in Madrid is also more readily available and cheaper (€27/sqm/month) than in the other prime locations competing to displace London as Europe’s financial capital [...] There’s one other factor that The Times didn’t mention: proximity to the major seats of political, judiciary and regulatory power. It’s one of the main reasons why London, once the center of the world’ biggest empire, has served as one of the world’s top-three financial capitals for the last 200 years. It is also the main reason why, if the City of London does fall from grace, the biggest beneficiary is likely to be Frankfurt, which is already home to Europe’s most powerful financial institution, the ECB. The fact that Germany also enjoys more influence over European economic policy-making than any other EU Member State would certainly be an added enticement for the world’s biggest financial institutions. Over 70% of respondents to a recent Ernst & Young survey said they expect Frankfurt to come out on top in the race to displace London. But such a move is unlikely to be welcomed by many other European countries, especially those in the South where resentment over Germany’s influence over their economies is already running high. Nor is it likely to be welcomed by many in Germany who, as Bloomberg points out, are likely to witness a surge in property investment volumes, prices and rents, with Frankfurt emerging as the biggest “beneficiary”.[...]"
Commentary: "Did Citi Just Confiscate $1 Billion In Venezuela Gold?" [07/13/16] "Just over a year ago, cash-strapped Venezuela quietly conducted a little-noticed gold-for-cash swap with Citigroup as part of which Maduro converted part of his nation's gold reserves into at least $1 billion in cash through a swap with Citibank. As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro's socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices. Needless to say, the socialist country's economic situation is orders of magnitude worse now. According to El Nacional, "the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup." As Reuters further added: "former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out. A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves." On paper yes - very much as any comparable gold leasing operation conducted by sovereign nations with central banks - but the actual physical gold would be transferred to an unknown vault of Citi's choosing where it would become an asset controlled by the bailed out US bank. [...] We note this peculiar gold swap case because something curious took place overnight. On the same day that Venezuela announced it would seize a local Kimberly-Clark factory after the US consumer-products giant announced it would shutter its Venezuela operations after years of "grappling with soaring inflation and a shortage of hard currency and raw materials", Venezuela's President Nicolas Maduro said on Monday that Citibank planned to shut his government's foreign currency accounts within a month, denouncing the move by one of its main foreign financial intermediaries as part of a "blockade." [...] Among the many reasons why the sudden departure is surprising is that due to strict currency controls in place since 2003, the government relies on Citibank for foreign currency transactions, meaning that suddenly Venezuela's financial "blockade" is indeed about to get worse. "With no warning, Citibank says that in 30 days it will close the Central Bank and the Bank of Venezuela's accounts," Maduro said in a speech, adding that the government used the U.S. bank for transactions in the United States and globally. [...] n typical bluster, Maduro added: "Do you think they're going to stop us with a financial blockade? No, gentlemen. No one stops Venezuela." What Maduro did not mention is that among the central bank accounts closed by Citi will be at least one, rather prominent, gold swap launched just over a year earlier. Reuters adds that Citibank, could not immediately be reached for comment about the purported measure against Venezuela's monetary authority and the Bank of Venezuela which is the biggest state retail bank. With the OPEC nation's economy immersed in crisis, various foreign companies have been pulling out or reducing operations. However, few of them held over $1 billion in Venezuela gold as hostage. So during his next address, perhaps someone inquire Maduro if as part of its "blockade" Citi also absconded with a substantial portion of the country's gold reserves, and if so, which other banks have comparable "swap" arranagements with the insolvent nation? Meanwhile, Hugo Chavez, who spent the last years of his life repatriating Venezuela's gold is spinning in his grave.[...]" Related: "US-Led Economic War, Not Socialism, Is Tearing Venezuela Apart" | "Venezuela, Cuba, Nicaragua: Hostile Coverage and Economic Sabotage" |"Venezuela's Democratic Facade Has Completely Crumbled"
MSM: "Eric Holder’s Longtime Excuse For Not Prosecuting Banks Just Crashed And Burned" [07/13/16] "Eric Holder has long insisted that he tried really hard when he was attorney general to make criminal cases against big banks in the wake of the 2007 financial crisis. His excuse, which he made again just last month, was that Justice Department prosecutors didn’t have enough evidence to bring charges. Many critics have long suspected that was bullshit, and that Holder, for a combination of political, self-serving, and craven reasons, held his department back. A new, thoroughly-documented report from the House Financial Services Committee supports that theory. It recounts how career prosecutors in 2012 wanted to criminally charge the global bank HSBC for facilitating money laundering for Mexican drug lords and terrorist groups. But Holder said no. [...] When asked on June 8 why his Justice Department did not equally apply the criminal laws to financial institutions in the wake of the 2008 economic crisis, Holder told the platform drafting panel of the Democratic National Committee that it was laboring under a “misperception.”[...] In September 2012, the Justice Department’s Asset Forfeiture and Money Laundering Section (AFMLS) formally recommended that HSBC be prosecuted for its numerous financial crimes. The history: From 2006 to 2010, HSBC failed to monitor billions of dollars of U.S. dollar purchases with drug trafficking proceeds in Mexico. It also conducted business going back to the mid-1990s on behalf of customers in Cuba, Iran, Libya, Sudan, and Burma, while they were under sanctions. Such transactions were banned by U.S. law.[...]"
Commentary: "US Refuses To Charge HSBC "Because It ‘Could’ Hurt The Financial System" [07/13/16] "As it turns out, the rumors were true — HSBC escaped prosecution for money laundering because the behemoth bank was “too big to jail.” A U.S. Congressional report, entitled “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable,” (PDF) found officials in the U.K. applied the economic threat cum warning of “market turmoil” to ensure HSBC wouldn’t be subject to prosecution for rather serious allegations. Among a multitude of other findings, according to the report’s Executive Summary [all emphasis has been added]: [...] Senior DOJ leadership, including Attorney General [Eric] Holder, overruled an internal recommendation by DOJ’s Asset Forfeiture and Money Laundering Section to prosecute HSBC because of DOJ leadership’s concern that prosecuting the bank would have serious adverse consequences on the financial system […] Attorney General Holder misled Congress concerning DOJ’s reasons for not bringing a criminal prosecution against HSBC. Chaired by U.S. Rep. Jeb Hensarling, the Committee on Financial Services initiated a study in March 2013 concerning the Department of Justice’s incongruent decision not to prosecute the London-based bank, nor its executives or employees, for laundering drug cartel money.[...] From the beginning, the Committee encountered “non-compliance” in efforts to obtain “relevant documents” from both the DOJ and Dept. of the Treasury, “necessitating the issuance of subpoenas to both agencies.” In fact, it took the Committee three full years from its initial request for information to ultimately procure the necessary items for review, and records from the Treasury show the DOJ “has not been forthright with Congress or the American people concerning its decision” not to prosecute the Big Bank. As the summary noted further: “Attorney General [Loretta] Lynch and Secretary [of the Treasury Jack] Lew remain in default of their legal obligation to produce the subpoenaed records to the Committee,” and, in fact, “DOJ’s and Treasury’s longstanding efforts to impede the Committee’s investigation may constitute contempt and obstruction of Congress.”[...]" Related:"US Probe Into HSBC Money Laundering ‘Hampered’ By George Osborne"
MSM: "Former EU President Hired As New Chairman of Goldman Sachs International" [07/11/16] "The former president of the of the European Commission, the European Union’s (EU) unelected executive arm, has been recruited as the new boss of international operations at Goldman Sachs, who funded the official anti-Brexit campaign. The American investment bank, which was accused of “serious misconduct” and agreed last month to pay out $5.06bn for its role in the 2008 financial crisis, is to hire José Manuel Barroso, the former Portuguese prime minister and most powerful man in the EU (pictured right, alongside current president Jean-Claude Juncker). Mr. Barroso, who was president of the European Commission for 10 years until 2014 and presided over the Eurozone crisis, will help the Wall Street giant manage the so-called “fall out” from Brexit as well as other international uncertainties. His pay has not been disclosed. During his time as President of the Commission he persistently attacked Eurosceptics, including David Cameron when he announced that the British people would have a democratic say on their membership of the block. The bank has a long history of hiring EU bureaucrats. Mr. Barroso takes the job from Peter Sutherland, a former European Commissioner and ex-boss of the World Trade Organisation, who left last year. Mr. Sutherland’s anti-democratic and anti-Brexit rhetoric has been even more inflammatory. After the Brexit vote was announced, he called for it to be “overturned”. [...]" Note: Barroso behaves like an unprincipled, unelected thug. Related: Nigel Farage has a lot to say about him. Revealing and fun to watch.
MSM: "Deutsche Bank Economist: EU Banks Need $166 Billion Bailout" [07/11/16] "Europe urgently needs a 150 billion-euro ($166 billion) bailout fund to recapitalize its beleaguered banks, particularly those in Italy, Deutsche Bank AG’s chief economist said in an interview with Welt am Sonntag. "I do not expect a second financial crisis like in 2008," Folkerts-Landau said, according to Welt. "The banks are much more stable today and have more equity. What we face this time is a slow, long downward spiral." The Bloomberg Europe 500 Banks and Financial Services Index has tumbled 33 percent this year, falling to the lowest level in more than seven years on Thursday. Deutsche Bank’s stock price has fallen 48 percent during that period.[...]"
Hugh Jaynis Award: "How George Soros Created the European Refugee Crisis, And Why" [07/10/16] "George Soros is trading again. The 85-year-old political activist and philanthropist [read traitor, social terrorist and global criminal] hit the headlines post-Brexit saying the event had “unleashed” a financial-market crisis. Well, the crisis hasn’t hit Soros just yet. He was once again on the right side of the trade, taking a short position in troubled Deutsche Bank and betting against the S&P via a 2.1-million-share put option on the SPDR S&P 500 ETF. [...] (His background and how/why he became a Globalist:) [...] Today, Soros’s net worth stands at $23 billion. Since taking a back seat in his company, Soros Fund Management, in 2000, Soros has been focusing on his philanthropic efforts, which he carries out through the Open Society Foundations he founded in 1993. So who does he donate to, and what causes does he support? During the 1980s and 1990s, Soros used his extraordinary wealth to bankroll and fund revolutions in dozens of European nations, including Czechoslovakia, Croatia, and Yugoslavia. He achieved this by funneling money to political opposition parties, publishing houses, and independent media in these nations. If you wonder why Soros meddled in these nations’ affairs, part of the answer may lie in the fact that during and after the chaos, he invested heavily in assets in each of the respective countries. He then used Columbia University economist Jeffrey Sachs to advise the fledgling governments to privatize all public assets immediately, thus allowing Soros to sell the assets he had acquired during the turmoil into newly formed open markets. Having succeeded in advancing his agenda in Europe through regime change—and profiting in the process—he soon turned his attention to the big stage, the United States. [...] In 2004, Soros stated, “I deeply believe in the ' values of an open society'. For the past 15 years I have been focusing my efforts abroad; now I am doing it in the United States.” Since then, Soros has been funding groups such as: The American Institute for Social Justice, whose aim is to “transform poor communities through lobbying for increased government spending on social programs” ; The New America Foundation, whose aim is to “influence public opinion on such topics as environmentalism and global governance” ; The Migration Policy Institute, whose aim is to “bring about an illegal immigrant resettlement policy and increase social welfare benefits for illegals”. Soros also uses his Open Society Foundations to funnel money to the progressive media outlet, Media Matters. Soros funnels the money through a number of leftist groups, including the Tides Foundation, Center for American Progress, and the Democracy Alliance in order to circumvent the campaign finance laws he helped lobby for. Why has Soros donated so much capital and effort to these organizations? For one simple reason: to buy political power. [...] Soros’s relationship with the Clintons goes back to 1993, around the time when OSF was founded. They have become close friends, and their enduring relationship goes well beyond donor status. According to the book, The Shadow Party, by Horowitz and Poe, at a 2004 “Take Back America” conference where Soros was speaking, the former first lady introduced him saying, “[W]e need people like George Soros, who is fearless and willing to step up when it counts.” Soros began supporting Hillary Clinton’s current presidential run in 2013, taking a senior role in the “Ready for Hillary” group. Since then, Soros has donated over $15 million to pro-Clinton groups and Super PACs. More recently, Soros has given more than $33 million to the ' Black Lives Matter' group, which has been involved in outbreaks of social unrest in Ferguson, Missouri, and Baltimore, Maryland, in 2015. (And Dallas Texas in July 2016) Both of these incidents contributed to a worsening of race relations across America.[...]" Related: See also News and Developments archive for May 2016 for the following related stories: "Hungary PM: Clinton is George Soros Puppet, Wants to Overrun EU With Millions of Muslims" [05/23/16]; "Will The New World Order Finally Get Its Own Nuremburg Tribunal?" [05/17/16] ; "Panama Papers Reveal George Soros' Deep Money Ties To Secretive Weapons, Intel Investment Firm" [05/17/16]; "Companies That Were Revealed To Be Controlled By George Soros" [05/17/16]; Propaganda Theatre: "Soros: "Putin Bigger Threat To Europe’s Existence Than ISIS" [05/17/16]; "Soros-Funded NGOs ‘Whisper Into EU’s Ear’ to Encourage Refugee Influx" [05/17/16] ; "With Open Gates: The Forced Collective Suicide Of European Nations" [05/13/16]; "Turkey Threatens Europe: "Unless Visas Are Removed, We Will Unleash The Refugees" [05/12/16] and attached related stories.
Flashback: "Outrageous HSBC Settlement Proves The Drug War Is A Joke" 2012 [07/08/16] "Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me. Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who's ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a "record" financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank. The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows." This bears repeating: in order to more efficiently move as much illegal money as possible into the "legitimate" banking institution HSBC, drug dealers specifically designed boxes to fit through the bank's teller windows. Tony Montana's henchmen marching dufflebags of cash into the fictional "American City Bank" in Miami was actually more subtle than what the cartels were doing when they washed their cash through one of Britain's most storied financial institutions. [...] Though this was not stated explicitly, the government's rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a "systemically important institution" in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way: Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. It doesn't take a genius to see that the reasoning here is beyond flawed. When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC's Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn't protect the banking system, it does exactly the opposite. It terrifies investors and depositors everywhere, leaving them with the clear impression that even the most "reputable" banks may in fact be captured institutions whose senior executives are in the employ of (this can't be repeated often enough) murderers and terrorists. Even more shocking, the Justice Department's response to learning about all of this was to do exactly the same thing that the HSBC executives did in the first place to get themselves in trouble – they took money to look the other way.[...]"
Flashback: "Did Loretta Lynch Help HSBC Escape Justice In ‘Drugs And Terror’ Money-Laundering Case?" 2015 [07/07/16] " Loretta Lynch is the White House’s nominee to replace the outgoing Eric Holder as US Attorney General, but some of her past cases – in terrorism and financial fraud – are coming back to bite her now. Her record in prosecuting dubious ‘terror’ cases should be scrutinized as they appear to support the FBI’s use of entrapment and torturing of suspects to gain confessions and other self-incriminating ‘intel’, as was the case with Mahdi Hashi. Lynch also appears to have played a role in validating some questionable information in a letter she wrote which has been used to frame the British-Somalian man and two others on trial in New York, as ‘chemical weapons experts’ who were ‘building a chemical weapons factory for al Qaeda’. “The letter, dated September 18, 2013, was written by US Attorney Loretta Lynch. According to Rose and Miller, it confirms the existence of a chemical weapons program by Al-Qaeda, which had been LONG FEARED.” (Source: Translation Exercises) Of course, the inflated claim by Lynch has been proven to be bogus, and stands as one of the most bombastic terror tall tales we’ve seen to date. Add to this the case of HSBC and its role in enabling money laundering for some of the globe’s biggest criminal, terror and vice cartels – and Lynch’s involvement in allowing some of the responsible parties to slip through the net of justice. Breitbart explains: “In December 2012, ABC News’s Brian Ross, Matthew Mosk and Carlos Boettcher reported that HSBC Bank “will avoid a potentially crippling criminal prosecution for its role in moving cash for known terror groups, Mexican drug cartels, and rogue governments such as Iran” because Justice Department officials instead agreed to assess a $2 billion settlement against the bank.” Lynch, the U.S. Attorney for the Eastern District of New York, is quoted in that article as saying HSBC didn’t act on”numerous red flags and warnings about the money laundering risks.” Of course, no one from HSBC actually went to prison or faced any criminal charges for the biggest laundering scandal since the BCCI, and this is down to “Lynch’s and others’ efforts.” [...] Included: "Loretta Lynch is Condoleeza Rice With A Law Degree".
MSM: "British Pound To 31 Year Low, Deutsche Bank Sinks To Lowest Level Ever" [07/07/16] "The fallout from the Brexit vote continues to rock the European financial system. On Wednesday, the British pound dropped to a fresh 31-year low as confidence in the currency continues to plummet. At one point it had fallen as low as $1.2796 before rebounding a bit. As I write this, it is still sitting at just $1.293. Meanwhile, the problems for the biggest banks in Europe just continue to mount. At one point on Wednesday Credit Suisse hit an all-time record low, and German banking giant Deutsche Bank closed the day at an all-time record closing low of 12.93. Overall, Europe’s Stoxx 600 Bank Index closed at the lowest level in almost five years. What we are watching is a full-blown financial meltdown in Europe, but because it is not personally affecting them yet, most Americans are not paying any attention to it. [...] Of course this is likely only just the beginning. There are some analysts that are suggesting that the British pound could eventually hit parity with the U.S. dollar at some point. We are seeing seismic shifts on the foreign exchange market right now, and this is going to affect trillions of dollars worth of currency-related derivatives. It will be exceedingly interesting to see how all of this plays out. Meanwhile, Deutsche Bank continues to get absolutely hammered.[...]"
