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Bankster’s Paradise: Obama Allowing the Foxes Write the Rules


Bankster Lobbyists Writing Regulatory ‘Reform’ Legislation

Nearly six years since massive financial fraud and speculative market manipulation drove the global capitalist economy off the rails, congressional grifters in both benighted political parties have turned over the legislative process to bankster lobbyists.

Talk about technocratic efficiency!

Last week, The New York Times revealed that “Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.”

According to emails leaked to the Times, a bill that “sailed through the House Financial Services Committee this month–over the objections of the Treasury Department–was essentially Citigroup’s.”

Despite huge losses during the capitalist economic meltdown, which included heavy exposure to toxic collateralized debt obligations (CDOs) which cost shareholders some 85 percent of asset value by early 2009, by 2012 the bank had built up an enormous cash horde to the tune of $420 billion (£277.7bn), derived from selling some $500 billion (£330.6bn) of “special assets” placed in Citi holdings that were guaranteed from losses by the US Treasury Department; this included untaxed overseas profits of some $35.9 billion (£23.74bn) according to Bloomberg.

As I reported last month, Citigroup was handed some $45 billion (£29.78bn) in TARP funds while the Treasury Department and Federal Reserve secretly backstopped more than $300 billion (£197.31bn) in toxic assets on their books. In addition to receiving “$2.5 trillion [£1.64tn] of support from the American taxpayer through capital infusions, asset guarantees and low-cost loans,” as Wall Street on Parade analyst Pam Martens pointed out, like other too-big-to-jail banks such as Wachovia and HSBC, the Citi brand has long been associated with washing dirty cash for drug cartels.

Hit with a toothless Consent Order by the Federal Reserve in March over “deficiencies in the Banks’ BSA/AML [Bank Secrecy Act/Anti-Money Laundering] compliance programs,” federal regulators charged that Citigroup and their affiliate Banamex “lacked effective systems of governance and internal controls to adequately oversee the activities of the Banks with respect to legal, compliance, and reputational risk related to the Banks’ respective BSA/AML compliance programs.”

The Federal Reserve “action” followed an anemic Consent Order last year by the Office of the Comptroller of the Currency (OCC) which also cited Citi’s failure to “adopt and implement a compliance program that adequately covers the required BSA/AML program elements due to an inadequate system of internal controls.” Additionally, the OCC charged that the “Bank did not develop adequate due diligence on foreign correspondent bank customers and failed to file Suspicious Activity Reports (‘SARs’) related to its remote deposit capture/international cash letter instrument activity in a timely manner.”

Nevertheless, as with other criminogenic banks such as JPMorgan Chase, similarly hit with an equally toothless Consent Order by the Office of the Comptroller of the Currency in January, in their infinite wisdom the Federal Reserve averred that their Citigroup action was issued “without this Order constituting an admission or denial by Citigroup of any allegation made or implied by the Board of Governors in connection with this matter, and solely for the purpose of settling this matter without a formal proceeding being filed and without the necessity for protracted or extended hearings or testimony.”

In other words, let’s sweep this under the rug as quickly as possible and move on. But before we do, let’s step back for a moment and wrap our heads around a few salient facts.

Here’s a bank with a documented history as the GAO revealed in 1998, of laundering drug money for well-placed Juárez and Gulf Cartel crony Raúl Salinas de Gortari, the brother of former Mexican president Carlos Salinas, charged with amassing a multimillion dollar fortune from narcotics rackets and then squirreling it away in London, Switzerland and the Cayman Islands.

Does this evoke any memories?

According to GAO investigators, “Mr. Salinas was able to transfer $90 million to $100 million between 1992 and 1994 by using a private banking relationship formed by Citibank New York in 1992. The funds were transferred through Citibank Mexico and Citibank New York to private banking investment accounts in Citibank London and Citibank Switzerland.”

Beginning in 1992, Citibank “assisted Mr. Salinas with these transfers and effectively disguised the funds’ source and destination, thus breaking the funds’ paper trail.” And they did so by creating “an offshore private investment company named Trocca, to hold Mr. Salinas’s assets, through Cititrust (Cayman) and investment accounts in Citibank London and Citibank Switzerland,” and then failed to “prepare a financial profile on him or request a waiver for the profile, as required by then Citibank know your customer policy.”

Keep in mind that when Swiss prosecutors completed their money laundering investigation, The New York Times disclosed that “Swiss police investigators have concluded that a brother of former President Carlos Salinas de Gortari played a central role in Mexico’s cocaine trade, raking in huge bribes to protect the flow of drugs into the United States.”

That Swiss report stated, “When Carlos Salinas de Gortari became President of Mexico in 1988, Raúl Salinas de Gortari assumed control over practically all drug shipments through Mexico. Through his influence and bribes paid with drug money, officials of the army and the police supported and protected the flourishing drug business.”

Does the name of former Banamex CEO Roberto Hernández ring any bells?

Described as “the single biggest winner” of Mexican bank privatizations engineered by the Bush and Clinton regimes during the 1990s as Narco News disclosed, a subsequent investigation revealed that “Hernández had been accused–publicly and via a criminal complaint–by the daily newspaper Por Esto! of trafficking tons of Colombian cocaine through his Caribbean costa properties on that peninsula since 1997.”

And when Citigroup acquired Banamex in 2001 for the then-princely sum of $12.5 billion (£8.27bn), it was described as the largest US-Mexican corporate merger in history. Should it surprise us that this Citi subsidiary was named alongside parent Citigroup by the OCC and Federal Reserve for repeated failures to adequately police dirty money flowing into their coffers?

Members of the House Financial Services Committee should examine why they would turn over the legislative process to a criminal financial cartel!

As Times’ journalists Eric Lipton and Ben Protess reported, “Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)”

Proving yet again, that Washington lawmakers are beholden to their Wall Street masters, MapLight, a nonpartisan research group that “reveals money’s influence on politics in the US Congress,” disclosed that legislators “serving” on the House Financial Services Committee “approved six bills that would roll back pieces of the Dodd-Frank Act designed to improve regulation of the derivatives market.”

