The Untouchables

[seanD]

http://online.wsj.com/article/SB10001424052702304023804575566822027252084.html?mod=googlenews_wsj

I was reading this article about Arthur G. Nadel, who was sentenced to 14 years for an investment ponzi scam he ran, which defrauded people out of $168 mil. A fair sentence. But then I got to thinking what the mega bankers get away with, sometimes billions in fraudulent investments. The Goldman Sachs Abacus case for example...

http://www.sec.gov/news/press/2010/2010-59.htm

Let's look at what they did. They bundled a bunch of mortgages into an investment package called a security or collateralized debt obligation (CDO) which they knew were filled with subprime loans about to go belly up, then turned around and bought CDS's (credit default swaps) on those securities before they sold them to investors, IOW, bet against them that they would fail. They were then investigated by the SEC, that found them guilty of fraud. Did Torre or Paulson who were in charged of the fraud go to jail? Did Blankfein go to jail? No. They escaped all criminal charges and were fined $500 mil. Now that might seem like a lot until you realize they made $2 bil on the fraudulent deal! Remember, AIG is the same institution we had to bail out so that they could pay the CDS deal they made with Goldman Sachs that covered other securities (not really sure if this was same deal or not).

Here are other cases where the mega banks defrauded investors and got away scot free...

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=anW3hAG0Zw5k
http://www.nypost.com/p/news/business/metal_are_in_the_pits_2arTlGNbMK7mb1uJeVHb0O/1
http://finance.yahoo.com/tech-ticker/surprise,-wall-street-banks-still-masking-debt-levels-at-the-end-of-each-quarter-463876.html?tickers=xlf,gs,ms,jpm,c,bac
http://online.wsj.com/article/SB124598242367658239.html


Simply amazing.

[seanD]

Business as usual...

http://www.reuters.com/article/idAFN2725907120101027?pageNumber=2

[seanD]

JP Morgan under investigation for the same fraud Goldman Sachs committed. Packaged subprime mortgage loans into CDOs that they knew were risky and would implode, got them a high rating, sold them on the market, then bet against them. I doubt any criminal charges will be leveled at anyone though. Remember, these are the "too big to fail" banks that not only plunged the market into crisis in 2008 (and is still in crisis), but that your tax dollars bailed out as a result.

Business as usual...

http://www.businessinsider.com/the-sec-is-investigating-jpmorgan-2010-11

[Darfius]

No one can say you didn't try to warn people, sean. Way to be a watchtower, buddy. Not the culty kind like Jehovah's Witnesses, either.

[seanD]

"The authorities uncovered billions of dollars in wire transfers, traveller's cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.

The conclusion to the case was only the tip of an iceberg, demonstrating the role of the "legal" banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer."

"But the settlement leaves a sour taste in many mouths – and certainly in Woods's. The deferred prosecution is part of this "cop-out all round", he says. "The regulatory authorities do not have to spend any more time on it, and they don't have to push it as far as a criminal trial. They just issue criminal proceedings, and settle. The law enforcement people do what they are supposed to do, but what's the point? All those people dealing with all that money from drug-trafficking and murder, and no one goes to jail?""

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

[Zombie]

yeah...

apparently justice is blind...

...deaf

...and dumb.

you just have to slip her a $50 while everyone else is watching football.

[seanD]

More whistle-blowers come fourth and expose the abject fraud and criminality that takes place in the "too-big-too-fail" banks that were bailed out by our tax dollars. I ignored the article about the Goldman Sachs guy who recently came fourth because GS is pretty much notorious by now -- exposed by former GS alums like Nomi Prins years ago -- as being a criminal bank...

http://www.propublica.org/article/four-whistleblowers-who-sounded-the-alarm-on-banks-mortgage-shenanigans

http://www.rollingstone.com/politics/blogs/taibblog/bank-of-america-in-trouble-20120302

Since the evidence is crystal clear that these banks are above the law, the question then becomes -- why are they above the law? Is it because they engage in fraud that is too complicated for most people to understand, or is it because they have a powerful influential hold on the regulators in charge of enforcing the law?

[joel]

I was reading this article about Arthur G. Nadel, who was sentenced to 14 years for an investment ponzi scam he ran, which defrauded people out of $168 mil. A fair sentence. But then I got to thinking what the mega bankers get away with, sometimes billions in fraudulent investments. The Goldman Sachs Abacus case for example...

And even that pales in comparison to the coercive ponzi scheme of the U.S. Treasury or Social Security.
There we are talking trillions.

[seanD]

And even that pales in comparison to the coercive ponzi scheme of the U.S. Treasury or Social Security.
There we are talking trillions.

Agreed, but that's harder to prove because it's too complex for most people.

[joel]

Agreed, but that's harder to prove because it's too complex for most people.
No, it's way simpler than CDO's or derivatives etc.

