Posts Tagged ‘banks’

Ireland; a post modernist hero…

February 27, 2011

Not quite yet but Ireland most certainly could turn out to be so.

http://www.telegraph.co.uk/news/worldnews/europe/ireland/8349497/Irelands-new-government-on-a-collision-course-with-EU.html

So many significant excerpts I’ll post the entire article and intersperse my comments throughout – emphasis added:

“Ireland’s new government is headed for confrontation with Brussels after the country’s ruling party was wiped out on Saturday by voters in a huge popular backlash against a European-IMF austerity programme.

Exit polls and early tallies from Ireland’s general election heralded political annihilation for Fianna Fail (FF), the party which has ruled Ireland for more than 60 years of the Irish Republic’s eight decades of independence.

The unprecedented and historic defeat, Fianna Fail’s worst result in 85 years, makes the Irish government the first eurozone administration to be punished by voters in the aftermath of the EU’s debt crisis. Voter turn-out was exceptionally high at more than 70 per cent, indicating public anger at the government and the EU.

Late last year, Ireland was forced to accept a £72 billion EU-IMF bailout to cover huge public debts that were ran up to save failed Irish banks.

The bail-out was designed to prevent financial contagion that threatened the existence of the euro, but according to economic forecasts, the cost of servicing Irish bank debt and the EU-IMF bank loans will consume 85 per cent of Ireland’s income tax revenue by 2012, a burden that a majority of voters find intolerable.

GUIDO COMMENT: The bailout was most certainly not designed to “prevent” contagion. If the banks in question did not enjoy preferential accounting and legal treatment they would have failed long ago thus never achieving the position that allows them to threaten the system. Also, the author of the article should be careful how he constructs his sentences. “Voters find intolerable” to pay 85% of fiscal revenue to service a debt that rightly does not belong to them? Really? Is it only the voters find it intolerable?

Brian Cowen, the Irish Prime Minister and Fianna Fail leader, who stood down last month rather than face furious voters, was also pressured into implementing a savage £13billion austerity programme of tax rises and spending cuts drawn up by the EU.

The cost of the EU-IMF bailout in extra taxes for an average Irish family has been estimated at over £3,900 a year. Other deeply unpopular measures include controversial reductions to the minimum wage, unprecedented cuts to public services and 90,000 jobs losses in a country where unemployment is already running at almost 14 per cent.

GUIDO COMMENT: The IMF and the World Bank are finally doing to the EU what they to date were only able to do to dinky fringe countries around the world. Namely, ride in under the guise of lending assistance and saddling society with un-payable debt thus finally and effectively achieving the ultimate transfer of wealth from society to a restricted band of bankers and politicians.

“When people are angry, when you’ve just cut their pay packets, you are not going to be top of the pops,” admitted Tony Killeen, Fianna Fail’s campaign director yesterday.

GUIDO COMMENT: Wrong mate!!! The people are not angry because you cut their pay packets you idiot. The people are angry because you sold them down the river you blathering nitwit. You and your acolytes have betrayed not only the trust of the people but you have betrayed a swathe of ideals that range from democracy to plain vanilla decency without even mentioning fiduciary duty. You, sir, along with your accomplices are the archetype of the worse possible kind of politician in an interpretation of politicians that cannot inherently ever be positive because your only sorry excuse to do what you do is that the political process needs politicians.

In Dublin, Fianna Fail won just eight per cent of the vote in an electoral decimation that called into question the future of previously unassailable politicians such Brian Lenihan, the Irish finance minister.

“However bad people thought it would get for Fianna Fail, nobody thought it would get this bad,” said Michael Marsh, professor of political politics at Trinity College Dublin. “That is highly significant.”

According to exit polling carried out by the Irish RTE broadcaster, Fine Gael (FG), Ireland’s main centre-right opposition, had won 36.1 per cent of the vote. Labour, traditional FG’s traditional coalition partner, took 20.5 per cent, its best result ever. Fianna Fail took just 15.1 per cent share of the vote, representing a loss of 58 seats.

Sinn Fein, usually outsiders in southern Irish politics, recorded its own best result with 10.1 per cent, up almost five per cent on the last 2007 election. The vote share for Greens, FF’s junior coalition partner, plummeted to 2.7 per cent, possibly robbing the party of MPs.