Concepts and Practices: "The Poisonous Gap Between Paper Wealth And Real Wealth" Ø Hedge [07/06/16] "Understand that securities are not net economic wealth. They are a claim of one party in the economy - by virtue of past saving - on the future output produced by others. Fundamentally, it's the act of value-added production that ‘injects’ purchasing power into the economy (as well as the objects available to be purchased), because by that action the economy has goods and services that did not exist previously with the same value. True wealth is embodied in the capacity to produce (productive capital, stored resources, infrastructure, knowledge), and net income is created when that capacity is expressed in productive activity that adds value that didn't exist before. “New securities are created in the economy each time some amount of purchasing power is transferred to others, rather than consuming it. Once issued, all of these pieces of paper can vary in price later, so the saving that someone did in a prior period, embodied in the form of some paper security, may be worth more or less consumption in the current period than it was initially. That’s really the main effect QE has - to encourage yield-seeking speculation that drives up the prices of risky securities, but without having any material effect on the real economy or the underlying cash flows that those securities will deliver over time. [...] “If one carefully accounts for what is spent, what is saved, and what form those savings take (securities that transfer the savings to others, or tangible real investment of output that is not consumed), one obtains a set of ‘stock-flow consistent’ accounting identities that must be true at each point in time: 1) Total real saving in the economy must equal total real investment in the economy; 2) For every investor who calls some security an ‘asset’ there is an issuer that calls that same security a ‘liability’; 3) The net acquisition of all securities in the economy is always precisely zero, even though the gross issuance of securities can be many times the amount of underlying saving; and perhaps most importantly, 4) When one nets out all the assets and liabilities in the economy, the only thing that is left - the true basis of a society’s net worth - is the stock of real investment that it has accumulated as a result of prior saving, and its unused endowment of resources. Everything else cancels out because every security represents an asset of the holder and a liability of the issuer.” [...] Following the British referendum to exit the European Union, the paper value of global assets briefly fell by about $3 trillion. This decline in the market capitalization immediately garnered headlines, suggesting that some destruction of “value” had occurred. No. The value of a security is embodied in the future stream of cash flows that will actually be delivered into the hands of investors over time. What occurred here was a paper loss. While the recent one was both shallow and temporary, get used to such headlines. In the U.S. alone I fully expect that $10 trillion of paper wealth will be erased from U.S. equity market capitalization over the completion of the current market cycle. While any given holder can sell their securities here, somebody else has to buy those same securities. The fact that valuations are obscene doesn't mean that the economy has created more wealth. It just means that existing holders of stocks and long-term bonds have a temporary opportunity to obtain a wealth transfer from some unfortunate buyer. Whoever ends up holding that bag will likely earn total returns close to zero on their investment over the coming 10-12 year horizon, with profound interim losses on the way to zero returns.Investors who fail to understand the difference between paper wealth and value are likely to learn that distinction the same way they did during the 2000-2002 and 2007-2009 collapses, both which we correctly anticipated, with a constructive shift in-between. So not to throw stones in our own glass house, see the “Box” in The Next Big Short for a narrative of the challenges we encountered in the speculative half-cycle since 2009, as the Federal Reserve intentionally encouraged yield-seeking speculation long after previously reliable warning signs appeared. This has created what is now the third financial bubble in 16 years, the third most offensive valuation extreme next to 2000 and 1929, and the single most extreme point of valuation in history for the median stock.[...]"
MSM: "Three Largest UK Property Funds Freeze $12 Billion In Assets, More To Come" Ø Hedge [07/06/16] "As first reported last night, and following up this morning, in an episode painfully reminiscent of the Bear hedge fund "freezes" that preceded the bank's 2008 collapse and the great financial crisis, first the UK's Standard Life halted trading in its property fund, followed hours later by both Aviva and M&G which likewise announced they are suspending trading in their own portfolio funds. And, as Bloomberg summarizes, three of the U.K.’s largest real estate funds have frozen almost 9.1 billion pounds ($12 billion) of assets after Britain’s shock vote to leave the European Union sparked a flurry of redemptions. These were the first major dominoes to fall as a result of the confusion resulting from the Brexit vote. M&G Investments, Aviva Investors and Standard Life Investments halted withdrawals because they don’t have enough cash to immediately repay investors. About 24.5 billion pounds is allocated to U.K. real estate funds, according to the Investment Association. The rush by private investors to withdraw money prompted M&G, which held 7.7% in cash before the vote, to suspend its 4.4 billion-pound Property Portfolio fund and Aviva Investors to freeze its 1.8 billion-pound Property Trust on Tuesday. Standard Life halted trading on its 2.9 billion-pound U.K. real estate fund on Monday. The cash position for Aviva and Standard Life’s funds at the end of May was 9.3% and 13.1% respectively. [...]"
Commentary: "New Jersey's 'Mob-like" State Loan Rules Lead To Financial Ruin For Borrowers" [07/05/16] "Student loans are incredibly difficult to discharge, even through bankruptcy, this is widely known. However in New Jersey, it appears as though student loans are still expected to be paid, even if someone gets cancer or even dies. [...] According to the NYT, New Jersey's loans, which total $1.9 billion, come with extraordinarily stringent rules that can lead to financial ruin.[...] As the NYT explains: "New Jersey’s loans, which currently total $1.9 billion, are unlike those of any other government lending program for students in the country. They come with extraordinarily stringent rules that can easily lead to financial ruin. Repayments cannot be adjusted based on income, and borrowers who are unemployed or facing other financial hardships are given few breaks. The loans also carry higher interest rates than similar federal programs. Most significant, New Jersey’s loans come with a cudgel that even the most predatory for-profit players cannot wield: the power of the state. New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings — all without having to get court approval. “It’s state-sanctioned loan-sharking,” Daniel Frischberg, a bankruptcy lawyer, said. “The New Jersey program is set up so that you fail.” [...] The 'authority', which boasts in brochures that its “singular focus has always been to benefit the students we serve,” has become even more aggressive in recent years. Interviews with dozens of borrowers, who were among the tens of thousands who have turned to the program, show how the loans have unraveled lives. The program’s regulations have destroyed families’ credit and forced them to forfeit their salaries. One college graduate declared bankruptcy at age 26 after struggling to repay his debt. The agency filed four simultaneous lawsuits against a 31-year-old paralegal after she fell behind on her payments. [...] One reason that is given for the tactics is that that the state depends on Wall Street investors to finance student loans through tax-exempt bonds, and the state needs to satisfy those investors by keeping the loans to a minimum. Also, loan revenues cover about half the agency's administrative budget. Governor Chris Christie declined to respond to questions, but Christie appointed its executive director Gabrielle Charette, and Christie also has the power to appoint at least 12 of the agency's 18 board members, and can veto any action taken by the board."[...] As the NYT explains, for decades states served as middlemen for federal student loans, but in 2010 Congress and the Obama administration effectively eliminated the role of state agencies by having only the federal government lend directly to students. Some states decided to downsize and transfer their federal loan portfolios, but New Jersey went a different direction. New Jersey chose a different path. In the years leading up to the end of the federal program, New Jersey sharply expanded its loan program, slowly replacing the federal loans it once handled with state loans. From 2005 to 2010, loans from the agency nearly tripled, to $343 million per year. Since then, the agency has reduced its loans by half, but its outstanding portfolio has remained roughly the same, about $2 billion. [...] In contrast to New Jersey, Massachusetts, which is the next largest program with $1.3 billion in outstanding loans, automatically cancels debt if a borrower dies or becomes disabled, something many other states do also according to the NYT. New Jersey's solution to the problem is to encourage students to buy life insurance in case they die to help co-signers repay. How very nice of them. When consumer lawyers protested the program's onerous conditions at a 2014 agency meeting, the agency said that giving borrowers a break would make the bonds sold to finance loans "less attractive to the ratings agencies and investors." Which according to Moody's is an accurate assessment, as Moody's cited the authority's "administrative wage garnishing, which it uses aggressively for significantly higher collections" compared with other programs.[...]"
MSM: "Financially Corrupt, Predatory EU Is Looking To 'Roll Out The Carpet' To More Debt-Ridden Nations" [07/03/16] "EUROPE’S financial future has been thrown into doubt as EU bosses scramble to plug the multibillion pound financial black hole left by the exiting UK. [...] However, in true EU fashion while one hand rushes to fix a problem, another appears to be welcoming one. Nations across the main bloc are waiting with baited breath to hear just how the Union will fill the 15 per cent hole in the EU Budget by 2020.But Brussels bosses are simultaneously preparing to roll out the red carpet to debt ridden countries like Albania. Economists and Leave campaigners alike have warned of the possible financial consequences of opening the door to a country in financial crisis. But it appears the Union is pressing ahead with talks and Albania could join as early as 2020. We visited the country ahead of the vote - where nationals spoke of their desperation to join the Union - to pull their home out of spiraling debt. Albanians also spoke of their determination to move to European countries, especially the UK, when they are granted full membership. While the country is undoubtedly making improvements, poverty is rife. On the main streets in the capital Tirana, elderly men sell their own shoes, or tissues and cigarettes out of a bag, to make a living. And while the old look for ways to make money, the city is also plagued with street beggars.[...] The residents of Albania paint a bleak picture of life in the nation - but European bosses are determined to complete the country’s membership by 2020. In 2014 public debt of the former communist country was 9,530million dollars, and instead of decreasing, it has increased $535m on the previous year.[...] While the world’s attention is fixed on Greek financial crisis, other nations already in the Union are struggling under the weight of heavy public debt. Altogether there are six European nations whose debts are larger than their economic output, and 16 that have debts larger than the 60 per cent of GDP limit set out in the Maastricht Treaty.[...] In 2015 Greece’s public debt stood at 177 per cent of its GDP while Italy was at 132 per cent and Portugal owed 130 per cent of national economic output. Thirteen EU nations saw their public debt accelerate at a faster rate than Greece’s over the period, while Germany, Italy, the UK, France and Spain have debts standing at over €1trillion.Adopting the single currency is a crucial step in a Member State's economy and since the Brexit vote EU bosses have been pressing to ensure the Eurozone is completed. Within the European Union the exchange rate is irrevocably fixed and monetary policy is transferred to the hands of the European Central Bank, which conducts it independently for the entire euro area. [...] 'Remainers' have argued under the Maastricht Treaty which was signed in 1992 no country can join the EU if the national public debt exceeds 60 per cent of gross domestic product (GDP). But top economists have labelled such statements as naive following a history of rule bending by the EU. [...] Mark Littlewood is the Director General of the Institute of Economic Affairs. He said: “You have got to make sure the debt remains a problem for the country itself. If you bring in an indebted country it needs to be clear that they alone are liable for the debt. “The problem is that now...a new member country has to join the Eurozone. “A more flexible system would be better. By all means let new countries join the Union, but only if their public finances are in a reasonably safe situation.” However European leaders have often found loopholes in the Maastricht Treaty to allow them to carry on with borrowing, as Germany famously did in 2002. Mr Littlewood added: “If the treaty had been met the only country in the eurozone would be Luxembourg. “Every single country has breached those rules of financial prudence - only Luxembourg has not. “But it has been sidestepped a number of times for political reasons - and I have no doubt they will do it again. “The record of the EU over the last 20 years proves it. They were written down as rules and are now seen as 'mildly aspirational targets' which are easily overlooked.” [...] Note: Pluto in Capricorn is transforming 'structures', including social structures, that never return to their former state. Secrets are revealed.
MSM: "Clinton Sought Info On Bailout Plans As Son-In-Law's Doomed Hedge Fund Gambled On Greece" [07/01/16] "Hedge fund manager Marc Mezvinsky had friends in high places when he bet big on a Greek economic recovery, but even the keen interest of his mother-in-law, then-Secretary of State Hillary Clinton, wasn't enough to spare him and his investors from financial tragedy. [...] In 2012, Mezvinski, the husband of Chelsea Clinton, created a $325 million basket of offshore funds under the Eaglevale Partners banner through a special arrangement with investment bank Goldman Sachs. The funds have lost tens of millions of dollars predicting that bailouts of the Greek banking system would pump up the value of the country’s distressed bonds. One fund, exclusively dedicated to Greek debt, suffered near-total losses. Clinton stepped down as secretary of state in 2013 to run for president. But newly released emails from 2012 show that she and Clinton Foundation consultant, Sidney Blumenthal, shared classified information about how German leadership viewed the prospects for a Greek bailout. Clinton also shared “protected” State Department information about Greek bonds with her husband at the same time that her son-in-law aimed his hedge fund at Greece. That America’s top diplomat kept a sharp eye on intelligence assessing the chances of a bailout of the Greek central bank is not a problem. However, sharing such sensitive information with friends and family would have been highly improper. Federal regulations prohibit the use of nonpublic information to further private interests or the interests of others. The mere perception of a conflict of interest is unacceptable. [...] Through its press representative, Eaglevale declined to comment for this story. Clinton’s campaign press office did not respond to a request for comment. [...] A former Goldman Sachs broker himself, Mezvinsky formed Eaglevale Management with two ex-Goldman Sachs partners in October 2011. As a “global macro” firm, Eaglevale’s strategy is to seek profit opportunities in politically volatile situations. Mezvinsky set up several funds in the Cayman Islands, a secretive tax haven, with Goldman Sachs serving as Eaglevale’s prime broker and banker. The giant brokerage firm has a checkered history of manipulating the value of Greek debt to the detriment of Greece. [...] The same month that Eaglevale incorporated its offshore arm, Gary Gensler, the head of the United States Commodity Futures Trading Commission, which polices hedge funds, emailed Clinton that a bailout by the European Central Bank could “turn market sentiment” in favor of Greek bonds. Gensler had previously worked as co-head of finance at Goldman Sachs; he is now the financial director of Clinton’s election campaign. Goldman Sachs has donated up to $5 million to the Clinton Foundation and $860,000 to Hillary Clinton’s political campaigns. Shortly after Clinton resigned, Goldman Sachs paid her $675,000 in speaking fees. Clinton’s deputy in charge of economic policy was Robert Hormats, a former vice chairman of Goldman Sachs. Hormats and Clinton shared an extensive email trail about the possibility of bailing out Greece, including classified materials, and internal state department memos about the debt from the U.S. ambassador to Greece.[...]"
MSM: "Nigel Farage: 'Rubbish' To Blame Brexit For Stock Losses" [06/29/16] [12:13] "Exclusive interview with Farage. Very good, with a close examination of the 'reaction' in the financial industry. Things you will hear NO where else. [...]"
Commentary: "Soros Bets $110m Shorting Germany's Biggest Bank" [06/29/16] "George Soros is looking to take down Germany's biggest bank... [...] George Soros took out a staggering €100MILLION bet that a major German bank would collapse after Britain decisions to cut ties with the crumbling EU. The man who "broke the Bank of England" took a short position of 0.51 per cent in Deutsche Bank shares on Friday - the day after the people of Britain backed Brexit. In growing signs that desperate Angela Merkel's economy is struggling in the wake of the nation's decision to leave the EU - Soros Fund Management said its short position was now 0.46 per cent - suggesting it had begun to take profits from the trade. [...] Angela Merkel's sacrificing Germany on the altar of multiculturalism is what brought down the EU, not Brexit. The UK is just the first nation to jump ship. Now, studious hard working German savers who have been disciplined with their money have internationalist vultures circulating overhead eagerly seeking the collapse of their nation's largest bank.[...]" Note: Soros behaves as an international criminal parasite ...
Commentary: "Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard" [06/29/16] "On Monday, Alan Greenspan, the former Chairman of the Federal Reserve from 1987 to 2006, dropped a bombshell that will both incite panic as well make people scratch their heads in disbelief. Speaking on Bloomberg in an extensive 30-minute interview, Greenspan gave his assessment of Brexit. The former fed chair said David Cameron made a “terrible mistake” by even holding the referendum. Greenspan went on to explain that Brexit will inevitably lead to both Scotland and Northern Ireland declarations of independence as well. “We are in very early days of a crisis which has got a way to go,” asserted Greenspan. Today’s comments come after his already shocking assessment of Brexit on Friday, in which he said this was the worst situation he’s ever seen. [...] As if Greenspan’s predictions weren’t ominous enough, on Monday, he managed to top them. In his appraisal of the situation, Greenspan noted that unsustainable entitlement spending is eventually going to lead to a crisis. The issue is essentially that entitlements are legal issues. They have nothing to do with economics. You reach a certain age or you are ill or something of that nature and you are entitled to certain expenditures out of the budget without any reference to how it’s going to be funded. Where the productivity levels are now, we are lucky to get something even close to two percent annual growth rate. That annual growth rate of two percent is not adequate to finance the existing needs. [...] When asked if “we need an accident of history” to address this, as reported by ZeroHedge, Greenspan replied, “Probably. In the United States, social benefits, which is the more generic term, or entitlements, are considered the third rail of American politics. You touch them and you lose. Now, that is a general view. Republicans don’t want to touch it. Democrats don’t want to touch it. They don’t even want to talk about. This is what the election should be all about in the United States. You will never hear one word from either side.” After calling out the establishment on entitlement spending, Greenspan went on to unmask the false recovery narrative as perpetuated by Washington. [...] ZeroHedge aptly points out that Greenspan ignores his own role in the creation of the boom-bust cycle which has doomed the world to series of ever more destructive bubbles and ultimately, hyperinflation which will likely be unleashed once the helicopter money inevitably arrives. In retrospect, the 90-year-old, who clearly is looking forward not backward, has a simple solution: the gold standard. If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now? [...] Ironically, what Greenspan is referencing in 1913 still plays a devastating role in the current state of global economic affairs today. Immediately after the passage of the Federal Reserve Act of 1913, Congress reassigned the responsibility To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures, otherwise known as Article 1, Section 8 of the Consitution, to the Federal Reserve. The Fed quickly became a fourth branch of the federal government, only an entirely unaccountable and secret one. The newly created central bank began acting as a single point of controlling authority, setting interest rates for inter-bank lending and regulating the supply of money in circulation — setting of a chain reaction that has led us to the crisis we find ourselves in today. [...]"
MSM: "The $100 Trillion Bond Market’s Got Bigger Concerns Than Brexit" [06/28/16] "...“The real elephant in the room is not the U.K. vote or a Trump presidency,” Major said. “The real elephant in the room is we’ll have low and negative rates for a very long period of time.” While the Brexit vote roiled financial markets and caused a surge in haven demand, Major says investors in the $100 trillion bond market need to look at deeper structural problems plaguing the world: demographics, the explosion of debt globally and the disparity in wealth between the rich and poor. [...]"
MSM: "U.S. Politics Scares Overseas Investors" [06/27/16] "Sometimes, an economic paper delivers such a disturbing result that you have no choice but to sit up and take notice. That was the case for me, when I saw this new study by Stony Brook University’s Marina Azzimonti. Azzimonti’s disquieting hypothesis is that political partisanship is deterring overseas investment in the U.S. When we think of foreign direct investment, we usually think of rich countries investing in poorer ones -- a U.S. multinational buying a factory in China, for example. But the U.S. increasingly depends on other countries’ investment to put its people to work. Nowadays, you hear lots of stories of Chinese companies building copper tubing factories in Alabama, German companies creating chemical plants in Louisiana or Japanese automakers building record numbers of cars in the U.S. But these are not isolated anecdotes -- the numbers tell the same story. [...]"