It's just a simple ponzi scheme, paying off the earlier investors with funds from recent investments.

[onefour1]

I am almost finished reading a book entitled, "The creature from Jekyl Island: a second look at the federal reserve", by G Edward Griffin. This is a fabulous book that goes back and looks at the history of banking and how corrupt it has been. It is a real eye opener. From this book I have learned that the big private bankers were behind the creation of the federal reserve and are in bed with the politicians. The ability to create money from nothing and then borrow it out and receive interest on it and use it for many illicit things is what happens. The politicians are able to access any amount of money they desire. No competition for those who run the federal reserve and an unlimited checking account for our government officials. The book also speaks of how we are being taxed with a hidden tax called inflation that is primarily caused by these two unsavory groups. It speaks of Government loans given to thugs who run other countries and guaranteed by the government. This means that if these foreign dictators don't pay it back, we the American taxpayers are stuck with the bill which comes in the form of inflation. This book is loaded with very interesting things you don't learn in your history or economics classes. In it you will learn that many of our wars have been created by the big bankers of the world because countries have to go into major dept to finance a war and this means big profits for the banks. In the book you learn that the Bolshevik revolution came by means of bankers. The first world war as well as the Second world war came about not by necessity but by deceit. I highly recommend this book. It is truly a eye opener.

[seanD]

I am almost finished reading a book entitled, "The creature from Jekyl Island: a second look at the federal reserve", by G Edward Griffin. This is a fabulous book that goes back and looks at the history of banking and how corrupt it has been. It is a real eye opener. From this book I have learned that the big private bankers were behind the creation of the federal reserve and are in bed with the politicians. The ability to create money from nothing and then borrow it out and receive interest on it and use it for many illicit things is what happens. The politicians are able to access any amount of money they desire. No competition for those who run the federal reserve and an unlimited checking account for our government officials. The book also speaks of how we are being taxed with a hidden tax called inflation that is primarily caused by these two unsavory groups. It speaks of Government loans given to thugs who run other countries and guaranteed by the government. This means that if these foreign dictators don't pay it back, we the American taxpayers are stuck with the bill which comes in the form of inflation. This book is loaded with very interesting things you don't learn in your history or economics classes. In it you will learn that many of our wars have been created by the big bankers of the world because countries have to go into major dept to finance a war and this means big profits for the banks. In the book you learn that the Bolshevik revolution came by means of bankers. The first world war as well as the Second world war came about not by necessity but by deceit. I highly recommend this book. It is truly a eye opener.

It does have really weird origins. And I try not to dwell on dark conspiracies that are hard to prove, especially those that go back for many decades, but when you consider how the federal reserve was started, the power it has, the sheer magnitude of what's it's doing now within our monetary system and how utterly ignorant the general public is about it, you can't help but look at it as something really eerie.

[onefour1]

I was watching a documentary on NetFlix called "IRAQ FOR SALE". It showed how firms like KBR and Haliburon were bilking the federal government out of billions of dollars. One example was how they would give their employees a free can of Coke and charge the government $45 a can. Another example was how they didn't put oil filters on their trucks and when the engines failed they woud just buy a new truck and bill the government. They would also send their employees on dangerous delivery missions in empty trucks and charge the government. The documentary would then show how the media would broadcast the problem and congressmen would stand up in congress and protest and say how something should be done about it, but not one bill was passed to stop the fraud and the military just kept on paying for it after receiving countless examples of the fraud. The people being interviewed on the documentary couldn't understand how they could get away with this.

After reading "The Creature from Jekyl Island: A Second Look At The Federal Reserve" I could understand perfectly what was going on. The federal reserve loves war. War creates a huge amount of dept which means that they lend out a huge amount of money and get interest payments on it. They don't care that it is the American taxpayer who eventually pays the bill. Politicians are in bed with the federal reserve. With the federal reserve, the government can borrow an unlimited amount of money and always have that money at their finger tips. Politicians and the Federal Reserve Central Bank is one and the same entity. They work as one. If the central bank wants a huge amount of money spent on a war, the politicians cow tow. If the politicians want lots of money, the central bank is more than willing to deliver. After all, the money is simple created from nothing anyway. The problem is that when government borrows money, eventually that money gets back into the economy and is redeposited in another bank. That bank then loans that money out and charges interest and the process goes through several of these cycles. Each time a loan is created, new money is created also. This increased the money supply in the country and causes inflation. Inflation is the increase in the price of goods and services and thus the American public is hit with a hidden tax. Suddenly our dollars don't buy as much as they used to. Haliburon and KBR weren't cheating the US Government. They were doing what the government wanted. Sure the politicians pay lip service in their meetings and look concerned but they do nothing about it. They must retain their image with the public so they do a dog and pony show. The same for the media. It is just the unsuspecting American public that is being cheated.