Lawmakers who voted “yes” on HR 992, the Orwellian-named Swaps Regulatory Improvement Act, “received, on average, 2.6 times more money from top banks than committee members” who voted “no.” MapLight further disclosed that lawmakers who voted “yes” on this pernicious piece of legislative detritus “received, on average, 3 times more money from the Finance, Insurance, and Real Estate (FIRE) sector,” than committee members who voted “no.”

The $700 trillion derivatives market, 93.2 percent of which is controlled by the four largest too-big-to-fail-and-jail US banks, Bank of America, Goldman Sachs, JPMorgan Chase and Citigroup, is a cash cow and shadow market for crooked financial insiders. HR 992, which rolled-back a key provision of 2010’s anemic Dodd-Frank financial “reform” legislation, Sec. 716, would have required banks to spin off their derivatives activities into separate units that would not have access to federal bank subsidies, i.e., taxpayer bailouts.

“In recent weeks, the Times reported, “Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night, corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill championed by Citigroup.”

Responding to questions, Financial Services Committee member Jim Himes, a former Goldman Sachs banker, third-term Connecticut Democrat and one of the top recipients of Wall Street largess to the tune of $194,500 according to OpenSecrets told the Times:

“It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption. It’s unfortunately the world we live in.”

No Mr. Himes, it’s the world you live in.

While your colleague across the aisle, Stephen Fincher (R-TN), cites Bible verses to justify gutting federal nutritional assistance to 47 million hungry Americans while being the “the second largest recipient of farm subsidies in the United States Congress” according to Forbes, and received some $3.48 million (£2.3m) since 1999 in USDA farm subsidies while doing the “Lord’s work” according to the Environmental Working Group, the US Congress, including “liberal” Obama Democrats have promoted every filthy piece of legislation that facilitates Wall Street’s plundering of the American people.

Referencing the recent vote on HR 992, the Center for Responsive Politics reported that in the first quarter of 2013, members of the Financial Services Committee “received more than $1.3 million in donations to their campaigns and leadership PACs from the securities and investment industry and commercial banks.”

According to OpenSecrets, “By far the largest source of cash from the two industries was the Investment Company Institute, a trade association representing Wall Street firms. The ICI gave at least $129,000 to members of the House Financial Services Committee. Other trade groups representing banks and investment firms, including the American Bankers Association and the Independent Community Bankers of America, were also major contributors.”

OpenSecrets reported that “Banking industry companies increased their contributions in 2013 to $640,286, from $497,169 in early 2011. Citigroup, in particular, jumped from $19,500 in donations to committee members to $39,500. UBS went from $64,250 to $88,000. Wells Fargo also opened its checkbook a little wider this year, giving $80,000, compared with $31,250 in 2011.”

Commenting on this latest gift to Wall Street criminals, the World Socialist Web Site observed: “Flush with the $85 billion in cash printed up and handed to the banks every month by the Federal Reserve, business at the Wall Street casino is booming. Stock values are at record levels and so are bank profits, amidst declining wages and mass poverty.”

“Under these conditions,” Marxist critic Andre Damon averred, “the banks have been pushing to rip up even the very modest restrictions on financial speculation, while broadening the scope of government bailout laws. The aim is simple: to give banks the maximum ability to speculate without constraint, while getting the maximum possible government assistance if and when the bubble collapses.”

None of this should surprise anyone who has paid the least attention to the cronyism and financial parasitism of the Obama regime.

From get-out-of-jail-free-cards passed out to drug money laundering banks by Eric Holder’s Justice Department, to the appointments of Citigroup alumnus and Cayman Islands tax-dodger Jacob Lew as Treasury Secretary, Debevoise & Plimpton partner Mary Jo White over at the Securities and Exchange Commission to the nomination of billionaire Hyatt Hotel heiress, subprime mortgage “pioneer” and union-buster Penny Pritzker to lead the Commerce Department, it’s a bankster world, all the time.

How’s that for Hope and Change™!

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, an independent research and media group of writers, scholars, journalists and activists based in Montreal, he is a Contributing Editor with Cyrano’s Journal Today. His articles can be read on Dissident Voice, Pacific Free Press, Uncommon Thought Journal, and the whistleblowing website WikiLeaks. He is the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press and has contributed to the new book from Global Research, The Global Economic Crisis: The Great Depression of the XXI Century.

via Bankster’s Paradise: Obama Allowing the Foxes Write the Rules – Pacific Free Press | Pacific Free Press.

What bankers don’t know


Obama-Democrats-Bank-Patrol-SC

What I am concerned with, is what hard working bankers really didn’t know, when with hindsight, we can see it was astounding that they didn’t know. Because that points the finger at the whole system. To gaol a few of the more flagrantly repulsive bankers, while invigorating, leaves the system untouched. It allows the guilty-but-uncaught to heave a sigh of relief and be able to talk of ‘a few bad apples’ and ‘lessons learned’ and ‘by the way, where’s my bonus?’

I want to look at the  truely breath-taking extent of what bankers really didn’t know and show that the banking system itself ,was and still is so genetically malformed that not only is it a breeding ground for the cancerously corrupt, the vicious, the venal and  the morally stunted, but that the system itself, in its entirity, would have collapsed even without them. The problem is not the corruption of a good system but the flourishing of a thoroughly bad one.

The Stupidity that was.

Let’s start with some of the most astonishingly stupid things that were done in the early days of the bank crisis:

2007 (October) Royal Bank of Scotland (RBS) bought a very large part of Dutch banking giant, ABN Ambro for an eye-watering £49 billion.

2007 (October) German bank HypoReal Estate bought another German Bank Depfa for €2 billion ABOVE what even Depfa itself thought  it was worth (personal communication from a former Depfa director).

2008 (July) Bank of America (BoA) bought CountryWide Financial.

2008 (Sept) Bank of America (BoA) bought Merrill Lynch

2009 (May) Commerzbank bought Dresdner Bank.

