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Gary Edwards

Roubini: Citi Is Already Nationalized, Just Need To Finish The Job (C) - 0 views

www.businessinsider.com/-need-to-finish-the-job-2009-2

financial-crisis socialism obama-socialism banksters

shared by Gary Edwards on 02 Mar 09 - Cached
  • Gary Edwards on 02 Mar 09
     
    "The government has already taken over the financial system," Roubini says, noting U.S. policymakers have committed $9 trillion to rescue the financial system and already spent $2 trillion. "So let's stop the delusion about 'no nationalization.'" Economist Nouriel Roubini explains why full nationalization (as opposed to partial) is the free-market friendly way forward. Includes video interview with Roubini as well as important links. Roubini, who has publicly advocated for temporary nationalization of insolvent banks, says fully nationalizing Citigroup and/or Bank of America would have a minimal effect on the Dow, which is a price-weighted average. More importantly, he believes full nationalizations (vs. the current partial, piecemeal effort) would be better for the market and the economy because it's the first step in the process of cleaning up "bad" banks so they can later be sold back to private investors, i.e. "re-privatized", as was the case last year with IndyMac.
Gary Edwards

Why Are We So Afraid To Fix Banks The Right Way?* | Clusterstock Henry Blodgett - 0 views

clusterstock.alleyinsider.com/...aid-to-fix-banks-the-right-way

finacial-crisis

shared by Gary Edwards on 21 Jan 09 - Cached
  • a debt-equity swap
  • LIF said: Jan. 19, 3:17 PM MY PLAN 1. Mandate a 12-1 leverage cap for all financial institutions to take effect within 180 days. This 12-1 leverage cap has to be calculated using real market prices, not mark-to-model prices. 2. Temporary ban on capital raising by banks – water can’t dilute poison. You eliminate the poison first then add more water. 3. Force banks, etc to reach this 12-1 leverage cap by selling their toxic assets within 180 days via a US Govt Auction. The US Govt will be the Auctioneer but will NOT bid for assets 4. Any bank that is unable to sell sufficient assets to bring it under the 12-1 leverage cap will automatically nationalized by the US Govt at a price of $1. All shareholdrers and bond holders forfeit their assets. This will provide an incentive to the banks/financial institutions to sell these assets. 5. The US Govt will now hold all the toxic assets to maturity - this will prevent private market bidders from low-bidding in (3) above. Private market bidders in essence are being told, you buy the assets during the auction or you will not have another opportunity to buy the assets, as the US Govt will sieze them at an effective rate of ZERO and then hold them to maturity. 6. Any bank that falls under nationalization will also have its CEO, Board of Directors and members of the Management committee for the past 5-10 years disgorge all compensation earned during the past 5-10 years. 7. Create standardized CDS products that traded on an electronic exchange. All non-standard CDS products should be liquidated in the OTC market or swapped into standardized CDS products prior to the commencement of the new CDS exchange. The exchange will commence within180 days. 8. New Mortgage Financing Rules: 20-30% minimum govt mandated down payments. Strict Debt to Income limits, etc. These rules must be codified into federal law. 9. New Credit Card/Auto Finance rules: strict rules on the amount of credit card/Auto finance debt available to consumers.
  • Gary Edwards on 21 Jan 09
     
    You don't have to subsidize banks and their stakeholders at taxpayer expense to avoid another Lehman.  You just have to fix the banks the right way. What's the right way? * Temporarily seize the banks * Write their assets down to nuclear-winter levels (or, if desired, put them in a big bad bank, as Sheila Bair wants to do.) * Convert enough of their debt to equity to put them in a strong capital position. That's it.  No taxpayer money.  No citizen outrage.  No comical "Yes, we're lending" assurances when what the banks are really doing is, sensibly, hoarding everything. We could do this to Citigroup and Bank of America tomorrow afternoon, and on Wednesday morning, two of our biggest banks would be rock solid (they could also still be publicly traded, under the same ticker symbols, with different shareholders). 
Gary Edwards

States negotiating immunity for banks over foreclosures - 0 views

newsandinsight.thomsonreuters.com/...ty_for_banks_over_foreclosures

MERS financial-collapse Banksters Mortgage-fraud Liar-Loans Undocumented-mortgages

shared by Gary Edwards on 22 Jul 11 - No Cached
  • Gary Edwards on 22 Jul 11
     
    Thanks to Marbux.  Seems like nothing will stop the Banksters from seizing it all.  I think i've previously posted that when i was with Virtual Realty (VRi), we were forever trying to crack into the MERS electronic database.  Wow did the Banksters screw this one up.  Now only their corrupt sycophants in Congress and the Coursts can save them.  Not even the lap dog media will touch this. excerpt: A coalition of all 50 states' attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks. State and federal officials declined to say if any form of immunity from criminal prosecution also is under discussion. The banks involved in the talks are Bank of America, Wells Fargo, CitiGroup, JPMorgan Chase and Ally Financial. REUTERS REPORT PROMPTS LETTER Reuters reported Monday that major banks and other loan servicers have continued to file questionable documents in foreclosure cases. These include false mortgage assignments, and promissory notes with suspect or missing "endorsements," which prove ownership. The Reuters report also showed continued "robo-signing," in which lenders' employees or outside contractors churn out reams of documents without fully understanding their content. The report turned up several cases involving individuals who were publicly identified as robo-signers months ago. Reuters found that such activity has continued even after 14 major mortgage lenders signed settlements with federal bank regulators promising to halt such practices and give remediation to some homeowners who were harmed. In response to these disclosures, Sen. Robert Menendez (D-NJ), chairman of the Senate Subcommittee on Housing, Trans
Gary Edwards

