Jun 24

BAML Admits Wrongdoing, Agrees To Pay $415 Million For “Misusing Customer Cash To Generate Profits”:

The SEC announced on Thursday that Bank of America’s Merrill Lynch unit admitted wrongdoing and has agreed to pay $415 million to settle charges that it “misused customer cash to generate profits for the firm.”

According to the statement, Merrill violated the SEC’s Consumer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account, freeing up billions to finance its own trading activities as a result. Continue reading »

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May 23

Flashback:

American Government Backed Murderous Mexican Drug Cartel For More Than A Decade

CONFIRMED: The DEA Struck A Deal With Mexico’s Most Notorious Drug Cartel

Breaking News: Romney’s Bain Capital Exposed As Cash Laundry For Bush Drug Cartel (Video)


Major banks under investigation for ties to Mexican drug cartels (RT, May 23, 2014):

Federal regulators in the United States are reportedly investigation no fewer than two major American banks with regards to their relationships with clients believed to be tied to Mexican drug cartels.

Reuters reported exclusively on Wednesday this week that the US Securities and Exchange Commission is probing both Charles Schwab Corp. and Bank of America’s Merrill Lynch brokerage firm because clients of those entities were linked to Mexican drug cartels. Continue reading »

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Apr 06

All The Presidents’ Bankers: The Hidden Alliances That Drive American Power (ZeroHedge, April 5, 2014):

The following is an excerpt from ALL THE PRESIDENTS’ BANKERS: The Hidden Alliances that Drive American Power by Nomi Prins (on sale April 8, 2014).  Reprinted with permission from Nation Books. Nomi Prins is a former managing director at Goldman Sachs.

Lloyd Blankfein, James Dimon, John Mack, Brian Moynihan

NIXON’S BANKERS: When What Was Good for Wall Street Was Good for the President

Wall Street’s War

While the protests against the Vietnam War intensified in the first years of the Nixon administration, the financial elite was fighting its own war—over the future of banking and against Glass-Steagall regulations. National City Bank chairman Walter Wriston was a steadfast warrior in related battles, as he fought with Chase chairman David Rockefeller for supremacy over the US banker community and for dominance over global finance.

Rockefeller’s sights were set on a grander prize, one with worldwide implications: ending the financial cold war. He made his mark in that regard by opening the first US bank in Moscow since the 1920s, and the first in Beijing since the 1949 revolution.

Continue reading »

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Jul 26

It Is Happening Again: 18 Similarities Between The Last Financial Crisis And Today (Economic Collapse, July 25, 2013):

If our leaders could have recognized the signs ahead of time, do you think that they could have prevented the financial crisis of 2008?  That is a very timely question, because so many of the warning signs that we saw just before and during the last financial crisis are popping up again.  Many of the things that are happening right now in the stock market, the bond market, the real estate market and in the overall economic data are eerily similar to what we witnessed back in 2008 and 2009.  It is almost as if we are being forced to watch some kind of a perverse replay of previous events, only this time our economy and our financial system are much weaker than they were the last time around.  So will we be able to handle a financial crash as bad as we experienced back in 2008?  What if it is even worse this time?  Considering the fact that we have been through this kind of thing before, you would think that our leaders would be feverishly trying to keep it from happening again and the American people would be rapidly preparing to weather the coming storm.  Sadly, none of that is happening.  It is almost as if they cannot even see the disaster that is staring them right in the face.  But without a doubt, disaster is coming.

The following are 18 similarities between the last financial crisis and today…

Continue reading »

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Apr 15

Gold Crush Started With 400 Ton Friday Forced Sale On COMEX (ZeroHedge, April 15, 2013):

On The Forced Sale…

Via Ross Norman of Sharps Pixley,

The gold futures markets opened in New York on Friday 12th April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract in what proved to be only an opening shot. The selling took gold to the technically very important level of $1540 which was not only the low of 2012, it was also seen by many as the level which confirmed the ongoing bull run which dates back to 2000. In many traders minds it stood as a formidable support level… the line in the sand.