There are many others of course, but these are the recent ones, which were clearly commercial decisions and not, like the 2009 Lloyds Bank purchse of  HBOS (Halifax/Bank of Scotland) or the ‘rescue’ of Bear Sterns, a government backed TBTF operation.

Each and everyone of these deals ended in bankruptcy and a vast public bail-out. How could they have been so stupid? Let’s ask them.

Here is an email (taken from p. 197 of the Consolidated Class Action filed in NY District Court against Citi) sent on 3rd March 2007 from a senior Bear Stearns Fund Manager Ralph Cioffi to his fellow Fund Manager Matt Tannin.

“…the worry for me is that subprime losses will be far worse than anything people have modeled”

Yet four days later on the 7th March Mr Cioffi wrote to another colleague,

Matt [Tannin – Cioffi’s fellow Fund Manager at Bear Stearns] said it’s either a meltdown or the greatest buying opportunity ever.

And there you have it. In 2007 Matt Tannin, senior Hedge Fund Manager at one of Wall Street’s oldest banks, Bear Stearns, didn’t know if it was going to be a meltdown or the greatest buying opportunity ever. And this is despite the fact that Tannin and Cioffi and everyone on Wall Street, had already had a couple of years worth of clear evidence that asset values were collapsing and the securities based on those valuations were becoming unsellable. Don’t take my word for it, you can read page after page of first hand testimony from the dealers and senior executives themselves, in every section of the financial industry, in the Class Action linked above.

Thus this isn’t the corruption of a good system by a few crooks. This is clever, though probably morally stunted people, hard at work in an utterly dysfunctional and destructive system. The same system we still have. No matter what evidence was piling up the priests of global finance just could not believe it was all a disaster or that there was anything fundamentally wrong with what they were doing or the system in which they were doing it. They just could not see that it could be anything more serious than a massive market ‘correction’ in which case there would be equally massive rewards for those greedy enough to take the gamble. As late as 2009 RBS, BoA, Commerzbank and Hypo Real Estate all still thought it was the perfect moment to borrow tens of billions in order to buy hundreds of billions worth of another banks’ loans, assets and libilities.

But back to Mr Cioffi who has more to teach us. By 23rd March 2007 Mr Cioffi had come to a personal conclusion and started to move his own money ($2 million) OUT of the funds he was managing. By 19th April, Bear Stearns had commissioned and received a report on its CDO Sub-Prime holdings.  Matt Tannin emailed Ralph Cioffi and said,

…the subprime market looks pretty damn ugly… If we believe the [CDOs report is] ANYWHERE CLOSE to accurate I think we should close the funds now.  (My emphasis)

But he and Mr Tannin did not close those funds nor advise investors to get their money out. To the contrary, in a conference  call to the fund’s clients Mr Cioffi said,

”there’s no basis for thinking this is one big disaster,”

Sadly it was for the investors who listened to him. Those people stayed in until the funds imploded as did the entire bank shortly after. Matt and Ralph were charged with fraud by the SEC and taken to Federal Court. Where they were aquitted.

Why were they aquitted? Were the jurers knobbled? I don’t think so. One of the jurors Serphaine Stimpson, said afterwards,

“They were scapegoats for Wall Street.”

I think Ms Stimpson was correct. Cioffi and Tannin were revolting creatures who protected themselves from a looming disaster but ‘honestly’ (On Wall Street it’s a relative term)  couldn’t bring themselves to believe that the entire Wall Street, global financial edifice was a suppurating pustule. They also knew full well that if they advised clients to get out and closed their funds it would reveal the truth and that in turn would unleash panic. So they didn’t.

They no doubt felt that while there would be a disaster for some, there would still be money to be made for a few of the, luckier or ‘smarter’, ones. I suspect they would still count themselves as among the ‘smarter’ and acted accordingly.

What’s more, no matter how massive the losses that would be inflicted, I suspect our loathsome twosome also thought there had to be someone who had to take the risks and suffer the losses, in order that the system itself be preserved to profit another day. Only they wanted to make sure that that ‘someone’ was not them personally. On this, the rest of the Global Financial class agreed with them. Today, five years in to the cataclysm, it is clear that that ‘someone’ was only ever going to be you and me. Someone had to be frogmarched up to ‘save’ the system but it was never going to be the wealthy. Those senior bond holders are oh so sacrosanct. Whereas depositors, well they can be bailed in can’t they.

I have dredged Mr Cioffi and Mr Tannin back into the light not simply to pour more scorn on them but to make it clear they were not unusual. They were not guilty of anything that the whole of the global financial system was not guilty of. The larger point about them is not their personal repulsiveness but their averageness. They were two Mr Normals in the workings of the financial and banking system. They did nothing ‘wrong’, nor even unusual. They were not rogue traders. What was wrong is the normal working of the system.

The wider picture.

Let’s go back to that roll call of takeovers. What we need to keep firmly in mind is that these takeovers were done by people who were earning millions and who insisted they were so clever, so ‘smart’ they were worth every penny and cent. They did what they did at their own pace with no constraints or outside pressures.

What this means in practice is that all the buyers, RBS, Hypo. BoA and Commerzbank had full and unfettered access to all the information they needed to understand fully what they were going to buy. For example when Hypo bought Depfa I know from a someone who was at board level at the time, that a special room was created which contained all the information DEPFA had. The books were open for scrutiny. Hypo executives had full and unfettered access. There were experts on hand to answer any question. I wrote about it in the second part of ‘Ireland was Germany’s Off-shore Tart.’

And yet, they paid €2 billion over the odds and it led very quickly to the absolutely titanic collapse of both and a bail out of Hypo to the tune of something in the region of €180B.

I have talked of Depfa because I have been told what happened by someone who was involved. But the same, or something very similar,  would have happened in all the takeovers. It is required by law. It is Due Diligence. You cannot spend share holders money without being able to tell them you know what it is you are buying. Thus we know that Commerzbank executives looked at the opened books of Dresdner. That RBS experts looked closely at ABM Ambro’s assets and loans and came to the highly paid view that this was worth spending £49 billion on, and that BoA top brass pored over the inner most secrets of Merrrill Lynch and CountryWide. To suggest anything less would be to accuse them of dereliction of their duty, of something very near to fraud, and that would be libelous would it not?  And yet each and every one of these deals ended in disaster on a global scale.