Commentary: "Brexit: Just What The Doctor Ordered" Peter Schiff [06/25/16] "Janet Yellen should send a note of congratulations to Nigel Farage and Boris Johnson, the British politicians most responsible for pushing the Brexit campaign to a successful conclusion. While she’s at it she should also send them some fruit baskets, flowers, Christmas cards, and a heartfelt “thank you.“ That’s because the successful Brexit vote, and the uncertainty and volatility it has introduced into the global markets, will provide the Federal Reserve with all the cover it could possibly want to hold off on rate increases in the United States without having to make the painful admission that domestic economic weakness remains the primary reason that it will continue to leave rates near zero. For months the corner that the Fed has painted itself into has gotten smaller and smaller. It continues to say that rate hikes will be appropriate if the data suggests the economy is strong. Then its representatives continually cite (arguably bogus) statistics that suggest a strengthening economy, which cause many to speculate that rate hikes are indeed on the horizon. But then at the last minute the Fed conjures a temporary reason why it can’t raise rates “right now,” but stresses that they remain committed to doing so in the near future. But each time they conduct this pantomime, they lose credibility. Sadly, Fed officials are discovering that their supply of credibility is not infinite, even among those who would like to cut them a great deal of slack. [...]"
Commentary: "Britain Votes To Leave EU: Cameron To Resign; Markets Rocked" [06/25/16] "Authorities ranging from the International Monetary Fund to the U.S. Federal Reserve and the Bank of England have warned that a British exit will reverberate through a world economy that is only slowly recovering from the global economic crisis. [...]" Related: "Dow Plunges More Than 600 Points on ‘Brexit’ Vote, Estimated $2.1T in Losses"
Flashback: "Global Financial Giants Look to Use TTIP to "Harmonize" US-EU Laws, Remove Obstacles to Future Taxpayer Bailouts" [06/14/16] "A cartel of 14 U.S. and European banking interests is working behind the scenes to tinker with the Transatlantic Trade and Investment Partnership (TTIP) agreement and remove any banking regulations designed to avoid a repeat of the global financial meltdown that began with 2008's taxpayer-funded bailouts of big banks."
MSM: "The £100bn Parasite Banker Work Through The Night To Make A Killing On The Referendum" [06/23/16] "Shameless bankers were last night gambling billions of pounds on the EU referendum. Hedge funds had commissioned private exit polls to steal a march on the official declaration. Armed with the advance information – and a £100billion war chest – their traders went on an all-night 'feeding frenzy'. They are thought to have placed huge bets on currencies and other markets, hoping to clean up by the time stock exchanges opened today. MPs said the public – 40million of whom voted – would be disgusted by the casino-style wagers on the nation's future. [...]"
Commentary: "Soros, Rothschild Warn Of Brexit Doom; Osborne Threatens With “Suspending” Market" Ø Hedge [06/22/16] "Just yesterday, we recounted the story of “Black Wednesday” when on September 16, 1992, the UK was forced out of the EU’s exchange-rate mechanism, or ERM, when the BOE tapped out and allowed the British pound to float freely, leading to 15% losses in the sterling. As we noted, this was George Soros’ infamous trade which “broke the Bank of England” and made the Hungarian richer by over $1.5 bilion. 24 years later Soros is back, and this time he is warning against the kind of devaluation that made him a billionaire and which he believes will be unleashed by Brexit, when in a Guardian Op-Ed he wrote that U.K. voters are “grossly underestimating” the true costs of a vote to leave the EU, saying that there would be an “immediate and dramatic impact on financial markets, investment, prices and jobs.” He predicts that the pound would decline “precipitously”, seeing a gargantuan drop of at least 15% and possibly >20% to below $1.15. Considering it has now become trendy for analysts to come up with ever “doomier” forecasts of just how low cable would plunge in case of Brexit, we are surprised Soros stopped there. Here Soros makes the distinction how the collapse in cable would be different from the one that made him richer by saying that this devaluation wouldn’t be “healthy” like the one in 1992 because BOE wouldn’t cut rates, U.K. has large current account deficit and devaluation unlikely to improve manufacturing exports this time. Just don’t tell that to the BOJ, which would gladly leave the EU – twice if it had to – if it meant a 20% devaluation. [...] As opinion polls on the referendum result fluctuate, I want to offer a clear set of facts, based on my six decades of experience in financial markets, to help voters understand the very real consequences of a vote to leave the EU. Of course, Soros’ set of facts may be clouded by his far greater equity stake in equity interests around Europe, and the globe, which would be drastially impacted by not only a Brexit, but by a European Union which is suddenly on the rocks. From that point on, Soros’ entire analysis is on the “worst case” scenario centered around a collapsing pound, something which most ironically every other central bank around the globe is so desperate to achieve: " … sterling is almost certain to fall steeply and quickly if there is a vote to leave– even more so after yesterday’s rebound as markets reacted to the shift in opinion polls towards remain. I would expect this devaluation to be bigger and more disruptive than the 15% devaluation that occurred in September 1992, when I was fortunate enough to make a substantial profit for my hedge fund investors, at the expense of the Bank of England and the British government." At least he is honest. [...] It is notable that Soros’ warning comes just days after that of Jacob Rothschild himself who said in another Op-Ed, this time for The Times, that leaving the EU could lead to a “damaging and disorderly situation” in the UK as he urged Britons to vote ‘remain’. Just like Soros, Lord Rothschild, suddenly exhibiting a rare strain of humanitarian concern, said readers should not “risk the wellbeing of our country”and European countries are “better off together”. He said that “at present we enjoy being a permanent member of the UN security council and we are essential to the G8 and Commonwealth. But diplomacy, defence, the environment and our values of being a liberal democracy will all be at risk” adding that “I can see no good reason why we should accept our playing a diminished role on the world stage,” especially if his own personal fortune would be jeopardized. [...] Osborne also played down claims he could be forced to leave the Treasury after the referendum amid anger form Tory backbenchers over the way he has campaigned, saying: “It’s really not about my job”. Oh but is George, just like it is in Soros and Rothschild’s own self interest for the people to vote “Remain.” To suggest otherwise is naive, but it may also be irrelevant. With just three days until the vote, the scaremongering tactic, not to mention the murder of an innocent woman, may have already done its job judging by the reveral in public opinion. In any case, one can only hope that unlike the case of the failed Greek referendum where the people voted one way only to get the opposite, no matter how the Brits vote, it will truly represent the democratic will of the majority and that particular outcome is what they get." Note: It's all conceptual head games. Everyone should do the opposite of what these people ask for.
MSM: "US Banks Top Cluster Bomb Investment 'Hall Of Shame': Report" [06/21/16] "Despite the international ban on cluster bombs, more than 150 financial institutions have invested $28 billion in companies that produce them, according to a new report released Thursday. Bank of America, JP Morgan Chase, and Wells Fargo are among the 158 banks, pension funds, and other firms listed in the "Hall of Shame" compiled by the Netherlands-based organization PAX, a member of the Cluster Munition Coalition (CMC). [...] The report, titled Worldwide Investments in Cluster Munitions: A Shared Responsibility (pdf), finds that the leading investors come from 14 countries including the U.S., the UK, and Canada. Of the top 10 overall investors, the U.S. is home to eight. Japan and China round out the last two. [...] Both the UK and Canada— along with France, Germany, and Switzerland, whose institutions are also named on the list—have signed the 2008 Oslo treaty known as the Convention on Cluster Munitions banning the use of the indiscriminate bombs under international law. The U.S., which hosts by far the most companies on the list with 74, is not a signatory. [...] Cluster bombs, which can be launched from the air or ground, operate by ejecting smaller sub-munitions or "bomblets" that can saturate an area of several football fields, according to CMC. They can remain volatile long after a conflict ends. "Financial institutions must stop turning a blind eye to the lethal consequences of their investments," said CMC ambassador Branislav Kapetanović, who survived a cluster bomb in Serbia 16 years ago. "Cluster munitions are being used in Yemen and Syria, causing significant civilian casualties including among children and women. All banks and financial institutions must prohibit investment in companies that produce these indiscriminate weapons." [...] One type of cluster bomb, produced by the U.S.-based company Textron, has been used by the Saudi Arabia-led coalition in Yemen since March 2015, the report states, citing research by Amnesty International and Human Rights Watch. [...] Some of the countries listed in the report have adopted legislation (pdf) that bans certain forms of investment in cluster bombs, including Belgium, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, New Zealand, Samoa, Spain, and Switzerland. Others have "made an interpretive statement that investments in cluster munitions are or can be seen as prohibited by the Convention on Cluster Munitions." [...] But more needs to be done, PAX said, noting that its recommendations "all come down to one simple message: disinvest from producers of cluster munitions now!" [...] For financial firms, that means ending any connection to cluster bomb manufacturers on every level—commercial banking, investment banking, and asset management, the report states. It continues: "Financial institutions should develop policies that exclude all financial links with companies involved in cluster munitions production. Because all investment facilitates this production, no exceptions should be made for third-party financial services, for funds that follow an index, or for civilian project financing for a company also involved in cluster munitions." [...] Co-author Suzanne Oosterwijk said, "It is an outrage that so many financial institutions have no qualms about investing in companies that make banned cluster munitions," though she noted that some companies have made proactive steps to end those links. "We commend these financial institutions for halting their investments and encourage others to follow suit," she said. [...]" Related: "$28 Bln Invested In Cluster Weapon Producers In 4 Years" " [...]"| "Worried About “Stigmatizing” Cluster Bombs, House Approves More Sales to Saudi Arabia" "The House on Thursday narrowly defeated a measure that would have banned the transfer of cluster bombs to Saudi Arabia, but the closeness of the vote was an indication of growing congressional opposition to the conduct of the U.S.-backed, Saudi-led bombing coalition in Yemen. The vote was mostly along party lines, with 200 Republicans – and only 16 Democrats – heeding the Obama administration’s urging to vote against the measure. The vote was 204-216. [...] Cluster munitions are large shell casings that scatter hundreds or thousands of miniature explosives over large areas – often the size of several football fields. Some of the bomblets fail to explode on impact, leaving mine-like explosives that kill civilians and destroy farmland decades after a conflict ends. Cluster bombs are banned by an international treaty signed by 119 countries, not including the United States. The United States opposed the treaty, and instead of signing it, adopted a policy that cluster bombs should never be used in concentrated, civilian areas.[...]"
Commentary: "Socialism's 1%: "The Rich People Are Thieves ... Socialist Dream Is Falling Apart" Ø Hedge [06/20/16] "A defining characteristic of socialism in all its forms in all places and at all times is a relatively small political elite (and its “private sector” cronies) that lives lavishly by plundering its population, destroying its economy, imposing a regime of equality of poverty and misery; and turning almost everyone into a dependent on the state for survival. Joseph Stalin was the wealthiest man in the world during his time, not the Rockefellers, Morgans, or anyone else, as the de facto “owner” of the entire Soviet Union. African and Latin American socialist political thugs in the “post- colonial era” have long been notorious for becoming millionaires or billionaires, with Swiss bank accounts galore, while their people starved and begged them for subsistence. Socialism’s one percenters make today’s Wall Street plutocrats seem impoverished by comparison. [...] The latest glaring example of the disgusting and immoral corruption of socialism’s one percenters is Venezuela, a country that has “long been the darling of the [socialist] Left,” according to a June 16 article in the Daily Mail. The article, authored by Jake Wallis Simons, has the headline: “Super-rich socialists quaff champagne in Venezuelan country clubs while middle-class mothers scavenge for food in the gutter . . . even the dogs are starving.” [...] Venezuelan socialism, known as “Chavismo,” after the wealthy socialist one percenter Hugo Chavez, has indeed destroyed the country’s economy. Thanks to government-imposed price controls that hold prices below costs, supermarkets are empty, everything is in short supply or simply unavailable, and middle-class people are literally “rummaging in stinking piles of rubbish for cabbage leaves . . . and fetid meat,” according to the Daily Mail article, which includes dozens of pictures of these pathetic scenes. Among the most disturbing pictures are those of starving dogs and other animals in this socialist “paradise.” [...] Nationalization, price controls, and suffocating government regulations have so destroyed the remnants of capitalism that hospitals can’t afford toilet paper, let alone medicine; people wait in queues for ten our twelve hours a day, just like in the old Soviet Union, in hopes of buying something – anything – that might come up for sale in hopes of trading it for things they actually need; there is raging hyperinflation as the government tries to print money like mad to continue paying for its socialist fantasies; and crime is the worst of anywhere on earth. One middle-class woman is quoted in the article as saying “Chavez’s legacy is people like me looking for food in the garbage.” “Those rich people are thieves,” says the woman quoted by the Daily Mail. “They are government cronies and they stole the country’s money . . . . We had a socialist revolution and these are the results.” “I feel cheated. Our socialist dream is falling apart,” said another pathetically-duped victim of Bernie Sanders/ Hugo Chavez- style socialism. Meanwhile, according to a recent poll, 46 percent of American “millennials” say they could vote for a socialist for president, who they believe would end political cronyism, “get money out of politics,” and redistribute the wealth of the politically-connected one percenters to them. This, of course, is complete nonsense and an expression of extreme ignorance. As F.A. Hayek explained in his classic, The Road to Serfdom, the reality is that under socialism, “the only power worth having is political power.” It is capitalism, private property, and markets that provide the most potential for economic opportunity, economic advance based on merit, hard work, savings, entrepreneurship, and individual initiative. Who says the government schools are not teaching the kids much these days?[...]"
Commentary: "You Are Living Through The Dumbest Monetary Experimental Endgame In History" Ø Hedge [06/19/16] "We have seen several explanations for the financial crisis and its lingering effects depressing our global economy in its aftermath. Some are plain stupid, such as greed for some reason suddenly overwhelmed people working within finance, as if people in finance were not greedy before 2007. Others try to explain it through “liberalisation” which is almost just as nonsensical as government regulators never liberalised anything, but rather allowed fraud, in polite company called fractional reserve banking, to grow unrestrained. Some point to excess savings in exporting countries as the culprit behind our misery. Excess saving forces less frugal countries reluctantly to run deficits, or so the argument goes. [...] While some theories are pure folly, others are partial right, but none seem to grasp the fundamental factor that pulled and keep pulling the world into such unsustainable constellations witnessed in global finance, trade and capital allocation. Whenever we try to explain the reasons behind the crisis, such as the build-up in non-productive and counterproductive debt (see here, here and here for more details) people ask us why did this happened now, and not earlier? It is a fair question that we have thought about and believe have one simple answer. Bottom line, the world economy is running on a system with no natural correcting mechanisms. [...] As we are never tired of pointing out, the Soviet Union only had one recession, the one in 1989. The system was stable, until it was not. A system that does not correct internal imbalances grows just like a parasitic cancer, eventually killing its host. If unsustainable capital allocations are allowed to continue unchecked, the pool of real savings will at some point be depleted. At that point recession hits because the structure of production is too capital intensive relative to the level of real saving available. A quick look at US saving and investment rates since the 1950s confirms what we all know to be true; saving and investments are not keeping up with GDP growth. That the trend broke after Nixon took the dollar of gold in 1971 is not a coincidence. Real funding for economic activity were slowly substituted from proper saving towards “forced” saving through fiat money expansion. [...] The inevitable result from such a policy has been the massive increase in debt and drop in the US balance versus the rest of the world. No matter what political leaning the country had, debt kept on rising and its mirror image, the current account balance, kept on falling. The US mortgaged their future to foreigners willing to fund this consumption spree. No one seemed to care that the US did not build up a productive capital base that could service all this debt in the future. The US, issuer of the world reserve currency, was good as gold. At least that was what the world assumed, and surprisingly enough still do.[...] So what does this have to do with a world in economic crisis? [...]"
MSM: "Almost $50 Billion Dollars In Retail Property Loans Will Be Due In The Next 18 Months" [06/18/16] "Things are not looking good for America’s shopping malls. General Growth Properties Inc, the second largest mall owner in the U.S., has missed a $144 million dollar loan payment. [...] This delinquency marks the beginning of the end for America’s favorite shopping destinations. According to Bloomberg almost $50 billion dollars in retail property loans will be due in the next 18 months spelling doom for Americas dying shopping malls, strip malls and struggling retailers. [...] Suburban Detroit's' Lakeside Mall, with mid-range stores such as Sears, Bath & Body Works and Kay Jewelers, is one of the hundreds of retail centers across the U.S. being buffeted by the rise of e-commerce. After a $144 million loan on the property came due this month, owner General Growth Properties Inc. didn't make the payment. [...] The default by the second-biggest U.S. mall owner may be a harbinger of trouble nationwide as a wave of debt from the last decade's borrowing binge comes due for shopping centers. About $47.5 billion of loans backed by retail properties are set to mature over the next 18 months, data from Bank of America Merrill Lynch show. That's coinciding with a tighter market for commercial-mortgage backed securities, where many such properties are financed. [...] For some mall owners, negotiating loan extensions or refinancing may be difficult. Lenders are tightening their purse strings as unease surrounding the future of shopping centers grows, with bleak earnings forecasts fromÂ retailers including Macy's Inc. and Nordstrom Inc., and bankruptcy filings by chains such as Aeropostale Inc. and Sports Authority Inc. Older malls in small cities and towns are being hit hardest, squeezed by competition from both the Internet and newer, glitzier malls that draw wealthy shoppers. "For many years, people thought the retail business in the U.S. was a bit overbuilt," said Tad Philipp, an analyst at Moody's Investors Service. "The advent of online shopping is kind of accelerating the separation of winners and losers." Landlords that can't refinance debt may either walk away from the property or negotiate for an extension of the due date. It can be hard to save a failing mall, leading to high losses for lenders on soured loans, Philipp said. [...]"
MSM: "US Fed: No Interest Rate Hike, For Now" [06/16/16] "Although it stated that it expects the job market to rebound in 2016 and that US economic performance has strengthened in recent years, the Federal Open Market Committee (FOMC) indicated following its two-day meeting in Washington that it will not hike interest rates at this time.Instead, it voiced confidence that interest rates will likely gradually rise but maintained an accommodative stance. [...]"
Satire: "Last Week Tonight with John Oliver: Retirement Plans (HBO)" [06/15/16] [21:29] "Saving for retirement means navigating a potential minefield of high fees and bad advice. Billy Eichner and Kristin Chenoweth share some tips. [...]"
MSM: "Soros Buying Gold On BREXIT, EU “Collapse” Risk" [06/15/16] "George Soros is again buying gold and selling and going short stocks due to BREXIT and EU “collapse” risk, after a six year hiatus from the gold market. [...] The multi-billionaire hedge fund manager, the man who “broke the Bank of England” and one of the richest and most powerful men in the world has now publicly warned that inflation is likely soon and is voicing concerns about BREXIT, the disintegration of the EU, a Chinese financial crash, global contagion and a new World War. Soros Fund Management, which manages around $30 billion for the Soros family, is now aggressively selling and going short stocks and diversifying into gold and shares in gold mining companies, due to his now even “gloomier” view of the global financial system and the global economic outlook. Soros has become more involved in trading at his family office, due to his many concerns and the risk that “large market shifts may be at hand”, according to a person familiar with the matter as reported by Bloomberg. Soros recently warned that the EU is “on the verge of collapse” because of its handling of the Greek economic crisis and refugee crisis and said the prospect of a BREXIT from EU Superstate posed a fresh threat to the EU.[...] Governments, economists, financial advisers, brokers and of course bankers did not see the first crisis coming in 2008 and they are not seeing it now. Some are simply not informed or aware of the risks and others choose to ignore them and spin the illusion that all is well and there is nothing to be worried about. The cosy consensus and groupthink of economic recovery continues and there is a remarkable lack of a plurality of opinion and lack of debate regarding the risks posed to savers and investors today. The real risks of another global financial crisis as warned in recent days by Martin Wolf and Japanese Prime Minister Abe are largely being ignored again – as was the case before the first crisis. A few market observers are warning about and again they are largely being ignored. The inability to look at the reality of the global financial and economic challenges confronting us today will see investors suffer financial losses again. In the coming crisis, depositors and savers are also exposed due to the new bail-in regimes.[...]"