GAO Audit: Fed Gave $16 Trillion in Emergency Loans to Bankster Cartel! - 0 views

www.informationclearinghouse.info/article28660.htm

Banksters GAO-Audit Federal-Reserve-Bank-Cartel Federal-debt-ceiling financial-collapse

shared by Gary Edwards on 27 Jul 11 - No Cached
  • Gary Edwards on 27 Jul 11
     
    The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank. Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion. Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows. Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012. Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion. The audit also found that the Fed mostly outsourced its lending operations to the very financial institutions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis. The GAO report recommends new policies that would eliminate such conflicts of interest, and suggests that in the future the Fed should keep better records of their emergency decision-making process.
Gary Edwards

Is This the End of Capitalism? Hardly, but it's a great excuse for the antiglobalization crowd - 0 views

online.wsj.com/...SB123862779016180329.html

financial-crisis obama-socialism reagan-capitalism G20 Banksters

shared by Gary Edwards on 05 Apr 09 - Cached
  • Gary Edwards on 05 Apr 09
     
    Daniel Henninger Says Blaming Capitalism for the Crisis Overlooks the Housing Bubble - WSJ.com: "Heads of state, perplexed finance ministers, inflated retinues and journalists from 20 nations arrived in London yesterday to address "the greatest financial crisis since the Depression." By 4 p.m. London time today they will hold a press conference and go home." "Beware of real-estate salesmen. The housing bubble that floated into view in 2007 is turning into the blob that ate the world. Real-estate mortgages and their derivative securities are a significant problem. That discrete problem, however, has been pumped up to an historic "crisis of capitalism." Capitalism didn't tank the U.S. economy. Overbuilt housing did. Overbuilt housing tanked the economies of the U.K. and Ireland and Spain. If little else, we've learned that artificially cheap housing sets loose limitless moral hazard." "In a normal environment, the problems revealed by the crisis in mortgage finance would produce fixes relevant to the problem, such as resetting the ratios of assets to capital for banks and hedge funds, or telling the gnomes of finance to rethink mark-to-market and the uptick rule. More energetic reformers might consider Gary Becker's suggestion that as financial institutions expand in size, their capital requirements tighten, so that compulsive eaters like Citigroup can fit inside their capital base." "Two signal events in history are shaping the politics of the current economic crisis: the Great Depression and the Reagan presidency (and in Europe, Thatcherism)." "The Depression put in motion an historic tension between public and private sectors over who sets a nation's course. After 50 years of public dominance, Reagan's presidency tipped the scales back toward private enterprise. The economic life of the ensuing 35 years became "the American model." Every waking hour of this economically liberal era, the losing side has wanted to tip the balance back toward public-sector
Gary Edwards

Derivatives - The $600 Trillion Time Bomb Set to Explode | InvestorPlace - 0 views

www.investorplace.com/...llion-time-bomb-set-to-explode

Banksters Derivative-time-bomb financial-collapse

shared by Gary Edwards on 19 Oct 11 - No Cached
  • The world’s gross domestic product (GDP) is only about $65 trillion, or roughly 10.83% of the worldwide value of the global derivatives market, according to The Economist. So there is literally not enough money on the planet to backstop the banks trading these things if they run into trouble.
  • Gary Edwards on 19 Oct 11
     
    Pay Attention Alert!  This is why the Banksters are hoarding cash and not lending ...... excerpt:  Do you want to know the real reason banks aren't lending and the PIIGS have control of the barnyard in Europe? It's because risk in the $600 trillion derivatives market isn't evening out. To the contrary, it's growing increasingly concentrated among a select few banks, especially here in the United States. In 2009, five banks held 80% of derivatives in America. Now, just four banks hold a staggering 95.9% of U.S. derivatives, according to a recent report from the Office of the Currency Comptroller. The four banks in question are JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS). Derivatives played a crucial role in bringing down the global economy, so you would think that the world's top policymakers would have reined these things in by now - but they haven't. Instead of attacking the problem, regulators have let it spiral out of control, and the result is a $600 trillion time bomb called the derivatives market.
Paul Merrell

