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Bankers


Quotation by Lord Acton:

The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks”.

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Lord Acton

1834-1902 (Age at death: 68 approx.)

John Emerich Edward Dalberg-Acton, 1st Baron Acton, KCVO, DL (10 January 1834 – 19 June 1902), known as Sir John Dalberg-Acton, 8th Bt from 1837 to 1869 and usually referred to simply as Lord Acton, was an English Catholic historian, politician, and writer. He was the only son of Sir Ferdinand Dalberg-Acton, 7th Baronet[1] and a grandson of the Neapolitan admiral Sir John Acton, 6th Baronet.[2][3] He is famous for his remark, often misquoted: “Power tends to corrupt, and absolute power corrupts absolutely”..read more

http://en.wikipedia.org/wiki/John_Dalberg-Acton,_1st_Baron_Acton

via OpEdNews – Quotations by Tag.

Thatcher’s Zombie Ideology Preying on our Collective Imagination


Thatcher-zombie

Even in death, Thatcher’s zombie ideology that “there is no alternative” will continue to feed on our imagination. The time has come to prove her wrong.

Thatcher is dead — and I am in a state of mourning. I am mourning because she got away with it. Just like that disgusting dictatorial friend of hers, General Pinochet, when the mass-murdering monster peacefully died in his sleep in 2006. They both got away with it. And worse: each left behind an ideological legacy so politically and culturally pervasive that we are still beating our heads into the wall just to try and erase it. Like some kind of zombie ideology preying on our collective imagination, the undying spirit of Pinochet and Thatcher lingers on into the 21st century. We protest, we write, we riot — but nothing ever seems to change. For these are the undead. They cannot die.

“Liberalize, privatize, stabilize!” The austerity mantra is repeated by bland and lifeless technocrats from Mexico to Greece, while teenage students lock themselves up in high schools and go on hunger strike in Santiago de Chile. Others run riot in the street, dragging policemen off their horses and beating them up with sticks. In London, the disaffected youth rise up in riotous fury, attacking police, looting shops and burning down their neighbor’s homes. “There is no alternative,” Thatcher said. In this neoliberal era of cynicism, the only alternative left for Generation Playstation has become the emulation of the effigies of consumerism; or burning down its symbols of authority.

The traditional Left still has good reason to hate Thatcher, and perhaps to organize some kind of public party on her state-funded grave. I don’t blame them. But I also don’t think the celebration of her long-awaited death will do the cause of the Left much good. The traditional Left — based as it is on defunct political parties and dysfunctional trade unions that toppled over the moment the Big Bad Wolf huffed and puffed and blew a whiff of its neoliberal hot air at them — is clearly moribund and destined for the dustbin of history. Partly, the ferocity with which Thatcher pursued her state-based class war was responsible for its demise; but for the most part the decline of state-oriented labor activism is simply the result of a process of structural change that goes far beyond the actions of an individual woman.

In an otherwise profoundly misguided article, Slavoj Zizek once rightly observed that the greatest achievement of Thatcherism was not the 11-year rule of Thatcher herself, but the premiership of Tony Blair. There is a truth in these words that should weigh heavily on the conscience of all those who remain committed to social change today. The great triumph of Thatcher’s neoliberal project resides not in the many confrontational ways in which she sought to weaken Labour, but rather in the subversive ways in which her polarizing rhetoric actually ended up strengthening Labour — eventually turning it into the most powerful weapon of the capitalist class. If anything, Tony Blair proved that it was never really Thatcher who ruled Britain, but the financial interests in the City of London all along.

From the very beginning it was clear that Thatcher was really just the bitch of financial capital — who did not mind biting ordinary citizens in the face on its behalf. She deregulated the financial sector with a religious ferocity that would make even an inquisition-era Pope blush; but she was by no means single-handedly responsible for the financialization and de-industrialization of the British economy. Indeed, the seeds of that process go back way further, at least to the late 1950s, when a combination of structural pressures and deliberate state actions helped to establish the so-called Eurodollar markets in London, which effectively served to re-establish the City as a major international financial center. And, of course, Thatcher’s deregulation of the City continued with equally dogmatic conviction under Tony Blair.

In this sense, Thatcher is hated not because she assaulted labor and destroyed the British welfare state — but because she did it with such religious zeal and such extreme determination. She was hated, in other words, not for the policies and ideas she pursued but for the ugly face she put on them, and the extremely obnoxious squeaking voice with which she barked at her opponents. Ultimately, Thatcher was hated because she personified the naked logic of class warfare operating underneath the technocratic surface of her neoliberal project. She was hated because she made “there is no alternative” sound like there really was no alternative; and because her version of class warfare seemed to veer on the same blunt brutality that had marked the profoundly dehumanizing logic of laissez-faire capitalism in the Victorian era.

For this, we should actually be grateful to Thatcher: at least she made it very obvious where she stood. From the extreme police brutality at the Battle of Orgreaves to the highly symbolic milk snatching from school children, Thatcher’s approach to class struggle was straightforward and in-your-face: “my job is to stop Britain going red”, she once proudly boasted. Under Thatcher, as under Reagan and George W. Bush, the battle-lines were clearly drawn: you were either with her or against her. Things were so simple then. What are we to do today, with the Orwellian ideological apparatus of the neoliberal project firing on all cylinders? Thatcher’s dictum that “there is no such thing as society” became Cameron’s “Big Society”. The policies and social outcomes are still the same, but many people just don’t see it anymore.

