Infinite Unknown

Before you read the Financial Times article below, read this, if you haven’t done so:

- Mike Krieger: This Is The Last Dance:

They refuse to allow the yuan to strengthen because they know that once they do that it will mark the real end of the dollar era. So instead they are spending like crazy on infrastructure ahead of them allowing the dollar to plunge.  Then the strong yuan will be employed to purchase all the commodities they need to utilize their infrastructure and the OECD gets priced out. To those that talk about yuan devaluation, you need to be specific.  Devaluation versus what?  Versus commodities generally along with other currencies?  I can buy that argument very easily.  Versus the dollar, highly doubtful.  Why? The latest data says China owns $877.5 billion in U.S. treasuries. All they have to do is start dumping and the dollar is finished as the Fed will be forced to print so many dollars it will make Mugabe blush.  People need to wake up.

(Mike Krieger, formerly a macro analyst at Bernstein, and currently running his own fund, KAM LP, summarizies the pretend reality we are all caught in now, knowing full well America is set on a crash course with reality at some point, yet sticking our collective heads in the sand, as the collapse will be some time in the “indefinite” future. In the meantime, banks will continue to boost US GDP by peddling “financial innovation” and restructuring advice to countries like Greece… and nothing else.)

And what happened to the US dollar since China allowed the yuan to strengthen?!!!

And now Illuminati bank JPMorgan and …

Aug. 26 (Financial Times) — A number of the world’s biggest banks have launched international roadshows promoting the use of the renminbi to corporate customers instead of the dollar for trade deals with China.

HSBC, which recently moved its chief executive from London to Hong Kong, and Standard Chartered, are offering discounted transaction fees and other financial incentives to companies that choose to settle trade in the Chinese currency.

“We’re now capable of doing renminbi settlement in many parts of the world,” said Chris Lewis, HSBC’s head of trade for greater China. “All the other major international banks are frantically trying to do the same thing.”

HSBC and StanChart are among a slew of global banks – including Citigroup and JPMorgan – holding roadshows across Asia, Europe and the US to promote the renminbi to companies.

The move aligns the banks favourably with Beijing’s policy priorities and positions them to profit from what is expected to be a rapidly growing line of business in the future.

The phenomenon will accelerate Beijing’s drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro. Continue reading »

Tags: China, Citigroup, Dollar, Economy, Global News, Government, HSBC, JPMorgan, Politics, U.S., Yuan

Listen to Catherine Austin Fitts in this video from 2008:

- Former Assistant Secretary of Housing: The U.S. is the Global Leader in Illegal Money Laundering

A U.S. Customs and Border Protection agent inspects a vehicle heading into the U.S. at the San Ysidro border crossing in San Diego.(Bloomberg)

Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets magazine reports in its August 2010 issue.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

‘Blatant Disregard’

Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history — a sum equal to one-third of Mexico’s current gross domestic product.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.

Since 2006, more than 22,000 people have been killed in drug-related battles that have raged mostly along the 2,000-mile (3,200-kilometer) border that Mexico shares with the U.S. In the Mexican city of Ciudad Juarez, just across the border from El Paso, Texas, 700 people had been murdered this year as of mid- June. Six Juarez police officers were slaughtered by automatic weapons fire in a midday ambush in April.

Rondolfo Torre, the leading candidate for governor in the Mexican border state of Tamaulipas, was gunned down yesterday, less than a week before elections in which violence related to drug trafficking was a central issue.

45,000 Troops

Mexican President Felipe Calderon vowed to crush the drug cartels when he took office in December 2006, and he’s since deployed 45,000 troops to fight the cartels. They’ve had little success.

Among the dead are police, soldiers, journalists and ordinary citizens. The U.S. has pledged Mexico $1.1 billion in the past two years to aid in the fight against narcotics cartels.

In May, President Barack Obama said he’d send 1,200 National Guard troops, adding to the 17,400 agents on the U.S. side of the border to help stem drug traffic and illegal immigration.

Behind the carnage in Mexico is an industry that supplies hundreds of tons of cocaine, heroin, marijuana and methamphetamines to Americans. The cartels have built a network of dealers in 231 U.S. cities from coast to coast, taking in about $39 billion in sales annually, according to the Justice Department.