MSM: "US Asset Managers Target Australia's $1.5 Trillion Pension Funds" Ø Hedge [06/12/16] "Hedge funds attracted a net $44 billion in assets globally last year, the smallest amount since 2012. As these increasingly desperate funds try to change that in 2016, one enormous target has been identified in Australia. Australia has approximately USD$1.5 trillion in retirement savings, one of the largest and fastest growing pools of pension money in the world according to the WSJ. Several US asset managers are already actively working to get a foot in the door, even though management fees charged in Australia are among the world's lowest according to local lobby group Financial Services Council. "Everyone wants to get their hands on that pie. People think there's a lot of money to be made (stolen) in Australia" said Jesse Huang, director for strategic relations Boston based hedge fund PanAgora Asset Management [...] Ah yes, hedge funds who introduce complex trading strategies to mom and pop investors and massive pension funds - what could possibly go wrong there?"
MSM: "76 Million Americans Are Struggling Financially Or Just Getting By" [06/12/16] "The Federal Reserve Bank’s latest survey on Americans’ economic well-being, which looked at 2015. 31% of American adults, or 76 million people, said they are struggling to get by or just barely making it. [...] Seven years after the end of the Great Recession, millions of Americans have yet to find firm financial footing. That’s one reason why the economy remains a top concern in the 2016 presidential election. Some 46% of adults say they can’t cover an unexpected $400 expense or would have borrow or sell something to do so. While lower income Americans said they’d have the toughest time handling this emergency charge, some 38% of middle class Americans reported they’d have trouble too. Even 19% of those raking in over $100,000 a year said they couldn’t pay the bill promptly. About one-third of Americans also say that their income varies month-to-month, mainly because they have an irregular work schedule. Some 45% say their expenses shift each month. Some 42% of those with these volatile income streams or expenses say they struggled to pay the bills at least once in the past year. Many Americans want to work more or are already holding down multiple jobs. Some 35% of those who are not self-employed said they’d prefer to work more hours (at their current wage). This was particularly true of lower-income respondents, non-Hispanic blacks, younger folks, Hispanics and and those with less education.[...]"
Commentary: "How Wall Street Profits From ‘Public Education’ While Students Drown In Debt" [06/11/16] [9:43] " In this episode of ‘Behind The Headline,’ host Mnar Muhawesh meets Steve Mims, the writer and director of ‘Starving The Beast,’ a documentary about the privatization of college education. He explains that learning is now treated like a profitable commodity rather than a public good. [...] An education crisis largely orchestrated by neoconservatives in both the Republican and Democratic Parties, has left some of the country’s oldest and most prestigious public universities struggling under deep cuts and severe budget shortfalls. Although these cuts are driven mostly by conservative think tanks, the changing face of education isn’t just about austerity. It’s no coincidence that some of the deepest cuts have come against social sciences, the humanities, and the arts — all subjects that are traditionally the target of some of the GOP’s harshest critics. And despite these staggering cuts, football coaches continue to earn massive salaries. [...] Simultaneously, thanks to rising tuition costs and a poor job market, students are struggling under record-breaking levels of debt. It’s an economic bubble that some predict could burst with devastating effects similar to the 2008 subprime mortgage crisis. Our old friends at Wall Street are ready to step into the gaps created by the neocons’ cuts, offering a new form of education that treats learning as a commodity and students as consumers. Neocons in Congress have argued for allowing more for-profit universities to receive accreditation, while the “Investing In Student Success Act” would see students become indentured servants of big corporations in return for their education. [...]" Related: "Using Students As a Commodity, And the Propaganda Train Pushing for US Intervention in Syria" [28:02] "Mnar Muhawesh, editor-in-chief of MintPress News and host of “Behind The Headline,” starts this episode with Steve Mims, director of “Starving the Beast,” who reveals how a Republican-led attack on public education in the United States has left schools struggling to meet their budgets and students drowning in debt. He explains why learning is now being treated as a profitable commodity rather than a public good, and how the shift to treating students as consumers has negative implications for both their education and for the country’s future. [...] (10:35) And with 250 new boots about to hit the ground in Syria, investigative journalist Vanessa Beeley pulls back the curtain on U.S., NATO and Gulf ally forces already driving the conflict in Syria. She goes further, explaining the Western mainstream media’s complicity in the crisis by “following the imperialist roadmap” and “very rarely deviating from a narrative that serves the U.S. and NATO propaganda and objectives in Syria.”[...]" | "Documentary Reveals How Wall Street ‘Disrupted’ Public Education" "Is education a right and a public good, or is it a commodity from which corporations can profit? “Starving The Beast,” a documentary which premiered March 13 at the SXSW Film festival, reveals the struggle between these two paradigms for higher education taking place across the country at publicly funded universities. From the University of Texas at Austin to the University of Illinois at Urbana-Champaign, decades of budget cuts have resulted in skyrocketing tuition alongside a simultaneous decline in the quality of education. Now Wall Street is moving into the gaps created by a largely Republican-created budget crisis, from the increasing reliance on private student loans as public funding falls to schemes to allow the accreditation of more for-profit universities, a move championed by Sen. Marco Rubio during his 2016 electoral campaign. [...]" |
MSM: "Mervyn King's Alarmist Warning: "All China's Assets In The US Might Be Annulled" Ø Hedge [06/10/16] "What is it about former central bankers who first destroy the fiat system with their monetarist policies, only to go into retirement, and preach the virtues of the one compound they spend their entire professional careers trying to destroy: gold. To be sure, when it comes to polar reversals of opinion, nobody comes even remotely close to Alan Greenspan: the former Fed chairman who is not only instrumental in launching the "Great Moderation", which unleashed the current unprecedented global debt wave which will lead to unprecedented disaster sooner or later, has in recent years become one of gold's biggest advocates as demonstrated most recently in "Greenspan's Stunning Admission: "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It." Now it's the turn of his former colleague at the Bank of England, Mervyn King, who in an interview with the WGC's Gold Investor monthly, pours cold water over Bernanke's "explanation" that gold is merely a tradition, and says the following: "I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold,” he adds." The then innocently pointed out that when it comes to defense against hyperinflation, gold remains the, well, gold standard: [...] But the most interesting observation from Mervyn King's interview comes courtesy of an observation by The Money Trap's Robert Pringle, who writes the following about "Mervyn King's alarmist warning": According to the World Gold Council, Mervyn King, former governor of the Bank of England, believes that in certain circumstances China’s assets in the US could be “annulled”. Mervyn King’s alarmist warning is made in an interview, entitled “Present perilous, future imperfect” that appears in the June issue of Gold Investor, a WGC publication. After pointing out that “China and other countries do not want to be in a situation where all their iternational assets are in effect dependent on the US”, he is quoted as suggesting that all China’s US assets could be at risk: "Over the last decade or so, the claims by some emerging market countries on the US have grown. Who knows what the future holds, but China and other countries do not want to be in a situation where all their international assets are in effect dependent on the US. Of course the US would not want to renege on its debts, but if some awful conflagration occurred, then all China’s assets in the US might be annulled. So there are plenty of big concerns that make it extremely reasonable to have assets in your portfolio that are not dependent on the goodwill of other countries." The choice of the word “annulled” suggests some kind of deliberate action. Under what scenario could this be even contemplated? [...]"
Commentary: "Saudi Arabia To Tax Millions Of Foreign Residents To Raise Cash" Ø Hedge [06/09/16] "The troubles that Saudi Arabia has been facing due to the plunge in oil prices have been discussed many times, most recently when Saudi authorities ordered banks to stop allowing speculators to bet against the Riyal. Liquidity worries have also surfaced, as late last month Saudi Arabia indicated that it was considering paying contractors with government issued bonds - read: IOUs. [...] As Bloomberg reports, in a proposal released this week for the country's National Transformation Plan, the kingdom is seeking to tax millions of foreign residents. The tax is only "an initiative that will be discussed" Finance Minister Ibrahim al-Assaf said. However as Bloomberg notes, the fact that the tax was included in the proposal means that Deputy Crown Prince Mohammed bin Salman is considering the idea. Prince Mohammed has already taken steps to reduce spending, recently cutting fuel and utility subsidies and has proposed reducing the public sector wage bill. The kingdom is also joining other members of the six-nation Gulf Cooperation Council in imposing value-added taxation starting from 2018.[...]"
Commentary: "Blockchain Entrepreneur To Central Bankers: Get Into The Digital Thing For Control" [06/08/16] "The direction digital currencies are headed in is real bad. The head of a startup, Adam Ludwin CEO of San Francisco-based Chain, was recently in Washington D.C to introduce the digital blockchain to central bankers. He met with central bankers from 90 countries including Federal Reserve Chair Yellen, as well as officials from the International Monetary Fund, World Bank and Bank for International Settlements. And get this, the meeting was held at the Washington D.C. headquarters of the Federal Reserve, the notorious Eccles Building where monetary policy meetings are held. Luwin's pitch to the central bankers was about pure control, that is, the central bankers can get even more control over their monetary systems and a countries economy by going digital. [...]"
MSM: "Major Australian Bank Taken To Court Over Interest Rate Rigging" [06/08/16] "The corporate regulator has launched legal action against National Australia Bank for allegedly manipulating the bank bill swap rate (BBSW) 50 times. NAB said it would fight the case. Labor leader Bill Shorten jumped on the move, saying it provided further evidence of the need for a royal commission into the banks. “How many more people need to suffer and get ripped off before [Prime Minister Malcolm] Turnbull stops covering up for the banks?” Mr Shorten said. “Rather than hold the big banks accountable, Mr Turnbull is gifting them a $7.4 billion tax handout. It is an insult to everyone who’s been ripped off. Mr Turnbull has a choice here – and he’s putting the big banks first. He’s governing for the banks, not the Australian people.” The Australian Securities and Investments Commission’s case is based on unconscionable conduct and market manipulation. ASIC alleges NAB “traded in a manner that was unconscionable and intended to create an artificial price” for bank bills on 50 occasions between June 8, 2010 and December 24, 2012. [...]"
Commentary: "It Takes A Village To Maintain A Dangerous Financial System" Ø Hedge [06/07/16] "Last month, Anat R.Admati, the George G.C. Parker Professor of Finance and Economics at Stanford University’s Graduate School of Business, published a very important working paper titled, It Takes a Village to Maintain a Dangerous Financial System. PDF At 26 pages, it’s a bit longer than what you might leisurely read in the course of your daily activities, but I strongly suggest you take the time. Of course, if you don’t have the time, I’ve provided some key excerpts for you below. Despite deconstructing an intentionally complicated subject, the paper was both an enjoyable read and easily understandable. Additionally, the range of issues she successfully covered in such an short piece was nothing short of heroic. I knew it would be good after reading the abstract… Abstract: I discuss the motivations and actions (or inaction) of individuals in the financial system, governments, central banks, academia and the media that collectively contribute to the persistence of a dangerous and distorted financial system and inadequate, poorly designed regulations. Reassurances that regulators are doing their best to protect the public are false. The underlying problem is a powerful mix of distorted incentives, ignorance, confusion, and lack of accountability. Willful blindness seems to play a role in flawed claims by the system’s enablers that obscure reality and muddle the policy debate.[...]"
Trends: "Developed World Bond Yields Plunge To Record Lows" [06/07/16] "With the plunge in rate-hike odds and fears over Brexit, it appears the safety of global developed market bonds is sought after as Bloomberg's Developed World Bond yield slumps to just 62bps - a record low. Yields are moving opposite to what economist expected (and have been expecting since the fall of 2011 when Ben Bernanke broke the capital markets). Record low global bond yields ... [...]"
MSM: "Pure Coincidence? Massive McKinsey-Managed Hedge Fund Has Made Money In 24 Out Of 25 Years" Ø Hedge [06/07/16] "McKinsey, known as one of the world's most influential consulting firms, has another business line that hasn't been talked about much until recently - a little known investment arm called McKinsey Investment Office (MIO). MIO has total assets of $9.5 billion, in which roughly $5 billion are partner investments (past and present), and the rest is invested on the behalf of the McKinsey group pension plan FT reports. What the FT also found was MIO uses sophisticated proprietary trading strategies and external hedge fund and private equity managers, and has even seeded some of the funds with its own capital. Most interestingly, the flagship offering of the fund called Compass Special Situations, has made money for 24 of the past 25 years, only suffering a loss during the 2008 financial crisis. In 2014, the fund returned 14% compared to the average 3% average for hedge funds during that year. [...] So to summarize, an influential consulting firm that advises some of the world's largest companies on strategic questions such as M&A and restructuring has an internal investment arm with $9.5 billion in assets that hasn't lost money more than once in 25 years. Now that's Steve Cohen type performance right there. "Given the size of the internal investment fund, it raises the question of whether there's a conflict of interest here between McKinsey's investment strategy and its clients' needs" said Fiona Czerniawska, director of Source Global Research. Do you think? Let's take a look.[...]"
Commentary: "The Case For A Super Glass-Steagall" Ø Hedge [06/06/16] "Donald Trump can instantly get to the left of Hillary with respect to Wall Street and the one percenters by embracing Super Glass-Steagall. The latter would cap U.S. banks at $180 billion in assets (<1% of GDP) if they wished to have access to the Fed’s discount window and have their deposits backed by FDIC insurance. Such Federally privileged institutions would also be prohibited from engaging in trading, underwriting, investment banking, private equity, hedge funds, derivatives and other activities outside of deposit taking and lending. Instead, these latter inherently risky economic functions would be performed on the free market by at-risk banks and financial services companies. The latter could never get too big to fail or to manage because the market would stop them first or they would be disciplined by the fail-safe institution of bankruptcy. No taxpayer would ever be put in harms’ way of trades like those of the London Whale. By embracing this kind of Super Glass-Steagall Trump would consolidate his base in the flyover zones and reel in some of the Bernie Sanders throng, too. The latter will never forgive Clinton for her Goldman Sachs speech whoring. And that’s to say nothing of her full-throated support for the 2008 bank bailouts and the Fed’s subsequent giant gifts of QE and ZIRP to the Wall Street gamblers. Besides, breaking up the big banks and putting Wall Street back on a free market based level playing field is the right thing to do. Today’s multi-trillion banks are simply not free enterprise institutions entitled to be let alone. Instead, they are wards of the state dependent upon its subsidies, safety nets, regulatory protections and legal privileges. Consequently, they have gotten far larger, more risky and dangerous to society than could ever happen in an honest, disciplined market. [...]"
Concepts and Practices: "In Landslide Vote, Swiss Reject Proposal To Hand Out Free Money To Everyone" [06/06/16] "This weekend the Swiss population was called upon to make a historic decision, when Switzerland became the first country worldwide to put the idea of free money for everyone, technically known as Unconditional Basic Income (of CHF2,500 per month for every adult man and woman, and CHF625 for every child, for doing absolutely nothing) to a vote. As reported previously, the outcome of this referendum would set a strong precedent and establish a landmark in the evolution of the debate of handing out free money in a centrally-planned world. And as predicted, based on early vote projections it has been a landslide decision against the "free lunch." [...] Critics of the measure say that disconnecting the link between work done and money earned would be bad for society. But Che Wagner from the campaign group Basic Income Switzerland, says it wouldn't be money for nothing. "In Switzerland over 50% of total work that is done is unpaid. It's care work, it's at home, it's in different communities, so that work would be more valued with a basic income." Luzi Stamm, who's a member of parliament for the right-wing Swiss People's Party, opposes the idea. "Theoretically, if Switzerland were an island, the answer is yes. But with open borders, it's a total impossibility, especially for Switzerland, with a high living standard," he says. "If you would offer every individual a Swiss amount of money, you would have billions of people who would try to move into Switzerland.[...] Switzerland may be the first but it won't be the last. The idea is also under consideration elsewhere. In Finland, the government is considering a trial to give basic income to about 8,000 people from low-income groups. And in the Dutch city of Utrecht is also developing a pilot project which will begin in January 2017.[...]"
MSM: "Why The Fed Is Trapped: A 1% Increase In Rates Would Result In Up To $2.4 Trillion Of Losses" [06/05/16] "A funny thing happened as every central bank around the world rushed to stimulate their economy by devaluing their currency in a global FX war that is now 7 years old and getting more violent by the day: with bond yields plunging, and over $10 trillion in global debt now having a negative yield, every fixed income investor starved for yield was pushed into the long end of the bond curve where whatever yield is left in the world of "safe" bonds is to be found. As long as interest rates never go up, this strategy is relatively safe. However, a major risk emerges when central banks start tightening. To be sure, banks have been eager to front-run any concerns about the Fed's rate hike by cheering higher rates as precisely what they need to be more profitable, and the market has so far believed and rewarded bank stocks the higher rate hike odds rose. Just this Thursday, speaking at an investor conference James Dimon said that if short-term and long-term rates were to move up by 1 percentage point simultaneously, 70% of the benefit would come from the move in short-term rates. The reason for this is that even if long-term rates remain under pressure, and the curve flattens further, an increase in short-term rates provides an immediate boost to bank profits. That is because many loans are automatically priced against short-term benchmarks like LIBOR and Prime. [...] What Dimon did not discuss is the P&L impact from the higher yields and dropping bond prices in the long end of the yield curve. And it is here, in the unprecedented duration exposure that central banks have forced everyone into, that the true risk resides.[...]How big is the risk? According to an analysis by Goldman's Charles Himmelberg, if rates rise by the Jamie Dimon-referenced 1 percentage point, the market value loss would be between $1 and $2.4 trillion! Putting this loss in context, even the smaller $1trn loss would be over 50% larger than the market value lost in the 1994 bond market selloff in inflation-adjusted terms, and larger than the cumulative credit losses experienced to date in the non-agency residential mortgage backed securities market. And this is only only as a result of a 1% interest rate increase: assuming full normalization of rates to their historical level of 3.5%, and the level of mark-to-market losses climbs to a staggering $3 trillion.[...]The culprit? The Fed, the same Fed which does not to grasp that by "renormalizing" into the biggest bond bubble in history is assuring massive losses for the financial sector.[...]The problem is simple: having inflated a gargantuan bond bubble, letting the air out would by definition lead to dramatic consequences not just for bonds but for all other asset classes. [...]"