In the global class war of the 21st century, Thatcher’s blunt upper-class sneers have been replaced with the seemingly progressive reason of the embarrassingly subservient Nick Clegg; Pinochet’s murderous role in suppressing the Left became Piñera’s heroic role in saving trapped Chilean miners; Reagan’s cowboy attitude to CIA-sponsored coups and US invasions in Latin America has long since made way for Obama’s friendly smiles and silent drone strikes. In the process, the dehumanizing logic of global capitalism and neoliberal ideology is obscured with a gentle layer of good-intent. This is capitalism with a human face; a blend of market fundamentalism specifically tailored to making you believe it is in your best interest to obey.

But the financial meltdown of 2008 and the deluge of public debt that followed in its wake have made it clear that the financial sector still pulls the strings everywhere, and that the political puppet-show and democratic dress-rehearsal repeated every four years or so are just that: superficial changes to cover up a terrifying process of structural change towards ever greater capitalist control over our lives. Coming on the heels of the collapse of the corporatist Keynesian compromise that had marked the post-war decades, Thatcher’s relentless assault on the working class came to embody that structural change — it came to represent it. But it remains crucially important to make a distinction here: it was not Thatcher who systematically erased our dignity and destroyed our society. It was the capitalist system she sought to defend.

If there is one thing that captures Thatcherism as an ideology and sets it apart from the naked logic of capitalism as Thatcher otherwise expounded it, it must be the immensely effective mantra that “there is no alternative.” In this respect, Thatcher helped to bring about one of the most dramatic and most successful suppressions of humanity’s collective imagination since the invention of the Catholic Church. Indeed, the mantra was so powerful that it continues to be repeated ad nauseam by the right today — in the proclamations of Troika representatives, for instance, when they claim that “there is no alternative” to dramatic budget cuts, impossible tax hikes and a mass firesale privatization of state assets in Greece or Spain. This is surely the most powerful way to repress change and avoid any democratic debate.

And yet the mantra’s most destructive and subversive legacy resides not in its dogmatic appropriation by the right, but in the many subversive ways in which it managed to undermine the collective imagination of the Left. For instance, when reviewing David Graeber’s new book on democracy, John Kampfner argues that “Graeber’s unwillingness to set out credible economic and political alternatives is curious.” But did not Graeber, by helping to set up the New York General Assembly and by explicitly mentioning Occupy Wall Street’s anarchist roots and its emphasis on direct democracy, provide precisely such an already-existing alternative? Was not the prefigurative politics of the Occupy movement precisely the type of real-world alternative we have all been longing for? By just refusing to see it, Kampfner indirectly helps to perpetuate Thatcher’s dictum that there is, indeed, no alternative.

Either way, regardless of how successful her ideological mantras may have been, Thatcher was never really the prophet her supporters made her out to be. In the 1980s, she unapologetically defended the Apartheid regime in South Africa, stating that Mandela’s ANC “is a typical terrorist organisation” and “anyone who thinks it is going to run the government in South Africa is living in cloud-cuckoo land.” For Thatcher, there was apparently no alternative to white racist rule in South Africa. Luckily, it only took a few years for the Iron Lady to be proven wrong. Now that global capitalism and neoliberal ideology are running on their last legs, the time has come for us — those anti-capitalists living in “cloud-cuckoo land” — to prove her wrong once more.

via Thatcher’s zombie ideology preying on our collective imagination | ROAR Magazine.

via Thatcher’s zombie ideology preying on our collective imagination | ROAR Magazine.

Why are the Irish People Making Payments to Criminals?


Why are the ‘ Bondholders’ and the Irish government so concerned that the Irish people be forced to take the loss and pay the debts of the speculators

But when we talk of Anglo Irish’s bondholders  we talk of people with already accumulated wealth
We are not talking about widows and orphans or you and me. It is therefore worth
remembering, the next time an Irish politician, or any of our politicians for that matter, say that
some welfare payment can no longer be afforded, it is because the money that could have paid for
it has been given instead to the already wealthy bondholders. The Irish people are
paying and protecting the interests of the bondholders over the interests of their own children.
And it is our very own politicians who have arranged this not you not me

At the end of the third quarter of 2010, not long before Dublin requested a bailout, German banks had $208.3 billion in total exposure to Ireland, according to data from the Bank for International Settlements. That includes $57.8 billion in exposure to Irish banks, an amount exceeding British and French banks’ exposure to Irish lenders combined.

Dublin campaigned to impose haircuts on banks’ senior bondholders to reduce the amount of money the state would have to pump into Irish banks. The ECB refused, fearing contagion.

Most of these banks have indulged in absolute criminal activity and have been able to get away with their criminal acts.

So, at the end of the day the Irish people are paying off a bunch of criminals.

To copper fasten the point lets have a look at Deutsche Bank

Recent Deutsche bank events worth noting

Spying scandal – From as late as 2001 to at least 2007, the Bank engaged in covert espionage on its critics. The bank has admitted to episodes of spying in 2001 and 2007 directed by its corporate security department

Housing Bubble and CDO Market – Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004–2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a ‘case study’ of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors.