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Feb 02

Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings (Economic Collapse, Jan 29, 2013):

Does a shadowy group of obscenely wealthy elitists control the world?  Do men and women with enormous amounts of money really run the world from behind the scenes?  The answer might surprise you.  Most of us tend to think of money as a convenient way to conduct transactions, but the truth is that it also represents power and control.  And today we live in a neo-fuedalist system in which the super rich pull all the strings.  When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars.  As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt.  That is an amount of money so large that it is almost incomprehensible.  Under this ne0-feudalist system, all the rest of us are debt slaves, including our own governments.  Just look around – everyone is drowning in debt, and all of that debt is making the ultra-wealthy even wealthier.  But the ultra-wealthy don’t just sit on all of that wealth.  They use some of it to dominate the affairs of the nations.  The ultra-wealthy own virtually every major bank and every major corporation on the planet.  They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line.  They control how we view the world through their ownership of the media and their dominance over our education system.  They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO.  When you step back and take a look at the big picture, there is little doubt about who runs the world.  It is just that most people don’t want to admit the truth.The ultra-wealthy don’t run down and put their money in the local bank like you and I do.  Instead, they tend to stash their assets in places where they won’t be taxed such as the Cayman Islands.  According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.

U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn’t hit 32 trillion dollars. Continue reading »

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Jan 10

Secrets and Lies of the Bailout (Rolling Stone, Jan 4, 2013):

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

Continue reading »

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Dec 14

@Amazon.com: Big Oil & Their Bankers In The Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network



The Federal Reserve Cartel: Part IV: A Financial Parasite (Veterans Today, Dec 14, 2012):

(Excerpted from Chapter 19: Big Oil & Their Bankers…Part four of a five-part series)

United World Federalists founder James Warburg’s father was Paul Warburg, who financed Hitler with help from Brown Brothers Harriman partner Prescott Bush. [1]

Colonel Ely Garrison was a close friend of both President Teddy Roosevelt and President Woodrow Wilson.  Garrison wrote in Roosevelt, Wilson and the Federal Reserve, “Paul Warburg was the man who got the Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and opposition.  The mastermind of both plans was Baron Alfred Rothschild of London.”

Continue reading »

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Sep 02

From the article:

Comment: It’s not “socialism for the rich”; that’s an oxymoron.

It’s corporatism, i.e. fascism, as defined by Benito Mussolini.


Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts (Sott.net, Sep 1, 2012):

The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out.

Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:
Continue reading »

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Jul 02

BofA Fined $2.8 Million for Overbilling 95,000 Accounts (Bloomberg, June 21, 2012):

Bank of America Corp.’s Merrill Lynch wealth-management unit was fined $2.8 million by the Financial Industry Regulatory Authority for overbilling customers by $32.2 million over an eight-year period.

Merrill Lynch charged the fees to about 95,000 accounts between April 2003 and December 2011, FINRA said in a statement today. New York-based Merrill Lynch, which was acquired by Bank of America in 2009, lacked an adequate supervisory system to ensure that customers were billed in accordance with their contracts and disclosure documents, the regulator said.

Continue reading »

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Dec 04

See also:

Gerald Celente Endorses Ron Paul For President – ‘The Entire Economic System Is Collapsing’ – ‘Fascism Has Come To America In Every Form’ (Video – Nov. 29, 2011)


Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks? (The Econonomic collapse, Dec. 2, 2011):

What you are about to read should absolutely astound you.  During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.  Do you remember the TARP bailout?  The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the “too big to fail” banks.  Well, that bailout was pocket change compared to what the Federal Reserve did.  As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the “too big to fail” banks between 2007 and 2010.  So have you heard about this on the nightly news?  Probably not.  Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture.  The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down.  The Federal Reserve has been actively picking “winners” and “losers” in the financial system, and it turns out that the “friends” of the Fed always get bailed out and always end up among the “winners”.  This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

Continue reading »

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Oct 21


The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue (Image: PLoS One)

Revealed – the capitalist network that runs the world (New Scientist, Oct. 19, 2011):

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

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Oct 19

Insanity just hit RECORD HIGHS!


HOLY BAILOUT – Federal Reserve Now Backstopping $75 Trillion Of Bank Of America’s Derivatives Trades (The Daily Bail, Oct 18, 2011):

This story from Bloomberg just hit the wires this morning.  Bank of America is shifting derivatives in its Merrill investment banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC.

This means that the investment bank’s European derivatives exposure is now backstopped by U.S. taxpayers. Bank of America didn’t get regulatory approval to do this, they just did it at the request of frightened counterparties.  Now the Fed and the FDIC are fighting as to whether this was sound.  The Fed wants to “give relief” to the bank holding company, which is under heavy pressure.

This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input.  You will also read below that JP Morgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve.

