This is what happens when we don’t arrest hardly anyone except for the most blatant of the financial criminals: they continue doing whatever it was that made them super-rich! Duh! So, as the central banks raid future tax promises in order to capitalize bankrupt banks, the gnomes are again, flush with cash and desperate to continue doing what they did two years ago: get the carry trade borrowing restarted.
This fatal program is at the root of world finances. Now that several key nations are imitating Japan’s ZIRP business including the fatal ‘drop worker’s wages’ angle, we see the gnomes crawling out of their taxpayer-built economic bunkers and resuming business as usual, again. With absolutely NO changes.
Wall Street Firms Will Revert to Pre-Crisis Model, Cohen Says – Bloomberg.com
Wall Street, after getting billions of taxpayer dollars, will emerge from the financial crisis looking much the same as before markets collapsed, said H. Rodgin Cohen, chairman of law firm Sullivan & Cromwell LLP.
This is why draconian responses are so important. They were not punished for creating and feeding the Derivatives Beast. Nor punished for opening pirate operations on various islands and mountain kingdoms, nor were they punished for using the Japanese carry trade to dump mountains of debt on top of everything in sight.
“The system will look more like what preceded the current environment than many people seem to believe,” Cohen said yesterday at a panel discussion on the future of Wall Street sponsored by Bloomberg News in New York. “I am far from convinced there was something inherently wrong with the system.”…
Why should this corrupt little gnome think anything is wrong with the stupid, dangerous system he and his gang [tribal members, for the most part] created? Hey, it made HIM rich! So what’s wrong with that?
“Some people say, did all of this arise due to the elimination of Glass-Steagall and we should put Glass-Steagall back into place,” Parr, a specialist in advising financial firms, said at the panel. “I’ve observed that that had little or nothing to do with this crisis.”
See? The debate over what happened and what is wrong is still raging….online. But the guys who committed the crimes that created this mess, are dusting off their hands and going back into doing the same things, again! When criminal creeps bribe politicians to remove laws that protect us from ravaging wolves, they are still criminals even if they legalize their criminal actions.
Rubenstein said private-equity firms will take advantage of the financial crisis by investing in “smaller” financial companies.
“This is a good opportunity for private equity to show what it can do,” Rubenstein said.
They will buy up the last remains of whatever is functional and incorporate it all into their wonderful Mafioso system. And then defy us to write laws, stopping them or stopping AIPAC. These guys totally own Congress and control the President to some degree [Obama wants to close some of their beloved tax loopholes!] so they will insure that not the slightest change or even reversion to older laws, will occur.
They will ride out this storm and hope that more and more ZIRP credit will make us all very happy and gay and get us to forget that they are looting us relentlessly and are destroying our economic base.
JPMorgan Will Pass Test, Bank of America Needs Funds, FBR Says – Bloomberg.com
JPMorgan Chase & Co., the second- largest U.S. bank by assets, is the only lender among 12 commercial banks being stress-tested by the government that probably won’t need more capital, Friedman, Billings, Ramsey Group Inc. analyst Paul Miller wrote to clients today.
All the commercial banks may need capital under a “more adverse” scenario, Miller wrote. The Treasury is testing 19 of the biggest U.S. financial firms, including credit-card lender American Express Co. and insurer MetLife Inc., with results expected to be made public later this week….
Bank of America Corp. and Wells Fargo & Co. would need a combined $31.35 billion in additional capital after the U.S. finishes stress-testing, the FBR report said.
JP Morgan is the #1 derivatives holder in America and one of the top 5 in the world if not the top, in the world. And it is capitalized???? HUH??? HAHAHA. Right! And I live in the White House! Which was removed by the Wicked Witch of the East’s tornado to my little mountain in upstate NY.
This insanity is peddled to the public to reassure us that the gangsters running our financial systems are finally solvent after raiding the Treasury to the tune of trillions of dollars. The cascade of bad CDOs and other paper instruments has faded not because all is well but because WE are now holding all these bad debts and thus, are the Final Bank for Settlements and everyone is not telling us the truth because then, we would have to pay up to all these gnomes!