Deutsche Bank Gambles Bailout Money in Las Vegas – Loses BIG During the financial meltdown of 2008, Deutsche Bank received at least $11.8 billion in US taxpayer-funded bailout money. The banking giant had made some bad credit decisions and took on some enormous risks – but the gamble failed miserably. So what did Deutsche Bank do with the funds provided by the American taxpayers? The Financial Times has the pathetic story:

Deutsche Bank has apparently gambled in the world capital of gambling and it looks like they may lose: Deutsche Bank has risked a total of $4.9 billion, the institute, a newspaper reported in a luxury casinos in Las Vegas – a significant portion of the money will probably never be seen again.

Deutsche Bank convicted in Italy in widening scandal

Deutsche Bank slashes profits to meet sub-prime mortgage legal action costs
German bank sets aside billions of euros to cover litigation linked to US bonds as Libor-rigging investigations continue

Deutsche Bank under US investigation for Iran dealings

Bundesbank investigating Deutsche Bank derivatives trade

Privatizing Europe: using the crisis to entrench neoliberalism


TNI-report

Rather than solving Europe’s crisis, EU institutions are allowing corporate elites to further enrich themselves through a fire sale of state assets.

TNI-European-Spring-01

The text and infographics below are excerpted from a new working paper, Privatising Europe: Using the Crisis to Entrench Neoliberalism, which was just released by the Transnational Institute in Amsterdam:

The European Union is currently undergoing the biggest economic crisis since its foundation 20 years ago. Economic growth is collapsing: the eurozone economy contracted by 0.6% in the fourth quarter last year and this slump is set to continue. The euro crisis was incorrectly blamed on government spending, and the subsequent imposition of cuts and increased borrowing has resulted in growing national debts and rising unemployment. Government debts in crisis countries have predictably soared: the highest ratios of debt to GDP in the third quarter of 2012 were recorded in Greece (153%), Italy (127%), Portugal (120%) and Ireland (117%).

Europe’s member states have responded by implementing severe austerity programmes, making harsh cuts to crucial public services and welfare benefits. The measures mirror the controversial structural adjustment policies forced onto developing countries during the 1980s and 1990s, which discredited the International Monetary Fund (IMF) and World Bank. The results, like their antecedents in the South, have punished the poorest the hardest, while the richest Europeans – including the banking elite that caused the financial crisis – have emerged unscathed or even richer than before.

Behind the immoral and adverse effects of unnecessary cuts though lies a much more systematic attempt by the European Commission and Central Bank (backed by the IMF) to deepen deregulation of Europe’s economy and privatise public assets. The dark irony is that an economic crisis that many proclaimed as the ‘death of neoliberalism’ has instead been used to entrench neoliberalism. This has been particularly evident in the EU’s crisis countries such as Greece and Portugal, but is true of all EU countries and is even embedded in the latest measures adopted by the European Commission and European Central Bank.

This working paper gives a broad and still incomplete overview of what can best be described as a great ‘fire sale’ of public services and national assets across Europe. Coupled with deregulation and austerity measures, it is proving a disaster for citizens. Nevertheless, there have been clear winners from these policies. Private companies have been able to scoop up public assets in a crisis at low prices and banks involved in reckless lending have been paid back at citizens’ expense.

Encouragingly though, there have been victories in the battle to protect and improve Europe’s public services which serve as beacons of hope. There is even a counter-trend of remunicipalisation taking place in Europe as people have become aware of the cost and downsides of privatising public services, particularly water. As public awareness grows that the European Commission far from solving the crisis is using it to entrench the same failed neoliberal policies, these counter-movements and growing popular resistance can work together to halt the corporate takeover of Europe.

TNI-Great-European-Firesale-01

TNI-Great-European-Firesale-06

 

TNI-Great-European-Firesale-04

 

TNI-Great-European-Firesale-02

 

TNI-Great-European-Firesale-05

 

TNI-Great-European-Firesale-07

 

TNI-Great-European-Firesale-08

 

TNI-Great-European-Firesale-09

via Privatizing Europe: using the crisis to entrench neoliberalism | ROAR Magazine.

via Privatizing Europe: using the crisis to entrench neoliberalism | ROAR Magazine.

The Goldman Diary


We are led to believe that the world is in recession but these bailed out bankers are still able to make huge profits and pay themselves vast sums of money.

You know a long time ago well maybe not so long the old Imperial powers looted their colonies without showing a drop of remorse.

Today the Imperial powers are dormant and have been overhauled by the financial institutions. These dragons of fiscal matters are today’s new colonists. These people care not a whit for countries or international borders they will rob and plunder wherever the treasure lies.

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Goldman Sachs’s Jon Corzine –8th April

The FBI report on the MF Global collapse that was sent to the bankruptcy trustee paints a damning picture of former Goldman Sachs chief executive, Jon Corzine.  Investors in MF Global lost $2.1 billion–a sure indication that these high-priced executives do not live up to their hype.  Why Corzine is not in jail is not a mystery but certainly alludes to fraud that goes unpunished in a corrupt justice system.

Corzine’s spokesman prefers to blame everyone else except the guy in charge.  Meanwhile, the wreckage of the economy and the bad faith in justice continues apace.

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THURSDAY, APRIL 11, 2013

How Many Ways Does Goldman Sachs Get Preferential Treatment?

Let me count one of those ways:  Goldman Sachs (accidentally) obtained preferential treatment when it received the Federal Reserve FOMC minutes, which give important information regarding intended monetary policy, before the public did.The comments at the end of the following article show how little credence the “accidental” leak has with the public some of whom consider information leaks a feature of the system rather than a bug in the system.  There is a lot of cynicism from the public regarding all banks and their relationship with the Federal Reserve.
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The Guardian, Friday 12 April 2013 19.49 BST

Goldman Sachs paid its chief executive, Lloyd Blankfein, $21m last year – and granted him a further $5m in bonus shares in January.

