The Bank Bailout Was Actually $8 Trillion
Ah, free-market capitalism — the economic system that works best, provided that one infuses $8 trillion to stave off total collapse. The Atlantic Wire writes:
Remember the $700 billion Troubled Asset Relief Program with which the federal government came to the rescue of faltering banks in 2008? Well, according to a Bloomberg report, that was just a fraction of the financial help the Federal Reserve Bank wound up doling out to troubled lenders. The real total was reportedly closer to $8 trillion, after you add up benefits outside TARP, including emergency loans given at below-market rates:
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and…
Five More Countries For Goldman Sachs To Take Over
Now that Goldman Sachs has achieved coups d’etats in Greece and Italy, DJ Pangburn at Death and Taxes lays out five additional countries ripe for bankdom to install leaders:
We present five other countries where Goldman Sachs could install bankers as heads of state.
Where to begin, though? Originally, I considered Ireland to be a prime candidate for some Goldman Sachs coup d’etat action, but it seems that Ireland already got the old Goldman Sachs in/out in the form of Peter Sutherland, a non-executive director of Goldman Sachs, as well as a non-executive at BP. Here are five countries that could use a little Goldman Sachs in/out.
Spain: With concerns in Italy lessening amidst the installation of ex-Goldman man Mario Monti as PM, bankers and investors in the eurozone and abroad are looking to Spain, which the BBC is calling the “weaker link in the eurozone chain.”
This is obviously the first country that requires a Goldman…
Bank Bailouts Explained
Confused about what has unfolded since 2008? The sublime absurdity of bank bailouts and what we have(n’t) gotten in return, laid out in adorable animated form:
Greece’s Choice, And Ours: Rule By Democracy or Finance?
A number of nations, including Greece and the United States, are in the process of deciding between being governed by democracy or by finance, Bill Clinton’s Secretary of Labor Robert Reich writes:
Greek Prime Minister George Papandreou decided in favor of democracy yesterday when he announced a national referendum on the draconian budget cuts Europe and the IMF are demanding from Greece in return for bailing it out.
(Or, more accurately, the cuts Europe and the IMF are demanding for bailing out big European banks that have lent Greece lots of money and stand to lose big if Greece defaults on those loans—not to mention Wall Street banks that will also suffer because of their intertwined financial connections with European banks.)
If Greek voters accept the bailout terms, unemployment will rise even further in Greece, public services will be cut more than they have already, the Greek economy will contract, and the standard of…
Five Demands To Rein In Wall Street
If we want a country in which the most powerful financial institutions may longer hold our political process hostage, where do we start? Via Rolling Stone, Matt Taibbi puts forth his list of five demands for anti-Wall Street protesters to push for:
1. Break up the monopolies. The so-called “Too Big to Fail” financial companies – now sometimes called by the more accurate term “Systemically Dangerous Institutions” – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.
2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on…
“Monetizing” Electoral Politics: TV Networks Are Out To Sell, Not Tell
Already the projections are in—not for who is going to win the election in 2012—but for how much it is likely to cost.
Public Radio International concludes: “Campaign spending in the 2012 US election could reach $6 or 7 billion dollars as outside groups pay for electoral influence.”
Here we are in the middle of a deep recession that’s getting deeper by the day, with austerity the unofficial slogan du jour while Republican scheme up new ways to trim, cut and decimate government spending, and parties are spending billions on political horse races.
They decry government spending but they don’t talk much about their own spending, do they?
And neither do the Democrats who are also backing an orgy of spending cuts if only to show their opponents how “responsible” they are.
As both parties slash spending that benefits people, they are in a manic overdrive effort to raise more for themselves and their campaigns.
Dave Levinthal,…
Systems Collapse When The Irrational Is Considered Rational
Photo: Agamisudo (CC)
Oh thank you, Wikipedia, for this definition:
“Irrationality is cognition, thinking, talking or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate reasoning, emotional distress, or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful or more illogical than other more rational alternatives.”
And what about this one? Market Psychology? This term is defined in the Investopedia this way:
“The overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group’s overall investing mentality of sentiment.”
Q: What do we have when we put the two together?
A: The current madness and market mayhem.
S&P’s downgrade is being blamed for the market panic even though all the business media expected a downgrade and initially minimized its potential impact. The ratings…
Who Rules America? Breaking Down the Top 1%
Here’s an excerpt from an article by G. William Domhoff on Global Research. This may not exactly be news to some of us, but it certainly re-affirms a lot:
…the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.