“The political landscape of Ireland is completely and utterly redrawn,” said Roger Jupp, the chairman of the Millward Brown Lansdowne pollsters which conducted the exit polls for RTE.

Enda Kenny, Fine Gael’s leader, will later on Sunday, start to form a new government, almost certainly with Labour, after full election results under Ireland’s complicated PR system come through.

Both Mr Kenny and Eamonn Gilmore, Labour’s leader, have promised Irish voters that they will renegotiate the EU-IMF austerity programme to reduce the burden for taxpayers and to force financial investors to shoulder some of the bank debts currently paid out of the public purse.

GUIDO COMMENT: Investors should not shoulder “some of the bank debts”. Investors should shoulder 100% of the bank debts. That’s what investors do in all other industries. Indeed, that is the very definition of investor. So far, all I can say is that End Kenny is the best of the worst of political choices. He may yet turn out to be the William Wallace of the situation but, so far, the indications are that he’s going to be a politician with a different slant… but only a slant… Enda Kenny would do well to have a chat with Iceland President Ólafur Ragnar Grímsson to get lessons in the use of moral compasses.

At a summit of centre-right EU leaders in Helsinki next Friday, Mr Kenny will use his position as Ireland’s new Prime Minister to beg the German Chancellor, Angela Merkel, and French President, Nicolas Sarkozy, for concessions ahead of an emergency March 11 Brussels summit to restructure the euro zone.

GUIDO COMMENT: The author of this article is out of his mind. “Beg”!!!??? Mr. Kenny is holding all the fucking cards. He needn’t beg anything. The only thing Mr. Kenny must do is decide whether he’s going to be a politician or whether he is going to grow a pair of balls and be a servant of the people thus acting in the best interest of the people that put him in power. Mr. B. Obama was in a similar position and he chose to be a politician. Mr. Kenny now has the opportunity to join other democratic luminaries like Vaclav Klaus, Ron Paul and Olafur Ragnar Grimsson to show what fiduciary duty means.

But neither the two European leaders nor the European Central Bank or EU will permit any substantial changes, despite the huge popular Irish revolt against the bailout.

Chancellor Merkel will tell Mr Kenny that if he wants to reduce the high, punitive 5.8 per cent interest rate charged on EU loans then Ireland will have to give up its low corporate tax rates – a measure regarded as vital to Ireland’s recovery and one of the few economic policies it has not yet handed over to Brussels or Frankfurt.

The new Irish premier will also be warned that there is no question of forcing privately-owned financial institutions to assume Ireland’s £85 billion bank debts because the resulting market panic would spread to Germany and France, tearing the euro single currency apart.

GUIDO COMMENT: The only appropriate response to the “two European leaders” whom the author evidently feels is a foregone conclusion as to whom they are, as well as to Merkel, the ECB, the EU or the IMF is a plain “no!’. Personally a more appropriate response would be to tell them to fudge cake but, though devoid of emotional charge, a simple “no” will do. The EU has no power to allow or forbid anything. Once again. Ireland holds all the cards. More prosaically, Ireland has the EU and the Euro by the balls. Moreover, Merkel has no business dictating what economic model anyone should follow. Indeed, this is the essence of economic freedom. It is true that just like Vaclav Klaus has warned long ago the EU is hard at work to destroy the last vestiges of personal and economic freedoms but for the time being, people and nations still have a degree of freedom in choosing what to run and how to run it. Enda Kenny has the power to re-assert those freedoms and he needs not beg anyone. Enda Kenny now has the mandate of his people to tell these idiots “how it is and how it’s going to be”!

As Irish voters headed for the polling booths on Friday, the European Commission bluntly declared that the terms of the EU-IMF bailout “must be applied” whatever the will of Ireland’s people or regardless of any change of government.

GUIDO COMMENT: And there you have it. In an unwitting moment of candor, the EU admits to being nothing but a bunch of fascist statists hell bent on subjugating the people: “whatever the will of Ireland’s people”. Notice here the similarities with the prevarication of the US Government upon the constitutional rights of the people as reported here for example and in many other posts on this blog.