The Wall Street bank handed Blankfein $13.3m (£8.7m) in restricted shares and a $5.7m cash bonus on top of his $2m annual salary last year.

His total 2012 pay was $9m more than in 2011, and the highest since the $68m he received in 2007, before the financial crisis struck.

The payout, disclosed in a filing with the US regulator the Securities and Exchange Commission (SEC), makes Blankfein, 58, the world’s best paid banker.

On top of his annual pay Goldman granted him long-term incentive plan (LTIP) shares worth an additional $5m at today’s share price. But he will have to meet performance targets in order to collect the full amount, and the value of the shares could go up or down.

Blankfein’s top four lieutenants collected a total of $72m in annual pay, bonuses and share options last year.

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More Preferential Treatment for Goldman Sachs
Posted: 12 Apr 2013 09:20 AM PDT
When Goldman Sachs became a commercial bank in 2008 (in order to save itself from insolvency), it apparently came under commercial bank regulations. However, in 2010 Goldman bought warehouses of aluminum products as an investment even though “[u]nder US banking regulations, banks are barred from owning the physical commodity assets that they operate.”

But, of course, the Federal Reserve gave Goldman 5 years of grace (until autumn 2013) while it decides if Goldman is exempt from the rules. This is another instance of the two-tier system of justice in the US–one for banks and the other for the rest of us.

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Payments

Goldman Sachs bankers to reward themselves a staggering £8.3billion in bonuses- jan 2013
The bank will be first to unveil its rewards – an average of £250,000 a person
Increase, up from £230,000 last year, comes as families are struggling to make ends meet
Calls for restraint by politicians, who used taxpayers’ money to bail banks out, have fallen on deaf ears

Goldman Sachs paid its chief executive, Lloyd Blankfein, $21m last year – and granted him a further $5m in bonus shares in January. -April 2013

The Wall Street bank handed Blankfein $13.3m (£8.7m) in restricted shares and a $5.7m cash bonus on top of his $2m annual salary last year.

His total 2012 pay was $9m more than in 2011, and the highest since the $68m he received in 2007, before the financial crisis struck.

Cash bonanza anticipated for Goldmans workers as firm sets aside £2.75bn pay and bonus pot- April 3013

Bankers at Goldman Sachs – including its 6,000 London staff – are in line for another bumper year as results this week are forecast to show average pay packets of £85,000 for the first quarter alone.

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Goldman Sachs is Caught In Its Own Web of Deceit 18 Apr 2013 
A federal judge, District Judge Susan Wigenton, has upheld Prudential’s $270 million lawsuit against Goldman for fraudulent RMBS it sold to them.

A little bit of justice goes a long way when complete justice is denied.

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What Is Goldman Sachs Really Like?
19 Apr 2013
First, Goldman Sachs has paid its latest fine for RMBS fraud to Stichting Pensioenfonds ABP and according to the Bloomberg’s article:

“ABP sued New York-based Goldman Sachs in New York State Supreme Court in January 2012. The company alleged that it purchased certain mortgage-backed securities in reliance on false and misleading statements and that the securities were riskier than had been represented, backed by mortgage loansworth significantly less than had been represented.”
. . . . . . . . . . . . . . . . .

Second, Professor Jeffrey Sachs calls the banks what they really are in an audio/video recoding posted at Market-Ticker. He is talking by telephone to a conference of academics discussing ending the fractional reserve lending system in order to repair the financial system by taking liquidity away from bankers who treat their banks as casinos for gambling. He calls the bankers cynical and full of conflicts of interest. Here is a partial transcript of what he thinks the banking system is:

“Prima facie, [it is] criminal behavior. It’s financial fraud on a very large [scale]; there’s a tremendous amount of insider trading…. [John] “Paulson worked together with Goldman Sachs to defraud massively many European banks which bought the toxic mortgages that Paulson had put together…. Goldman ended up paying a small fine and the chair of Goldman, of course, continued in his position and continued [to attend] White house State dinners.”

Other descriptors that Sachs uses for bankers and banking include:
“lawlessness,” “collapse of decency,” “a lot of them are crooks,” “nefarious behavior,”

Goldman Sachs should not be a commercial banking unit. That [it is] is sad.

The banking system is dysfunctional; there is a crisis of values that is extremely deep. Legal structures and regulators need reform. “I regard the moral environment of Wall Street people as pathological.” They bear no responsibility to others; they are tough, greedy, aggressive and out of control and have “gamed the system.” Regulators and the White House remain docile. Politics is corrupt to the core.

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Fraud*
According to the Collins English Dictionary 10th Edition fraud can be defined as: “deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage”.[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent “discoveries”, e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Native American Society


native-american-society-quote

Native American Society – StumbleUpon.

via Native American Society – StumbleUpon.

The Deficit is Stagnating, Just Like the Economy


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The rest of the world seems to be suffering from austerity fatigue – apart from the Berlin and Dublin governments (and London too – but no-one is holding it up as a model for anything).

The Department of Finance tells us that the deficit is improving. DoF reports that the general government deficit fell from €22.4bn in 2009 to €12.4bn in 2012. But it is widely known that the impact of bailing out bank shareholders and bondholders has had a hugely distorting effect on public finances. Unfortunately, DoF does not show these effects in the same release as the overall government finances, and you need to go to a separate database to get these data.