So where does this leave us? To my mind there are only two possible scenarios. Either DEPFA, ABN Ambro, Merrill, Dresdner and Countrwide executives all lied and concealed and thus all the information Hypo and the other buyers were seeing was a pack of lies, in which case the Hypo et al bankers did their jobs but were misled by crooks. Or, Depfa and the other sellers did faithfully lay bare the truth but the buyer bankers were either too stupid to see or did not care. You tell me is there a third, happier scenario I am missing? I know many banks log on and read this blog so one of you write in and tell us what the third, missing scenario is. Write to me confidentially. I really would like to know if I am missing the obvious.

But before anyone suggests that everything was honestly revealed by the sellers and all competently understood by the buyers, but that both were foxed by unforseen events which so changed cirumstances that a few deals did go bad – before you try to tell us anything like that – please refer back to the Tannin and Cioffi emails above and in fact to the rest of the evidence in the Citi indictment. Events were certainly NOT unforeseen. And please also remember that it wasn’t just a few deals that went bad, it was in many cases 100% of whole groups of securities and thousands of deals which went bad and turned out not to be anything at all like they were supposed to be -as the paperwork claimed they were. Citi lied. It’s there in the indictment. So did Merrill. So did all of them.

So am I saying it was all the sellers fault? No I am not. We cannot know that for sure in every case. We only know it for sure in some cases. In the rest we don’t know who was more to blame buyers or sellers. But it doesn’t matter does it? That is the point. Stand back and what do we have? Either we have banks full of bankers who are corrupt liars or we have banks full of the slow witted and guillible who do not understand the financial deals it is their job to understand…or both. Either way we are left with an industry that  did not and – unless everything has magically improved – cannot and will not do its job. We have a financial system which in very important ways, critical ways, is staffed and run by people who, whether by criminal and moral  degeneracy or simple stupidity, are not fit for their jobs.

It seems a terribly sweeping statement I know. But run back over how we got here and tell me where we, I, went wrong.  Unless you can find the place we lost the thread, then what else can we conclude other than that we have a banking system which is not fit for purpose? Or perhaps I should say, is not fit for the purpose we were expecting. It does leave the possible conclusion that our bankers and regulators are all very fit for purpose it ‘s just a rather different purpose from the one we expected.

What one banker didn’t know.

Before I conclude, I want to return from the general to the specific. Let us hear from another insider, this time the Chief Risk Officer of Bank of America during the time it was buying Merrill and CountryWide. Please welcome Amy Woods Brinkley. She was once considered one of the 25 most powerful women in banking (according to US Banker magazine).

BoA bought CountryWide in July 2008 and Merrill Lynch in Spetember 2008. In Late September 2008 just as the ink of both deals was about dry, Amy Woods Brinkly gave an extensive interview to Forbes Magazine. In it she was asked why BoA bought Countrywide.  She replied,

Our company did very extensive due diligence. I’ve been involved in a lot of our acquisitions and I don’t recall one that was more thorough. During that process I became increasingly comfortable; the problems at Countrywide were real, but they were also manageable.

Forbes pressed the point asking surely she was worried about the estimates of the write downs on Countrywide assets which were already being talked about as being between $8 -$30 billion. I should also mention that in March 2008, five months before BoA bought it, The FBI announced it was investigating CountryWide for fraud on mortgages and home loans. It didn’t stop BoA going ahead and buying, but presumably it did make them even more diligent.  Ms Brinkley’s reply –

As we said a number of times, we did very extensive due diligence on the transaction, not only before signing but going back in before closing the transaction, and we believe the economics made sense and the market-share opportunity is worth the risk…So again, just before closing the transaction we revisited the economics and we are comfortable with what they tell us.

Brinkley was rated by her peers as one of the best. Was she lied to? Were the lies so clever, so convoluted that she just missed them – all the many thousands of them? Or was she actually quite a stupid person seen as a genius by other fairly thick people? Or were they all, collectively, so cock-sure of themselves and the system which had made them rich and powerful, that none of them could see clearly any more? I think it is this last explanation which rings true. I am sure lies were told. We know from court documents and extensive anaysis of thousands of deals which were done and sold in the bubble years, that there was systemic fraud. What we don’t know is if everyone could see it was fraud or if they all had become captured by an ideology which said fraud is just ‘good’ business.

It’s worth bearing in mind that however senior and clever Ms Brinkley was, she was not the only one who was responsible for vetting the deal and doing the due diligence. Every deal has ranks of lawyers and experts who are handsomely paid to pour over the details and make sure the deal is sound. In the case of BoA and CountryWide the Washington DC law firm K&L Gates advised. Just as in the Depfa/Hypo case Goldmand advised.

However, it was Ms Brinkley who was thrown under the bus. She lost her job. She was replaced by Mr Greg Curl who had been the senior deal maker for the  Merrill deal. The Merrill deal has cost BoA $30B and counting. He too has now left the bank though he’s still in finance.

Today.

Is this all history? No it’s not. Most of the people who lied and/or “didn’t know” back then are still in the financial system, still lying to us, the regulators or themselves. Just this week one of the only really ethical banks in the UK the Co-operative Bank has had to come clean about the scale of losses it inherited when it bought the Britiannia Building society (at the time the second largest in the UK) …in April 2009.

I may be biased, I bank with the Co-operative, but I don’t think they are a fraudulent organization. I think they really do operate more ethically than most. Possibly running second, among UK banks, only to Triodos bank. But the fact is the Cooperative bought Britannia at the height of the crisis after doing its due diligence. And yet the losses the Cooperative bankers didn’t see are so large the Coop bank has found its debt downgraded to junk.