What this means for you is that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in CDS insurance contracts sold by Bank of America and JP Morgan.  Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure.

This is a recipe for Armageddon.  Bernanke is absolutely insane.  No wonder Geithner has been hopping all over Europe begging and cajoling leaders to put together a massive bailout of troubled banks.  His worst nightmare is Eurozone bank defaults leading to the collapse of the large U.S. banks who have been happily selling default insurance on European banks since the crisis began.

BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit (Bloomberg, Oct 18, 2011):

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.

Continue reading »

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Feb 07

Among some of the discoveries of the financial crisis is that the entire financial system is now, following the Lehman bankruptcy, built entirely on fraud. And while Ken Lewis may spend the remainder of his days on some private island with stolen taxpayer money providing for his every last wish, it was he, in following the Fed’s and the Treasury’s orders to make a mockery of fiduciary responsibility, that was among the first people to confirm that there is no rule of low in America, or rather whatever law there is, it only applies to the less than immortal (i.e. the sub-banker class). Below, in an indication that Zero Hedge will never forget, we present the salient highlights from the Ken Lewis deposition on the MAC clause surrounding the Merrill transition, emphasizing the threats from Hank Paulson and Ben Bernanke. For as long as neither of these three is in jail for what is documented shareholder (and taxpayer) fraud, we fail to see why the remaining 300+ million Americans continue to diligently pay their share of taxes into a government that is now beyond (and in full documentation) corrupt. Also, how BofA’s lawyer Wachtell was not at all present during the discussion of the MAC clause, makes a complete mockery of the US legal process in its entirety. We wonder just when the official scribe of the kleptocracy, Andrew R. Sorkin, will write a book disclosing the truth of what happened, including a listing of all the laws broken with full premeditation by every single player, and not the watered down, PG13 (and rather expensive)version  that makes everyone come out like a law-abiding superman.

Full transcript highlights, presented without commentary: Continue reading »

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Jan 29


Added: 28. January 2011

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Dec 03

Related articles:

Federal Reserve Withholds Collateral Data for $885 Billion in Financial-Crisis Loans

UK Banks Borrowed More Than $1 Trillion From US Federal Reserve

Has the Federal Reserve become the central bank of the world?

Federal Reserve to Name Recipients of $3.3 Trillion in Aid During Crisis



Top recipients of overnight loans made by the Federal Reserve under special program that ran from March 2008 through May 2009.

NEW YORK (CNNMoney.com) — The Federal Reserve made $9 trillion in overnight loans to major banks and Wall Street firms during the financial crisis, according to newly revealed data released Wednesday.

The loans were made through a special loan program set up by the Fed in the wake of the Bear Stearns collapse in March 2008 to keep the nation’s bond markets trading normally.

The amount of cash being pumped out to the financial giants was not previously disclosed. All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed — an annual rate of between 0.5% to 3.5%.

Still, the total amount was a surprise, even to some who had followed the Fed’s rescue efforts closely.

“That’s a real number, even for the Fed,” said FusionIQ’s Barry Ritholtz, author of the book “Bailout Nation.” While the fact that the markets were in trouble was already well known, he said the amount of help they needed is still surprising.

“It makes it very clear this was a very serious, very unusual situation,” he said.

Continue reading »

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Nov 30

Here is a flashback on ‘CO2’ first:

Happy Climate Fools’ Day!

Prof. Ian Clark: ‘Rises in C02 lag 800 years behind temperature rises!’ – You will pay taxes for nothing!:

‘Rises in C02 lag 800 years behind temperature rises. So temperature is leading CO2 by 800 years!’

Study: CO2 levels remained constant since 1850!

Watch an ‘Inconvenient Truth (Lie)’ again (What a horrible thought!) or watch the following  video from 2:20 and you will see that CO2 lags 800 years behind temperature rises:

And yes, the hockey stick graph is a fake and it is obvious to anybody:


Redd scheme designed to prevent deforestation but critics call it ‘privatisation’ of natural resources


An aerial view of trees at a forest on Sumatra, Indonesia where millions are being spent to fight deforestation. Photograph: Beawiharta/Reuters

Some of the world’s largest oil, mining, car and gas corporations will make hundreds of millions of dollars from a UN-backed forest protection scheme, according to a new report from the Friends of the Earth International.