‘You’re Missing the Point’

Twenty million people in the U.S. regularly use illegal drugs, spurring street crime and wrecking families. Narcotics cost the U.S. economy $215 billion a year — enough to cover health care for 30.9 million Americans — in overburdened courts, prisons and hospitals and lost productivity, the department says.

“It’s the banks laundering money for the cartels that finances the tragedy,” says Martin Woods, director of Wachovia’s anti-money-laundering unit in London from 2006 to 2009. Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia’s branch network.

“If you don’t see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you’re missing the point,” Woods says.

Cleansing Dirty Cash

Continue reading »

Tags: Bank of America, Banks, Citigroup, Drugs, Economy, Global News, HSBC, Mexico, Military, Politics, Santander, U.S., Wachovia, Wall Street, Wells Fargo & Co.

Congress looked serious about finance reform – until America’s biggest banks unleashed an army of 2,000 paid lobbyists

This article originally appeared in RS 1106 from June 10, 2010.

(Rolling Stone Magazine) — It’s early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act - the massive, year-in-the-making effort to clean up the Wall Street crime swamp - word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once-indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.

The real shocker is a thing known among Senate insiders as “716.” This section of an amendment would force America’s banking giants to either forgo their access to the public teat they receive through the Federal Reserve’s discount window, or give up the insanely risky, casino-style bets they’ve been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street’s most lucrative profit centers: Five of America’s biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan’s trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed. Continue reading »

Tags: Alan Greenspan, Bank of America, Banks, Barack Obama, Ben Bernanke, Citigroup, Congress, Derivatives, Derivatives market, Economy, FDIC, Fed, Federal Reserve, Goldman Sachs, Government, JPMorgan, Law, Lobbyists, Morgan Stanley, Obama administration, Politics, Ron Paul, Senate, Sheila Bair, Timothy Geithner, U.S., Wall Street

Can’t make this up!

Here is an email from a member of the House Committee on Homeland Security to Max Keiser regarding Financial Terrorism. Both the email and Max Keiser’s response had me laughing my head off.

Hi Mr. Keiser,

My name is Chris Beck and I work on the staff of the House Committee on Homeland Security in Washington, DC. I have been reading and listening to you regarding the May 6 stock market plunge and the likelihood that this was an act of financial terrorism. I think this is a huge issue that has not been given enough attention, and may warrant oversight by our committee. I would greatly appreciate the chance to talk to you to make sure I understand the nuts and bolts, and to figure out what avenues may be available to correct what appears to be a massive fraud that could undermine U.S. National Security. Can you please contact me and let me know if you are available to talk?
Thank you,
Chris

Chris Beck, Ph.D.
Senior Advisor for Science and Technology
House Committee on Homeland Security

I asked Max Keiser how he responded.

Max Replied “I told him to investigate this financial terrorist crime happening right now! in real time!”

Max went on to say …

I think it’s really incredible how clueless these people are.

Given the recent track record of corrupt regulators in D.C. it’s not hard to imagine that Chris Beck is wittingly or unwittingly just bird dogging intelligence that will be fed to Goldman and used to package ever more exotic Financial Terrorist weapons.

My position is the government IS Goldman and any info gleaned by this type of thing will end up helping no one BUT Goldman.

Here is the video that Chris Beck was responding to. Play the first few minutes of it. It will have you rolling on the floor.

I am also told that homeland security was interested in talking with David DeGraw about his post on Market Oracle Financial Terrorism Operations: 9/29/08 & 5/6/10.

This reads like a spoof straight out of The Onion, but I have phone numbers and email address and a chain of emails to verify. Continue reading »

Tags: Ben Bernanke, Bonds, Central Bank, Citigroup, Debt, DHS, Economy, EU, Europe, Fed, Federal Reserve, Germany, Global News, Gold, Goldman Sachs, Government, Homeland Security, IMF, Ireland, Italy, Max Keiser, Obama administration, Politics, Quantitative Easing, Society, Spain, Terrorism, Timothy Geithner, U.S., Wall Street

Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. This has become the most pressing election issue of all

Goldman Sachs was in the spotlight last November when demonstrators protested outside its Washington offices against executive bonuses. (Bloomberg via Getty Images)

The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world. Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government. We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.

Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks - huge lenders in Britain - was handed to its public prosecution service. A court-appointed examiner found that collapsed investment bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was - accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters. In Switzerland UBS has been defending itself from the US’s Internal Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come - except in saintly Britain. Continue reading »

Tags: Bailout, Banks, Citigroup, Derivatives, Derivatives market, Deutsche Bank, Economy, Fraud, Goldman Sachs, Hedge Funds, Iceland, John Paulson, Lehman Brothers, Meltdown, SEC, Taxes, Taxpayers, U.K., U.S., UBS, Wall Street

A Wall Street sign hangs near the New York Stock Exchange in New York, on Dec. 18, 2009. (Bloomberg)

March 26 (Bloomberg) — JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and UBS AG were among more than a dozen Wall Street firms involved in a conspiracy to pay below-market interest rates to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case.

A government list of previously unidentified “co- conspirators” contains more than two dozen bankers at firms also including Bank of America Corp., Bear Stearns Cos., Societe Generale, two of General Electric Co.’s financial businesses and Salomon Smith Barney, the former unit of Citigroup Inc., according to documents filed in U.S. District Court in Manhattan on March 24. Continue reading »

Tags: Bank of America, Banks, Bear Stearns, Citigroup, Conspiracy, Economy, General Electric, Government, JPMorgan, Justice Department, Lehman Brothers, Societe Generale, U.S., UBS, Wall Street

See also:

- Dylan Ratigan & Eliot Spitzer on The Lehman Brothers Report

Timmy-Gate Takes a Turn For The Worse: Did Geithner Help Lehman Hide Accounting Tricks?

Timothy Geithner at the Council on Foreign Relations

By L. Randall Wray

L. Randall Wray, Ph.D. is Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute. His research expertise is in: financial instability, macroeconomics, and full employment policy.

Just when you thought that nothing could stink more than Timothy Geithner’s handling of the AIG bailout, a new report details how Geithner’s New York Fed allowed Lehman Brothers to use an accounting gimmick to hide debt. The report, which runs to 2200 pages, was released by Anton Valukas, the court-appointed examiner. It actually makes the AIG bailout look tame by comparison. It is now crystal clear why Geithner’s Treasury as well as Bernanke’s Fed refuse to allow any light to shine on the massive cover-up underway.

Recall that the New York Fed arranged for AIG to pay one hundred cents on the dollar on bad debts to its counterparties-benefiting Goldman Sachs and a handful of other favored Wall Street firms. (see here) The purported reason is that Geithner so feared any negative repercussions resulting from debt write-downs that he wanted Uncle Sam to make sure that Wall Street banks could not lose on bad bets. Now we find that Geithner’s NYFed supported Lehman’s efforts to conceal the extent of its problems. (see here) Not only did the NYFed fail to blow the whistle on flagrant accounting tricks, it also helped to hide Lehman’s illiquid assets on the Fed’s balance sheet to make its position look better. Note that the NY Fed had increased its supervision to the point that it was going over Lehman’s books daily; further, it continued to take trash off the books of Lehman right up to the bitter end, helping to perpetuate the fraud that was designed to maintain the pretense that Lehman was not massively insolvent. (see here)

Geithner told Congress that he has never been a regulator. (see here) That is a quite honest assessment of his job performance, although it is completely inaccurate as a description of his duties as President of the NYFed. Apparently, Geithner has never met an accounting gimmick that he does not like, if it appears to improve the reported finances of a Wall Street firm. We will leave to the side his own checkered past as a taxpayer, although one might question the wisdom of appointing someone who is apparently insufficiently skilled to file accurate tax returns to a position as our nation’s chief tax collector. What is far more troubling is that he now heads the Treasury - which means that he is not only responsible for managing two regulatory units (the FDIC and OCC), but also that he has got hold of the government’s purse strings. How many more billions or trillions will he commit to a futile effort to help Wall Street avoid its losses? Continue reading »

Tags: AIG, Bailout, Bank of America, Banks, Ben Bernanke, Citigroup, Economy, FDIC, Fed, Federal Reserve, Fraud, JPMorgan, Lehman Brothers, Politics, Timothy Geithner, Wall Street

Goldman Sachs Demands Collateral It Won’t Dish Out

Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc., speaks during a session on day two of the World Economic Forum in Davos, on Jan. 24, 2008. Photographer: Daniel Acker/Bloomberg

March 15 (Bloomberg) — Goldman Sachs Group Inc. and JPMorgan Chase & Co., two of the biggest traders of over-the- counter derivatives, are exploiting their growing clout in that market to secure cheap funding in addition to billions in revenue from the business.