Commentary: "Uber And Goldman Leasing Cars To Broke People" [06/04/16] "Deal led by Goldman Sachs, Xchange received a $1 billion credit facility to fund new car leases. Uber will grow its U.S. subprime auto leasing business and give many of the world’s biggest financial institutions exposure to the company’s auto leases. [...]" Note: The Saudis (below) have just bought into Uber for 3.5 Billion ...
MSM: "Cash-Strapped Saudi Arabia Looking To Issue $15 Billion In Bonds" [06/03/16] "Last week the bond market was stunned by the unprecedented demand for sovereign paper issued by the middle-eastern nation of Qatar, which announced it would issue $9 billion in Eurobonds (in three maturities), more than double what had been originally expected by the market, and well below the total demand for Qatar sovereign paper: according to Reuters, the issue was massively oversubscribed, with over $23 billion in soft orders. [...] While Saudi Arabia is still sitting on nearly $600 billion in foreign-exchange reserves, the country has burned through $140 billion in reserves since the end of 2014. And the IMF warned the Saudis could eventually run out of cash. This is not Saudi Arabia’s first recent approach to capital markets: in April the kingdom raised a $10 billion loan from a group of banks, its first loan in 25 years. Last year, the Saudis tapped the local bond market for the first time in eight years, raising at least $4 billion. But this would be the first time Saudi Arabia has issued international bonds. And it will be a whopper. CNN also quotes John Sfakianakis, a former official in Saudi Arabia’s Ministry of Finance who said the sale would likely take place over the next several months. “There is a need to cover the fiscal gap,” said Sfakianakis, who is currently director of economic research at the Gulf Research Center in Riyadh, Saudi Arabia. “It’s better for this money to come from other sources than reserve assets because as they get depleted that places a bigger risk over the medium to long-term.”[...]" Related: "Saudi Arabia Has Just Invested 3.5 Billion In Uber, Making It The Largest Single Investment In A Private Company On Earth" "Uber Technologies Inc. said it received its biggest investment to date, raising $3.5 billion from the Public Investment Fund of Saudi Arabia.The investment valued Uber at $62.5 billion, the same amount as its previous valuation, the company said Wednesday in a statement. Yasir Al Rumayyan, the managing director of Saudi Arabia’s sovereign wealth fund, will take a board seat. The investment brings Uber’s total balance sheet, including cash and convertible debt, to more than $11 billion, the company said. [...]" More from Bloomberg.com
MSM: "Mission Impossible: Untold Story of US-Saudi 41-Year-Old Secret Agreement" [06/02/16] "For 41 years the amount of Saudi Arabia's holdings in US Treasuries remained shrouded in secrecy. What was behind the mysterious deal? [...] "The basic framework was strikingly simple. The US would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America's spending," the journalists continues.[...]" Related: Corbett Report: "Why is the MSM (Finally) Reporting on the Petrodollar? " [17:09] "Bloomberg is trumpeting "The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret," but anyone who is scratching their heads at this non-revelation might well wonder 'Why Bloomberg?' and 'Why now?' Join James in today's Thought For The Day as he examines the latest volleys in the ongoing covert war between the Saudis and the US and the bigger picture of the battle for the global monetary system. [...]"
Commentary: "SWIFT Finally Pushes Two-Factor Authorization In Banks" [06/01/16] "The international financial network SWIFT has said it will "expand" its use of two-factor authentication when banks shift funds. The belated decision comes following a turbulent few weeks in which a series of multi-million dollar thefts carried out through the SWIFT system came to light. Bangladesh's central bank lost $81m, Ecuadoran bank Banco del Austro SA lost $12m, and the same attacks were also used against a bank in the Philippines and the Vietnamese bank Tien Phong. SWIFT's initial response to the hacks was to stress that its network had not been compromised and the thefts were the result of other banks' systems being hacked. But that slant on things elicited a fierce response, with experts pointing out that SWIFT's security measures were severely lacking and used a model of threat awareness that was a decade out of date. Stung by criticism, a few weeks later SWIFT's CEO promised to review the organization's security measures and earlier this week outlined a five-point plan in a speech at a financial conference. [...] On Friday, that plan was fleshed out a little. It will now "require" more information from customers and share that information with its other customers, plus inform everyone on its system of any incidents, and issue "best practices" for "cyber defense." Critically, it will "expand" its support of two-factor authentication as well as include "additional tools" such as monitoring software. Although we note that it has still not said it will insist on the basic security measure for transfers. SWIFT will provide "audit frameworks" and create audit standards and certification, plus compare banks' compliance level with "baselines." And it will "support increased payment patterns control" as well as "explore tools to allow customers to quickly recall fraudulent payment messages" and make it easier to put a stop on payments. All of those improvements will help beef up the security of a system that moves billions of dollars around the globe on a daily basis. The fact that it took four incidents of theft and widespread public criticism to force SWIFT to enter the modern world does not put the organization in a good light, however. [...]"
MSM: "Stockman: U.S. Has Been Living Beyond Its Means For 30 Years" [06/01/16] [4:45] "Fmr Reagan budget director David Stockman explains.
MSM: "Iceland Has Offered Foreign Bondholders A "Choice": Sell Now, Or Have Cash Impounded Indefinitely" Ø Hedge [06/01/16] "Iceland has had a difficult past few months politically, as its Prime Minister Sigmundur David Gunlaugsson became the first casualty of the Panama Papers. Economically however, the story is more upbeat, as the country has rebounded since the financial crisis. The Icelandic Krona has stabilized against the Euro, the rate of change in inflation has slowed, and the country has recorded year-over-year growth in GDP each year since 2011. However, in a shocking turn of events, a law passed on May 22 by Iceland's parliament is offering the foreign holders of about $2.3 billion worth of krona-denominated bonds a choice of either selling out in June at a below-market exchange rate, or have the money they receive upon maturity be impounded indefinitely in low interest bank accounts. In other words, Iceland is trying to kick out foreign investors. However, in a shocking turn of events, a law passed on May 22 by Iceland's parliament is offering the foreign holders of about $2.3 billion worth of krona-denominated bonds a choice of either selling out in June at a below-market exchange rate, or have the money they receive upon maturity be impounded indefinitely in low interest bank accounts. In other words, Iceland is trying to kick out foreign investors. [...] Iceland has had formal capital controls since it barred conversions of krona to foreign currencies during the 2008 crisis, boxing in foreign bondholders at that time as well. While the controls are still in place, the country has made the first step in easing some of the controls, as it recently negotiated a deal with creditors that paved the way for payments to be made to those holding distressed bank debt left over from the crisis. Investors deciding to stay invested with Iceland are playing a dangerous game of chicken with the government on whether or not capital controls will be lifted in any reasonable amount of time. It has taken nearly seven years for creditors to get money out of the country after the financial crisis, and although the krona has stabilized since its plunge and the economy is back on firmer footing, nobody can know for certain just how long investor cash will be tied up in Iceland's low yielding bank accounts before controls are finally lifted. [...]"
MSM: " Illinois Gov Vetoes Plan To Reduce Chicago’s Pension Contributions" [05/31/16] "Chicago’s pension contributions to its four dreadfully underfunded pension plans were supposed to double this year to $1.1 billion, up from $478 billion in 2015. But state legislators passed a bill (which had been bottled up for nearly a year) to cut that back to under $900 million. On Friday Illinois Governor Bruce Rauner (shown) vetoed the bill, expressing in no uncertain terms that he was tired of politicians kicking the can down the road: By deferring responsible funding decisions until 2021 and then extending the timeline for reaching responsible funding levels from 2040 to 2055, Chicago is borrowing against its taxpayers to the tune of $18.6 billion. This practice has got to stop. If we continue, we’ve learned nothing from our past mistakes. Those past “mistakes” have got Chicago Mayor Rahm Emanuel in a pickle. He dares not challenge the unions to cut benefits for teachers and city workers. The state enacted the largest property tax increase in history in 2011, mulcting another $31 billion from taxpayers, nearly all of which went to shore up those pension plans. The pension liabilities, even if funded under the original plan, would still result in the plans running out of money within 10 years. Pension assumptions have just been reduced (slightly), which neatly added $11.5 billion to the city’s $20 billion plan shortfalls. And with stock and bond prices at historic highs, there is little chance that investment returns over the next decade will overcome funding shortfalls through market gains. Already those plans are eating into principal every year just to make payments to current beneficiaries. [...] And then there’s House Speaker Michael Madigan. Mayor Emanuel didn’t mention Madigan’s name in his blunt response to Rauner’s veto. Instead, he made it clear that, in order to meet the pension shortfall, Rauner is forcing Emanuel to impose another property tax increase on Chicagoans: With a stroke of his [veto] pen, Bruce Rauner just told every Chicago taxpayer to take a hike. Bruce Rauner ran for office promising to shake up Springfield [Illinois’ capital city], but all he’s doing is shaking down Chicago residents, forcing an unnecessary $300 million property tax increase on them and using them as pawns in his failed political agenda. Would that it would be that simple. On May 19 the city’s net pension liability of just one of its four plans, its Municipal Employees’ Annuity and Benefit Fund, jumped by $11.5 billion as the plan’s actuaries were forced to reduce some of its investment assumptions.[...]"
Commentary: "Here's Why All Pension Funds Are Doomed" [05/30/16] "There are limits on what the Fed can do when this bubble bursts, as it inevitably will, as surely as night follows day. It's no secret that virtually every pension fund is dead man walking, doomed by central banks' imposition of low yields on safe investments, i.e. Zero Interest Rate Policy (ZIRP). Given that both The Economist and The Wall Street Journal have covered the impossibility of pension funds achieving their expected returns, this reality cannot be a surprise to anyone in a leadership role. [...] Here's problem #1 in a nutshell: the average public pension fund still expects to earn an average annual return of 7.69%, year after year, decade after decade (arbitrary and delusional) This is roughly triple the nominal (not adjusted for inflation) yield on a 30-year Treasury bond (about 2.65%). The only way any fund manager can earn 7.7% or more in a low-yield environment is to make extremely high risk bets that consistently pay off. This is like playing one hand after another in a casino and never losing. Sorry, but high risk gambling doesn't work that way: the higher the risk, the bigger the gains; but equally important, the bigger the losses when the hot hand turns cold. [...] Here's problem #2 in a nutshell: in the good old days before the economy (and pension funds) became dependent on debt-fueled asset bubbles for their survival, pension fund managers expected an average annual return of 3.8%--less than half the current expected returns. In the good old days, the needed returns could be generated by investing in safe income-producing assets-- high-quality corporate bonds, Treasury bonds, etc. The risk of losing any of the fund's capital was extremely low. Now that the expected returns have more than doubled while the yield on safe investments has plummeted, fund managers must take risks (i.e. chase yield) that can easily wipe out major chunks of the fund's capital if the bubble du jour bursts. [...]" Related: "Keiser Report: Pensions Going Bankrupt" [25:47] "In this episode of the Keiser Report, we discuss retirement: the ugliest word in the English language, which, nevertheless, many Americans will no longer have to encounter. In the second half, Max interviews Constantin Gurdgiev, Professor of Finance at Middlebury Institute of International Studies, about the debt situation in Europe and the Irish water fiasco."
MSM: "China Sends Yellen Another Warning, Fixes Yuan At Lowest In Over Five years" Ø Hedge [05/30/16] "We got an early hint of what the PBOC would do tonight on Friday and Saturday, when as we reported, an unprecedented volume burst of bitcoin buying out of China, sent the digital currency soaring to the highest level since 2014. To be sure, we had expected sailing would not be smooth for the FX market, when on Friday afternoon, after Yellen's' unexpectedly hawkish comments at Harvard, which sent the USD surging, we predicted a stormy sea for the Monday Yuan fix [...]"
Concepts and Practices: "EU Passes Tax ID Numbers For Everyone" [05/30/16] "The EU is laying the groundwork for everyone in Europe to be given a new tax ID number in preparation for moving to electronic money. They are using a National Insurance number pretense to disguise the real objective. This scheme was passed by the Economic and Monetary Affairs Committee last week. This is another step in the federalization of Europe and even the British will have to comply. Naturally, nobody will report this in Britain because it obviously calls for a European Taxpayer Identification Number to keep track of every EU citizen, which include the British. The actual the European Commission text reads: “Proper identification of taxpayers is essential to effective exchange of information between tax administrations. The creation of European Taxpayer Identification Number (EU TIN) would provide the best means for this identification. It would allow any third party to quickly, easily and correctly identify and record TINs in cross-border relations and serve as a basis for effective automatic exchange of information between member states tax administrations.” [...] This covert maneuver calls for the EU to take over member states’ corporate taxation powers with a common corporation tax base for Europe as a whole. The British corporations are suddenly going to taste the bitter bite of Europeans socialism and watch their taxes sky-rocket. That should help increase unemployment in Britain at a far faster pace than expected. This new legislation is banning sovereign member states from increasing their competitiveness by cutting corporation tax below 15%. Brussels is eliminating independence within Europe on taxes and this enables Brussels to be handed the ability to track every EU taxpayer, laying the foundations for a new European tax and to prevent competitive taxation to lure in companies from other members to help reduce local unemployment."
MSM: "US Default Risk Hits 8-Month Highs" Ø Hedge [05/29/16] "While still relatively low, USA sovereign CDS spreads have risen to 8-month highs, surging off early March lows. The reasons are likely numerous though we suggest the 4 surges in the last 3 months appear to line up with notable 'events'... While correlation does not imply causation, it does waggle its eyebrows suggestively and gesture furtively while mouthing "look over here." Could it be that Trump's honest comments on the creditworthiness of the USA are beginning to resonate with market participants as the probability of his winning in November rises? [...]"
MSM: "The Plans on Putin's Desk - 3 Ways Out of the Economic Crisis" [05/28/16] "Plan 1: Limit the income of the population. The Ministry of Economic Development believes that the growth of salaries and the country's galloping consumption are driving the Russian economy into a dead end. That is why it is suggesting two ways of getting out of the crisis: limiting salaries and transforming the revenues into investments. According to this plan, investments in the upcoming years should grow by 7-8 percent annually if consumption stagnation remains as it is now, says the ministry. It is impossible to force all employers to limit the growth of salaries, but it is possible to influence the budget structures that are dependent on the government. [...] Plan 2: Print money. An alternative plan was presented by the so-called Stolypinsky Club, named in honor of Minister Peter Stolypin from the beginning of the 20th century, (a club of conservative economists). One of the members of its presidium is Putin's advisor Sergei Glaziev, a leftist economist who is in favor of independence for the Russian-speaking Donbass region in eastern Ukraine. The Stolypinsky Club suggests that Russia launch a "quantitative easing" policy, for example, print special obligations for 1.5 trillion rubles ($22.5 billion). In order for this not to affect inflation, the club proposes the country return to the currency corridor and end the floating exchange rate, which was introduced at the end of 2014. Such a plan was implemented in the USSR during the large crisis at the end of the 1980s, which led, among other things, to the collapse of the state. This method is actively employed in the West.[...] Plan 3: Reform the justice system. It is impossible to obtain economic growth without guaranteeing the right to property. That is why the necessary condition for overcoming the crisis must be the reformation of the law enforcement agencies and the justice system, according to former finance minister and author of the third plan Alexei Kudrin. Despite the fact that Kudrin resigned in 2011 and currently heads the Committee of Civil Initiatives, which in reality opposes the present government, he remains one of the most influential economists in the country. In his view, for the country to get over the crisis the justice and law enforcement systems must be more objective and the share of the economy that belongs to the government must be reduced in favor of small business. But to speed up growth rates to 4 percent in 2019 an additional 4.5 million people must enter the workforce and 40 trillion rubles ($599 billion) of investment must be injected into the principal capital. Such a policy produced successful results in the Southeast Asian countries, notes Emil Martirosyan, professor at the Russian Presidential Academy of National Economy and Public Administration’s Institute of Business and Business Administration.[...]"
Commentary: "Bill Would Prohibit Federal Reserve Bailouts for States, Cities" [05/28/16] "Amid the fiscal meltdown in Puerto Rico, a coalition of Republican lawmakers introduced a bill in Congress that would prohibit any federal or Federal Reserve “funny-money” funding to bail out state, county, local, or territorial governments across the United States. If the legislation is approved, the prohibition would apply to bailouts by both the Obama administration’s Treasury and the “independent” Federal Reserve System, which in recent years has conjured trillions of dollars into existence out of thin air to bail out mega-banks and other cronies in America and worldwide. Some analysts, though, are skeptical of the motives. [...] The anti-bailout measure comes amid Puerto Rico’s ongoing financial woes, problems so serious that the island, a territory of the United States, is said to be in a “death spiral” after defaulting on its debts. At the same time, America is also facing a widely anticipated wave of looming state, county, and municipal bankruptcies in the face of outlandish pension obligations and wild debtsrun up by Big Labor-controlled politicians. Some city governments, including Detroit (shown) and Stockton, have already declared bankruptcy in recent years. More will follow in the months and years ahead. The legislation, entitled No Bailouts for State, Territory, and Local Governments Act (HR 5276), is only four pages long. The purpose, according to the summary, is simple: “To prohibit the provision of Federal funds to State, territory, and local governments for payment of obligations, to prohibit the Board of Governors of the Federal Reserve System from financially assisting State and local governments, and for other purposes.” [...] Opponents of bailing out fiscally irresponsible state and local politicians and bureaucrats celebrated the legislation. Some analysts, though, suspect the bill is really aimed at saving all of the potential Federal Reserve bailouts for the federal government itself, which currently has more debt and unfunded liabilities than any entity has ever accumulated in all of human history. Among other liabilities, Washington, D.C., has a national debt close to $20 trillion, owing much of it to the Fed and Communist China. That figure does not include unfunded liabilities, which experts estimate at between $100 trillion and $200 trillion. More than a few states are also in trouble. Among state governments, the Big Government-dominated states of Illinois, California, New Jersey, and New York are said to be in the most dire financial straits — and that is despite imposing some of the highest tax burdens in the nation. Conservative states such as Alaska, Wyoming, the Dakotas, and Florida are in the best shape, and also have among the lowest tax rates. Numerous Democrat-controlled cities are also facing impossible-to-pay pension obligations and debt loads. Several have already gone under, stiffing bond holders.[...]"
MSM: "Fed Has Limited Number of Tools to Address Possible US Economic Downturn" [05/28/16] "The US Federal Reserve is constrained in the number of ways it can address economic challenges in the United States, Federal Reserve Chair Janet Yellen said on Friday. Yellen also underscored that greater scope for fiscal policy might be needed in the future to address the US economic weakness. The Federal Reserve Chair explained that current tools to stimulate the US economy include purchases of longer-term assets and provision of forward guidance, which serve to assure the public about intended monetary policies. Yellen noted that the Federal Reserve considered negative interest rates as a tool, employed by other economies, but only briefly. "We were concerned at the time that there could be a number of negative repercussions… to lowering to zero or negative territory," she added.[...]"