The group’s new report – launched on the first day of the global climate summit in Cancun, Mexico, where 193 countries hope to thrash out a new agreement – is the first major assessment of the several hundred, large-scale Redd (Reduced emissions from deforestation and degradation) pilot schemes. It shows that banks, airlines, charitable foundations, carbon traders, conservation groups, gas companies and palm plantation companies have also scrambled into forestry protection.

While forestry is billed as one issue where significant progress could be made at the talks, over the weekend David Cameron, Chris Huhne, the climate change secretary, and the government’s chief scientists all played down the prospect of a global deal to cut carbon emissions.

“British ministers are going to Mexico this week with an approach that is both realistic and optimistic,” the prime minister wrote in the Observer . “Realistic, because we don’t expect a global deal to be struck in Cancun, but optimistic too, because we are viewing this as a stepping stone to future agreement.”

Huhne, who will attend the second week of the talks, was more blunt: “No one expects a binding deal on climate change in Cancun.” But he said deforestation and longer-term climate finance were areas where progress could be made.

The Redd scheme is central to slowing, or halting, deforestation, which causes huge releases of carbon dioxide. But critics say that the scheme amounts to privatisation of natural resources.

FoE’s report shows, for example that the Anglo-Dutch oil firm Shell has linked with Russian gas giant Gazprom and the Clinton Foundation to invest in the Rimba Rey project, 100,000ha of peat swamp in Indonesia. The project is expecting to prevent 75m tonnes of carbon being emitted over 30 years, which could earn the three groups $750m at a modest carbon price of $10 a tonne.

It also says that an investment of little more than $10m by the bank Merrill Lynch, the conservation group Flora and Fauna International and an Australian carbon trading company could generate more than $430m, over 30 years, from a project to protect 750,000ha of forest in Aceh province, Indonesia.

Continue reading »

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Feb 09

goldman-sachs
Goldman Sachs

David Fiderer’s below piece, originally published on the Huffington Post, continues probing the topic of Goldman and AIG. For all intents and purposes the debate has been pretty much exhausted and if there was a functioning legal system, Goldman would have been forced long ago to pay back the cash it received from ML-3 (which in itself should have been long unwound now that plans to liquidate AIG have been scrapped) and to have the original arrangement reestablished (including the profitless unwind of AIG CDS the firm made improper billions on, by trading on non-public, pre-March 2009, information), and now that AIG is solvent courtesy of the government, so too its counterparties can continue experiencing some, albeit marginal, risk, instead of enjoying the possession of cold hard cash. Oh, and Tim Geithner would be facing civil and criminal charges.

Yet as we look forward, we ask, who now determines the variation margin on Greek CDS (and Portugal, and Dubai, and Spain, and, pretty soon, Japan and the US), the associated recovery rate, and how much collateral should be posted by sellers of Greek protection? If Greek banks, as the rumors goes, indeed sold Greek protection, and, as the rumor also goes, Goldman was the bulk buyer, either in prop or flow capacity, it is precisely Goldman, just like in the AIG case, that can now dictate what the collateral margin that Greek counterparties, and by extension the very nation of Greece, have to post on billions of dollars of Greek insurance. Let’s say Goldman thinks Greece’s debt recovery is 75 cents and the CDS should be trading at 700 bps, instead of the “prevailing” consensus of a 90 recovery and 450 spread, then it will very likely get its way when demanding extra capital to cover potential shortfalls, since Goldman itself has been instrumental in covering up Greece’s catastrophic financial state and continues to be a critical factor in any future refinancing efforts on behalf of Greece. Obviously this incremental margin, which only Goldman will ever see, even if the CDS was purchased on a flow basis, will never be downstreamed on behalf of its clients, and instead will be used to [buy futures|buy steepeners|prepay 2011 bonuses|buy more treasuries for the BONY $60 billion Treasury rainy day fund].

In essence, through its conflict of interest, its unshakable negotiating position, and its facility to determine collateral requirements and variation margin, Goldman can expand its previous position of strength from dictating merely AIG and Federal Reserve decision making, to one which determines sovereign policy! This is unmitigated lunacy and a recipe for financial collapse at the global level.

This is yet another AIG in the making, with Goldman this time likely threatening to accelerate the collapse not merely of the US financial system, but of the global one, in order to attain virtually infinite negotiating leverage. Of course, the world will not allow a Greece-initiated domino, allowing Goldman to call everyone’s bluff once again. Continue reading »

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Feb 04

Feb. 3 (Bloomberg) — Italy’s financial police are seizing 73.3 million euros ($102 million) of assets from Bank of America Corp. and a unit of Dexia SA as part of a probe into an alleged derivatives fraud in the region of Apulia.