Wall Street's Win on Swaps Rule Shows Washington Resurgence - Bloomberg - 0 views

www.bloomberg.com/...-resurgence-in-washington.html

banksters economy legislation Dodd-Frank Lincoln-Amendment derivatives

shared by Paul Merrell on 12 Dec 14 - No Cached
  • Wall Street is re-emerging as a force in Washington as it closes in on one of its biggest wins against regulation since the financial crisis. With must-pass spending legislation making its way through Congress this week, banks seized on an opportunity to attach a measure that would halt a planned restriction on derivatives trading they had long opposed. The industry’s lobbying extended to the highest levels of finance with JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon pressing lawmakers to support the change.
  • Wall Street’s success, after four years of struggling to persuade Congress to ease the Dodd-Frank Act, is a precursor to more fights next year against some of the law’s hallmarks: the consumer protection bureau and stiff oversight of big financial companies whose failure could threaten the financial system. “The Wall Street interests -- the big banks -- they’re back,” said Richard Durbin of Illinois, the Senate’s second-ranking Democrat. The $1.1 trillion spending measure cleared its biggest hurdle when the House passed it last night and sent it to the Senate for consideration today. Banks had modest expectations even under the new Republican Congress that will convene in January, a group they presume will be more receptive to their agenda. Their surprising success this week may embolden lenders to seek deeper regulatory changes as Republicans take control of the Senate from Democrats.
  • The derivatives provision would let JPMorgan, Citigroup Inc. (C), Bank of America Corp. and other banks trade almost all swaps in divisions that have government backstops like deposit insurance. It would repeal a requirement that some of the trades be pushed out to separate units, which Wall Street argued would drive up costs for clients and increase risk in the financial system by moving the trades to firms less regulated than banks. Lawmakers put the requirement in Dodd-Frank, which was passed in 2010 after banks’ losses on souring derivative trades spurred a taxpayer bailout of Wall Street in 2008. The inclusion of the Dodd-Frank changes in the spending bill spurred a week-long opposition campaign by Senator Elizabeth Warren of Massachusetts, House Minority Leader Nancy Pelosi and other Democratic lawmakers. Their news conferences, TV interviews, emergency meetings on Capitol Hill and pressure from allies including the AFL-CIO labor federation prompted President Barack Obama to call lawmakers urging them to vote for the broader bill to avoid a government shutdown.
Paul Merrell

Where Bank Regulators Go to Get Rich - Bloomberg - 0 views

www.bloomberg.com/...regulators-go-to-get-rich.html

SEC revolving-door

shared by Paul Merrell on 10 Apr 13 - No Cached
  • Mary Schapiro, the former chairman of the Securities and Exchange Commission, must take us for fools. No need to worry about her and the so-called revolving door between government and Wall Street, she told the Wall Street Journal on April 2, after announcing she would be joining the Promontory Financial Group LLC as a managing director in its Washington office, in charge of its governance and markets practice. “In my case, there’s no revolving door,” she said. “I won’t ever be going back to government.”
  • About 100 of the 400 Promontory employees are former Washington regulators; some 5 percent, like Ludwig, come from the Office of the Comptroller of the Currency, which regulates all banks with federal bank charters, including Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. Last year, the firm hired Julie Williams, the former chief counsel of the OCC. To keep things in the family, the agency hired as Williams’s replacement Amy Friend, a Promontory managing director.
Paul Merrell

A Choice For Corporate America: Are You With America Or The Cayman Islands - 0 views

www.informationclearinghouse.info/article33901.htm

banksters globalists tax havens offshoring

shared by Paul Merrell on 10 Feb 13 - No Cached
  • When the greed, recklessness, and illegal behavior on Wall Street drove this country into the deepest recession since the 1930s, the largest financial institutions in the United States took every advantage of being American. They just loved their country - and the willingness of the American people to provide them with the largest bailout in world history. In 2008, Congress approved a $700 billion gift to Wall Street. Another $16 trillion in virtually zero interest loans and other financial assistance came from the Federal Reserve. America. What a great country. But just two years later, as soon as these giant financial institutions started making record-breaking profits again, they suddenly lost their love for their native country. At a time when the nation was suffering from a huge deficit, largely created by the recession that Wall Street caused, the major financial institutions did everything they could to avoid paying American taxes by establishing shell corporations in the Cayman Islands and other tax havens.
  • In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. That same year Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis. On and on it goes. Wall Street banks and large companies love America when they need corporate welfare. But when it comes to paying American taxes or American wages, they want nothing to do with this country. That has got to change.
  • Offshore tax abuse is not just limited to Wall Street. Each and every year corporations and the wealthy are avoiding more than $100 billion in U.S. taxes by sheltering their income offshore. Pharmaceutical companies like Eli Lilly and Pfizer have fought to make it illegal for the American people to buy cheaper prescription drugs from Canada and Europe. But, during tax season, Eli Lilly and Pfizer shift drug patents and profits to the Netherlands and other offshore tax havens to avoid paying U.S. taxes.
  • ...3 more annotations...
  • Apple wants all of the advantages of being an American company, but it doesn't want to pay American taxes or American wages. It creates the iPad, the iPhone, the iPod, and iTunes in the United States, but manufactures most of its products in China so it doesn't have to pay American wages. Then it shifts most of its profits to Ireland, Luxembourg, the British Virgin Islands and other tax havens to avoid paying U.S. taxes. Without such maneuvers, Apple's federal tax bill in the United States would have been $2.4 billion higher in 2011.
  • This tax avoidance does not just reduce the revenue that we need to pay for education, healthcare, roads, and environmental protection, it is also costing us millions of American jobs. Today, companies are using these same tax schemes to lower their tax bills by shipping American jobs and factories abroad. These tax breaks have contributed to the loss of more than 5 million U.S. manufacturing jobs and the closure of more than 56,000 factories since 2000. That also has got to change. At a time when we have a $16.5 trillion national debt; at a time when roughly one-quarter of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high; it is past time for Wall Street and corporate America to pay their fair share. That's what the Corporate Tax Dodging Prevention Act (S.250) that I have introduced with Rep. Jan Schakowsky (D-Ill.) is all about.
  • We have a much better idea. Wall Street and the largest corporations in the country must begin to pay their fair share of taxes. They must not be able to continue hiding their profits offshore and shipping American jobs overseas to avoid taxes. Here's the simple truth. You can't be an American company only when you want a massive bailout from the American people. You have also got to be an American company, and pay your fair share of taxes, as we struggle with the deficit and adequate funding for the needs of the American people. If Wall Street and corporate America don't agree, the next time they need a bailout let them go to the Cayman Islands, let them go to Bermuda, let them go to the Bahamas and let them ask those countries for corporate welfare.
  • Paul Merrell on 10 Feb 13
     