Curiosities: "Anonymous Alleged To Have Hit NY Stock Exchange, World Bank, The Fed, & Vatican" [05/27/16] "Amidst a global media blackout of Anonymous’ ongoing worldwide attacks on the “corrupt banking cartels,” the hacking collective has now taken down some of the most prestigious institutions in global governance. OpIcarus has recently taken offline the World Bank, the New York Stock Exchange, five U.S. Federal Reserve Banks and the Vatican. After announcing a global call to arms against the “corrupt global banking cartel,” the hacker collective, known as Anonymous, in conjunction with Ghost Squad Hackers, have taken more than 30 central banks offline,[...]"
MSM: "World’s 16 Biggest Banks Ordered To Face Libor Lawsuits In Ruling Court Warns Could Ruin Them" [05/26/16] "Sixteen of the world’s largest banks including JPMorgan Chase & Co. and Citigroup Inc. must face antitrust lawsuits accusing them of hurting investors who bought securities tied to Libor by rigging an interest-rate benchmark, a ruling that an appeals court warned could devastate them. The appellate judges reversed a lower-court ruling on one issue — whether the investors had adequately claimed in their complaints to have been harmed — while sending the cases back for the judge to consider another issue: whether the plaintiffs are the proper parties to sue, in part because their claims, if successful, provide for triple damages that could overwhelm the banks. “Requiring the banks to pay treble damages to every plaintiff who ended up on the wrong side of an independent Libor denominated derivative swap would, if appellants’ allegations were proved at trial, not only bankrupt 16 of the world’s most important financial institutions, but also vastly extend the potential scope of antitrust liability in myriad markets where derivative instruments have proliferated,” the U.S. Court of Appeals in New York said in the ruling. Bank of America Corp., HSBC Holdings Plc, Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, Royal Bank of Canada and Royal Bank of Scotland Group Plc are also among the banks sued in Manhattan. Libor Fines: About a dozen firms have paid almost US$9 billion in fines to resolve government investigations around the world into rigging of the key benchmark. Libor is used to set interest rates for trillions of dollars financial instruments. The ruling by a three-judge panel opens the possibility the banks may have to pay billions more.[...]" Related: "So, You Thought Bank of America Would be Punished for Role in 2008 Crisis? Think Again"
MSM: "Head Of The IMF Christine Lagarde In Court Charged With Embezzlement And Fraud" [05/25/16] "The head of the International Monetary Fund arrived in the dock of a Paris courtroom today as she braced herself to be formally charged with embezzlement and fraud. [...] Christine Lagarde’s humiliation is not only a massive personal blow which could lead to her resignation, but one which will plunge the world’s banking system into further ignominy. The clearly nervous 57-year-old said nothing to reporters as she entered the Court of Justice of the Republic, a special tribunal set up to judge the conduct of France’s government ministers, shortly after 8.30am. Lagarde faces a maximum sentence of 10 years in jail if found guilty of the very serious charges. It was when she was President Nicolas Sarkozy’s finance minister that she is said to have authorised a 270 million pounds payout to one of his prominent supporters, so abusing her government position. The money went to Bernard Tapie, a convicted football match fixer and tax dodger who supported Lagarde and Sarkozy’s UMP party. It came after Dominque Strauss-Kahn, another senior French politician, was sacked as IMF chief following allegations that he attempted to rape a chambermaid in a New York hotel. Ms Lagarde began campaigning to succeed Mr Strauss-Kahn soon after his arrest for the alleged crime. But now it is Ms Lagarde, a lawyer and retired synchronised swimming star, who is facing a long court process of her own, as well as a possible jail sentence. The scandal will not only pile further shame on France’s political class, but worry politicians and bankers desperately trying to resolve the global financial crisis." Note: Pluto in Capricorn asserting itself ... and reckless path planning.
Commentary: "Lewis Black On Wall Street Bankers" [05/25/16] [12:04] "Comedian Lewis Black talks about the banks and their bail out. [...]"
MSM: "Greek Parliament Pushes Through More Austerity Measures To Unlock Bailout Cash" [05/25/16] "In the midst of huge public protests, Athens has approved more budget cuts, tax increases and a new privatization fund to manage almost all state property in order to get further rescue loans from European creditors. The government hopes to incorporate an extra €1.8 billion in revenue and get the next tranche of much-needed bailout funds to pay IMF loans, bonds held by the ECB coming due in July, and decreasing state debt. Greece's European creditors are expected to disburse €11 billion ($12.3 billion) following an assessment of the country's third bailout program. Under the terms of the bailout deal agreed last year, the international lenders will provide as much as €86 billion in aid. “Greeks have already paid a lot, but this is probably the first time the possibility of these sacrifices being the last is so evident,” said Prime Minister Alexis Tsipras to Parliament before the vote. The PM expects the country’s economy to grow three percent next year. The reforms involve new taxes on alcohol, tobacco, fuel, internet usage, cars, hotel stays, as well as an increase in the basic value-added tax rate from 23 to 24 percent. [...]" Note: I remember the movie and expression 'they shoot horses, don't they?' .... as if the Greek population hasn't been through enough ...
MSM: "American Companies Are 'Masking' A $6.6 Trillion Mountain Of Debt" [05/24/16] "Too much debt, however, can be a bit of a problem to say the least ... Well, American companies may just have a mountain's worth of problems, according to a new report from Andrew Chang and David Tesher of S&P Global Ratings. At the same time, the imbalance between cash and debt outstanding we reported on last year has gotten even worse: Debt outstanding increased 50x that of cash in 2015," wrote Chang and Tesher. "Total debt rose by roughly $850 billion to $6.6 trillion last year, dwarfing the 1% cash growth ($17 billion)." To be fair, Chang and Tesher do mention that the $1.84 trillion in cash that the over 2,000 companies they analyzed are holding is the largest amount ever. The issue is, a big pile of cash doesn't help mask the much, much larger mountain of debt. In S&P's case, one of the key factors used to determine a company's credit rating is the ability to pay down debt. So as the cash-to-debt ratio gets even more out of whack, debt problems could be around the corner. "Given the record levels of speculative-grade debt issuance in recent years, we believe corporate default rates could increase over the next few years, especially given diminished growth prospects in China, weak commodity and energy prices globally, and the sizable universe of lower-quality non-financial corporate debt outstanding," said the report.[...] How did this happen? It's all about investor appetite. As we've hit on before, the so-called reach for yield among investors has increased the appetite for higher yielding bonds. These companies have clearly obliged, opting to issue debt in order to fund operations or return cash to shareholders. "This jump in debt reflects the scant resistance borrowers faced from yield-starved investors as companies pursued acquisitions and returned cash to shareholders," said the report. Some have said that this has led to a massive bubble in the bond market, or it could just be a cycle. Regardless of its future ramifications, it is by any measure quite a lot of debt. Now to be fair, cash isn't the only way to pay off debt. If necessary, companies can liquidate assets or refinance in order to pay creditors beck. Doing so, however, usually means that the company is in big trouble and is much less preferable.[...]" Related: "Business Debt Delinquencies Are Now Higher Than When Lehman Brothers Collapsed In 2008"
MSM: "Finance: The Endgame" Ø Hedge [05/23/16] "There is a growing fear in financial and monetary circles that there is something deeply wrong with the global economy. Publicly, officials and practitioners alike have become confused by policy failures, and privately, occasionally even downright pessimistic, at a loss to see a statist solution. It is hardly exaggerating to say there is a growing feeling of impending doom. The reason this has happened is that today’s macro-economists are a failure on the one subject about which they profess to be experts: economics. Their policy recommendations have become the opposite from what logic and sound economic theory shows is the true path to economic progress. Progress is not even on their list of objectives, which fortunately for us all happens despite their interventions. The adaptability of humans in their actions has allowed progress to continue, despite all attempts to discredit markets, the clearing centres for the division of labour. Ill-founded beliefs in the magic of unsound money have been shattered on the altar of experience. Macro-economists are discovering that the failure of monetary and fiscal planning are becoming a policy cul-de-sac that has generated a legacy of unsustainable debt. Those of us aware of a gathering financial crisis are discovering that governments have tamed only the statistics and not what they represent. There is evidence that central bank intervention began to irrevocably distort markets from 1981, when Paul Volker raised interest rates to halt the slide in the dollar’s purchasing power. It was at that point the free market relationship between the price level and the cost of borrowing changed, evidenced by the failure of Gibson’s paradox. That was the point when central banks wrested control of prices from the market. This is explained more fully below. [...] Markets versus governments: [...] The analytical mistake: [...] The Consequences: [...]"
Commentary: "Meltdown - The Men Who Crashed The Financial World" [05/22/16] [43:20] "Meltdown is a four-part investigation into a world of greed and recklessness that brought down the financial world. The show begins with the 2008 crash that pushed 30 million people into unemployment, brought countries to the edge of insolvency and turned the clock back to 1929. But how did it all go so wrong? Lack of government regulation; easy lending in the US housing market meant anyone could qualify for a home loan with no government regulations in place. Also, London was competing with New York as the banking capital of the world. Gordon Brown, the British finance minister at the time, introduced "light touch regulation" - giving bankers a free hand in the marketplace. Meltdown moves on to examine the epidemic of fear that caused the world's banks to stop lending and how the people began their fight back. Finally, it asks how the world can prepare for the next crisis even as it recognises that this one is far from over. The first of a four-part investigation into a world of greed and recklessness that led to financial collapse. In the first episode of Meltdown, we hear about four men who brought down the global economy: a billionaire mortgage-seller who fooled millions; a high-rolling banker with a fatal weakness; a ferocious Wall Street predator; and the power behind the throne. The crash of September 2008 brought the largest bankruptcies in world history, pushing more than 30 million people into unemployment and bringing many countries to the edge of insolvency. Wall Street turned back the clock to 1929. But how did it all go so wrong? Lack of government regulation; easy lending in the US housing market meant anyone could qualify for a home loan with no government regulations in place. Also, London was competing with New York as the banking capital of the world. Gordon Brown, the British finance minister at the time, introduced 'light touch regulation' - giving bankers a free hand in the marketplace. All this, and with key players making the wrong financial decisions, saw the world's biggest financial collapse.[...]" Related: "Part 2" [15:09]| "Part 3" [12:26] | "Part 4" [44:59]
MSM: "Five Banks Sued In U.S. For Rigging $9 Trillion Agency Bond Market" [05/21/16] "Five major banks and four traders were sued on Wednesday in a private U.S. lawsuit claiming they conspired to rig prices worldwide in a more than $9 trillion market for bonds issued by government-linked organizations and agencies. Bank of America Corp (BAC.N), Credit Agricole SA (CAGR.PA), Credit Suisse Group AG (CSGN.S), Deutsche Bank AG (DBKGn.DE) and Nomura Holdings Inc (8604.T) were accused of secretly agreeing to widen the "bid-ask" spreads they quoted customers of supranational, sub-sovereign and agency (SSA) bonds. The lawsuit filed in Manhattan federal court by the Boston Retirement System said the collusion dates to at least 2005, was conducted through chatrooms and instant messaging, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold. [...] The lawsuit filed in Manhattan federal court by the Boston Retirement System said the collusion dates to at least 2005, was conducted through chatrooms and instant messaging, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold. "Only through collusion could a dealer quote a wider spread than market conditions otherwise dictate without losing market share and profits," the complaint said. "Defendants reaped millions of dollar(s) in profits at the expense of plaintiff and members of the class as result of their misconduct." The proposed class-action lawsuit seeks triple damages, and follows probes by U.S. and European Union antitrust regulators into possible SSA bond price rigging.[...] Those probes are also examining the London-based defendant traders Hiren Gudka of Bank of America, Bhardeep Singh Heer of Nomura, Amandeep Singh Manku of Credit Agricole and Shailen Pau of Credit Suisse, Thomson Reuters' IFR service reported in January. Bank of America, Credit Suisse, Deutsche Bank and Nomura declined to comment on behalf of themselves and the traders who have worked for them. Credit Agricole did not immediately respond to a request for comment.[...] The lawsuit is one of many in the Manhattan federal court seeking to hold banks liable for alleged price-fixing in bond, commodity, currency, derivatives, interest rate and other financial markets. One such lawsuit, concerning competition in the credit default swaps market, led last September to a $1.86 billion settlement with a dozen banks.[...]"
Commentary: "Texas Bullion Depository: Gold Backed Bank To Be Completed Next Year" [05/20/16] "Last year Texas Governor Gregg Abbott signed HB 483, allowing the creation of the Texas Gold Depository. “With the passage of this bill, the Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside our state,” he said last June. This gold bank would allow Texas to recover the gold that it has stored in New York vaults, and give Texan citizens and institutions a chance to store their gold in the facility, and open checking and savings accounts that would be valued in gold rather than dollars. This even opens the possibility of making gold transactions electronically for the very first time. Now several companies are offering competing plans to build the depository, including Brinks, Anthem Vaults, and Texas Precious Metals. TPM wants to create a sprawling 46,000 square foot facility with 12 inch concrete walls. Brinks would utilize a series of preexisting vaults that they own and operate in Texas, while Anthem vaults would build “multiple vaulting locations throughout Texas to enable all Texans access to their bullion within a reasonable distance from their homes.” They wold also set up coin shops that could accept deposits on behalf of the vault. According to Representative Giovanni Capriglione, the original sponsor of HB 483, “I am optimistic that the depository will be up and running at the end of this year or the beginning of next year.” What isn’t being said by the original proponents of this idea, is that it would give Texans a solid alternative to the Federal Reserve banking system and the US dollar. And should the dollar ever lose its global reserve status, Texas will be in a financial position that is far more resilient than the rest of the country. [...]"
MSM: "11 Signs That The U.S. Economy Is Rapidly Deteriorating Even As The Stock Market Soars" [05/19/16] "We have seen this story before, and it never ends well. From mid-March until early May 2008, a vigorous stock market rally convinced many investors that the market turmoil of late 2007 and early 2008 was over and that happy days were ahead for the U.S. economy. But of course we all know what happened. It turned out that the market downturns of late 2007 and early 2008 were just “foreshocks” of a much greater crash in late 2008. The market surge in the spring of 2008 was just a mirage, and it masked rapidly declining economic fundamentals. Well, the exact same thing is happening right now. The Dow rose another 222 points on Tuesday, but meanwhile virtually every number that we are getting is just screaming that the overall U.S. economy is steadily falling apart. So don’t be fooled by a rising stock market. Just like in the spring of 2008, all of the signs are pointing to an avalanche of bad economic news in the months ahead. The following are 11 signs that the U.S. economy is rapidly deteriorating… [...] Of course the U.S. economy is actually doing significantly better at the moment than almost everywhere else on the planet. Many areas of South America have already plunged into an economic depression, major banks all over Europe are in the process of completely melting down, Japanese GDP has gone negative again despite all of their emergency measures, and Chinese stocks are down more than 40 percent since the peak of the market. This is a global economic slowdown, and just like in 2008 it is only a matter of time before the financial markets catch up with reality.[...]" Related: "Working 60 Hours A Week At 3 Part-Time Jobs And Still Living Paycheck To Paycheck" "What can you do when you are working 60 hours a week at three part-time jobs and it is still not enough? In America today, many people have taken on more than one job in a desperate attempt to make ends meet, but they still come up short at the end of the month. And those that are actually working are the fortunate ones, because in one out of every five families in the United States nobody has a job. There are more than 100 million working age Americans that are currently not employed (yes this is true), and as I pointed out yesterday, job cut announcements by major firms are currently running 24 percent ahead of last year’s pace. But unemployment is just part of the overall problem. There is this growing misconception out there that if you “have a job” that you must be doing okay. Unfortunately for the growing number of “working poor” in America, that is not true at all. [...]"
Commentary: "America's Age Of Impunity" [05/19/16] "The Panama Papers opened yet another window on the global system of financial corruption, showing how political leaders and businesses use shell companies in secrecy havens like the British Virgin Islands and many US states to evade taxes and hide corruption and other crimes. Yet the system of corruption depends on another factor beyond secrecy, one that is perhaps even more important: impunity. Impunity means that the rich and powerful escape from punishment even when their malfeasance is in full view. Impunity is epidemic in America. The rich and powerful get away with their heists in broad daylight. When a politician like Bernie Sanders calls out the corruption, the New York Times and Wall Street Journal double down with their mockery over such a foolish “dreamer.” The Journal recently opposed the corruption sentence of former Virginia governor Bob McDonnell for taking large gifts and bestowing official favors — because everybody does it. And one of its columnists praised Panama for facilitating the ability of wealthy individuals to hide their income from “predatory governments” trying to collect taxes. No kidding. Our major institutions, the ones that should know better, are often gross enablers of impunity. Consider my alma mater, Harvard University, and its recent nuptial with hedge-fund manager John Paulson. Paulson was the coconspirator with Goldman Sachs of one of the most notorious scams of the recent financial bubble. Paulson and Goldman constructed and marketed a portfolio of toxic assets to sell to unwitting investors so that Paulson could bet against the portfolio. Goldman and Paulson thereby turned the sucker investors’ quick $1 billion loss into an equivalent $1 billion gain for Paulson, with Goldman collecting on fees. The SEC fined Goldman but left Paulson untouched. As one disillusioned SEC investigator put it: The SEC is “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors.” Yet Harvard was delighted last year to take $400 million of Paulson’s ill-gotten gains, leave Paulson with the rest, name its engineering school after Paulson, and declare Paulson to be “the epitome of a visionary leader.” [...]"