Adding the two together produces a measure of the underlying deficit, excluding both costs and revenues from the bailout. It is regrettable DoF doesn’t do this itself.

The table below shows the deficit excluding the effects of the bank bailout.

2009 2010 2011 2012
General Government Deficit -22.4 -48.3 -21.3 -12.5
Bank bailout net expenditure/receipts -3.8 -31.5 -5.7 +1.6
Underlying Deficit (excl. bank bailouts) -18.6 -16.8 -15.6 -14.1

Fig.1 – General Government Deficit Excluding Effects of Bailouts for Bank Shareholders and Bondholders, €bn. Source: Department of Finance

There is another factor to be taken into account. Hardly anyone suggests that the reduction in government investment is a welcome development. Even supporters of ‘austerity’ suggest it is nothing more than a temporary evil, or an unavoidable necessity. The government has pledged not to cut it further.

As a result, while it has a significant bearing on the economy, it is not strictly part of the ideological offensive supporting austerity at all. Therefore it is worth looking at the underlying deficit (excluding both bank bailouts and the effects of growth) after taking into account the government’s own reduction in investment (Gross Fixed Capital Formation). Without cutting investment sharply the deficit would not have been on much of an improving trend.

2009 2010 2011 2012
a. Underlying Deficit (excl. Effect of bank bailouts & growth) -18.6 -16.8 -15.6 -14.1
b. Govt. GFCF 6.1 5.5 4.0 3.3
c. Underlying deficit, (excluding investment & bank bailouts) (a-b) -11.5 -11.3 -11.6 -10.8

Fig. 2: Underlying Current Deficit (excluding bank bailouts), removing cuts in Government GFCF, €bn. Source: Author’s calculations, Department of Finance

On this measure the trend in the deficit is still downwards, but only marginally so. Once both the effect of the bank bailouts and the cuts in government capital investment are stripped out, the decline in the deficit is a paltry €700mn since 2009.

Unsurprisingly, while the economy has stagnated since the slump so has the underlying deficit. The chart below shows the trend in GNP and the underlying deficit since 2007. In effect, a slump has been followed by stagnation. The deficit is a mirror image of growth; a sharp rise has been followed by a flatlining deficit. The modest improvement in 2012 as whole reflected the moderate uptick in economic activity, which gave way to renewed recession at the end of 2012.

1_aMBGraphGNP_underlyingDef

The underlying deficit is not really on an improving trend. It remains dependent on growth, which itself remains elusive.

Supporters of austerity in Ireland maintain that export-led growth will be the salvation of the economy. But recorded exports have already risen strongly without lifting the economy out of Depression and there is a question mark about the continued strength of exports in the period ahead.

There is also a larger question looming. Ireland is a capitalist economy and set to remain so for a considerable period. Yet its capitalists have stopped producing capital. The implications of that startling fact will be addressed in a further post.

 

via Irish Left Review | The Deficit is Stagnating, Just Like the Economy.

Goldman Sachs Says: TINA (There Is No Alternative)


Goldman Sachs Says: TINA (There Is No Alternative)

When Blankfein says that the UK has no other choice but to stay with its austerity plan or it will (here’s the threat):  “face a negative reaction from global investors,” he knows that Goldman Sachs will benefit from austerity at the expense of the rest of the public:

Austerity gives Goldman opportunities to privatize and financialize the economy further;

Austerity allows Goldman to continue to be a parasite sucking on the lifeblood of the economy;

Austerity will guarantee more bailouts when Goldman takes big risks and fails;

Austerity will keep the 1% wealthy and the wealth accumulation for the rich will continue apace;

Austerity keeps wealth within the financial sector where Goldman can enjoy it;

Austerity guarantees Goldman’s “rentier” status, i.e., it collects unearned money via debt;

Austerity is financial warfare against labor, against industry and against the government;

Austerity will increase the role of the bank and lead to an increase of power and wealth over the rest of society while citizens suffer from low wages, low or no pensions, high debt and fewer entitlements.

You, too, Goldman Sachs, Have Committed Frauds


 

You, too, Goldman Sachs, Have Committed Frauds

Mr. Nye Lavalle is a consumer advocate who has written a paper entitled “You Can’t Trust the Mortgage Paper Trail” that carefully looks at all the frauds committed by mortgage servicers (such as Goldman’s Litton), banks and others that committed fraud leading directly to The Great Recession we are now in.It is difficult to be empathic and honest when the banks, the justice system and the government conspire together to cover up fraud in the mortgage servicing and securitization systems. Lavalle is one of those persons who insists on pursuing the truth to the best of his ability as shown in his report gong back to frauds beginning in the 1990s.

Goldman Sachs committed accounting control fraud and forgery through robo-signing and only ever had to pay a small fine for its gigantic frauds.

Mr. Nye Lavalle is a consumer advocate who has written a paper entitled “You Can’t Trust the Mortgage Paper Trail” that carefully looks at all the frauds committed by mortgage servicers (such as Goldman’s Litton), banks and others that committed fraud leading directly to The Great Recession we are now in.It is difficult to be empathic and honest when the banks, the justice system and the government conspire together to cover up fraud in the mortgage servicing and securitization systems.  Lavalle is one of those persons who insists on pursuing the truth to the best of his ability as shown in his report gong back to frauds beginning in the 1990s.

