Apr 14, 2016
Max and Stacy take a physicist’s view on global financial and economic news as central bankers play dice with the financial universe and Schroedinger’s bank has assets, both there and not there, living and dead at the same time, depending on who (if any) is observing said ‘asset’. In the second half Max, interviews Michael Krieger about the significance of Bill Black joining the Bernie Sanders campaign. They also discuss insane central bank policies driving a rush into derivatives.
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“It was pretty glowing about us,” one person who watched the event said. “It’s so far from what she sounds like as a candidate now. It was like a rah-rah speech. She sounded more like a Goldman Sachs managing director.”
We’ve seen bits and pieces emerge from Hillary Clinton’s infamous $225,000 speech to Goldman Sachs in October 2013, but an article published by the Huffington Post yesterday adds some additional perspective. In a nutshell, the author believes that a release of these transcripts would be so damaging it would end her bid for the presidency.
Hayman Capital founder Kyle Bass sat down recently for a conversation with Maria Bartiromo and Gary Kaminsky on Wall Street Week. He covered a variety of topics such as NIRP, income inequality, and the U.S. presidential race. As our regular readers know, Kyle correctly predicted the housing crisis, and is now calling for the yuan to be dramatically devalued.
On the growing use of negative interest rates as a central bank policy tool, he pointed out that while the central planners have their PhD’s and elaborate excel models, the reality is that not all people behave rationally, and thus in the real world those types of policies won’t necessarily work as intended. He also touched on the fact that a concern that should be on the front of everyone’s mind is the fact that if NIRP goes full Shinzo Abe and banks start charging customers for keeping cash at their banks, that there will be a run on cash. Continue reading »
In early 2015, after seeing a staggering $1.4 trillion in Euro area government debt trade at negative interest rates (the number has since grown to $6 trillion) we wondered when the bailout of insolvent governments was going to make its way to other debtors. Our question was quickly answered when we found that a negative rate mortgage had been issued by Nordea Credit, a bank in Denmark. Recently, even the WSJ finally stumbled on this bizarre inversion of traditional borrower obligations.
We noted at the time that this this was the first of many such paradoxes, as eventually more and more banks would begin to fall in line with ECB expectations and lend at slightly negative (at first, then progressively more negative) rates, rather than lose even more money as a result of leaving cash in the ECB deposit facility.
This is just the beginning: according the Danish media outlet, as a result of variable-refinancing, as recently as a week from now “a greater share of customers could have a negative rate.” Continue reading »
Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system. Continue reading »
Well, that didn’t take long.
Earlier today when we reported the stunning news that DB has decided to “turn” against the precious metals manipulation cartel by first settling a long-running silver price fixing lawsuit which in addition to “valuable monetary consideration” said it would expose the other banks’ rigging having also “agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement” we said “since this is just one of many lawsuits filed over the past two years in Manhattan federal court in which investors accused banks of conspiring to rig rates or prices in financial and commodities markets, we expect that now that DB has “turned” that much more curious information about precious metals rigging will emerge, and will confirm what the “bugs” had said all along: that the precious metals market has been rigged all along.” Continue reading »
Back in July of 2014, we reported that in an attempt to obtain if not compensation, then at least confirmation of bank manipulation in the precious metals industry, a group of silver bullion banks including Deutsche Bank, Bank of Nova Scotia and HSBC (later UBS was also added to the defendants) were accused of manipulating prices in the multi-billion dollar market. Continue reading »
Goldman Sachs has finally admitted to committing fraud. Specifically, Goldman Sachs reached a settlement yesterday with the Department of Justice, in which it admitted fraud:
The settlement includes a statement of facts to which Goldman has agreed. That statement of facts describes how Goldman made false and misleading representations to prospective investors about the characteristics of the loans it securitized and the ways in which Goldman would protect investors in its RMBS from harm (the quotes in the following paragraphs are from that agreed-upon statement of facts, unless otherwise noted):
Continue reading »
By Reggie Middleton
It’s official, I’m calling a banking crisis in Europe. Things didn’t go well the last time I did this. Of course, many will say, “But the rating agencies have learned their collective lessons. They would most assuredely warn us if the European banks are close to going bust, right?!!!”. Yeah, right! Reference our past research note on so-called trusted parties in private blockchains for banks. Those interested in purchasing the 22 page report on what is likely the first major bank to fall victim to the coming Pan-European Banking Crisis can do so here. All others, feel free to read on…
Here are some key points: Continue reading »
Bradley Birkenfeld is the most significant financial whistleblower of all time, so you might think he’d be cheering on the disclosures in the new Panama Papers leaks. But today, Birkenfeld is raising questions about the source of the information that is shaking political regimes around the world.