‘Herd-Like’ Financial Reporting Could Predict Stock Market Bubbles
Via ScienceDaily:
When the language used by financial analysts and reporters becomes increasingly similar the stock market may be overheated, say scientists.
After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators converge in a ‘herd-like’ fashion in the lead up to a stock market bubble. Immediately afterwards, the language disperses.
The findings presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain, on July 19, 2011, show that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.
“Our analysis shows that trends in the use of words by financial journalists correlate closely with changes in the leading stock indices — the DJI, the NIKKEI-225, and FTSE-100,” says Professor Mark Keane, Chair of Computer Science in University College Dublin, who was involved in…
Sacred Economics
This is the introduction to Sacred Economics: Money, Gift, and Society in the Age of Transition, by Charles Eisenstein, courtesy of Evolver Editions/North Atlantic Books and Reality Sandwich.
The purpose of this book is to make money and human economy as sacred as everything else in the universe.
Today we associate money with the profane, and for good reason. If anything is sacred in this world, it is surely not money. Money seems to be the enemy of our better instincts, as is clear every time the thought “I can’t afford to” blocks an impulse toward kindness or generosity. Money seems to be the enemy of beauty, as the disparaging term “a sellout” demonstrates. Money seems to be the enemy of every worthy social and political reform, as corporate power steers legislation toward the aggrandizement of its own profits. Money seems to be destroying the earth, as we pillage the oceans,…
Kill Bill 2011: The Ongoing Sabotage Of Financial Reform
Some years back Thomas Franck nailed it in his book, The Wrecking Crew. It was subtitled “How Conservatives Rule” and showed how narrow self-interest and well practiced cynicism in the service of partisan warfare has crippled our political system resulting in a deep paralysis despite the threat of a collapse.
I call it sabotage, a tactic that goes way back and involves deliberate effort to insure that reforms are effectively undermined.
When the book came out, Publishers Weekly praised it and criticized it in the same breath, writing,
“Frank paints a complex and conspiracy-ridden picture that illuminates the sinister and controversial practices of the Republican Party in the 20th and 21st centuries. While Frank’s assessments and interpretations of key events, players and party doctrines is accurate and justifiable, his overwhelming blame of the Republican Party as the source of everything that’s wrong with this county and as the emblem of self-destructing government denies the…
7 Ways The Hedge Fund Industry Is Built On Fraud, Lying, And Stealing
Could the entire hedge fund industry rest upon tens of thousands of instances of lying, cheating, and stealing? Well, at least they’re immensely generous (with their political donations). Via Guernica:
1. Insider Trading. If the Feds could tape every hedge fund we’d get an earful of how hedge funds use “expert networks” to transfer bits of illegal information that provide hedge fund managers with knowledge of events that are sure to move markets and make them a bundle.
2. Ponzi Schemes. Madoff isn’t the only one. Hedge funds and Ponzi schemes are made for each other since the funds are designed to evade so many disclosure regulations. It’s virtually a sure thing that every new year will reveal another Ponzi scheme through which a hedge fund steals money from investors and then uses new investor money to pay returns to the old investors.
3. Tax Evasion. No surprise here. Wherever you find billionaire financiers,…
Bank Of America Pays $410 Million To Settle Accusations Of Charging Illegal Overdraft Fees
Can we charge Bank of America an overdraft fee? The San Francisco Gate writes:
Bank of America has agreed to pay $410 million to settle a lawsuit in which the lender is accused of manipulating debit transactions to maximize overdraft fees. The agreement is believed to be the first financial settlement by a large bank in a case alleging deceptive overdraft practices. It may presage the outcome of related claims against 30 other lending institutions, including Wells Fargo, Citibank, Chase, Union Bank and U.S. Bank.
San Francisco’s Wells Fargo is embroiled in a separate lawsuit in federal court in San Francisco brought by California customers. That case started before the multistate legal action, but has not concluded because Wells has filed an appeal.
In August, U.S. District Judge William Alsup issued a scathing ruling ordering Wells Fargo to pay its California clients $203 million. He said the bank’s goal was to “maximize the number…
The Case Against Goldman Sachs
In his usual clear, profane manner, Matt Taibbi lays out why Goldman Sachs’s executives must face criminal charges as soon as possible. Via Rolling Stone:
America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn’t leave much doubt: Goldman Sachs should stand trial.