    Gotta love Bernie Sanders.
Paul Merrell

New Report: Fortune 100 Companies Have Received a Whopping $1.2 Trillion in Corporate Welfare Recently | Alternet - 0 views

www.alternet.org/...whopping-12-trillion-corporate

federal-spending corporate welfare

shared by Paul Merrell on 23 Mar 14 - No Cached
  • Most of us are aware that the government gives mountains of cash to powerful corporations in the form of tax breaks, grants, loans and subsidies--what some have called "corporate welfare." However, little has been revealed about exactly how much money Washington is forking over to mega businesses. Until now. A new venture called Open the Books, based in Illinois, was founded with a mission to bring transparency to how the federal budget is spent. And what they found is shocking: between 2000 and 2012, the top Fortune 100 companies received $1.2 trillion from the government. That doesn't include all the billions of dollars doled out to housing, auto and banking enterprises in 2008-2009, nor does it include ethanol subsidies to agribusiness or tax breaks for wind turbine makers. 
  • What Open the Book's forthcoming report does reveal is that the most valuable contracts between the government and private firms were for military procrument deals, including Lockheed Martin ($392 billion), General Dynamics ($170 billion), and United Technologies ($73 billion).  After military contractors, $21.8 billion was granted out to corporate recipients in the form of direct subsidies; literally transfers of cash from the pockets of Americans to major corporations. The biggest winners were General Electric (GE) ($380 million), followed by General Motors (GM) ($370 million), Boeing (BA) ($264 million), ADM ($174 million) and United Technologies ($160 million).  $8.5 billion in federally subsidized loans were also doled out to giant oil companies Chevron and Exxon Mobile, and $1 billion went directly to massive agri-business Archer Daniels Midland. 
  • Of course, the banks also got their piece of the pie: $10 billion in federal insurance went to Bank of America, Citigroup, Wells Fargo, JPMorgan Chase, not including any of the 2008 bailout money. Walmart enjoyed its share of federal insurance backing as well.    Thanks to Open the Books, the curtain has been lifted and the whole country can now witness the great suckling of corporate America. As Open the Books founder Adam Andrzejewski put it: "Mitt Romney had it wrong: When it comes to the Fortune 100, it's 99%, not 47%, on some form of the government's gravy train." 
Paul Merrell

US sues 16 banks for rigging Libor rate - Americas - Al Jazeera English - 0 views

www.aljazeera.com/...r-rate-201431544528243637.html

banksters libor fraud litigation

shared by Paul Merrell on 16 Mar 14 - No Cached
  • The US Federal Deposit Insurance Corp. (FDIC) has sued 16 big banks that set a key global interest rate, accusing them of fraud and conspiring to keep the rate low to enrich themselves. The banks, which include Bank of America, Citigroup and JPMorgan Chase in the US, are among the world's largest. The FDIC says it is seeking to recover losses suffered from the rate manipulation by 10 US banks that failed during the financial crisis and were taken over by the agency. The civil lawsuit was filed on Friday in federal court in Manhattan, the Associated Press reported. The banks rigged the London interbank offered rate, or Libor, from August 2007 to at least mid-2011, the FDIC alleged. The Libor affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans. A British banking trade group sets the Libor every morning after the 16 international banks submit estimates of what it costs them to borrow. The FDIC also sued that trade group, the British Bankers' Association.
  • By submitting false estimates of their borrowing costs used to calculate Libor, the 16 banks "fraudulently and collusively suppressed [the Libor rate], and they did so to their advantage," the FDIC said in the suit.
  • Four of the banks - Britain's Barclays and Royal Bank of Scotland, Switzerland's biggest bank UBS and Rabobank of the Netherlands - have previously paid a total of about $3.6bn to settle US and European regulators' charges of rigging the Libor. The banks signed agreements with the US Justice Department that allow them to avoid criminal prosecution if they meet certain conditions. Under a change announced last July, the London-based company that owns the New York Stock Exchange, NYSE Euronext, will take over supervising the setting of Libor from the British Bankers' Association. The changeover is scheduled to be completed by early next year.
Paul Merrell