I suggest, if you are willing to consider that the Co-operative bank and its bankers are a little more honest than most, that this indicates that it is the system itself, the origination of loans, how they are structured, how securitization works, how bankers are trained, how complex the financial products and deals are, that is the problem. Beyond even corruption, of which there is no shortage, the system itself is crap. It is not fit for any positive social purpose. It enriches the few while systematically endangering and then impoverishing the many. It concentrates power in a few hands who then insist that democratic power should be taken out of the hands of the many and given instead to technocrats drawn from the ranks of the few.

In conclusion.

Our financial system would have collapsed simply because IT DOESN’T WORK, not as an open and equitable system. Sure it makes profits… for some.  But so does riding around in a Mongol Hoard sacking cities. The present financial system is NOT a fair and open system where by dint of hard work, insight, research and expertese anyone can have a reasonable chance of prospering. It has not and will not NOT work as a repository for hard earned savings and pensions. Both are being systemaitcally pillaged for the ‘good’ of the major banks.

Whether one believes the capitalist system is a good thing or not, or even a potentially good thing, what we can perhaps all agree on is that it – our financial system – is NOT at the moment good for the many, and will not be in the future, if left in the hands of the repulsive elite who presently run it, defend it, facilitate it and profit by it.

via What bankers don’t know » Golem XIV – Thoughts.

Bush Versus Obama: Who’s Worse?


Obama Names Top Fundraisers to Major Political Posts

Last week, the Obama administration announced its choice to lead the Federal Communications Commission: Tom Wheeler, who is not only a former telecom lobbyist but also a huge bundler for the Obama campaign. The New York Times Editorial Page today explains that this choice is “raising serious questions about [Obama’s] 2007 pledge that corporate lobbyists would not finance his campaign or run his administration.” It also notes that “given his background, it is almost certain that [Wheeler] raised money [for Obama] from people whose companies he would regulate, creating potential conflicts of interest.”

Last week, President Obama named another big bundler of his, the billionaire heiress Penny Pritzker, to be his Commerce Secretary; at the Nation, Rick Perlstein details just some of the interesting questions about that choice that need to be explored. At this point, the only surprising thing is that there are any more bundlers left for Obama to appoint to important administration positions.

While despicable, this is nothing new.

The Center for Public Integrity reported in 2011 that Obama had rewarded as many big money bundlers in 2 years as Bush had appointed in 8:

Source: Public Citizen, iWatchNews analysis. Graphic: Jeremy Borden/iWatch News.

The Center wrote:

As a candidate, Obama spoke passionately about diminishing the clout of moneyed interests and making the White House more accessible to everyday Americans. In kicking off his presidential run on Feb. 10, 2007, he blasted “the cynics, the lobbyists, the special interests,” who he said had “turned our government into a game only they can afford to play.”

***

[But:]

• Overall, 184 of 556, or about one-third, of Obama bundlers or their spouses joined the administration in some role. But the percentages are much higher for the big-dollar bundlers. Nearly 80 percent of those who collected more than $500,000 for Obama took “key administration posts,” as defined by the White House. More than half the ambassador nominees who were bundlers raised more than half a million.

• The big bundlers had broad access to the White House for meetings with top administration officials and glitzy social events. In all, campaign bundlers and their family members account for more than 3,000 White House meetings and visits. Half of them raised $200,000 or more.

• Some Obama bundlers have ties to companies that stand to gain financially from the president’s policy agenda, particularly in clean energy and telecommunications, and some already have done so. Level 3 Communications, for instance, snared $13.8 million in stimulus money. At least 18 other bundlers have ties to businesses poised to profit from government spending to promote clean energy, telecommunications and other key administration priorities.

***

Bundling is controversial because it permits campaigns to skirt individual contribution limits of $2,500 in federal elections. Bundlers pool donations from fundraising networks and as a result “play an enormous role in determining the success of political campaigns,” according to Public Citizen. The group has tracked bundlers on a website http://www.whitehouseforsale.org in the belief that they are “apt to receive preferential treatment if their candidate wins.”

***

Ambassadorships have been the classic payoff for big bundlers. But it’s not just the posts in foreign capitals that are attractive. Light, the NYU expert on presidential transitions, said that in recent years many have sought jobs with deep reach into the federal bureaucracy — and found a receptive ear in the White House.

“When they get a resume from a bundler, that is a real signal of seriousness,” Light said. “It’s also a thinly veiled quid pro quo,” and it “goes without saying they will get considered.”

Bringing in a lot of cash to the campaign, Light added, “seems to be well established as a signaling device for getting into key jobs running the government. It’s become more significant and nobody seems to have much outrage about it.”

***

Passing over career diplomats in favor of mega-donors amounts to “selling ambassadorships,” said Susan Johnson, president of the American Foreign Service Association. She said it runs contrary to the law and is unethical, yet, “That hasn’t stopped anybody.”

Thomas Pickering, who served as ambassador to Russia and several other countries during a diplomatic career spanning four decades, said turning to bundlers adds a “new dimension” to what he termed “buying offices” through aggressive fundraising.

***

Hyatt hotels heiress Penny Pritzker, Wall Street titan Robert Wolf and financier Mark Gallogly, for instance, all served on the President’s Economic Recovery Advisory Commission.

***

In late February, in creating a new commission to take on the task of creating jobs, Obama again appointed the three businesspeople.  Transcripts of the recovery board meetings show that commission members are free to press for an agenda that could significantly benefit their business interests.

The Center pointed out in 2012:

At least 68 of 350 Obama bundlers for the 2012 election or their spouses have served in the administration, ranging from seats on advisory boards that tackle critical national issues such as economic growth, to ceremonial posts such as serving on the board of the John F. Kennedy Center for the Performing Arts.

At least 250 of the bundlers have been cleared to attend a White House event since January 2009. Most have come twice while others are frequent visitors. The events range from policy briefings to coveted invitations to state dinners and music and entertainment nights featuring top-draw performers at the executive mansion.

At least 30 of the 2012 bundlers have ties to companies that conduct business with federal agencies or hope to do so. They range from Wall Street investors to green energy, technology and defense firms with multimillion-dollar government contracts.

***

Bundlers have been cleared for more than 5,000 visits to the White House from January 2009 through August 2011, according to visitor logs.