Goldman Sachs committed accounting control fraud and forgery through robo-signing and only ever had to pay a small fine for its gigantic frauds.

Below are some excerpts from his report:

You Can’t Trust the Mortgage Paper Trail (TM) By Nye Lavalle – Scribd.com
. . . .
As such, to protect our nation, taxpayers, borrowers, and investors each alleged lender must be required to prove their noteownership with their accounting and financial books and records, not fabricated and forged paperwork and dubious servicing records that only allege accounting for a borrower’s payments.

Due to the Sarbanes-Oxley Act that was created after the ENRON debacle, this should be a relatively simple process. Journal entries in the lender’s financial, accounting, and general ledger systems showing a borrower’s note as an asset and the asset being recognized and de-recognized from the alleged lender’s books should be able to be produced with the push of a few keys and clicks of a mouse. (page 4)

 . . . .
Issues such as who has really suffered a loss and what is the amount of that actual loss must be addressed in each proceeding?Is there really a holder in due course or can a borrower sue the current alleged lender for the torts of the originators and securitizers. By now, the questions for judges and lawyers should not be whether frauds, bad, and unlawful acts were committed for we all know they were. The questions that should be posed to each court is how was the borrower damaged; who was responsible for the damages; who are or were the ultimate lenders that actually suffered any loss; how much is their actual loss; and how do we adjust the equities for the borrower and the true and rightful owner of the debt? Simply, who can a borrower sue and settle with?  (page 4 and 5)
. . . .
On pages 27–28 of this report, I described several robo-signing practices including the:

•“filing of fraudulent and false affidavits by predatory lenders claiming that theyown the note when in fact they are only the servicer;”
•“filing of fraudulent and false affidavits by predatory lenders claiming that theylost the note when in fact they never had control of the document;”
• “filing of fraudulent and false affidavits by predatory lenders claiming anindebtedness that is not owed;”
• “filing of fraudulent and false affidavits by predatory lenders claiming amountsowed that are non-recoverable from the borrower;”
• “filing of fraudulent and false affidavits by predatory lenders claiming control and custody of documents that are not in their control and custody;”
• “filing of fraudulent and false affidavits that claim to support knowledge of  facts not known by the affiant;”
• “supporting motions for summary judgment with fraudulent and false affidavits;”
• “using corporate dummies as corporate reps that are trained to avoid questioning and obstruct justice;” and “witness tampering.” (page 9 and 10)
. . . .
I also provided Merrill Lynch, Ocwen, Fairbanks Capital, Citigroup, and Litton LoanServicing with my reports. As for Ocwen, I attended an annual meeting where I was theonly outside shareholder in attendance in a conference room with the entire board andCEO and chairman present where I presented questions and noticed the board of myfindings. Years later, the general counsel for Ocwen would write me to inform me that there was nothing wrong with Ocwen’s practice of “surrogate signing” in front of notaries attesting to the signature of Scott Anderson. (page 15)
. . . .
My investigation and research over the last 20-years into the servicing, securitization, document custody, and foreclosure practices of both commercial and residential mortgage servicers reveals a variety of motives designed to confuse borrowers, lawyers,courts, and regulators about note ownership. These motives include:
• Concealing that the current and/or prior bank/lender is/was cooking their books;
• Concealing accounting schemes, frauds, and abuses from borrowers, shareholders,and regulators;
• Concealing that the securitizations were shams and were in reality not true sales, but financing of receivables subjecting the notes to the reach of federal bankruptcy trustees;
• Concealing real owners of foreclosed properties in downtrodden neighborhoods to prevent payment of property taxes and fines to local and state municipalities;
• Avoiding local transfer and state intangibles taxes and recording fees on transfers and assignments of mortgages and notes;
• Concealing double and multiple pledges of the same promissory note;
• Concealing broken chains of title;
• Concealing pledges of the note to other banks, private lenders, and even Federal Home Loan Banks and the Federal Reserve for other borrowings and advances; (etc., on page 42 ff.)
. . . .
Robo-signing is a merely a “symptom” of a much larger cancer (fraud). Since the cancer (i.e. foreclosure, securitization and accounting fraud) is so widespread, mere “testing” via a “temperature” is not sufficient to diagnose the extent of the disease and determine the appropriate treatment. If you find cancer in one part of the body or system, you must conduct additional tests and scans to see if the cancer has spread and if successfully treated, conduct continual testing to insure it has not returned

The banker’s guide to owning it all……………


1. Become majority lender in an economy of people with assets you want.

2. Encourage indebtedness by loaning generously while securing on assets of interest.

3. Loosen lending standards until the assets you seek to capture are attached.

(this makes the economy debt dependent)

4. Once debts are significant for the bulk of the population, sharply tighten lending standards. <– Economic shock – Onset of deflation

5. Backstop losses with public guarantees if possible. This is gravy if one can get it.

(Fannie and Freddie guarantees, for example)

6. Permit default ‘without risk’ on the assets you wish to seize to maximize wealth transfer.

(Stall foreclosure, stay repossession orders etc

7. Stall the economy to maximize default positions and deplete private liquidity. <– We are here

8. Successively ratchet the economy downhill, while bettering secured positions.

9. In a series of large actions, seize all security for default. Target the assets of greatest interest first.

(This deals a heavy economic blow and can help cause the ratcheting required for step 8.)

