The crooks who run the Western financial system set up the gold market in a way that lets them control the price. Gold is not priced in the physical gold market where bullion is bought and sold. Gold is priced in a futures market where uncovered contracts that are settled in cash are bought and... Read More
Glass-Steagall or Another Economic Meltdown?
Donald, listen, whatever you’ve done so far, whatever you’ve messed up, there’s one thing you could do that would make up for a lot. It would be huge! Terrific! It could change our world for the better in a big-league way! It could save us all from economic disaster! And it isn’t even hard to... Read More
William Goetzmann, Money Changes Everything: How Finance Made Civilization Possible (Princeton University Press, 2016) Debt mounts up faster than the means to pay. Yet there is widespread lack of awareness regarding what this debt dynamic implies. From Mesopotamia in the third millennium BC to the modern world, the way in which society has dealt with... Read More
All of Europe, and insouciant Americans and Canadians as well, are put on notice by Syriza’s surrender to the agents of the One Percent. The message from the collapse of Syriza is that the social welfare system throughout the West will be dismantled. The Greek prime minister Alexis Tsipras has agreed to the One Percent’s... Read More
A 1970 strike in Ireland provoked an admirable outbreak of ingenuity - Greece should take note
Television reporters stand in front of the shut doors of banks in Athens and speak as if a few days more of bank closure brings the Greeks that much closer to catastrophe. Media coverage dwells obsessively on the theme that for Greece it is five minutes to midnight, but somehow midnight never comes. Shuttered banks... Read More
The Rise of “Criminal Capitalism”
Introduction: About 75% of US employees work 40 hours or longer, the second longest among all OECD countries, exceeded only by Poland and tied with South Korea. In contrast, only 10% of Danish workers, 15% of Norwegian, 30% of French, 43% of UK and 50% of German workers work 40 or more hours. With the... Read More
Government Backing for Toxic Mortgage Securities?
The leaders of the U.S. Senate Banking Committee, Sen. Tim Johnson (D., S.D.) and Sen. Mike Crapo (R., Idaho), released a draft bill on Sunday that would provide explicit government guarantees on mortgage-backed securities (MBS) generated by privately-owned banks and financial institutions. The gigantic giveaway to Wall Street would put US taxpayers on the hook... Read More
Grand Cayman: In 1503, when Christopher Columbus discovered this remote island group between Jamaica and Mexico’s Yucatan, its only inhabitants were crocodiles, turtles, iguana and insects. He named it Las Tortugas. It didn’t take long for Tortugas to become the most notorious pirate’s lair of the West Indies from where they preyed on Spanish treasure... Read More
Banks nab $400B in USTs for "Window Dressing"
“Increasing the Fed’s transparency, openness and accountability has been one of my top priorities as chairman.” -Fed Chairman Ben Bernanke on the 100th anniversary of the Federal Reserve Ben Bernanke is a big believer in transparency. Transparency, transparency, transparency. Hardly a day goes by that Bernanke doesn’t reiterate his commitment to transparency. He thinks the... Read More
"I am not a crook," Jamie Dimon might as well have been insisting in his five telephone calls these past two weeks with U.S. Attorney General Eric Holder, asking that a criminal investigation of JPMorgan Chase be dropped as part of a plea deal on what has turned out to be a $13 billion fine... Read More
As I have pointed outbefore in this space, much of the most shocking evidence of America’s weakening position in the world these days gets swept under the rug in the mainstream press. We had another instance last week when a Japanese bank was found to have egregiously flouted the American-led financial embargo on Iran. The... Read More
Hard Landing in China? It's Just a Matter of Time
An uptick in manufacturing activity in March has eased fears of a hard landing, but China is not out of the woods yet, not by a long-shot. The industrial powerhouse has succumbed to the same problems as its trading partners in the West who were thrust into crisis by soaring real estate prices, reckless credit... Read More
Although the aftershocks created by the botched Cyprus bank bailout are by no means over, the news this morning is on balance reassuring. At least we should be thankful for small mercies: the European banking system is still standing. While the crisis has precipitated bank runs in Cyprus, depositors elsewhere seem to have remained remarkably... Read More