***

Boyle of Common Cause said that wealthy bundlers can amass political clout and use it to “further enrich themselves, and their circle of friends and business acquaintances.”

“Money buys access and influence and that’s the big problem,” she said. “Those who don’t have it are left out in the cold. That’s not how our democracy is supposed to work, and it must change.”

That’s not likely, according to Tufts political science professor Berry.

Asked if a Republican presidential challenger would end the practice should he win the office next year, Berry said: “It would be shocking if they decided not to try to reward their most loyal fundraisers. It would make no sense.”

Of course, Obama’s top donors in the 2008 election included:

Goldman Sachs

JP Morgan Chase

Citigroup

General Electric

Morgan Stanley

Goldman Sachs folks held so many top jobs in the Obama administration in his first term that everyone called the cozy relationship “Government Sachs”.

Obama appointed GE chairman Jeffrey Immelt as his jobs czar.

And of course, Obama rewarded his big contributors with tidal waves of government money.

Bush was a horrible crony nepotist, who favored the super-elite at the expense of the little guy.

Obama’s worse.

via Bush Versus Obama: Who’s Worse? | Global Research.

via Bush Versus Obama: Who’s Worse? | Global Research.

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

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.

=========================================================================

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.

================================================================================

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.
==============================================================================
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.

============================================================================
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.

================================================================================

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.

==============================================================================

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.

=================================================================================

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.

==============================================================

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

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

Who pays the real costs for oil from shale?


If you externalize the costs of a business activity, it means other people pay the costs—environmental, social and otherwise—and you get the profits. It goes on all the time in extractive industries such as oil and natural gas and mining. And, it is also a natural strategy for manufacturers who dump their pollution into the air and the water.

It’s even practiced in finance where the executives of Wall Street banks have managed to collect the bonuses made off a phony boom in the last decade and saddle taxpayers with the losses of the inevitable bust caused by bad and often fraudulent loans, misleading derivative contracts, and leveraged speculation in stocks and commodities.

If the loopholes are there, you can be assured that people in business will take advantages of them. That’s exactly what is happening in the business of shale gas drilling. Drillers are exempt from federal clean air and water regulations under a bill shepherded through Congress in 2005 by none other former Halliburton CEO Dick Cheney in his capacity as the then vice president of the United States. (Halliburton is one of the world’s largest providers of drilling fluids for shale gas drilling and other oil and gas drilling operations.)

That means the drillers can externalize the environmental costs of these hazardous fluids and other materials needed to fracture the shale and thereby free the natural gas. They can foist those costs on nearby residents in the form of ruined water supplies, toxic air pollution, poisoned land, and health problems for humans and animals.

The environmental and health horrors associated with shale gas drilling are now in the news on a daily basis. But I have begun to think about the issue in another way. All of these externalized costs have an energy cost. And, the toxic fracturing fluid—millions of gallons of which are pumped into each and every shale gas well—will stretch out the time frame during which such costs are borne.

No one knows what will happen to the half of that fluid which never returns to the surface during operations. There is concern that it could migrate to drinking water aquifers and destroy the drinking water not just for the few who happen to live near a drilling site, but for people living in huge swaths of the United States by polluting water sources for large cities such as New York.

Now, of course, that water could be cleaned up if it becomes toxic. Already shale gas drillers are having to provide filtering systems for people whose well water has become contaminated. In some cases, even this isn’t enough, and water must now be trucked in to families whose water is no longer fit to drink even with filtering.

In order to judge whether shale gas will provide any net energy to society, we must first decide where to set its system boundaries. It is hard to know exactly where to stop spatially: Should we, for example, include the energy needs of a family dependent on a worker at a subcontractor that provides software services to the driller? But, it is even harder to know what time frame to use.

One thing is certain. The legacy energy costs of doing shale gas drilling will not disappear anytime soon. The country and its people could be paying the externalized costs of such drilling decades after it ceases to provide any material benefit to society.

If New York city is forced to expend considerable energy to purify its water to clean out toxic chemicals leaching from wells in its watershed 50 years from now, how shall we then judge the presumed bounty of energy that shale gas supposedly represents?

The same kinds of questions have been raised about nuclear energy. If one takes into account the entire energy cost over time of building, operating, decommissioning, and then protecting decommissioned plants and their wastes—wastes that will remain dangerous for conceivably tens of thousands of years—it is possible to understand why some people claim that nuclear energy provides no net energy to society. Rather, it burdens future generations with huge legacy energy costs. We who are alive today get to externalize the energy costs of nuclear power by foisting them on future generations. This is probably the only way that one can consider nuclear power—as it is currently configured—an energy source rather than an energy sink.

I believe we may ultimately find that shale gas is nothing but an energy sink. It will provide net energy for a while to those who are living now while burdening future generations with huge cleanup costs that, in terms of energy, may equal or exceed the energy gain we are currently receiving from this supposedly “clean” energy source.

via Who pays the real costs for oil from shale? : Climate & Capitalism.

via Who pays the real costs for oil from shale? : Climate & Capitalism.

How Goldman Sachs is Manipulating Gold Prices :


David Zeiler writes: If you want a lesson on how to manipulate gold prices, you need only look at what Goldman Sachs Group Inc. (NYSE: GS) has been doing over the past few months.

Goldman set the table by predicting a turn in gold prices back in December 2012, which no doubt contributed to the precious metal’s 5% decline in the first two months of the year.

At the end of February, Goldman issued a research report that said the big Wall Street bank had soured on the yellow metal, and dropped its three-month target for gold prices from $1,825 an ounce to $1,615, its six-month forecast from $1,805 to $1,600, and its one-year outlook from $1,800 to $1,550.

Then, just yesterday (Wednesday), Goldman doubled down on its negative outlook for gold prices.

The bank’s new targets for gold prices are $1,530 in three months, $1,490 in six months and $1,390 in one year.

The double whammy – two downgrades in two months – had its intended effect, as gold prices fell 2%, to $1,558.80, after Goldman released its report. It was the biggest single-day percentage drop for gold in nearly six months.