Moody's downgrades 4 US giant lenders - RT Business - 0 views

rt.com/...downgrades-four-us-lenders-766

financial-collapse too-big-to-fail bail-ins U.S. Cyprus

shared by Paul Merrell on 17 Nov 13 - No Cached
  • Moody’s is to cut the credit rating of US major banks, including Morgan Stanley, Goldman Sachs, JPMorgan and Bank of New York Mellon. The rating agency thinks the government is now less likely to support the lenders in times of new financial difficulties. The debt rating of the holding company of Goldman Sachs was cut from A3 to Baa1, JPMorgan - from A2 to A3, Morgan Stanley - from Baa1 to Baa2, and Bank of New York Mellon -  from Aa3 to A1.
  • "We believe that US bank regulators have made substantive progress in establishing a credible framework to resolve a large, failing bank," said Robert Young, the Moody’s Managing Director. "Rather than relying on public funds to bail-out one of these institutions, we expect that bank holding company's creditors will be bailed-in and thereby shoulder much of the burden to help recapitalize a failing bank." Lower credit rating can cost the lenders a higher loan price, increasing their financial burden. However the bank executives complained about unfairly assessed downgrades, and optimism overcompensation, the Financial Times reported. The review is similar to one by Standard & Poor's in June and comes from government’s unwillingness to repeat bailouts in a crisis.
  • The decision was made after the ratings of eight American banks, including Citigroup, Bank of America, Wells Fargo and State Street were placed on revision in August, when more details of government’s intention to abandon banks support were unveiled.
  • Paul Merrell on 17 Nov 13
     
    So Moody's thinks Cyprus like bail-ins for large failing U.S. banks are more likely than government bail-outs and names the large banks most likely to fail, with their projected likelihood to fail reflected in Moody's adjusted credit ratings. For those who don't understand what a "bail-in" is, it means that the bank gets your deposits and you get back a bit of ownership in a failing enterprise. Try to spend that. 
Paul Merrell

BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit - Bloomberg - 0 views

www.bloomberg.com/...-derivatives-to-bank-unit.html

banksters toxic-derivatives BoA JPMorgan FDIC Dodd-Frank too-big-to-fail

shared by Paul Merrell on 13 Nov 13 - No Cached
  • Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation. The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
  • Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC- insured bank accounts from risks generated by investment-banking operations. Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms. “The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.”
  • Moody’s Investors Service downgraded Bank of America’s long-term credit ratings Sept. 21, cutting both the holding company and the retail bank two notches apiece. The holding company fell to Baa1, the third-lowest investment-grade rank, from A2, while the retail bank declined to A2 from Aa3.
  • ...5 more annotations...
  • The Moody’s downgrade spurred some of Merrill’s partners to ask that contracts be moved to the retail unit, which has a higher credit rating, according to people familiar with the transactions. Transferring derivatives also can help the parent company minimize the collateral it must post on contracts and the potential costs to terminate trades after Moody’s decision, said a person familiar with the matter. Bank of America estimated in an August regulatory filing that a two-level downgrade by all ratings companies would have required that it post $3.3 billion in additional collateral and termination payments, based on over-the-counter derivatives and other trading agreements as of June 30. The figure doesn’t include possible collateral payments due to “variable interest entities,” which the firm is evaluating, it said in the filing.
  • Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates. Dodd-Frank Rules Keeping such deals separate from FDIC-insured savings has been a cornerstone of U.S. regulation for decades, including last year’s Dodd-Frank overhaul of Wall Street regulation. The legislation gave the FDIC, which liquidates failing banks, expanded powers to dismantle large financial institutions in danger of failing. The agency can borrow from the Treasury Department to finance the biggest lenders’ operations to stem bank runs. It’s required to recoup taxpayer money used during the resolution process through fees on the largest firms.
  • Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades. That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.
  • Moving derivatives contracts between units of a bank holding company is limited under Section 23A of the Federal Reserve Act, which is designed to prevent a lender’s affiliates from benefiting from its federal subsidy and to protect the bank from excessive risk originating at the non-bank affiliate, said Saule T. Omarova, a law professor at the University of North Carolina at Chapel Hill School of Law. “Congress doesn’t want a bank’s FDIC insurance and access to the Fed discount window to somehow benefit an affiliate, so they created a firewall,” Omarova said. The discount window has been open to banks as the lender of last resort since 1914. As a general rule, as long as transactions involve high- quality assets and don’t exceed certain quantitative limitations, they should be allowed under the Federal Reserve Act, Omarova said.
  • In 2009, the Fed granted Section 23A exemptions to the banking arms of Ally Financial Inc., HSBC Holdings Plc, Fifth Third Bancorp, ING Groep NV, General Electric Co., Northern Trust Corp., CIT Group Inc., Morgan Stanley and Goldman Sachs Group Inc., among others, according to letters posted on the Fed’s website. The central bank terminated exemptions last year for retail-banking units of JPMorgan, Citigroup, Barclays Plc, Royal Bank of Scotland Plc and Deutsche Bank AG. The Fed also ended an exemption for Bank of America in March 2010 and in September of that year approved a new one. Section 23A “is among the most important tools that U.S. bank regulators have to protect the safety and soundness of U.S. banks,” Scott Alvarez, the Fed’s general counsel, told Congress in March 2008.
  • Paul Merrell on 13 Nov 13
     