How Wall Street "Privatized" Money Creation
Regulators are worried about the explosive growth of shadow banking, and they should be. Shadow banks were at the heart of the last financial crisis and they'll be at the heart of the next financial crisis as well. There's no doubt about it. It's simply impossible to maintain a system where unregulated, non-bank financial institutions... Read More
Cordray Fails to Protect
Richard Cordray might be the most powerful man in America today, and you've probably never even heard of him. As head of the new US Consumer Financial Protection Bureau (CFPB), Cordray can effectively set the clock back to 2005 and inflate another gigantic, economy-busting housing bubble without breaking a sweat. All he has to do... Read More
How the Financial Lobbyists Carried the Day
Last Thursday, the Wall Street Journal ran an article titled "Burdened by Old Mortgages, Banks Are Slow to Lend Now", in which, author Nick Timiraos said that the reason that housing has been so slow to recover is because Fannie and Freddie "have been forcing banks to take back an increasing number of loans that... Read More
Skimming Profits Off Bad Loans
Didn't Ben Bernanke promise that another round of bond purchases would lower unemployment and boost economic growth? We think he did, which is why we're wondering why all the benefits from QE3 appear to be going to the banks. According to Bloomberg News: Well, how do you like that? That means that Mr. Bernanke's trickle... Read More
Since what is now going is being described as “the greatest financial scandal in the history of Britain” -- the Barclays imbroglio – I have a question to ask. Where are those tents outside St Pauls? Or ones in solidarity this side of the Atlantic? Where are the vibrant reminders that – as has happened... Read More
If you are a contrarian like me, you probably hold a few bank stocks — so as the Libor scandal has gathered steam you may be wondering about your exposure. Daily newspaper reports have not been much help because they mention only a few of the more obvious names. As a reader service, I have... Read More
I Thought People Were Supposed to Rob Banks, Not Vice Versa
Over a year ago Vi was wondering where to put her family’s modest savings. The peso was erratic. Any contact with the US involved too many forms and regulations. A friend suggested Danskebank, which is Danish. We thought about it. The Danes were not too vivacious, entirely inadequate as party animals, but solid and respectable.... Read More
Gaming the Housing Market
It's the same everywhere. The banks are keeping houses off the market to trick people into believing that prices have hit bottom. But prices haven't hit bottom, in fact, they still have a long way to go. So, what's going on here; what do the banks hope to gain by withholding supply? Here's a clip... Read More
What a Mess!
A poor jobs report, higher than expected inflation in China, and another flare-up in the Eurozone sent stocks tumbling on Monday. US Treasuries rallied on news from the Labor Department that employers added just 120,000 non-farm payrolls in March, far below analysts most pessimistic predictions. The Dow Jones lost 130 points on the day, while... Read More
The 50-State Foreclosure Settlement
Under the terms of the 50-state mortgage foreclosure settlement, US taxpayers could end up paying billions in penalties that were supposed to be paid by the banks. That's the gist of a front-page story which appeared in the Financial Times on Thursday, February 17. The widely-cited article by Shahien Nasiripour notes that the 5 banks... Read More
What will their future be – and what is the government’s proper financial role?
The inherently symbiotic relationship between banks and governments recently has been reversed. In medieval times, wealthy bankers lent to kings and princes as their major customers. But now it is the banks that are needy, relying on governments for funding – capped by the post-2008 bailouts to save them from going bankrupt from their bad... Read More
The Derivatives Flap
Why is Bank of America moving derivatives from Merrill Lynch to an insured subsidiary? Is it because the derivatives could blow up at any time leaving Merrill with gigantic, unsustainable losses? If that's the case, then it would make perfect sense to shift them into a depository institution that's covered by the FDIC. That way,... Read More