“If you’ve ever suspected gold prices are being manipulated, you’re not alone – and you’re right, they are,” said Money Morning Chief Investment Strategist Keith Fitz-Gerald.

The proof is right in front of us.

How Goldman Uses its Forecasts to Manipulate Gold Prices

In addition to the lower targets, Goldman’s reports spell out why the bank thinks gold prices will decline, which are at least as important in the price manipulation strategy as the targets themselves.

Here’s what Goldman said in its February report:

“The decline in prices since last fall and our updated forecast [emphasis ours] suggests that the turn in the gold price cycle is likely already underway. As a result, although our U.S. economic forecasts point to modest near-term upside to gold prices, we believe that a sharp recovery in prices to our previous price forecast is unlikely.”

Goldman brazenly cites its own forecast as part of the evidence that the downward move in gold prices is happening. In other words, they’re practically bragging about their manipulation of gold prices.

Then Goldman applies a Jedi mind-control technique to remedy the inherent contradiction in its forecasts for the U.S. economy and its targets for gold prices: “These are not the forecasts you are looking for.”

Yesterday’s report again advised investors to ignore economic realities and trust in Goldman instead.

“Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning,” Goldman said in its research note.

Meanwhile, Fitz-Gerald said, the reasons gold is more likely to rise than fall – central bank money printing, central bank gold-buying, slowing production at gold mines, more Euro-zone troubles – haven’t changed.

How Goldman’s Gold Price Manipulation Works

The purpose behind all this, Fitz-Gerald explained, is to “get the weak money out, so they can accumulate more gold themselves.”

In fact, this is a widely used Wall Street strategy that dates back at least to the 1920s.

For that matter, there’s plenty of evidence Goldman uses this strategy to manipulate stocks and other commodities all the time.

Here’s how it’s done.

Often, the big banks are making subtle trades to help push the commodity – be it gold, a stock or anything else in the markets – in the direction they want it to go.

Issuing reports helps the cause by getting the media to transmit and amplify the message manipulators like Goldman are trying to send.

“Bigger firms like JPMorgan, Goldman Sachs, PIMCO or any of a dozen other behemoths simply release a “research report’ that is interpreted as gospel by the mainstream media and swallowed hook, line and sinker by millions of unsuspecting investors as a reason to buy or sell,” Fitz-Gerald said.

For example, the MarketWatch headline on its story about yesterday’s Goldman downgrades of gold prices proclaimed, “Another blow to gold – Goldman Sachs slashes 2013, 2014 forecast.”

That story noted that Deutsche Bank AG (NYSE: DB) also had lowered its forecast for gold prices just the day before.

In short, investors need to pay close attention to what the big banks say about stocks and commodities, because very often they are betting in the opposite direction. If you fall for the misinformation, you’ll end up on the wrong side of the trade – losing money while Wall Street operators like Goldman reap the big profits.

How to Deal With the Market Manipulators

Fitz-Gerald advised investors not to get frustrated and angry about Wall Street manipulation of stocks and gold prices, but rather to try to understand what’s going on and use it for their own benefit.

“Do what Wall Street does, not what it says,” Fitz-Gerald said.

That’s not as hard as one might think, he said, noting that retail investors don’t have the pressure to move around large amounts of money every day and don’t need to worry about major moves that could tip off their strategies to other big competitors.

“You can use tactics the big boys can’t,” Fitz-Gerald said.

One thing that retail investors can do to avoid becoming a Wall Street patsy, he said, is to dollar-cost average (buy a set dollar amount of an investment at regular intervals) into things like gold and stocks.

“Dollar-cost averaging forces you to buy more when the price is low and less when the price is high,” Fitz-Gerald said. “Maybe you can’t compete with the big banks, but you can beat them at their own game.”

Source :http://moneymorning.com/2013/04/11/goldman-sachs-is-manipulating-gold-prices-right-before-your-eyes/

Money Morning/The Money Map Report

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via How Goldman Sachs is Manipulating Gold Prices :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website.

via How Goldman Sachs is Manipulating Gold Prices :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website.

Goldman Sachs Guy, Stephen Friedman…Conflicts of Interest


From Wikipedia we find this information about Stephen Friedman and his conflicts of interest:

‘During a period of immense financial market upheaval and Government bailouts of banks and financial insurance companies, Friedman was Chairman of the New York Federal Reserve Board (which implements the Federal Reserve’s Wall Street policies) while simultaneously serving Goldman Sachs (a company impacted by the quasi Governmental policies of the Federal Reserve) as a Board Director. The AIG bailout, an historically large controversial bailout, directly benefitted Goldman Sachs who had one of the largest counterparty claims against AIG. On May 7, 2009 Friedman resigned as Chairman of the Federal Reserve Bank of New York in response to criticism of his December 2008 purchase of $3 million of stock in Goldman Sachs.[2] Friedman, who remains a member of Goldman Sachs’ board, came into violation of Federal Reserve policy when Goldman was converted to a bank holding company in September 2008, thereby placing it under the regulatory authority of the New York Fed. Friedman requested a waiver from this violation when the conversion occurred, which was granted roughly two and a half months later.[3] In his resignation letter, Friedman stated that the Fed did not need the “distraction” caused by his “public service motivated continuation on the Reserve Bank Board…being characterized as improper.”‘  (Wikipedia)

So we should not be surprised that Friedman is presently making exceptionally high compensation as a director of Goldman Sachs (and that is not the only board on which he presently serves):

via Goldman Sachs: Information, Comments, Opinions and Facts.

via Goldman Sachs: Information, Comments, Opinions and Facts.

Big Pharma: Enemies Of Humanity?


Everyone knows about the sick, depraved monsters of the Third Reich – Hitler, Himmler, Mengele and the rest. Well, there is an evil just as insidious on the planet today. It isn’t as widely known as it should be – that’s one of the reasons why it is so insidious. They are predators that are so wealthy and so devious that they are able to hide behind a veil of legality and respectability. Actually, the most treacherous aspect of this story is the fact that they are a significant part of the health industry. Yes, the HEALTH industry.