    So according to Bloomberg, JPMorgan's commercial bank was the recipient of 99 percent of JPMorgan's $79 trillion (face value of derivatives) in bad bets. So adding JPMorgan's $78 trillion or so to the $75 trillion in bad bets Bank of America unloaded on its FDIC insured subsidiary, we arrive at $153 trillion in bad bets moved by two investment banks alone under the FDIC umbrella. Meanwhile, FDIC has authority under Dodd-Frank to liquidate these insolvent banks but doesn't, despite several successful lawsuits to recover the value of toxic derivatives that they sold to smaller banks that failed (which implies that FDIC could tell JPMorgan and BoA's investment banksters that they've got to pay off the toxic assets they transferred to their commercial banks, rather than diluting the insurance for normal depositors. Problem: the two big investment banks don't have sufficient assets to absorb those losses, so the too-politically-connected-to-fail factor kicks in. Note that I have not done any legal research in regard to these issues and am basing these observations on what has been stated about legal requirements in various media articles.
Paul Merrell

Bigger than Libor? Forex probe hangs over banks - Nov. 20, 2013 - 0 views

money.cnn.com/...index.html

banksters forex foreign-exchange fraud

shared by Paul Merrell on 22 Nov 13 - No Cached
  • Yet another dark cloud is looming over global banks as officials examine their behavior in the massive foreign exchange market, threatening to deal a new blow to earnings and reputations. Regulators in the U.S., Europe and Asia are in the early stages of investigating whether traders at the world's top banks manipulated foreign exchange benchmarks to profit at the expense of their clients. Goldman Sachs (GS, Fortune 500), Citigroup (C, Fortune 500), JP Morgan (JPM, Fortune 500), Deutsche Bank (DB), Barclays (BCS), Royal Bank of Scotland (RBS), UBS (UBS) and HSBC (HBCYF)are among the firms in their sights. Financial lawyers say the probe could have steep and uncertain consequences as the impact of currency market abuse would reverberate far beyond Wall Street.
  • It's unwelcome timing for an industry already fighting a raft of legal battles over foreclosure abuses, misleading investors over mortgages and payment protection insurance. And then there's the Libor scandal. A global investigation into the setting of the London interbank lending rate, and related global benchmarks, has so far yielded about $3.6 billion in fines. Penalties for some of the biggest players are still to come. Traders have also faced criminal charges. As the extent of damage caused by Libor-rigging is revealed, lawyers say the probe into fixing currency rates could unfold in a similar way, and rival its impact. London is the center of the loosely regulated foreign exchange market, the biggest in the world's financial system with average daily turnover of $5.3 trillion. Proven abuse in this market would have a significant ripple effect, exposing offending firms to a host of legal action.
  • Paul Merrell on 22 Nov 13
     
    For more detail see http://money.cnn.com/2013/10/30/news/companies/global-forex-probe/ I'll get excited if and when major bankster executives face prison time. Until then, the "fines" against corporations are just a cost of doing business usually dwarfed by the unjust riches that one group of human beings fraudulently acquires from others. Reality check: corporations are an entirely imaginary legal fiction; it's actually people that are committing the misbehavior. Fines for corporations are as fictional as the corporations themselves; you must prosecute the people and send them to prison to deter bankster misbehavior.  And it is human beings working for another legal fiction, government, who are making the decisions to prosecute corporations rather than misbehaving people. 
Paul Merrell

EU imposes record 1.7bn euro fines on major intl banks over rate-rigging - RT Business - 0 views

rt.com/...s-rates-libor-manipulation-690

banksters Libor EU European Commission antitrust fines

shared by Paul Merrell on 11 Dec 13 - No Cached
  • The European Commission has slapped record fines of 1.7 billion euros on six major banks for manipulating lending rates that play a key role in the global economy. The penalties will add to already escalating costs for leading global lenders. The EU fines marks the latest to be levied on banks and financial institutions for making profits or masking their problems by fraudulently rigging the rates that reflect the cost of lending money to each other. The banks fined are Citigroup, Deutsche Bank, Royal Bank of Scotland, JPMorgan, Societe Generale, and RP Martin, the EC said in a statement.
  • The borrowing rates involved - the London interbank offered rate (Libor), the Tokyo and the euro area equivalents - are used to set price of trillions of dollars of financial products, ranging from mortgages to derivatives. “What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other,” said Joaquín Almunia, European Commission Vice-President in charge of competition policy.
Paul Merrell

The Global Banking Game Is Rigged, and the FDIC Is Suing | Global Research - 0 views

www.globalresearch.ca/...5377703

banksters libor litigation FDIC

shared by Paul Merrell on 23 Apr 14 - No Cached
  • On March 14, 2014, the FDIC filed suit for LIBOR-rigging against sixteen of the world’s largest banks – including the three largest USbanks (JPMorgan Chase, Bank of America, and Citigroup), the three largest UKbanks, the largest German bank, the largest Japanese bank, and several of the largest Swiss banks. Bill Black, professor of law and economics and a former bank fraud investigator, calls them “the largest cartel in world history, by at least three and probably four orders of magnitude.”
Paul Merrell