Police are investigating losses on derivatives linked to the sale of 870 million euros of bonds sold by the regional government in 2003 and 2004, according to an e-mail from the prosecutor’s office in Bari today. The banks misled the municipality, located in the heel of Italy, on the economic advantages of the transaction and concealed their fees, the prosecutor said.

The region, also known as Puglia, joins more than 519 Italian municipalities that face 990 million euros in derivatives losses, according to data compiled by the Bank of Italy. In Milan, prosecutors seized assets from four banks including JPMorgan Chase & Co. and UBS AG in April and requested they stand trial for alleged fraud. Hearings started this month.

“Italy, like other countries, is full of these examples,” said Dario Loiacono, a banking lawyer in Milan who isn’t involved in the case. “It’s the result of the unavoidable asymmetry of information between the banks and the municipal borrowers.” Continue reading »

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Jan 29

Jan. 29 (Bloomberg) — The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.

The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.

That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc.’s own mid-September bankruptcy filing.

Saving the System Continue reading »

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Dec 31

goldman-sachs-headquarters

NEW YORK — When financial titan Goldman Sachs joined some of its Wall Street rivals in late 2005 in secretly packaging a new breed of offshore securities, it gave prospective investors little hint that many of the deals were so risky that they could end up losing hundreds of millions of dollars on them.

McClatchy has obtained previously undisclosed documents that provide a closer look at the shadowy $1.3 trillion market since 2002 for complex offshore deals, which Chicago financial consultant and frequent Goldman critic Janet Tavakoli said at times met “every definition of a Ponzi scheme.”

The documents include the offering circulars for 40 of Goldman’s estimated 148 deals in the Cayman Islands over a seven-year period, including a dozen of its more exotic transactions tied to mortgages and consumer loans that it marketed in 2006 and 2007, at the crest of the booming market for subprime mortgages to marginally qualified borrowers.

In some of these transactions, investors not only bought shaky securities backed by residential mortgages, but also took on the role of insurers by agreeing to pay Goldman and others massive sums if risky home loans nose-dived in value — as Goldman was effectively betting they would.

Some of the investors, including foreign banks and even Wall Street giant Merrill Lynch, may have been comforted by the high grades Wall Street ratings agencies had assigned to many of the securities. However, some of the buyers apparently agreed to insure Goldman well after the performance of many offshore deals weakened significantly beginning in June 2006.

Goldman said those investors were fully informed of the risks they were taking.

These Cayman Islands deals, which Goldman assembled through the British territory in the Caribbean, a haven from U.S. taxes and regulation, became key links in a chain of exotic insurance-like bets called credit-default swaps that worsened the global economic collapse by enabling major financial institutions to take bigger and bigger risks without counting them on their balance sheets.

The full cost of the deals, some of which could still blow up on investors, may never be known.

Before the subprime crisis, the U.S. financial system had used securities for 40 years to generate $12 trillion to help Americans finance their houses, cars and college educations, said Gary Kopff, a financial services consultant and the president of Everest Management Inc. in Washington. The offshore deals, he lamented, “became the biggest contributors to the trillions of dollars of losses” in 2008’s global meltdown. Continue reading »

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Dec 05

A senior Chinese official who oversees the country’s largest state-owned enterprises has publicly slammed western investment banks for “maliciously” peddling complicated derivative products that caused huge losses for Chinese companies over the last year.

In Beijing’s strongest criticism on the matter to date, Li Wei, vice director of the State-owned Assets Supervision and Administration Commission, singled out Goldman Sachs, Morgan Stanley, Merrill Lynch and Citigroup in a long and highly critical article in the latest issue of an official Communist party newspaper.

The large losses suffered by Chinese state companies were “closely associated with the intentionally complex and highly leveraged products that were fraudulently peddled by international investment banks with evil intentions,” Mr Li asserted. “To a certain extent some international investment banks were the chief criminals and the root of ruin for the Chinese enterprises who encountered this financial derivatives Waterloo.”

In his article, Mr Li said 68 of the 130-odd state companies controlled directly by Sasac had been buying derivatives to speculate or hedge against rising commodity prices and fluctuating currencies and interest rates, even though some of them were not authorised to do so.

These 68 companies had booked total combined net losses of Rmb11.4bn on the Rmb125bn worth of financial derivatives products they had bought by the end of October 2008, Mr Li said.