To date, there has been only one successful prosecution of a financial big fish from the mortgage bubble, and that was Lee Farkas, a Florida lender who was just convicted on a smorgasbord of fraud charges and now faces life in prison. But Farkas, sadly, is just an exception proving the rule: Like Bernie Madoff, his comically excessive crime spree (which involved such lunacies as kiting checks to his own bank and selling loans that didn’t exist) was almost completely unconnected to the systematic corruption that led…
Why Wall Street Is Winning
Photo: RMajouji (CC)
A Hated Financial Center Is Bouncing Back. How Did They Do It?
Two years ago as financial reform was put on the U.S. Congressional agenda, a skeptical Senator, Dick Durbin of Illinois, spoke of the power of the banks over the country’s legislative process.
“They run the place,” he said matter of factly.
The comment was then treated as a sidebar in the few newspapers that carried it, perhaps because it hinted at how interests, not ideology, dictate what happens on Capitol Hill.
The remark about a shadowy power structure far more important than all the partisan in-fighting that dominates the news is worth recalling as a way of explaining how little has been done to rain in Wall Street in the years since its crash virtually wrecked the global economy.
It is also worth realizing that the people who “run the place” usually do so in ways that rarely get high profile…
How To Start Your Own Currency
Afraid that the world is collapsing and your hard-earned dollars will soon be worthless kindling? At heart, monetary systems are based upon a shared delusion, so you might as well get empowered and start you own — The Atlantic explains how.
And, lest you think the whole idea is tongue-in-cheek, there are tons of real-world examples of successful alternate currencies right now for inspiration: Ithaca HOURS (used in Ithaca, NY), World of Warcraft money, BitCoin, and Japan’s Fureai Kippu, or “friendship tickets”:
Here’s a nightmare scenario shared by some mainstream investors, goldbugs and Ron Paul devotees: The year is 2013. Inflation has the U.S. economy in a stranglehold. International investors are fleeing to the far corners of the globe. The dollar is in a free fall, and Americans are scurrying to protect their wealth. What do you do?
Start your own currency. It’s not as complicated as it sounds. You can “back” it with…
California Man Pays Off $6,500 Credit Card Bill In Pennies
UPI reports:
MIRA MESA — California man upset with his bank for disallowing his requested refinance said he decided to pay off his $6,500 credit card bill entirely with pennies.
Thierry Cahez of San Diego County rolled 650,000 pennies in plastic, loaded them into crates and drove the lot to his Mira Mesa bank, KABC-TV, Los Angeles, reported.
Cahez was turned away by the bank several times but eventually was sent to a branch with a vault large enough to handle the coins.
Cahez said he opted to pay his credit card bill with pennies because he was turned down for a refinance and for the amount of charges and fees on his credit card, KABC-TV said Tuesday.
Treasure Islands: The Murky World Of Offshore Tax Shelters
New Left Project sits down with author Nicholas Shaxson to talk tax havens — a mammoth system of quasi-legal money-laundering which has a far wider impact than we realize, with a large role in the global drug trade and financial crisis. As it turns out, the biggest “treasure islands” are not the Caymans or Monaco, but places such as the City of London and the U.S. state of Delaware:
There is no common definition of what a tax haven is. Everybody has a slightly different definition. Ultimately what a tax haven provides is escape from the rules and the laws of jurisdictions. Tax havens are also about ‘elsewhere’ – the laws of the Cayman Islands are not designed for the benefit of the 50,000-odd population of the Cayman Islands.
The traditional view is…palm-fringed tropical islands in the Caribbean, Monaco, Switzerland, Liechtenstein. Small states. But if you do the analysis of what a tax…
Silver Manipulation By JP Morgan And U.S. Fed?
In yesterday’s New York Times, William D. Cohan refines what was once a confusing and fringe theory about JP Morgan and HSBC’s involvement in silver market manipulation into a very plausible scenario, tying in the cloak and dagger elements of the story with the currently unfolding class action lawsuits in several states.
Once again, the Xtranormal.com platform is being put to good use to elucidate exactly what’s happening:
Each segment has information that I found useful, especially the fact that there is actually no physical silver left in circulation — nice touch. Part II is here and part III available here.
Part IV is here, and after the creators accidentally deleting the original voices, the bear in the overalls is now sounding strangely like John Lennon.
Another source of information and a more detailed breakdown on basic market manipulation and arbitrage is available here. The site that appears to be the sponsor/creators of the Xtranormal videos silvergoldsilver.blogspot.com is less clear, but has information as well…