10. Transfer asset ownership, but retain prior owners as renters where possible.

(This reduces public lashback and helps maintain the asset for resale)

11. Once the bulk of assets of transferred, write them down to leverage the public financial backstop.

12. Buy up as many remaining assets on the cheap as possible. Hide this action.

13. Hyper inflate to destroy the external claims on wealth. <– Onset of hyperinflation

(This destroys treasuries, gov’t bonds, currency. Ensures free title on new assets. May cause war.)

14. Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.

Hyperinflation is only a risk to the wealthy if the population has the assets.

Make note of that statement. It is key to timing the shift from deflation to hyperinflation.

via The banker’s guide to owning it all…………… | Awaken Longford.

via The banker’s guide to owning it all…………… | Awaken Longford.

Deutsche Bank Whistleblower Exposes Multi-Billion Dollar Securities Violations


The continuing story of Banking fraud that you must pay for

(Washington, DC) – Labaton Sucharow LLP and the Government Accountability Project (GAP) announce their representation of a whistleblower who is alleging multi-billion dollar securities violations at Deutsche Bank, the Germany-based global investment bank. The alleged misconduct was first publicly disclosed in an article published online by the Financial Times. Dr. Eric Ben-Artzi is believed to be the first SEC whistleblower to share his story publicly.

Ben-Artzi, a former Quantitative Risk Analyst at Deutsche Bank responded, “I never wanted or expected to be a whistleblower. I reported internally first and extensively, in accordance with bank policies and procedures. As the problem was not acknowledged or corrected, I felt compelled to inform the proper law enforcement authorities. Unfortunately, my family and I are paying a heavy price for doing the right thing.”

Reported Securities Violations

Dr. Ben-Artzi discovered and internally reported possible securities violations stemming from Deutsche Bank’s failure to accurately report the value of its credit derivatives portfolio. Specifically, between mid-2007 and 2010, the bank failed to properly value the gap option component in its portfolio of Leveraged Super Senior (“LSS”) tranches of credit derivatives. The gap option is the difference between the collateral paid by the LSS note buyer and the mark-to-market expected loss that the LSS note seller agreed to cover. With a $120-$130 billion portfolio in notional value, Deutsche Bank was the largest holder of LSS trades in the marketplace. By not accurately valuing it, the bank was able to maintain its carefully crafted public image that it was weathering the financial crisis better than its peers – many of which required financial assistance from the government and experienced significant deterioration in their stock prices. Even using conservative assumptions, if the LSS portfolio had been properly valued, the bank would have substantially missed its earnings estimates. Due to these material misrepresentations, countless investors may have been harmed.

Deeply troubled by the bank’s unwillingness to acknowledge and appropriately address this significant valuation problem, Dr. Ben-Artzi sought legal representation from Labaton Sucharow and reported the possible securities violations to the U.S. Securities and Exchange Commission through the SEC Whistleblower Program. The program, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010, has broad international reach and offers eligible whistleblowers significant employment protections, monetary awards and the ability to report anonymously.

Dr. Eric Ben-Artzi has worked in positions of significant responsibility at major financial institutions. He has unique expertise with the models, assumptions and calculations necessary to properly value and assess risk associated with derivatives. Earlier, he earned his Ph.D. from the Courant Institute at New York University where he also taught undergraduate courses in mathematics and financial engineering.

“When Dr. Ben-Artzi first consulted with me, I was shocked by the size and scope of the alleged misconduct,” said Jordan Thomas, a former SEC Assistant Director and Chair of the Whistleblower Representation Practice at Labaton Sucharow. “This is exactly the type of significant and unreported securities violations that the SEC Whistleblower Program was intended to address. It is one of many high-profile matters in the pipeline.”

Employment Retaliation

Dr. Ben-Artzi repeatedly attempted to work through internal reporting channels, at increasingly higher levels, to correct the valuation problem. As alleged in his retaliation complaint filed with the Department of Labor, when he pressed his concerns further, he was subjected to severe hostility, isolated, denied access to records necessary to perform his job, lost his job independence and was stripped of responsibilities. In November 2011, shortly after returning from paternity leave, Deutsche Bank informed Dr. Ben-Artzi that his position had been moved to Europe and laid him off without warning, the chance to move with his job, or a real opportunity to find a new position within the financial institution. At all times prior to this illegal employment action, Dr. Ben-Artzi had received favorable performance reviews, and when laid off, was being recruited to work in other groups within the bank due to his professional expertise and reputation. Accordingly, GAP agreed to represent Dr. Ben-Artzi in his retaliation case, alleging violations of the whistleblower protection provisions contained within the Sarbanes-Oxley Act.

Tom Devine, GAP Legal Director and author of the award-winning Corporate Whistleblower’s Survival Guide, commented: “This is a classic illustration of what whistleblowers risk when trying to work within the system at firms acting in bad faith. Dr. Ben-Artzi was a model corporate citizen who discovered SEC violations that could incur serious liability, and stuck his neck out internally to warn bank management. Deutsche Bank’s response was to personally harass him, and fire him as soon as it pinned down what he knew. The retaliation was crude, and not camouflaged. Quite clearly, the point was to scare other would-be whistleblowers into silence. The lesson learned is that working within Deutsche Bank’s corporate compliance and reporting system is an act of professional suicide.”

Bank Employee ‘Know Your Rights’ Campaign

In October, GAP launched a nationwide educational campaign aimed at employees of large banks and financial institutions. This educational Know Your Rights campaign, one of the first major coordinated national efforts of its kind, seeks to inform workers of whistleblower protections and incentives that potentially apply to them, if they have witnessed or are aware of wrongdoing. Among other things, tens of thousands of leaflets were distributed at banks and financial intuitions in 15 major cities across the country, informing workers of their protections.