​London banker pleads guilty to fixing Libor, faces up to 10 yrs in jail - RT UK - 0 views

rt.com/...872-london-banker-libor-guilty

banksters Libor criminal litigation

shared by Paul Merrell on 11 Oct 14 - No Cached
  • A senior London banker has become the first person to be prosecuted for fixing the London interbank offered rate (Libor), a scandal that resulted in billions worth of losses for savers as banks fraudulently boosted their profits. The banker, who has not been named for legal reasons, faces up to 10 years in jail after being charged with fixing the inter-lending rate by the Serious Fraud Office (SFO). The banker pleaded guilty to “conspiracy to defraud” by manipulating the rate at Southwark Crown Court on 3rd October. “A senior banker from a leading British bank pleaded guilty at Southwark Crown Court on 3 October 2014 to conspiracy to defraud in connection with manipulating Libor,” the court said in a statement. “This arises out of the Serious Fraud Office investigations into Libor fixing.”
  • The banker is the first person in Britain to be found guilty following the Libor scandal in 2012, in which the SFO discovered evidence of rigging the benchmark interest rate. According to the SFO, between 2005 and 2008, traders working for several major banks including Barclays were asked to submit Libor positions that would put the bank in a favourable position, as well as other illegal activity such as colluding with other banks to manipulate the overall rate. Other banks implicated in the scandal include the Royal Bank of Scotland (RBS), Deutsche Bank (DB), Credit Suisse (CS), JP Morgan (JPM) and Citigroup.
Paul Merrell

Bernie Sanders Introduces a Bill to Break Up the Big Banks | The Nation - 0 views

www.thenation.com/...rss-bill-would-break-big-banks

Auction 2016 Sanders banksters bank-breakups O'Malley Hillary

shared by Paul Merrell on 08 May 15 - No Cached
  • Senator Bernie Sanders announced legislation Wednesday that would break up the country’s largest financial institutions. It’s the third time he’s introduced such a measure, but this time around he wields the large microphone of a presidential candidate. The bill, titled the “Too Big to Fail, Too Big to Exist Act,” will also be introduced in the House by Representatives Brad Sherman and Alan Grayson. If passed, it would require regulators at the Financial Stability Oversight Council to come up with a list of too-big-to-fail institutions whose failure would threaten the economy. One year later, those banks would be broken up by the secretary of the Treasury. Sure to be included on that list, based on the standards outlined in the legislation, would be JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America, and Morgan Stanley.
  • It also unavoidably poses a test for Hillary Clinton, the other declared Democratic candidate. Much of the Draft Warren movement launched by progressive activists focused on the Massachusetts senator’s advocacy for combating the financial sector’s power generally, and breaking up the big banks in particular—and Clinton’s perceived weakness on that front.
  • Another likely Democratic candidate, former Maryland governor Martin O’Malley, wrote an op-ed in The Des Moines Register in March that also called for the biggest financial institutions to be broken up. Elsewhere, Senators Sherrod Brown and David Vitter have introduced similar legislation in the past, and the Federal Deposit Insurance Corporation’s Tom Hoenig also favors break-ups. Sanders and Sherman cited the danger posed to the economy by big banks, many of which are dramatically larger than they were before the 2008 financial crisis. JPMorgan Chase, for example, has increased its assets by $1.1 trillion since 2007. “In 2008 we learned that if Wall Street calls and says ‘bail us out or we’re going to take the economy down with us,’ that even if there is no statutory provision for bailouts, which there really isn’t today, Congress will pass as we did in 2008 a bill mandating the bailout,” said Sherman. “So ‘too big to fail’ means you will be bailed. That isn’t capitalism. That is socialism for the wealthy.”
  • ...2 more annotations...
  • Sanders noted the large fines and settlement paid by big financial institutions since 2009, totaling $176 billion, and referenced former attorney general Eric Holder’s frank admission in 2013 that some banks are “too big to jail.” (Holder later walked back that comment, though no high-level executives have gone to prison for anything related to the financial crisis.)
  • The duo also described their belief that big Wall Street banks are crushing smaller and medium-sized banks. Sherman cited research from the International Monetary Fund that when big banks have implicit taxpayer backing, their access to capital is so much easier that it amounts to an extra $83 billion annually—something he argued was an unfair advantage over smaller banks that would be allowed to fail. The Independent Community Bankers of America, which represents 6,000 smaller banks, has endorsed the Sanders-Sherman legislation. Beyond just small banks, Sanders argued that enormous financial institutions harm the broader economy because those smaller banks are key sources of capital for small businesses. “Wall Street cannot be an island unto itself separate from the productive economy,” he said.
  • Paul Merrell on 08 May 15
     
    Sanders pushing Hillary to commit to doing something about the banks. Fat chance. But maybe he can show who she really is.
Paul Merrell