[seanD]

Yet another major bank skirts criminal prosecution for drug money laundering...

http://money.cnn.com/2012/12/12/news/companies/hsbc-money-laundering/

The blatant double standard and lack of justice is now being openly discussed in public forums, and the theoretical argument is that these "too big to fail" banks are now "too big to jail," or that such criminal indictments would cause an adverse ripple effect in the economy. Though this is bad enough, I question whether this is the real motive behind law enforcement complicity. Could it be that these institutions are just too powerful to take down and thus above the law because they make the law themselves or directly influence the lawmakers. I refer you to my thread about the conspiracy of global corporate control here (http://www.theologyweb.com/campus/showthread.php?153232-Global-corporate-consiracy-theory-no-longer-a-theory).

Nonetheless, this obviously creates a moral hazard, because we know from observing human behavior that immorality doesn't get better if there is no incentive for moral behavior, especially when large sums of money are involved and especially in an environment where unethical behavior is the norm and even necessary in order to successfully thrive. What effect does this abject corruption within these institutions and their control on the markets (by control I mean their direct influence) have in/on our economies? It certainly isn't a positive one, to put it mildly.

[seanD]

Once again, banks get off scott free with a plea bargain for a cash settlement (undoubtedly a small fraction of what they made in the scandal) in exchange for no crinimal charges, this time for the LIBOR scandal...

http://www.bloomberg.com/news/2012-12-14/ubs-libor-pact-said-to-include-charges-against-bankers.html

To illustrate as simple an explanation for what the LIBOR scandal is, it goes like this: banks control the decision to set interest rates, which include just about everything that has an interest rate.

So a city, for example, takes a loan with a variable rate of 5%. In order to safeguard themselves in case the rate goes up, they purchase from a bank an interest rate swap contract of 5%, which is a fixed rate. If the variable rate goes up past 5%, the bank has to cover the difference. If the rate goes down under 5%, the city has to cover the difference.

So the banks conspired with each other (and we're talking major banks here, the ones that were bailed out by your tax dollars) to keep the rates at a certain point in order to make a bunch of contracts with clients (private investors, cities, countries, etc.), then conspired with each other again to keep the rates low so that their clients were forced to pay them the difference. Of course, we're talking trillions here, and this doesn't just affect the parties involved in the contracts, but obviously everyone that deals with interest rates (mortgages, credit cards, student and auto loans, mutual funds, pension funds, short-term bond investments, etc.).

So there you go.

[seanD]

Does the spiraling economic disintegration of the EU have anything to do with the LIBOR scandal? It's not just possible, but it's probable...

http://www.bloomberg.com/news/2012-03-06/goldman-secret-greece-loan-shows-two-sinners-as-client-unravels.html

[seanD]

Another slap in the face to you mortal serfs.

http://www.reuters.com/article/2013/02/06/us-rbs-libor-idUSBRE91500B20130206

[seanD]

Get ready for the next Libor interest rate conspiracy scandal. Though I don't expect this to be sensationalized much by MSM...

http://www.telegraph.co.uk/finance/newsbysector/epic/iap/9980794/ICAP-probed-by-US-regulators-over-rate-fix.html

To give a brief explanation what they were allegedly doing; it was similar to the movie The Sting, where they had set up a fake announcer of a horse race in a place that wealthy clients were placing bets. The announcer would actually be announcing the results of the race after the real race had already occurred. This way the House knew the race results before the bets were placed. Apparently ICAP, the largest brokerage firm of interest rates swaps, was intentionally delaying the rate-swap price of derivatives so that they had advanced knowledge of the prices before their clients placed their bets on the rate-swap price results. The alleged conspiracy is whether they were colluding with other banks (the big international banks of course) towards this end.

I think Matt Taibbi gave the most in-depth explanation of how it affects everyone outside the scandal; us commoners...

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

[seanD]

Oil price manipulation. Where there's smoke, there's fire...

"The European Commission raided the offices of Shell, BP and Norway's Statoil this week as part of an investigation into suspected attempts to manipulate global oil prices spanning more than a decade.

None of the companies have been accused of wrongdoing, but the controversy has brought back memories of the Libor rate-rigging scandal that rocked the financial world last year.

UBS (UBS), Royal Bank of Scotland (RBS) and Barclays (BCS) have already reached settlements with regulators in the U.S. and U.K. over Libor-rigging, paying over $2.5 billion in fines after admitting to attempts to manipulate interest rates to appear more credit-worthy and to benefit trading positions. Roughly a dozen other global banks remain under scrutiny over rate-rigging, and three people have been arrested so far."

http://money.cnn.com/2013/05/17/news/economy/oil-price-libor/index.html

At this point; anywhere there is suspicion of asset/commodity price manipulation (especially when it involves the too powerful to jail banks), it's not just plausible, it's now probable.