Dr. Ben-Artzi’s case serves as a great example of the need for this important public awareness campaign. More information can be found at http://www.BankWhistleblower.org.

About Us

Labaton Sucharow, one of the nation’s premier law firms, has been a champion of investor and consumer rights for close to 50 years. It was the first law firm in the country to establish a practice exclusively focused on protecting and advocating for whistleblowers who report possible violations of the securities laws. Building on the firm’s top ranked securities litigation platform, the Whistleblower Representation Practice leverages a world-class in-house team of investigators, financial analysts, and forensic accountants with federal and state law enforcement experience to provide unparalleled representation for whistleblowers.

The Government Accountability Project is the nation’s leading whistleblower protection organization. Through litigating whistleblower cases, publicizing concerns and developing legal reforms, GAP’s mission is to protect the public interest by promoting government and corporate accountability. Founded in 1977, GAP is a non-profit, non-partisan advocacy organization based in Washington, D.C.

Dylan Blaylock is Communications Director for the Government Accountability Project, the nation’s leading whistleblower protection and advocacy organization.

via Deutsche Bank Whistleblower Exposes Multi-Billion Dollar Securities Violations – Government Accountability Project.

 

Austerity: First the bad news. Then the bad news. And then… the bad news.


Was away over Easter in a far flung part of this island. But, was able to get the Sunday Business Post in its print edition and what did I read? Nothing but good news there… no, excuse me, not so good news. For the headline read:

Austerity to end by 2016 but ten years of tight budgets to come.

And reading further it was hard to see how one could differentiate between the pre-2016 and post-2016 era. Actually it’s interesting how it was phrased. Some will recall that the narrative has been shaped by a ‘spending beyond our means’ line and how cuts and austerity were not merely necessary but actually good. But the report notes that 2016 will ‘show the end of huge cuts to public spending and tax increases in 2016’. Which is interesting in that at least the scale of said cuts is unvarnished.

It continues:

In effect his this will mean that the government finances will remain extremely tight for another decade, during which time they will be overseen by European authorities.

This being the case it does make something of a mockery of all the talk of ‘regaining our sovereignty’ does it not? For if sovereignty meant anything it fundamentally means the capability to make our own decisions and allow for those being both good and bad. Though it’s hard to argue that the actual situation will be good, in the context of said European supervision.

And there’s more.

There will be little or no scope for spending increases beyond the rate of economic growth nor will there be resources for tax cuts.

Let’s put the latter to one side, that being the SBP’s trope of the day, every day, but let’s note that once austerity has done its magic nothing changes. Literally nothing. We will be locked into a permanent 2016, or near enough permanent. It’s hardly worth dragging out the growth and stimulus argument, we’re all well aware of it at this stage, but this has effects beyond the economic.

For a start it suggests a complete shutting down of alternative economic policy options. What is political contest in a state which has in itself decided that there can be no change, and worse again is constrained by the EU and others in this. This provides both challenge and opportunity for those who would argue otherwise, for almost every argument in that context is an oppositional one, and if not revolutionary – after all, let’s not get ahead of ourselves, it is one that provides a direct push back against the orthodoxy and the status quo.

That’s, in a sense, the broader context, but more narrowly this has significant ramifications.

One obvious follow on from this is that this must spell ruin to Labour’s ambitions of a recovery, and not very good news at all for Fine Gael, for despite all their right of centre tilting they are as aware as any Fianna Fáil member of the necessity to disburse something to the citizenry, and how, at the end of the near enough decade of austerity that need will be greater again.

Indeed it suggests that the messages both FG and LP can craft are minimal in terms of their attractiveness for the post-2016 period.

Now granted none of this is new, we’ve known broadly the parameters that the state will operate under for quite some time, but now it is beginning to come into sharper focus. Particularly as a sense that economic growth is quite some way off.

But if one thinks that’s it, what of this last weekend’s news, again from the SBP that:

The IMF has warned that the cost of bailing out Ireland’s embattled financial institutions could spiral by as much as €16 billion if the economy fails to recover.

And:

The fund states that this could happen in a “downside scenario” when slow growth would hit the property market. It believes this would increase bank mortgage loses and hamper Nama’s ability to dispose of its mammoth loan book.

The IMF has also called for more EU help for Ireland, warning that, if economic growth does not recover as expected, the national debt will quickly rise to unsustainable levels. The warning places further pressure on the European Union to ease the terms of the €40 billion it has advanced to Ireland through as part of the bailout.

Thing is we’re living in precisely that ‘downside scenario’. Only this weekend the Central Bank revised growth forecasts downwards yet again.

Now the IMF is an unreliable operation, in so far as it often appears to be speaking out of both sides of its mouth simultaneously. Nor is it’s ‘good cop’ to the ECB/EU ‘bad cop’ routine entirely convincing. Yet there is a consistency now to its refrain that growth must be supported. But contextualise its thoughts with those already outline above and far from things looking as if they’re getting better it would appear that stagnation, is at best, the light at the end of the tunnel.

via Austerity: First the bad news. Then the bad news. And then… the bad news. | The Cedar Lounge Revolution.

via Austerity: First the bad news. Then the bad news. And then… the bad news. | The Cedar Lounge Revolution.

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