Both New York-based banks are demanding unequal arrangements with hedge-fund firms, forcing them to post more cash collateral to offset risks on trades while putting up less on their own wagers. At the end of December this imbalance furnished Goldman Sachs with $110 billion, according to a filing. That’s money it can reinvest in higher-yielding assets.

“If you’re seen as a major player and you have a product that people can’t get elsewhere, you have the negotiating power,” said Richard Lindsey, a former director of market regulation at the U.S. Securities and Exchange Commission who ran the prime brokerage unit at Bear Stearns Cos. from 1999 to 2006. “Goldman and a handful of other banks are the places where people can get over-the-counter products today.” Continue reading »

Tags: Bank of America, Banks, Citigroup, Derivatives, Derivatives market, Economy, Goldman Sachs, Hedge Funds, JPMorgan, Morgan Stanley, U.S., Wells Fargo & Co.

See also:

- Lehman bosses used accountancy gimmick to cover up debt (Times)

- EXPLOSIVE: Lehman Corruption - Where Are The Cops? (Market Ticker)

The implosion of Lehman Brothers was in part triggered by excessive capital demands from JP Morgan Chase and Citigroup, and in part by the manipulation of its balance sheet by leading directors, a wide-ranging official report into the investment bank’s collapse has found.

Dick Fuld, the former chief executive of Lehman, is criticised in the report which has taken a year to compile

In what is likely to kick-start a series of costly and long-running court cases, the exhaustive investigation found that the two Wall Street banks demanded significant amounts of capital and extra guarantees in the run-up to Lehman’s downfall - with JP Morgan Chase requesting $5bn (£3.3bn) just three days before Lehman’s bankruptcy filing.

At the same time, Lehman directors, including chairman Dick Fuld and former finance director Erin Callan, failed to disclose key practices, and certified misleading statements. The astonishing claims are made in a 2,200-page, nine-volume report written by court-appointed examiner Anton Valukas, which Judge James Peck admitted read “like a best seller”.

The explosive report also calls into question:

• The use of accounting tactics designed to move $50bn from Lehman’s balance sheet.

• The work of auditor Ernst & Young.

• Barclays’ subsequent purchase of Lehman’s US assets.

Among Mr Valukas’s findings - which are designed to help the court and the bank’s trustees establish where there may be legal grounds for future claims - he asserts that the evidence “may support the existence of a . . .[valid] claim that JP Morgan breached the implied covenant of good faith and fair dealing by making excessive collateral requests” to Lehman.

“The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” he says. Continue reading »

Tags: Banks, Citigroup, Economy, JPMorgan, Lehman Brothers, U.S., Wall Street

In the course of getting to know the online forex landscape, we came across the following.

That’s right. When you do a search for “Casino Bonanza Online” you get two ads for online casino-based sites, but the very first is an add for CitiFXPro.com, which is, yes, a retail Forex trading site run by Citi.

Now, it’s not really shocking that a multi-headed behemoth as big as Citigroup (C) has a retail Forex site, but here they’re specifically advertising against gambling-related terms, and showing up right next to Best USA Online CASINOS.

Major Wall Street firms are frequently likened to casinos, but they’re usually not this blatant about it, and usually their services are geared towards sophisticated, institutional investors. But CitiFXPro.com is pure retail, requiring only $10,000 to open an account. That’s not non-trivial, but it’s way less than the threshold for anything that would be regarded as institutional.

And if all this alone weren’t enough to make Paul Volcker lose his lunch, check out what Citi lists as its advantages. Check out the fourth one, specifically: Continue reading »

Tags: Banks, Casino, Citigroup, Economy, FDIC, Forex