“The CIA I’m sure is behind this, in my opinion,” Birkenfeld said.
– From the CNBC article: Swiss Banker Whistleblower: CIA Behind Panama Papers
Last Friday, I published a post titled, Was the Panama Papers “Leak” a Russian Intelligence Operation? Here’s some of what I wrote:
Initially, this seemed to be a theory worth exploring, but in the following days I’ve come to a far different conclusion. The primary divergence between what I currently believe and what Mr. Murray proposed is that I do not think the leaker was a genuine whistleblower motived by the public interest. I think the leaker was working on behalf of a sophisticated intelligence agency. Continue reading »
Earlier today, former central bank staffer and Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, said something shocking. “A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as “sensible, pragmatic and nonpartisan.”
With every passing day, the Fed is slowly but surely losing the game.
Only it is not just former (and in some cases current) Fed presidents admitting central banks are increasingly powerless to boost the global economy, even if they still have sway over capital markets. What is far more insidious to the Fed’s waning credibility is when former economists affiliated with the Fed start repeating mantras that until recently were only a prominent feature in the so-called fringe media. Continue reading »
The latest confirmation of the pain global megabanks are suffering as a result of an abysmal trading environment, in no small part made even worse due to constant central bank tinkering, comes from Japan’s largest brokerage, Nomura, which eight years after buying Lehman’s European and Asian units has decided to fire 15% of its European staff and is abandoning most of its European equities business. Altogether, Nomura will fire about 1,000 bankers between its European and US groups.
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“The mortgage ‘floor clauses’ are a fraud.”
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
Thursday, April 7, 2016, could go down in history as a great day for Spanish mortgage holders and a very grim one for many Spanish banks, thanks to a new ruling that the so-called mortgage floor-clauses that were unleashed across the whole financial sector in 2009 are abusive (but not illegal) and lack transparency.
These floor clauses set a minimum interest rate — typically of between 3% and 4.5% — for variable-rate mortgages, even if the Euribor drops far below that figure. In other words, the mortgages are only really variable in one direction: upwards! Continue reading »
A fine for doing God’s work?
Hot on the heels of Wells Fargo’s $1.2 billion settlement, Bloomberg reports that Goldman Sachs will pay $5.1 billion to settle a U.S. probe into its handling of mortgage-backed securities involving allegations that loans weren’t properly vetted before being sold to investors as high-quality bonds.
“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart Delery.
As AP reports,
The Justice Department announced a $5 billion settlement with Goldman Sachs over the sale of mortgage-backed securities leading up to the 2008 financial crisis. Continue reading »
Just over a year ago, a black swan landed in the middle of Europe, when in what was then dubbed a “Spectacular Development” In Austria, the “bad bank” of failed Hypo Alpe Adria – the Heta Asset Resolution AG – itself went from good to bad, with its creditors forced into an involuntary “bail-in” following the “discovery” of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies.
Austria had previously nationalized Heta’s predecessor Hypo Alpe-Adria-Bank International six years ago after it nearly collapsed under the bad loans it ran up when it grew rapidly in the former Yugoslavia. Having burnt through €5.5 euros of taxpayers’ money to prop up Hypo Alpe, Finance Minister Hans Joerg Schelling ended support in March 2015, triggering the FMA’s takeover. Continue reading »
Italy Seeks “Last Resort” Bailout Fund to “Ringfence” Troubled Banks, Meeting Monday; Italy vs. Austria
Italy’s finance minister, Pier Carlo Padoan, wants to “ringfence” its troubled banks.
Padoan called for a meeting of executive of the troubled banks in Rome on Monday. The banks allegedly will come up with a “Last Resort” bailout fund.