Look at the Office of the Comptroller of the Currency [defanged back in 1913 so the Fed Reserve could inflate the currency]:
JP Morgan is OK while holding nearly $90 trillion in bets? HAHAHA. Right! A monkey’s game.
This horrible mess is now our mess. So long as we are nice to the gnomes and let them continue looting and change no laws, all will be well. Unless China calls us on all this and forces a financial reckoning.
FT.com / Weekend / Reportage – Genesis of the debt disaster
In the 1990s, a young team at Wall Street investment bank JP Morgan pioneered a new way of making money – credit derivatives. Within a decade, the market for these exotic securities had exploded to more than $12,000bn – and some people later blamed them for fuelling the global financial fiasco. In the first of two extracts from her book, Fool’s Gold, the FT’s Gillian Tett reveals how the innovation genie was first let out of the bottle – and eventually devoured the system, to the horror of its creators.
A good book. JP Morgan soaked up the actual operators of the Reagan-era derivatives machine that put so many financial wizards in prison. So the concepts that caused a financial collapse in the mid-1980’s was allowed to continue and grow. Instead of stopping this, the Federal Reserve helped this and our government undid old laws so that this would continue and grow.
Notice that everyone doing these crimes are most anxious to keep their criminal acts legal!
More Banks Will Need Capital – WSJ.com
The U.S. is expected to direct about 10 of the 19 banks undergoing government stress tests to boost their capital, according to several people familiar with the matter, a move that officials hope will quell fears about the solvency of the financial sector.
The exact number of banks affected remains under discussion. It could include Wells Fargo & Co., Bank of America, Citigroup Inc. and several regional banks. At one point, officials believed as many as 14 banks would need to raise more funds to create a stronger buffer against future losses, these people said, but that number has fallen in recent days.
Minimizing the damage is important for our government. So, even as the FDIC is rapidly running out of cash to resolve bank collapses, the insolvency will be avoided if the the government doesn’t close bankrupt banks or interfere with their capitalization methodology which was 99% going into the carry trade and getting cheap loans so they could then claim to be capitalized as they handed out more expensive loans than the loans they had to pay.
401(k)s Hit by Withdrawal Freezes – WSJ.com
Even with recent gains in stocks such as Monday’s, the months of market turmoil have delivered a blow to some 401(k) participants: freezing their investments in certain plans. In some cases, individual investors can’t withdraw money from certain retirement-plan options. In other cases, employers are having trouble getting rid of risky investments in 401(k) plans. Individual investors mightn’t even be aware of some behind-the-scenes maneuvers causing liquidity problems in their retirement plans. Many funds offered in 401(k) plans lend their portfolio holdings to other investors, receiving in exchange collateral that they invest in normally safe, liquid holdings.
The aim is often to generate a small but relatively reliable return that can help offset fund expenses. But in recent months, many of the collateral investments have gone haywire, prompting money managers to restrict retirement plans’ withdrawals from the lending funds.
As usual, the gnomes get full access to all their loot while working stiffs get stiffed. The gnomes need these savings to save their own bonuses. This is why only the gnomes and pirates can have liquidity via Uncle Sam’s banking/tax/Treasury system while the taxpayers who are bailing out the gnomes, get nothing.
KRUGMAN- Falling Wage Syndrome – NYTimes.com
Concern about falling wages isn’t just theory. Japan — where private-sector wages fell an average of more than 1 percent a year from 1997 to 2003 — is an object lesson in how wage deflation can contribute to economic stagnation.
So what should we conclude from the growing evidence of sagging wages in America? Mainly that stabilizing the economy isn’t enough: we need a real recovery….To break that vicious circle, we basically need more: more stimulus, more decisive action on the banks, more job creation.
Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss. But the risk that America will turn into Japan — that we’ll face years of deflation and stagnation — seems, if anything, to be rising.
I still remember very fondly the previous 5 years where top economists would snark at me and tell me, my obsession about the Japanese ZIRP system was stupid. Well, we are now becoming Japan in more ways than one. We are seeing our wages drop to Japanese levels even as Japan’s industrialists are taking over all our systems and dropping wages at home in tandem to forcing wages down, here.