The government has not previously revealed the full extent of losses suffered by Chinese companies that made ill-fated bets on over-the-counter, mostly offshore, derivatives.

In September, Sasac warned that some of the contracts were illegal and might be invalidated, a move that prompted some western banks to agree quietly to renegotiate contracts behind closed doors. Continue reading »

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Oct 23

“When the people find they can vote themselves money, that will herald the end of the republic.”
– Benjamin Franklin


Added: 22. October 2009

Fall Of The Republic documents how an offshore corporate cartel is bankrupting the US economy by design. Leaders are now declaring that world government has arrived and that the dollar will be replaced by a new global currency.

President Obama has brazenly violated Article 1 Section 9 of the US Constitution by seating himself at the head of United Nations’ Security Council, thus becoming the first US president to chair the world body.

A scientific dictatorship is in its final stages of completion, and laws protecting basic human rights are being abolished worldwide; an iron curtain of high-tech tyranny is now descending over the planet.

A worldwide regime controlled by an unelected corporate elite is implementing a planetary carbon tax system that will dominate all human activity and establish a system of neo-feudal slavery.

Continue reading »

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Oct 05

If people trust the US government and the Federal Reserve, then they are doomed and they deserve it, because they haven’t done they research.

Why would you trust somebody that has been caught lying and stealing almost all of the time?

Why would you trust somebody that has brought down the value of the US dollar to 5 cents compared to 1913, when the Federal Reserve banksters took over?

Why would you trust somebody that has stolen essentially 95% of your money?

Why would you trust somebody that threatens with an economic meltdown if you would take a look into their books?


Senior Officials Had Financial Concerns About Nine Bank Instiutions Receiving TARP Funds

banksters-and-money
The chief watchdog for the government’s $700 billion bailout program says federal officials were trying to contain the worst financial crisis in decades last year with the Troubled Asset Relief Program, but they had concerns about the bank institutions’ financial health. (ABC News Photo Illustration)


The Treasury Department and the Federal Reserve lied to the American public last fall when they said that the first nine banks to receive government bailout funds were healthy, a government watchdog states in a new report released today.

Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country’s economy, federal officials knew otherwise.

“Contemporaneous reports and officials’ statements to SIGTARP during this audit indicate that there were concerns about the health of several of the nine institutions at that time and, as detailed in this report, that their overall selection was far more a result of the officials’ belief in their importance to a system that was viewed as being vulnerable to collapse than concerns about their individual health and viability,” Barofsky says.

Last October, the government was in the midst of trying to contain the worst financial crisis in decades. On Sept. 7, 2008, mortgage giants Fannie Mae and Freddie Mac were placed under conservatorship. On Sept. 15, the massive investment bank Lehman Brothers filed for bankruptcy. The next day, insurance giant AIG needed an $85 billion government loan to avoid collapse.

On Oct. 13, after Congress had passed the $700 billion financial bailout program earlier that month, Treasury provided capital injections for nine institutions that together held over $11 trillion in assets: Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Merrill Lynch, State Street and the Bank of New York Mellon. As of June 2008, these nine banks accounted for around 75 percent of all assets held by U.S. banks.

In announcing the initial $125 billion provided to these banks, former Treasury Secretary Hank Paulson on Oct. 14 said,These are healthy institutions, and they have taken this step for the good of the U.S. economy. As these healthy institutions increase their capital base, they will be able to increase their funding to U.S. consumers and businesses.”

That same day, the Treasury Department, the Federal Reserve and the FDIC also released a joint statement reiterating that “these healthy institutions are taking these steps to strengthen their own positions and to enhance the overall performance of the US economy.” Continue reading »

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Sep 20

Related article: Eliot Spitzer: Federal Reserve is a Ponzi scheme, an inside job:
The Federal Reserve – the quasi-autonomous body that controls the US’s money supply – is a “Ponzi scheme” that created “bubble after bubble” in the US economy and needs to be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York.


Is a political scandal brewing in New York? A year and a half after taking over for a disgraced Spitzer, Paterson is now at war with everyone, but most notable the New York State Budget, and now, the President.