MSM: "Revealed: Saudi Arabia Owns $117 Billion Of U.S. Debt" [05/18/16] "Saudi Arabia stockpiled $116.8 billion of U.S. Treasuries as of March, the Treasury Department announced on Monday, ending four decades of keeping the figure secret. That makes Saudi Arabia the 13th largest foreign holder of U.S. debt, though well behind the $1 trillion-plus owned by China and Japan each. The Saudi figure was first reported by Bloomberg News based on a Freedom of Information Act request. Unlike with most other major owners of U.S. debt, the Treasury Department kept Saudi Arabia's precise holdings secret since the 1970s. Saudi's holdings were lumped together with that of other oil exporting nations, including Venezuela and Iraq. But that policy ended on Monday as the Treasury Department disclosed precise holdings by specific countries that were previously grouped together. A Treasury official told CNNMoney the move was made following a review aimed at trying to provide more "comprehensive and transparent" data. The new Treasury report also revealed that the Cayman Islands, a country of less than 60,000 people, owned $265 billion of U.S. Treasuries as of March. That's the third-highest sum in the world and a reflection of the nation's status as a major tax haven. The Cayman Islands does not have a corporate tax, encouraging multinational companies to store vast sums of money there to avoid taxes. [...]" Related: "Bill Allowing 9/11 Victims To Sue Saudi Arabia Passes The Senate" "The US Senate adopted unanimously a proposed bill that would allow Americans to sue nation-states for terrorist attacks on US soil, despite opposition from the White House and allies such as Saudi Arabia. The Cornyn-Schumer bill seeks to create an exception in the doctrine of sovereign immunity established by a 1976 law, which has so far shielded Saudi Arabia from lawsuits over the September 11, 2001 terror attacks. Fifteen out of 19 hijackers involved were Saudi subjects. Citing sovereign immunity, a federal judge threw out a lawsuit by the 9/11 families against the kingdom in September 2015. Under the Cornyn-Schumer bill, however, Riyadh could be sued because the attacks on the World Trade Center and the Pentagon killed American citizens on US soil. Saudi Arabia has voiced opposition to the bill. During the visit to Washington in March, Saudi Foreign Minister Adel al-Jubeir said the country would sell up to $750 billion in US treasury securities and other assets before the lawsuits put them in jeopardy. The warning was delivered by last month during a visit to Washington, the New York Times reported. He said his country would sell up to $750 billion in US treasury securities and other assets before the bill puts them in jeopardy. [...]"
Commentary: "House Committee Announces Plan to Mark Up "Audit the Fed" Bill" [05/17/16] "The U.S. House of Representatives Oversight and Government Reform Committee announced that on May 17 they will begin markup of a bill aimed at forcing an audit of the Federal Reserve. Upon learning of the decision, former presidential candidate and sponsor of several “Audit the Fed” bills, Ron Paul, released the following announcement: “OGR’s announcement that they will markup Audit the Fed next week is a good step toward finally tearing down the Fed’s wall of secrecy,” Paul said. “The House of Representatives should vote on the bill this summer and send it back to the Senate for another vote before the election, and then hopefully on to President Obama’s desk so people can finally learn the truth about monetary policy,” he added. [...]" Related: "New Story Title and Link" " [...]"
MSM: "Longest 5 Seconds Of Lloyd Blankfein's Life: Frozen In Thought Crime" [05/17/16] [0:42] "This clip is from a Charlie Rose interview in 2012, near the time Goldman Sachs was facing Senate scrutiny for purposefully selling securities (CDOs) filled with worthless mortgage paper to clients around the globe. It's a Blankfein instant classic. [...]"
Commentary: "The SWIFT System: A Potential Weapon In The Hybrid War" [05/16/16] "The acronym SWIFT ( Society for Worldwide Interbank Financial Telecommunications) has once again popped up in the global media headlines. Experts usually describe SWIFT as an international, interbank network for transmitting information about payment transactions. [...] Globalization would be impossible without SWIFT: The society was founded in 1973. By that time the post-war monetary system established in 1944 in Bretton Woods had virtually collapsed. The dollar as well as other currencies had been divorced from gold, and the printing presses at the US Federal Reserve and other Western central banks were furiously at work. The volume of international payments had increased sharply. The traditional systems for sharing data about payment transactions (the teletype, telegraph, and telephone) could not cope with the increased traffic. It was necessary to draw upon the latest technology in order to centralize the isolated channels used to exchange information. Two hundred thirty-nine banks from 15 countries worked together to set up an organization devoted to solving this problem. SWIFT is a cooperative society, established under European law, with a head office in Brussels. Currently almost 11,000 institutions from over 200 countries, including 9,600 banks, are members of SWIFT. Every year 2.5 billion payment orders are transmitted through the SWIFT network, which processes billions of dollars each day. SWIFT’s advantages are its speed, low cost, and reliable data protection. As a result, the majority of the world’s international settlements and payments now go through the SWIFT system. Payments are also cleared through this network even when each of the parties is under the same jurisdiction. This includes dollar and euro payments that must be handled by the banking systems of the US and European Union. During the 21st century the SWIFT system began helping money circulate throughout the entire global economy. The economic and financial globalization that began in the 1970s would have been impossible without SWIFT.[...] Russia needs an alternative to SWIFT: There are about 800 banks in Russia today, approximately 600 of which are connected to the SWIFT system. Russia is home to the second-highest number of SWIFT member institutions (after the US), but it doesn’t even crack the top ten in terms of volume of transactions (last year Moscow was in 15th place). By the early 2000s at least 90% of Russia’s foreign payments were processed through SWIFT. The system was also utilized for many domestic transactions. When the West first introduced economic sanctions against Russia in 2014, British Prime Minister David Cameron demanded that Russia be disconnected from the SWIFT system. The only reason they have not made good on this threat is because the West is afraid of the potential consequences. After all, disconnecting Russia from SWIFT isn’t like disconnecting Iran – only 14 banks were cut off there, while 600 would need to be unplugged in the Russian Federation. But if the hybrid war against Russia becomes a full-blown conflict, it will not be possible to rule out the chance that Russian bank operations will be completely barred from SWIFT. Preparations for that war can’t wait until the last minute, and some measures are already in place. For example, by late 2014 Russian companies and organizations were already making payments and settling accounts with one another without resorting to SWIFT as an intermediary. A national system had been set up to handle domestic payments between Russian banks.[...]"
Commentary: "How Hedge Funds Invest Heavily In Washington D.C.'s Culture Of Corruption" [05/16/16] "Earlier this week, Ryan Grim and Paul Blumenthal published a blockbuster piece in the Huffington Post, titled: The Vultures’ Vultures: How A New Hedge-Fund Strategy Is Corrupting Washington. It details the secretive world of the dark money groups representing mercenary hedge funds in their insatiable quest for more and more money. In many ways, it’s merely a microcosm of America in 2016. A culture in which ethics has become so irrelevant, it isn’t even a nuisance; it simply never factors into the equation. The first few paragraphs set the stage perfectly: [...]"
MSM: "Angry Teamsters: One Of America's Largest Pension Funds Demands A Taxpayer Bailout" [05/15/16] "Over the past few months, we have covered the unfolding saga (here and here) of the Central States Pension Fund, which handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota, and is one of the largest pension funds in the nation, all the way through Kenneth Feinberg's rejection of the proposal to cut benefits on behalf of the Treasury. When the proposal was rejected, we said that the final resolution will be in the form of an inevitable taxpayer-funded bailout [...] As it turns out, that is precisely what fund director Thomas Nyhan believes as well. Nyhan said the rejection means the CSPF likely won't be able to offer another proposed fix without getting funding from Congress, either directly or through the Pension Benefit Guaranty Corp. However with the PBGC also on its way to insolvency, and unable to shoulder the additional burden in world of zero and negative rates, that leaves us with... drum roll please... the US taxpayers, aka Congress, footing the bill. "There are only two solutions. Either the plan receives more money or has to have fewer benefits. I'm hopeful that come probably 2017, we can actually all get to work on something that can provide a solution. If there is no legislation at any time, we're going to end up going to insolvency." Nyhan said. The full-court press is now on, as now everyone involved is calling on congress to step in [...]"
MSM: "Bank Of England Warns Of "Sharp" Sterling Fall If UK Votes To Leave EU" [05/14/16] "The Bank of England stepped up its warnings about the economic risks if Britain votes to leave the European Union, saying on Thursday that sterling could fall sharply and unemployment would probably rise. The central bank also cut Britain's growth forecast for this year to 2.0 percent from 2.2 percent in February, reflecting how uncertainty about next month's referendum is already weighing on the economy. The Bank's rate setters - who voted unanimously to keep interest rates on hold - said households and companies were likely to hold off on spending and investment in the event of a vote for so-called Brexit on June 23. Governor Mark Carney said the BoE would try to offset the potential hit to the economy but there were limits to what monetary policy could do. British finance minister George Osborne, who has tried to focus voters on what a Brexit would mean for their incomes, said the BoE assessment was a "clear and unequivocal warning" that leaving the EU would be a "lose-lose situation for Britain."[...]"
MSM: "CNBC Busts Sid Blumenthal On Fraud At The Clinton Foundation" [05/13/16] [2:36] "Blumenthal is not an idiot despite the appearances. He had to realize he was heading into enemy territory this morning on Squawk Box. Joe Kernan loathes Hillary Clinton and he doesn't hide it. Finally, someone has the courage to ask him directly to his face about fraud at the Clinton Foundation. Blumenthal is completely taken aback by the question. He stutters and squirms. He's not really sure how to answer because no one has actually ever questioned him about it before. He's not used to this kind of treatment. The mainstream media is protective of Hillary and her henchmen in anticipation of the coronation of their queen. That's the treatment he's used to. So, how did he end up here, with these evil people who actually want to know the truth about Hillary. [...]" Related: "Crooked Hillary Took $100 Million From Middle East Regimes: “Massive Conflicts Of Interest”"
Commentary: "Fed Dropping Rates To Zero For Hillary Clinton" [05/13/16] [4:57] "Peter Schiff CNBC World 5/9/2016 [...]" Related: "Yellen: “I Won't Completely Rule Out Negative Interest Rates" "In response to a question submitted by US Rep. Brad Sherman (D-California) as to what the Fed plans to do in the event of another economic downturn, Yellen said that negative rates are not completely off the table."
MSM: "Devastating” Documentary Probing Clinton’s Cash To Premiere At Cannes Next Week" [05/13/16] "The film was written and produced by Breitbart News executive chairman Stephen K. Bann [...] “Clinton Clash,” premiering at the Cannes Film Festival on May 16, is a “devastating” documentary, according to MSNBC, alleging Bill and Hillary Clinton used the Clinton Foundation to “help billionaires make shady deals around the world with corrupt dictators, all while enriching themselves to the tune of millions.” The film, written and produced by Breitbart News executive chairman Stephen K. Bannon and directed by M.A. Taylor, is based on the New York Times bestselling book of the same name (subtitled “The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich”) by Peter Schweizer. [...] “The movie alleges that Bill Clinton cut a wide swathe through some of the most impoverished and corrupt areas of the world — the South Sudan, the Democratic Republic of Congo, Colombia, India and Haiti among others — riding in on private jets with billionaires who called themselves philanthropists but were actually bent on plundering the countries and lining their own pockets. “In return, billionaire pals like Frank Giustra and Gilbert Chagoury, or high-tech companies like Swedish telecom giant Ericsson or Indian nuclear energy officials — to name just a few mentioned in the film — hired Clinton to speak at often $750,000 a pop …”[...] Read the full report over at MSNBC. And watch the trailer [1:39]
MSM: "Chelsea Clinton's Husband Loses 90% Of Money In A Greek Hedge Fund" [05/12/16] "Oy! Hillary's son-in-law goes belly up. Let's see if this makes the nightly news. [...] Chelsea Clinton's husband is reportedly closing his Greek hedge fund. The news from Marc Mezvinsky comes after the fund is said to have lost 90 percent of its value. "It was a hedge fund portfolio pitched by Hillary Clinton's son-in-law, Marc Mezvinsky, as an opportunity to bet on a Greek economic revival," the New York Times reports. "Now, two years later, the Greece-focused fund is shutting down, after losing nearly 90 percent of its value, according to two investors with direct knowledge of the matter who spoke on the condition of anonymity. "Investors were told last month that the fund would close. The fund, Eaglevale Hellenic Opportunity, had raised $25 million from investors to buy Greek bank stocks and government debt. "Eaglevale Partners, a Manhattan hedge fund firm founded by Mr. Mezvinsky and two former Goldman Sachs colleagues, raised money for the Hellenic fund at a time when some on Wall Street had hopes for a revival in the Greek economy. For a time, Mr. Mezvinsky appeared at hedge fund conferences promoting the Greece investment thesis.[...]" Note: Pluto in Capricorn in action.
Commentary: "Four Clinton Foundation Trustees Charged or Convicted of Financial Crimes" [05/09/16] "This newest, startling revelation is just one more of many in Peter Schweizer’s bombshell book Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich, the book that has sent the Hillary Clinton campaign and the media scrambling. The book shows that there are many problems with the Clinton charity. In fact, the Clinton Foundation is so unlike a real charity that even charity watchdog group Charity Navigator refuses to rate the Clinton Foundation because of its “atypical business model.” One of those problems is the fact that the Clintons put big donors and close pals on the board for reasons that are hard to fathom. In fact, at least four of these “board members” have either been charged or convicted of serious financial irregularities, crimes including bribery and fraud. [...] The most well-known of these board members is Vinod Gupta. [...] “Vinod Gupta, the founder and chairman of the database firm InfoUSA, was a major Clinton financial supporter who served as a foundation trustee,” the book says. In 2008 he was charged with fraud by the Securities and Exchange Commission (SEC) for using company funds to support his luxurious lifestyle. He was alleged to have used more than $9.5 million in corporate funds to pay for personal jet travel, millions for his yacht, personal credit card expenses, and the cost of twenty cars. He settled with the SEC for $4 million. Gupta also paid Bill Clinton a $3 million “consulting fee,” an act of misuse of corporate funds that brought shareholders to file a suit against him. The company eventually settled with shareholders to the tune of $13 million, Clinton Cash reports.[...] Another such person involved with financial irregularities is foundation trustee Sant Chatwal, who has convictions for illegal campaign financing, obstruction of justice, and a list of other charges.[...] Then there is trustee Victor Dahdaleh, who “was charged by the Serious Fraud Office (SFO) in Great Britain with paying more than 35 million pounds in bribes to executives in Bahrain to win contracts of more than 2 billion pounds,” the book notes. [...] Clinton Cash goes on to report that Dahdaleh “has worked for the American aluminum company Alcoa as a ‘super-agent.’ (The billionaire had his bail revoked in the case because he contacted prosecution witnesses.) Dahdaleh was found not guilty after the SFO offered no evidence against Dahdaleh because a key witness, Bruce Hall, pleaded guilty to conspiracy to corrupt but refused to testify. Alcoa ended up pleading guilty in the US case arising out of the transaction and settled with the US Justice Department for $384 million. Dahdaleh was not charged in the United States individually.” [...] Finally, there is current Clinton Foundation board member and trustee Rolando Gonzalez Bunster, who “has been named in a fraud case in the Dominican Republic involving his company InterEnergy. The charges were filed by the Dominican government’s Anti-Corruption Alliance (ADOCCO). In 2013, Bunster was charged along with officials of a government agency concerning alleged ‘ballooned’ fees charged to the government. The company dismisses the charges as ‘baseless allegations.'” These are just a few of the troubling things that Clinton Cash reveals about the Clinton Foundation. [...]" Related: Website: Clinton Cash | Amazon link: Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich |
MSM: "Wall Street Analyst Who Warned On GE Ahead Of Crash Calls Clinton Foundation “Charity Fraud" [05/08/16] "The Clinton Foundation’s finances are so messy that the nation’s most influential charity watchdog put it on its “watch list” of problematic nonprofits last month. The Clinton family’s mega-charity took in more than $140 million in grants and pledges in 2013 but spent just $9 million on direct aid. The group spent the bulk of its windfall on administration, travel, and salaries and bonuses, with the fattest payouts going to family friends. “It seems like the Clinton Foundation operates as a slush fund for the Clintons,” said Bill Allison, a senior fellow at the Sunlight Foundation, a government watchdog group where progressive Democrat and Fordham Law professor Zephyr Teachout was once an organizing director. – From last year’s post: Senior Fellow at Sunlight Foundation Calls the Clinton Foundation “A Slush Fund” [...] Thanks to Charles Ortel, it’s time to prepare ourselves for some more Clinton Foundation revelations: [...] The Washington Free Beacon reports: "The Wall Street analyst who uncovered financial discrepancies at General Electric before its stock crashed in 2008 claims the Bill, Hillary, and Chelsea Clinton Foundation has a number of irregularities in its tax records and could be violating state laws. Charles Ortel, a longtime financial adviser, said he has spent the past 15 months digging into the Clinton Foundation’s public records, federal and state-level tax filings, and donor disclosures. That includes records from the foundation’s many offshoots—including the Clinton Health Access Initiative and the Clinton Global Initiative—as well as its foreign subsidiaries. This week, Ortel is starting to release his findings in the first of a series of up to 40 planned reports on his website. His allegation: “this is a charity fraud.” The Sunday Times of London described Ortel as “one of the finest analysts of financial statements on the planet” in a 2009 story detailing the troubles at AIG.[...] Ortel turned his attention to the Clinton Foundation in February 2015. To learn more about the charity, he decided to take it apart and see how it worked. “I decided, as I did with GE, let’s pick one that’s complicated,” said Ortel. “The Clinton Foundation is complicated, but it’s really very small compared to GE.” [...] When Ortel tried to match up the Clinton Foundation’s tax filings with the disclosure reports from its major donors, he said he started to find problems. “I decided it would be fun to cross-check what their donors thought they did when they donated to the Clinton Foundation, and that’s when I got really irritated,” he said. “There are massive discrepancies between what some of the major donors say they gave to the Clinton Foundation to do, and what the Clinton Foundation said what they got from the donors and what they did with it.” Last year, the Clinton Foundation was forced to issue corrected tax filings for several years to correct donation errors. But Ortel said many of the discrepancies remain. Ortel said his reports in the coming months would also provide evidence that the foundation is not complying with state laws on fundraising, financial disclosure, and audits. “I’m against charity fraud. I think people in both parties are against charity fraud, and this is a charity fraud,” he said. Ortel said he hoped the reports would encourage investigative journalists to follow up on his findings. A spokesperson for the Clinton Foundation did not comment on the claims.[...]"
Commentary: "Baltic Dry Index Plunges Most Since November As Commodity Bubble Bursts" [05/06/16] "Remember a week ago when TV entertainers crowed about the surge in The Baltic Dry Freight Index was a "clear signal" that 'China is back' baby and that escape velocity growth was just around the corner as global growth was destined to pick up... Well, just as we warned very explicitly, the ramp in the index merely reflected the frenzied speculation in industrial metals by the Chinese and as authorities have cracked down on that idiocy, so the Baltic Dry has plunged by the most since November... as real demand punches back. [...]" Related: "Rail Traffic Depression: 292 Union Pacific Engines Are Sitting In The Arizona Desert Doing Nothing"
MSM: "120 Nations Accuse US Top Court Of Violating Law Over Iran" [05/06/16] "The 120-nation Nonaligned Movement headed by Iran accused the U.S. Supreme Court on Thursday of violating international law by ruling that nearly $2 billion in frozen Iranian assets can be paid to victims of attacks linked to the country. A communiqué issued by the NAM's Coordinating Bureau follows an Iranian appeal to the United Nations last week to intervene with the U.S. government to prevent the loss of their funds. Iran's Foreign Minister Mohammad Javad Zarif called the ruling an "outrageous robbery, disguised under a court order." The NAM, comprising mainly developing countries, called the U.S. waiver of "the sovereign immunity of states and their institutions" a violation of U.S. international and treaty obligations. It called on the U.S. government "to respect the principle of state immunity" and warned that failing to do so will have "adverse implications, including uncertainty and chaos in international relations." It also warned that a failure would also undermine the international rule of law "and would constitute an international wrongful act, which entails international responsibility." The U.S. Supreme Court ruled on April 23 that the families of victims of a 1983 bombing in Lebanon and other attacks linked to Iran can collect nearly $2 billion in frozen funds from Iran as compensation. The court's ruling directly affects more than 1,300 relatives of victims, some who have been seeking compensation for more than 30 years. They include families of the 241 U.S. service members who died in the bombing of the Marine barracks in Beirut. Iran denies any links to the attacks. Iran's U.N. Ambassador Gholamali Khoshroo asked that Secretary-General Ban Ki-moon circulate the NAM statement to the U.N. General Assembly and Security Council. [...]"