While hard-working people struggle to make ends meet and take care of their children to the best of their abilities, these traitorous criminals are amassing enormous sums of money to provide “necessary” drugs to ensure a healthy population. Or so we thought.

Now, for the multibillion dollar pharmaceutical corporations to make obscene amounts of money while actually providing life-saving drugs would be one thing. However, when an industry entrusted with people’s health actually creates a cartel and conspires to keep the masses sick to protect their profits while sucking billions of dollars out of the economy – well, that’s quite another.

Pharmaceutical corporations have morphed in recent years into something more like a criminal organization than an integral part of our healthcare system. Now, how have they been able to do this without creating a storm of maniacal rage from the public? The main reason why they – or corporations in any industry for that matter –  can get away with such ominously destructive behavior is that they are able to hide the fact that they rig the system by disseminating propaganda in a nation in which everything from elections to creative public relations is for sale.

First, they have legislation written for them by so called “industry experts” that are designed to bypass health and/or safety regulations while creating the illusion they are doing what’s best for the public (research the nefarious dealings of ALEC). Then, they purchase positions in government and put spies in place to quickly push this legislation (that they call regulation) through the normal bureaucratic process. This is possible because they have managed to increase their influence in Wall Street circles – partially due to duplicitous corporate in-breeding with the criminally insane Banking and Insurance Cartels. And, finally, because corporations have purchased virtually every media outlet in the nation they are able to indoctrinate the masses into believing their sociopathic behavior is acceptable and is aimed toward “progress”. This includes the group of corporations known collectively as Big Pharma.

For every dollar the drug companies spend on research, they spend 19 dollars on marketing. Interestingly, paid mouthpieces for the Big Pharma {like the Galen Institute, an industry-funded organization that promotes so-called “free market” policies} publically state that the drug companies have had to decrease funding for research and development due to regulation. Well, this regulation they speak of is something of a mystery to the rest of the planet. In fact, more than 80% of basic funding for new drugs and vaccines comes from public sources. Apparently, pharmaceuticals is another industry (like war) in which corporations benefit from taxpayer money while reaping a harvest of obscene profits.

A study on the pharmaceutical industry was done by Donald Light, a professor of social medicine and comparative health care at the University of Medicine & Dentistry of New Jersey, and Joel Lexchin, a professor of health policy and management at York University in Toronto. One of the facts they uncovered was that while the industry’s research and development costs have risen significantly between 1995 & 2010 (approximately $30 billion), profits have increased much more so in that same time period (over $200 billion). “Net profits after taxes consistently remain substantially higher than profits for all other fortune 500 companies”, according to the study.

Sometimes, nothing other than the concepts of justice and democracy are hurt from this greedy, manipulative behavior. Other times, however, the damage is much more deadly.

In 2010, Merck & Co. settled a lawsuit in which 3,468 people died of heart attacks and strokes associated with use of Vioxx, a painkiller they manufactured. Yes, three thousand four hundred sixty eight people. Dead. They were accused of not releasing safety data to the FDA, making innaccurate and misleading statements about the cardiovascular safety of the drug and illegally promoting “off label” uses of it. Meanwhile, they were more than happy to collect over $11 billion in sales of Vioxx from 1999 – 2004. This means that for six years a multi-billion dollar corporation spent untold amounts of money in litigation costs to avoid compensating the victims of their criminally insane greed. On top of this already sordid tale of unethical activity, another fact attests to the viciousness of this crime. Merck never admitted liability for the deaths attributed to their product. We can only imagine how many times corporations have gotten away with this type of crime without being caught.

Merck is not the only corporation in which management puts personal profit over the safety and well being of their customers. In 2012, GlaxoSmithKline pleaded guilty to extremely disturbing charges related to several of their medications. In the case of their antidepressant drug, Paxil, the company tried to promote use in children and was caught helping publish a medical journal article with misleading data from a clinical trial. One of the facts that was supressed is that there was significant evidence of suicidal thoughts in teenagers who were tested. Can’t have dead teenagers holding back profits. It might affect their value at the NYSE. With their drug, Wellbutrin, they jumped on the bandwagon of self-centered obsession with youth and physical appearance by promoting it for sexual dysfunction and weight loss. It was only designed for use as an anti-depressant. With yet another drug, Avandia, they failed to report data to the FDA about heart risks discovered during testing. Avandia is a medication for diabetes. How nice, deceive people and have them trade their diabetes for heart trouble.

Another aspect of this story of insatiable greed and lack of empathy is that overdoses of prescription sedatives and painkillers have killed more people than heroin and cocaine combined, yet are legal. Hospitalizations from poisonings attributed to these legal drugs increased 65% from 1999 to 2006. Over the same period of time, the increase of poisonings due to illegal drugs is half that rate. Some doctors consider prescription drug deaths the biggest man-made epidemic in the U.S. However, try telling law enforcement officials who listen to the propaganda put out by pharmaceutical lobbyists to arrest the pushers of prescription drugs. Jail is for the working class – not for wealthy people who live in mansions.

While Big Pharma has unscrupulously been filling their coffers with their ill-gotten gains, almost one-quarter of the U.S. population over the age of 50 has had to cut back on dosages or switch to generic brands due to price increases. Pharmaceutical corporations have had tremendous success in lobbying criminal elements inside our government to prevent Medicare and Medicaid from bargaining for affordable drug prices. In Canada, the provinces negotiate with drug companies for lower prices. This has kept prices in Canada significantly lower than in the U.S. – even when medications are imported from their southern neighbors. A recent survey among legitimate online pharmacies revealed prices in Canada ranging from 40% – 70% lower than their U.S. counterparts.

Oh, and one more thought about the lack of humanity on Wall Street: after their lawsuit was announced in 2010, Merck’s stock dropped 1% or about 33 cents per share. Is that all we value human life these days?

via Big Pharma: Enemies Of Humanity? | ashiftinconsciousness.

via Big Pharma: Enemies Of Humanity? | ashiftinconsciousness.

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