Reports the New York Times:

President Obama has sent a request to Gov. David A. Paterson that he withdraw from the New York governor’s race, fearing that Mr. Paterson cannot recover from his dismal political standing, according to two senior administration officials and a New York Democratic operative with direct knowledge of the situation.
The decision to ask Mr. Paterson to step aside was proposed by political advisers to Mr. Obama, but approved by the president himself, one of the administration officials said.
“Is there concern about the situation in New York? Absolutely,” the second administration official said Saturday evening. “Has that concern been conveyed to the governor? Yes.”
The president’s request was conveyed to the Mr. Paterson by Representative Gregory W. Meeks, a Queens Democrat, who has developed a strong relationship with the Obama administration, they said.

Yet Paterson seems unwilling to pull a Perella-Weinberg just yet:

“The message the White House wanted to send – that it wants Paterson to step aside – was delivered,” said the Democratic operative,, who spoke on condition of anonymity because the discussions were intended to be confidential. “He is resistant.”

What is the reason for this escalation? Simple – Bank Of America, and SEC-gate. Throw in some potential race issues, and you have one clusterfuck of a situation about to develop:

Now, Mr. Cuomo effectively has the blessing of the nation’s first black president to run against New York’s first black governor. That will probably neutralize any criticism he may face among the governor’s prominent black allies, including Representative Charles B. Rangel of Harlem, who warned this year that the party would become racially polarized if Mr. Cuomo took on Mr. Paterson.

With Andrew Cuomo now elbow deep in the Merrill bonus investigation, and likely about to file criminal charges against Ken Lewis any minute, what better way to shut him up than to promote him immediately to the post he will obtain sooner or later anyway. If in the meantime, the Faustian bargain between Lewis and Paulson/Bernanke can be retained without Lewis actually going to jail for folding like a lawn chair to threats about his job security by the Chairman, so much the better. As for the simple matter of how and why the President can so blatantly interfere in State affairs, and specifically nudging the direction of popular elections, which ultimately are the domain purely of US citizens, it is likely that nobody will care.

Submitted by Tyler Durden on 09/19/2009

Source: ZeroHedge

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Jul 31

July 30 (Bloomberg) — Citigroup Inc., Merrill Lynch & Co. and seven other U.S. banks paid $32.6 billion in bonuses in 2008 while receiving $175 billion in taxpayer funds, according to a report by New York Attorney General Andrew Cuomo.

Cuomo analyzed 2008 bonuses at nine banks that received Trouble Asset Relief Program financing from the U.S. government. New York-based Citigroup and Merrill, which has since been taken over by Bank of America Corp., received TARP funding totaling $55 billion, Cuomo said.

Continue reading »

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Jul 20


July 16, 2009 C-SPAN

Hank Paulson admits to threatening Bank of America’s Ken Lewis

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Jul 19

financial-terrorist-henry-paulson
Hank Paulson admitted to threatening Bank of America CEO Ken Lewis when Lewis threatened to pull the plug on the Merrill Lynch merger last fall.
Photo: AP

Former Treasury Secretary Henry Paulson made no bones about it: He did threaten Bank of America CEO Ken Lewis when Lewis threatened to pull the plug on the Merrill Lynch merger last fall.

“I further explained to him that, under such circumstances, the Federal Reserve could exercise its authority to remove management and the board of Bank of America,” Paulson told the House Oversight and Government Reform Committee on Thursday. “By referring to the Federal Reserve’s supervisory powers, I intended to deliver a strong message.”

That admission pretty much blew away the committee’s top Republican, Rep. Darrell Issa of California.

“The inappropriate behavior of government officials did not start or end with the threat to fire Ken Lewis and Bank of America’s board of directors,” Issa said. “It is a threat to the foundations of our free society when government officials, acting in the midst of a crisis, use dire predictions of imminent disaster to justify their encroachment on our individual liberty and the rule of law.”

Related articles:
Paulson Admits Pressuring Bank of America (ABC News)
Paulson admits bank merger threat (BBC News)

By MARTIN KADY II
7/17/09 4:21 AM EDT

Source: Politico

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Jun 29

Bernanke is ‘the perfect puppet’ and a ‘total success’ for the elitists … but a total disaster for the people.

Jim Rogers: We are going to have another Depression in the U.S. (Video):
“Mr. Bernanke has never been right. He has been in the government for six or seven years, he has never been right.”

Marc Faber: Bernanke Is An Economic Criminal And In My Opinion He Is A Madman (06/06/09) (Video)

Such ‘competence’ needs to be rewarded by the other perfect puppet:

Obama proposals to greatly increase the power of the Federal Reserve



ben-bernanke

Inquiring minds are reading Bernanke Flubs Tryout, Still Up for Leading Role by Caroline Baum.