Tomgram: Nomi Prins, Hillary, Bill, and the Big Six Banks | TomDispatch - 0 views

www.tomdispatch.com/..._bill%2C_and_the_big_six_banks

Auction 2016 Hillary banksters

shared by Paul Merrell on 08 May 15 - No Cached
  • The past, especially the political past, doesn’t just provide clues to the present. In the realm of the presidency and Wall Street, it provides an ongoing pathway for political-financial relationships and policies that remain a threat to the American economy going forward. When Hillary Clinton video-announced her bid for the Oval Office, she claimed she wanted to be a “champion” for the American people. Since then, she has attempted to recast herself as a populist and distance herself from some of the policies of her husband. But Bill Clinton did not become president without sharing the friendships, associations, and ideologies of the elite banking sect, nor will Hillary Clinton.  Such relationships run too deep and are too longstanding.
  • To grasp the dangers that the Big Six banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) presently pose to the financial stability of our nation and the world, you need to understand their history in Washington, starting with the Clinton years of the 1990s. Alliances established then (not exclusively with Democrats, since bankers are bipartisan by nature) enabled these firms to become as politically powerful as they are today and to exert that power over an unprecedented amount of capital. Rest assured of one thing: their past and present CEOs will prove as critical in backing a Hillary Clinton presidency as they were in enabling her husband’s years in office.  In return, today’s titans of finance and their hordes of lobbyists, more than half of whom held prior positions in the government, exact certain requirements from Washington. They need to know that a safety net or bailout will always be available in times of emergency and that the regulatory road will be open to whatever practices they deem most profitable. 
  • Whatever her populist pitch may be in the 2016 campaign -- and she will have one -- note that, in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader.  Though she may, in the heat of that campaign, raise the bad-apples or bad-situation explanation for Wall Street’s role in the financial crisis of 2007-2008, rest assured that she will not point fingers at her friends. She will not chastise the people that pay her hundreds of thousands of dollars a pop to speak or the ones that have long shared the social circles in which she and her husband move. She is an undeniable component of the Clinton political-financial legacy that came to national fruition more than 23 years ago, which is why looking back at the history of the first Clinton presidency is likely to tell you so much about the shape and character of the possible second one.
Paul Merrell

Banks fined over $5 billion for rigging global currency markets | Toronto Star - 0 views

www.thestar.com/...g-global-currency-markets.html

banksters fraud litigation criminal-convictions

shared by Paul Merrell on 13 Jun 15 - No Cached
  • A group of global banks will pay more than $5 billion U.S. in penalties and plead guilty to rigging the world’s currency market, the first time in more than two decades that major players in the financial industry have admitted to criminal wrongdoing. JPMorgan Chase, Citigroup, Barclays and The Royal Bank of Scotland conspired with one another to fix rates on U.S. dollars and euros traded in the huge global market for currencies, according to a resolution announced Wednesday between the banks and the U.S. Department of Justice. A group of currency traders, who called themselves “The Cartel,” allegedly shared customer orders through chat rooms and used that information to profit at the expense of their clients. The resolution is complex and involves multiple regulators in the U.S. and overseas.
  • The four banks will pay a combined $2.5 billion in criminal penalties to the DOJ for criminal manipulation of currency rates between December 2007 and January 2013, according to the agreement. The Federal Reserve is slapping them with an additional $1.6 billion in fines, as the banks’ chief regulator. Finally, British bank Barclays is paying an additional $1.3 billion to British and U.S. regulators for its role in the scheme. Another bank, Switzerland’s UBS, has agreed to plead guilty to manipulating key interest rates and will pay a separate criminal penalty of $203 million.
  • It is rare to see a bank plead guilty to wrongdoing. Even in the aftermath of the financial crisis, most financial companies reached “non-prosecution agreements” or “deferred prosecution agreements” with regulators, agreeing to pay billions in fines but not admitting any guilt. If any guilt were found, it was usually one of the bank’s subsidiaries or divisions — not the bank holding company.
  • ...2 more annotations...
  • Big banks overall have already been fined billions of dollars for their role in the housing bubble and subsequent financial crisis. But even so, the latest penalties are big. Including a separate agreement with the Federal Reserve announced Wednesday and another announced last year, the group of banks will pay nearly $9 billion in fines for manipulating the $5.3 trillion global currency market. Unlike the stock and bond markets, currencies trade nearly 24 hours a day, seven days a week. The market pauses two times a day, a moment known as “the fix.” Traders in the cartel allegedly shared client orders with rivals ahead of the “fix”, pumping up currency rates to make profits. Global companies, who do business in multiple currencies, rely on their banks to give them the closest thing to an official exchange rate each day. The banks are supposed to be looking out for them instead of conspiring to get even bigger profits by using customers’ orders against them. Travelers who regularly exchange currencies also need to get a fair price for their euros or dollars.
  • The number of traders who participated in the criminal activity was small. JPMorgan, in a statement, said the one trader involved has been fired. Citi said it fired nine employees involved. The agreement between the banks and the DOJ is subject to court approval. If approved, all five banks have agreed to three years of corporate probation overseen by a court. The banks will also help prosecutors with their investigations into individual criminal activity related to the currency market rigging. In 2012, HSBC avoided a legal battle that could further savage its reputation and undermine confidence in the global banking system by agreeing to pay $1.9 billion to settle a U.S. money-laundering probe. Another British bank, Standard Chartered, signed an agreement with New York regulators to settle a money-laundering investigation involving Iran with a $340 million payment. In 2014, the Bank of America reached a record $17 billion settlement to resolve an investigation into its role in the sale of mortgage-backed securities before the 2008 financial crisis
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