Toyota factories are not making us richer. All profits flow to Japan. And these factories are undercutting US factories by using cheap labor in wage-slavery states in the South. The US, Japan and UK are all addicted to running the banking system whereby savers get reamed out as interest rates are kept far below the real rate of inflation.
Here is proof: Bank of England|Home
See? The current rate of return is 0.5% which is part of the new ZIRP system. But look at current CPI: nearly 3%. Wow! So, if you save money, you lose money. Why bother with a banking account? Put it in a jar or under the mattress or buy gold and hold that. At least, there is a fair chance, gold will go up faster than inflation, not lag far behind!
Fed’s Rosengren: Systemic regulator needs global reach | Reuters
A systemic regulator needs a global reach to address a financial firm’s multinational operations and increased use of derivatives around the world or risk being ineffective, a top Federal Reserve policy maker said on Tuesday.
The U.S. needs to “adequately empower those in the systemic risk-regulatory and resolutions roles. If we cannot, we will do well to find other ways to limit systemic risk,” Eric Rosengren, president of the Boston Federal Reserve Bank said in remarks prepared for delivery to a panel in Hong Kong.
The financial meltdown has led to calls in the United States for a so-called systemic regulator to oversee institutions that are big or interconnected enough to pose a risk to the financial system. The Federal Reserve is widely seen as the most likely candidate for this role.
This is just too ridiculous. There is no way in hell, the Chinese will want the Fed Reserve running all international systems. Wishful thinking on the part of Rosengren, one of the Tribe. He and his kin would dearly love to run everything! Note how they all ran our nation into the ground and very deep into debt.
Asia Times Online :: China News, China Business News, Taiwan and Hong Kong News and Business.
The global financial crisis is proving a boon for a resurgent China, which is poised to exert ever greater influence in Southeast Asia. FT.com / Weekend / Reportage – Genesis of the debt disaster
While drawing neighboring countries back into China’s economic orbit has been part of Beijing’s strategy for restoring what it sees as the country’s rightful place on the global stage, recent months of recession have furnished Beijing with new opportunities to further its leadership ambitions in the region.
After the political turmoil in Thailand led to the cancellation of an Association of Southeast Asian Nations (ASEAN) summit aimed at tackling the global crisis in April, Beijing demonstrated its leadership and gained political mileage when regional leaders and chief executive officers attended the annual Boao forum in the southern Chinese island of Hainan. The meeting this year was billed as a new “platform for emerging economies” to cope with the economic downturn.
With the theme “Asia: Managing Beyond Crisis”, the meticulously organized Boao forum stood in stark contrast to the failed ASEAN summit in Pattaya.
See? The Chinese plan to ‘be bank’ and will be the bank. There are many commentators out there on the internet and most of whom are published in the Western mainstream media who mock China about this and pretend that teeming, vital, agitated China will curl up and die like Japan is dying. This is sheer lunacy.
As Japan literally kills off its own workforce and dies, as the US goes bankrupt and insane, China will TAKE OVER ASIA. China has little oil but they have lots of other things. Note that the great industrial powers that are displacing other powers, nearly always have NO or LITTLE oil??? Think about this! They don’t have to have great commodity resources at all! Look at Japan! Look at Britain 100 years ago!
When Britain was flush with North Sea oil, did they industrialize? Or deindustrialize? The answer is obvious. They consumed oil and produced very little. Kunstler, in his latest Clusterfuck Nation 25 is barking up the wrong tree when he assumes that owning no oil means not being able run an industrial expansionist power. China is buying up a great deal of global energy systems and are planning ahead while the US flounders about, trying to use our very, very expensive military to enforce global oil consumption of not only our needs but our ‘allies’ need for oil. They, in turn, flood our markets with their industrial goods in order to buy oil denominated in dollars. This is what is ending.
Our ability to use our guns to force everyone to use the fiat dollar is what is collapsing. And the banking gnomes are intent on only lining their own pockets and keeping our democracy corrupt so they can control law making and thus, legalize looting. And these things are killing us. Fast.