Most often I agree with Caroline, but not this time.

After trashing (and rightfully so) Bernanke’s last appearance before Congress, Caroline somehow arrives at the following conclusion.

It would be hard to find someone more suited for the job of Fed chairman than Bernanke. His performance yesterday has nothing to do with his unique qualifications for the position. … Unless President Barack Obama wants a solo pilot, he would do well to tap Bernanke for a second term.

Let’s take a look at the qualifications of which Baum speaks.

Ten Qualifications

1) Bernanke is either a liar or has a memory problem. I believe the former. Either way, there is a problem when a Fed chairman cannot recall a conversation with another Fed governor over something as critical as the Bank of America/Merrill Lynch merger. See Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America “Turd in the Punchbowl” for my take.

2) Bernanke claims to be a student of the great depression yet amazingly concludes the cause was misguided Fed policy after the stock market crash. This is nonsense. The cause of the great depression and the cause of the current depression (yes we are in a depression), is the massive expansion of credit and debt fostered by the Fed itself. Bernanke is no student of history, he is a dunce.

3) Bernanke has on many occasions promised transparency. This is an outright lie. There is no transparency and Bloomberg has filed freedom of information lawsuits requesting information that should have been disclosed. Moreover, Congress had to subpoena the Fed in regards to the Bank of America / Merrill Lynch shotgun wedding which is how we know about Bernanke’s selective memory loss. What else is Bernanke hiding?

Continue reading »

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Apr 25

Pressure from Fed and Treasury chiefs to complete purchase of Merrill Lynch despite ‘staggering’ losses


Merrill Lynch Chairman and CEO John Thain, left, shakes hands with Bank of America Chairman and CEO Ken Lewis, at a news conference last autumn. The deal between the banks has proved controversial Photo: AP

Ken Lewis’s position at the helm of Bank of America looked increasingly uncertain on Thursday after it emerged he stopped short of pulling out of the deal to buy loss-making Merrill Lynch after Treasury Secretary Hank Paulson threatened to oust him and his entire board.

Mr Lewis BoA’s chairman and chief executive, also knowingly hid the state of Merrill Lynch’s “staggering” losses from shareholders at the behest of former Treasury Secretary Paulson and Federal Reserve chairman Ben Bernanke.

The revelations were contained in a batch of BoA board minutes and testimony from Mr Lewis and Mr Paulson sent by New York Attorney General Andrew Cuomo to the Securities and Exchange Commission and Congressional leaders Chris Dodd and Barney Frank.


Bank of America chief ‘told to buy Merrill or face sack’

Bank boss claims US treasury told him to seal $50bn deal and keep quiet about brokerage’s huge losses

The US government threatened to eject the entire board of Bank of America if the firm pulled out of a $50bn (£34bn) takeover of troubled Merrill Lynch in December, according to new documents set to inflame a bitter shareholder dispute at America’s wealthiest bank.

In potentially explosive testimony to regulators, Bank of America’s chief executive, Ken Lewis, has claimed the US treasury ordered him to press ahead with a buyout of Merrill and to keep quiet about the Wall Street brokerage’s mounting losses.

Full article here: The Guardian


Mr Cuomo, who released details of the exchanges yesterday, has been investigating BoA after Merrill paid $3.6bn (£2.45bn) of bonuses to its staff just days before the acquisition was completed on January 1.

He believes he has uncovered “facts that raise questions about the transparency” of the Treasury’s $700bn bank bail-out programme “as well as about corporate governance and disclosure practices at Bank of America.”

Investors have already expressed serious concern that BoA did not attempt to pull out of the merger with Merrill, given the investment bank racked up losses of $15.84bn in the fourth quarter of 2008. The loss required BoA to take on an extra $20bn of Treasury funding as well as an $118bn loan-loss guarantee.

The documents paint all three men in a bad light. Mr Lewis, though initially keen to pull out of the Merrill deal after revealing the extent of what he calls the “staggering amount of deterioration in its finances,” claimed he caved in after being threatened by Mr Paulson on December 21, ten days before the sale was due to complete.

“That makes it simple. Let’s deescalate,” Mr Lewis told Mr Paulson, with reference to his original plan to invoke a material adverse clause (MAC) to get out of the Merrill deal.

Mr Paulson later testified to Mr Cuomo that he only threatened Mr Lewis “at the request of Chairman Bernanke.”

Continue reading »

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