MSM: "Trump Picks Former Goldman Partner And Soros Employee As Finance Chairman" [05/06/16] "In an oddly ironic twist, today Donald Trump announced that he has picked as chairman of his newly launched fundraising operation none other than a former employee of the bank he has repeatedly criticized in the past, and which he used as a foil to criticize Ted Cruz: Goldman Sachs. Trump announced that heading up his own personal fundraising operation as national finance chairman will be Steven Mnuchin, a long-time business associate, chairman and CEO of the hedge fund Dune Capital. More importantly, however, he spent 17 years at Goldman Sachs where he was most recently a Partner, having built a fortung of $46 million before launching his own hedge fund. While employed at Goldman, he purchased the remains of IndyMac Bank (now known as OneWest Bank), the Pasadena, California-based mortgage lender that collapsed in 2008. "Notoriously press-shy, the executive endured 2011 protests on the lawn of his Bel Air mansion by foreclosed homeowners angered at his lender's handling of soured mortgages." [...] As Zero Hedge readers are familiar, Trump often critized his main competitor Ted Cruz for his links to the bank because of loans used to finance Cruz’s Senate campaign, and because Heidi Cruz was a one-time employee of Goldman. "I know the guys at Goldman Sachs. They have total, total control over him. Just like they have total control over Hillary Clinton,” Trump said in one debate. He had no qualms, however, in hiring one of the most prominent Goldman alums to raise money for him. In addition to Goldman, Mnuchin also worked at Soros Fund Management, whose founder, George Soros, has funded many left-leaning causes. Where it gets even more bizarre is that Mnuchin has donated frequently to Democrats, including to Clinton and Barack Obama. As a hedge fund manager, Mnuchin is part of a group of businesspeople Trump has excoriated. In August, Trump said hedge fund managers were "getting away with murder" as he touted his proposal to end the so-called carried interest loophole, which gives private equity and hedge fund managers preferential tax treatment. [...]"
Commentary: "Either Reverse All The Perverse Incentives Or The System Will Implode" [05/04/16] "Every perverse incentive is the cash cow for a vested interest or cartel. I hope it's not a great shock to discover all the incentives in our status quo are perverse: those who rig the financial system while creating zero real value, jobs, goods or services reap all the big profits; those who take near-zero responsibility for their own health are subsidized by those who take responsibility for their own health; those who try to start enterprises and hire workers are saddled with endless regulations, junk fees and taxes while those who game the system to get welfare (household or corporate) skim the cream for doing nothing for their community or for the nation.[...] Systems in which all the incentives are perverse implode under their own weight. Those who struggle to pay the mounting costs of Imperial Over-Reach, crony- capitalism and all the skimmers and scammers eventually go bankrupt or quit in disgust, while the army of state dependents and cronies explodes higher.[...]It has taken decades for the incentives to become so perverse, so we no longer notice the perversity or the pathological consequences.[...]High-frequency traders and financiers with the ready ear of well-paid political lackeys, stooges, toadies and sycophants run never-lose skimming operations and pay lower tax rates than self-employed and small business owners.[...]Corporations have increased their share prices not by earning more money by producing more goods and services but by borrowing cheap money from the Federal Reserve and buying back outstanding shares.[...]Corporations pay less tax if they move production overseas and keep their profits in other countries.[...]If I wreck one vehicle after another due to reckless irresponsibility, what happens to my insurance premiums? They skyrocket, of course, reflecting the higher risks that result from my behavior and poor choices. Nobody thinks safe drivers should subsidize irresponsible drivers.[...]But if I wreck my health by recklessly pursuing risky behaviors, I pay the same as people who are careful "drivers" of their health. What sort of incentives does this system generate? Corporate profits have soared as financialization and rigging the system have paid much higher returns than risking capital in new goods and services. The incentives for home ownership have turned the bottom 90% into debt-serfs in servitude to banks while the top 5% own income-producing assets and businesses. Larded with the most perverse incentives possible, the U.S. healthcare system in the final stages of maximum costs, just before it implodes: [...] It's not hard to design positive incentives. For example: [...]"
MSM: "Exploding Insider Trading Based on Government Data" [05/04/16] "A new ECB white paper has found evidence that many major market-moving data releases in the US are leaked in advance of their official publication, allowing some investors to profit from trading stocks and Treasury securities when those data are released. Included among the data releases studied are two from the Federal Reserve Board, on industrial production and consumer credit. The researchers analyzed price movements in the S&P 500 futures market and the 10-year Treasury Note futures market in the thirty minutes prior to these data releases, assuming that strong price movements in the direction of the eventual post-release price were indicative of some sort of leak. The industrial production release was one of seven releases that was strongly suspected of being leaked. This isn’t good news for the Fed. [...] The Fed is already grappling with an ongoing probe into a 2012 leak of confidential interest rate information to a financial newsletter. The Fed also provides news organizations with sensitive data which is embargoed until the Fed publishes it, however those embargoes are occasionally breached. Then there are the accidental leaks from the Fed on FOMC matters and the case of the former New York Fed official who obtained confidential information from his former colleagues after he went to work at Goldman Sachs. There have been enough mistakes and leaks that the idea of sensitive information being systematically leaked to certain market participants isn’t far-fetched. Especially because such leaks rarely come to light and almost never result in anyone’s termination, the risks of being caught don’t outweigh the potential benefits of making friends on Wall Street or making a little extra money. At the very least, this study should result in hard questioning surrounding these data releases and the importance placed on them. In particular, the Federal Reserve’s role as a market mover should face scrutiny. Leaking information to profit special interests is all the more reason to end the existence of government agencies that have so much power to move markets. [...]"
MSM: "Freddie Mac Reports $354M Net Loss In First Quarter" [05/04/16] "Freddie Mac reported a $354 million net loss in the first quarter, significantly down from its $2.2 billion net income recorded in the fourth quarter of 2015. The news is a reminder of the government-sponsored enterprise’s net loss of $475 million for the third quarter of 2015, which marked its first loss in four years. Due to Freddie’s net worth of $1 billion, it required no draw from U.S. Treasury. To date, the company has returned $98.2 billion to taxpayers. [...] “The percentage of our purchases of loans to first-time homebuyers hit a 10-year high and we continue to finance record levels of rental housing. Also, the transfer of mortgage credit risk away from taxpayers, which we pioneered, proved its resiliency through the quarter’s significant financial market distress. While the resulting flight-to-quality decrease in interest rates reduced our GAAP results this quarter, an impact which is non-economic in nature, the fundamentals of our business are very solid and continue to improve,” CEO Donald Layton said." [...] Despite the positive aspects of the results, calls to recapitalize Freddie Mac and Fannie Mae will likely increase. Some analysts argue that Fannie and Freddie are moving more into a position to need additional intervention by the federal government; something brushed off by Freddie Mac repeatedly.[...]"
Concepts and Practices: "New Digital Cash System Just Unveiled At Secret Meeting For Bankers In New York" [05/03/16] "Last month, a “secret meeting” that involved more than 100 executives from some of the biggest financial institutions in the United States was held in New York City. During this “secret meeting“, a company known as “Chain” unveiled a technology that transforms U.S. dollars into “pure digital assets”. Reportedly, there were representatives from Nasdaq, Citigroup, Visa, Fidelity, Fiserv and Pfizer in the room, and Chain also claims to be partnering with Capital One, State Street, and First Data. This “revolutionary” technology is intended to completely change the way that we use money, and it would represent a major step toward a cashless society. But if this new digital cash system is going to be so good for society, why was it unveiled during a secret meeting for Wall Street bankers? Is there something more going on here than we are being told? None of us probably would have ever heard about this secret meeting if it was not for a report in Bloomberg. The following comes from their article entitled “Inside the Secret Meeting Where Wall Street Tested Digital Cash“… [...] On a recent Monday in April, more than 100 executives from some of the world’s largest financial institutions gathered for a private meeting at the Times Square office of Nasdaq Inc. They weren’t there to just talk about blockchain, the new technology some predict will transform finance, but to build and experiment with the software. By the end of the day, they had seen something revolutionary: U.S. dollars transformed into pure digital assets, able to be used to execute and settle a trade instantly. That’s the promise of a blockchain, where the cumbersome and error-prone system that takes days to move money across town or around the world is replaced with almost instant certainty.[...] This is actually how it was described by Bloomberg. And I think that there is a very good reason why this meeting was held in secret, because many in the general public would definitely be alarmed by this giant step toward a cashless society. Here is more on this new system from Bloomberg… While cash in a bank account moves electronically all the time today, there’s a distinction between that system and what it means to say money is digital. Electronic payments are really just messages that cash needs to move from one account to another, and this reconciliation is what adds time to the payments process. For customers, moving money between accounts can take days as banks wait for confirmations. Digital dollars, however, are pre-loaded into a system like a blockchain. From there, they can be swapped immediately for an asset. “Instead of a record or message being moved, it’s the actual asset,” Ludwin said. “The payment and the settlement become the same thing.”[...]" Related: "Australian Entrepreneur Craig Wright Reveals Himself As Bitcoin Creator "Satoshi Nakamoto" "In what may be the biggest "self-outing" in years, overnight Australian entrepreneur Craig Wright has publicly identified himself as Bitcoin creator Satoshi Nakamoto, revealing his identity to three media organizations - the BBC, the Economist and GQ. His admission ends years of speculation about who came up with the original ideas underlying the digital cash system. [...] There are detractors who say Wright isn't who he claims to be [...]"
MSM: "Puerto Rico Defaults On $422 Million" [05/03/16] "The island was unable to make a $422 million debt payment due Monday. It's another alarm bell of how bad the situation is getting on the island. Governor Alejandro Garcia Padilla calls it a "humanitarian crisis," which a step above an economic emergency. He claims he is prioritizing paying Puerto Rico's police and teachers over Wall Street. "I had to make a choice. I decided that essential services for the 3.5 million American citizens in Puerto Rico came first," the governor said in a speech Sunday. This is the third time the island has defaulted on bond payments. The island paid the interest due Monday, but not the principal amount, resulting in a default of about $370 million, Puerto Rico's largest yet. [...] Puerto Rico is deep in debt. It owes over $70 billion to creditors. For months, Garcia Padilla has warned that Puerto Rico doesn't have enough money to pay its creditors. Another huge payment is due July 1. The island's best hope is that Congress will act before then to provide some sort of relief, such as granting a temporary moratorium on payments until a plan can be worked out. "We're very far from the end," says Philip Fischer, the managing director of municipal bond research at Bank of America Merrill Lynch. "It's clear Congress doesn't know how to handle this." [...] The governor believes the solution is simple: Puerto Rico should be granted Chapter 9 bankruptcy rights -- or something similar -- to make it easier for the island to restructure some of its debts, akin to what Detroit did. But many creditors and Republican lawmakers argue that the island has had years of political and financial mismanagement and needs someone from the outside to come in and restore credibility. The island still has not completed its 2014 audit, for example. "Congress has a Constitutional and financial responsibility to bring order to the chaos that is unfolding in the U.S. territory," Republican House Speaker Paul Ryan said last month.[...]" Related: "Treasury Warns Congress - Bailout Puerto Rico Or Risk "Chaotic Unwinds... Cascading Defaults" "In a disappointingly similar tone to the warnings, threats, and promises sent to Congress in 2008 when demanding the banks get their bailout (or else), Treasury Secretary Jack Lew has released a letter he sent to Congress warning that if Puerto Rico's situation is not "fixed" in an "orderly" manner "quickly" then the nation will face "cascading defaults." [...]"
Commentary: "Panama, The Secret Garden Of The Colombian Oligarchy" [05/02/16] "As everywhere else in the world, the disclosure of the Mossack Fonseca documents has been on the front page of all major Colombian papers. However, the close historical links between Colombia and neighbouring Panama, as well as the deeply unequal social structure of the country, make the case of Colombia particularly interesting. Given the unusually close historical, economic and political links between the two countries, it is remarkable that almost nothing of substance has emerged from the Panama papers, from a Colombian perspective. [...] Panama hosts an estimated 50,000 Colombian shell companies. In the first days of the scandal, the media announced a small number of Colombian accounts among the data leak: 850. Publicly, however, the names of only 12 people were given – and then nothing more happened. Colombia has always been a deeply unequal country with weak state control in broad parts of its territory and a violent history of civil wars and guerrillas. Yet it has always been formally a democracy. Its 50-year-long and very complex internal armed conflict, born in the context of the Cold War, was triggered by land and social inequality, and was later fuelled by drug trafficking. According to a 2015 UN Development Programme report, the country ranks 12th worst in the world in terms of income distribution, and second in this regard (after South Africa) among countries with a significant population. [...] Fast forward to the present day, and Colombians now heavily use Panama as a tax haven. It is used by wealthy individuals; by foreign companies eager to escape tax and scrutiny; by Colombian companies eager to disguise their investments in Colombia as originating from abroad (TJN: a phenomenon known as round-tripping); by corrupt Colombian politicians, and by organised crime linked to drug money. Panama has been the locus of the major corruption scandals that shook Colombia in recent years. [...] Ortega estimated that Colombians had stashed around $100 billion in various tax havens, and cites TJN estimates of $14 billion kept in Panama just in bank deposits. Colombian individuals would keep around $20 billion in tax havens. To fully understand the magnitude of the fraud, the figures have to be compared with the wealth of the nation. The figures are mind-boggling. The national budget amounts to around $70 billion and Colombian GDP $266 billion. This means that Colombian money hidden in offshore havens is roughly 140% of the national budget and about 40% of the GDP.[...] "
Commentary: "The Cult Of Central Banking Is Dead In The Water" [05/01/16] "The Fed has been sitting on the funds rate like some monetary mother hen since December 2008. Once it punts again at the June meeting owing to Brexit worries it will have effectively pegged money market rates at the zero bound for 90 straight months. There has never been a time in financial history when anything close to this happened, including the 1930s. Nor was interest-free money for eight years running ever even imagined in the entire history of monetary thought. So where’s the fire? What monumental emergency justifies this resort to radical monetary intrusion and repression? Alas, there is none. And that’s as in nichts, nada, nope, nothing! There is a structural growth problem, of course. But it has absolutely nothing to do with monetary policy; and it can’t be fixed with cheap money and more debt, anyway. By contrast, there is no inflation deficiency—–even by the Fed’s preferred measure. Indeed, the very idea of a central bank pumping furiously to generate more inflation comes straight from the archives of crank economics.[...] The following two graphs dramatize the cargo cult essence of today’s Keynesian central banking regime. Since the year 2000 when monetary repression began in earnest, the balance sheet of the Fed has risen by 800%, while the amount of labor hours used in the US economy has increased by 2%. At a ratio of 400:1 you can’t even try to argue the counterfactual. That is, there is no amount of money printing that could have ameliorated the “no growth” economy symbolized by flat-lining labor hours.[...] Owing to the recency bias that dominates mainstream news and commentary, the massive expansion of the Fed’s balance sheet depicted above goes unnoted and un-remarked, as if it were always part of the financial landscape. In fact, however, it is something radically new under the sun; it’s the footprint of a monetary fraud breathtaking in its magnitude. [...] In essence, during the last 15 years the Fed has gifted the US economy with a $4 trillion free lunch. Uncle Sam bought $4 trillion worth of weapons, highways, government salaries and contractual services but did not pay for them by extracting an equal amount of financing from taxes or tapping the private savings pool, and thereby “crowding out” other investments. Instead, Uncle Sam “bridge financed” these expenditures on real goods and services by issuing US treasury bonds on a interim basis to clear his checking account. But these expenses were then permanently funded by fiat credits conjured from thin air by the Fed when it did the “takeout” financing. Central bank purchase of government bonds in this manner is otherwise and cosmetically known as “quantitative easing” (QE), but it’s fraud all the same. In essence, Uncle Sam has gotten $4 trillion of “something for nothing” during the last 16 years, while the Washington politicians and policy apparatchiks were happy to pretend that the “independent” Fed was doing god’s work of catalyzing, coaxing and stimulating more jobs and growth out of the US economy. No it wasn’t! What it was actually doing was not stimulating the main street economy, but falsifying and inflating the price of financial assets. [...] By contrast, the mainstream Keynesian delusion that the Fed has been stimulating GDP growth rather than speculator windfalls is rooted in the hoary concept of “aggregate demand” deficiency. That is, the proposition that the macroeconomy has a natural growth rate based on potential output at full employment, and that when actual growth falls short of that benchmark, it is the job of the state—–and in recent times, especially its central banking branch——to stimulate sufficient aggregate demand to close the gap. This is claimed to be the essence of the welfare enhancing function of the state. To wit, pushing a continuously lapsing and faltering private capitalism toward its inherent full employment potential, thereby generating jobs, income and wealth that would otherwise not happen.[...]" Related: See also below: "Why Real Structural Reform Is Now Impossible" [04/29/16]
MSM: "Deutsche Bank Unveils The Next Step: "QE Has Run Its Course, It's Time To Tax Wealth" [05/01/16] "Helicopter money may be on the horizon, but if Deutsche Bank has its way, there is at least one intermediate step. According to DB's Dominic Konstam, now that the benefits QE "have run their course", it is time for the next, and far more drastic step: "the ECB and BoJ should move more strongly toward penalizing savings via negative retail deposit rates or perhaps wealth taxes. With this stick would also come a carrot – for example, negative mortgage rates."... This in turn would strongly suggest a significant re-think to short-rate policy. In this case, central banks should move more strongly toward penalizing savings, rather than just the institutions that “house” those savings – the banks. This would mean allowing significantly negative retail deposit rates or perhaps even wealth taxes. With this stick would also come a carrot – one example being that while deposit rates penalize savings (the whole point), banks might also pay borrowers to buy houses via negative mortgage rates. In short, the real central bank panic is about to be unleashed; who will suffer? Why everyone else. Should wealth taxes really be imminent, we foresee more "boating incidents" in the immediate future. [...]"
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