Last resort or first resort, is there a difference at this point in time? Continue reading »
During a leisurely stroll around Germany, one may encounter many strange sights but nothing would stranger than the following ad (courtesy of Peter Barkow) which promises negative 1% interest rates for consumer loans up to 24 months.
Here is the quick and dirty: take out a loan and pay 1% less.
For the fine print we go to Santander Consumer Bank AG, which has this to which has this to say about this self-amortizing (if only in the beginning) loan.
Finance now with 0% and is pay 1% off the purchase price.
Nearly a decade since the housing bubble burst the dirty skeletons still emerge from the closet, and still nobody goes to jail.
In the latest example of how criminal Wall Street behavior leads to zero prison time and just more slaps on the wrist, overnight Warren Buffett’s favorite bank, Wells Fargo, admitted to “deceiving” the U.S. government into insuring thousands of risky mortgages. Its “punishment” – a $1.2 billion settlement of a U.S. Department of Justice lawsuit, the highest ever levied in a housing-related matter. Continue reading »
The Puerto Rican Senate and the House of Representatives have both passed an emergency declaration authorizing the governor to suspend payments on $72 billion in public debt — setting up a dramatic showdown between Puerto Rico and hedge funds amid the island’s historic debt crisis. The bill authorizes the Puerto Rican governor to “protect the health, security and public welfare … [by] using government funds first and foremost for public services.” The dramatic move comes one day after a group of hedge funds sued to freeze the assets of Puerto Rico’s Government Development Bank in efforts to stop the bank from spending money on the island that the hedge funds want to go toward upcoming debt payments.
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Three jailed Kaupthing bankers will be freed today due to a change in legislation.
Former Kaupthing Chairperson of the Board Sigurður Einarsson, former Kaupthing Luxembourg CEO Magnús Guðmundsson and former 10% owner of Kaupthing Ólafur Ólafsson will all be released from Kvíabryggja prison today, Stundin reports, on account of a change to the law. They will instead move to a halfway house, Vernd, where they will have to return every night but will otherwise be free. A member of parliament has criticised the legislation is being “handcrafted” for these bankers. Continue reading »
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place. Administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.
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Last month All News Pipeline warned that major banks were preparing to tighten the screws on American account holders starting April 1st.
It appears that the lock-down of cash has begun.
Never go full Krugman (retard).
Bill Morneau took centre stage last week in the Canadian Parliament and didn’t disappoint. The new Liberal finance minister’s first budget jacked up program spending across the board, to be paid for by borrowing and, eventually, presumably, money printing. His rhetoric was coated with suggestions that “economic growth” would solve the country’s problems. The only folks left out were taxpayers and savers.
On the face of it, Morneau’s logic makes sense. With interest rates near zero and the Canadian government’s debts among the lowest in the G-7, why not borrow a bit and invest in infrastructure? Well, there are several reasons – and all of them augur well for the future of gold. Continue reading »
CHRIS HEDGES: We’re going to be discussing a great Ponzi scheme that not only defines not only the U.S. but the global economy, how we got there and where we’re going. And with me to discuss this issue is the economist Michael Hudson, author of Killing the Host: How Financial Parasites and Debt Destroy the Global Economy. A professor of economics who worked for many years on Wall Street, where you don’t succeed if you don’t grasp Marx’s dictum that capitalism is about exploitation. And he is also, I should mention, the godson of Leon Trotsky.
I want to open this discussion by reading a passage from your book, which I admire very much, which I think gets to the core of what you discuss. You write, Continue reading »
By now it is common knowledge that when it comes to massive, taxpayer-backed hedge funds, few are quite as big as the Swiss National Bank, whose roughly $100 billion in equity holdings have been extensively profiled on these pages, including its woefully investments in Valeant and the spike in its buying of AAPL stock at its all time high.
But while the SNB’s stock holdings are updated every quarter courtesy of its informative SEC-filed 13F (we wish the Fed would also disclose the equities it holds courtesy of its Citadel proxy), getting a gllimpse of the flow is more problematic, and involves waiting for the hedge fund’s, pardon central bank’s annual report. Continue reading »