“It’s an agreement between the EU and the Republic of Ireland, it’s not an agreement between an institution and a particular government,” said a Brussels spokesman.

GUIDO COMMENT: Yeah and???!!

A European diplomat, from a large eurozone country, told The Sunday Telegraph that “the more the Irish make a big deal about renegotiation in public, the more attitudes will harden”.

GUIDO COMMENT: Good!

“It is not even take it or leave it. It’s done. Ireland’s only role in this now is to implement the programme agreed with the EU, IMF and European Central Bank. Irish voters are not a party in this process, whatever they have been told,” said the diplomat.

GUIDO COMMENT: This idiot is reiterating that the political will of the people is of no consequence. How much more evidence do you need to realize that the Berlin wall may have come down but these traitors are hard at work to build a much more imposing wall this time encompassing the entire West?

In the face of the EU’s refusal to substantially renegotiate the austerity programme, Mr Kenny’s new government will face a grassroots campaign for a referendum.

Dessie Shiels, an independent candidate in Donegal, said: “People have not been given the basic right of deciding whether or not they should have their taxes increased in order to repay bondholders who have lent to the banks.

David McWilliams, an economist and former official at the Ireland’s Central Bank, has led calls for a popular vote under Article 27 of the Irish constitution, which requires on a matter of “such national importance that the will of the people ought to be ascertained”.

“We have to re-negotiate everything,” he said. “Obviously, the first way to do this is to make them aware that if they force us to pay everything, we will default and they will get nothing. So they had better get a little bit of something, than all of nothing. To make this financial pill easier to swallow, we must take the initiative politically. We can do this via a referendum.

“If the Irish people hold a referendum on the bank debts now, we can go to the EU with a mandate from the people which says No. This will allow our politicians to play hard-ball, because to do otherwise would be an anti-democratic endgame.”

Declan Ganley, the Irish businessman who led the 2008 No vote to the Lisbon Treaty, said Ireland must “have the balls” to threaten debt default and withdrawal from the single currency.

“We have a hostage, it is called the euro,” he said. “The euro is insolvent. The only question is whether Ireland should be sacrificed to keep the Ponzi scheme going. We have to have a Plan B to the misnamed bailout, which is to go back to the Irish Punt.””

GUIDO COMMENT: There evidently are some clear thinking people still around. Let’s all help the Irish do the right thing, the moral thing and the only thing that can ensure that a modicum of democracy is preserved.

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DO NOT ACCEPT THE BAILOUT IRELAND. DON’T!!!

November 23, 2010

Do not give up your sovereignty. More to the point DO NOT GIVE UP YOUR PRODUCTIVE ASSETS!!

At this particular junction, the choice is limited and very well defined.

Either you accept the bailout and ensure that a bunch of bankers are made whole whilst the rest of the population alone shoulders the costs of this debacle.

Or you default and ensure that banks’ bond holders too shoulder the cost of this debacle.

There is pain and hardship in store whatever we do. The least we can do is ensure that bank bondholders share with everyone.

http://www.tribune.ie/news/article/2010/nov/21/ireland-warned-it-will-have-to-stump-up-state-asse/

… in an investor note this weekend, Société Générale in Paris, which helps sell Irish sovereign bonds for the government, said there were calls from around Europe for Ireland to stump up “collateral” in return for its bailout loans.

Follow Iceland’s example. Let the banks fail.

You, the Irish people, were our only and last hope against the Lisbon Treaty. Make your stand now against the banks. Let the banks fail.

For those of you that fear that failing banks will result in lost savings and pensions, here is the skinny.

Whatever happens next, social expenditure will be curtailed if not, in some cases, discontinued entirely. Your pension is already compromised.

With regards to savings, whatever savings there may be, bondholders’ capital is largely sufficient to make those up. That is how the dynamic should evolve as contemplated by law. Savers are first in line to be paid back in bankruptcy. Follow bond holders, followed by second lien bond holders and so on and so forth till the shareholders. Shareholders are the first to be wiped out. Bondholders ans savers are last. As was the case for Lehman Brothers, Western banks today have largely sufficient bondholder capital to cover most bankruptcies. Thus savers are covered.

Let the banks fail. Stop fascism in its tracks. We are hurtling towards a global war and you and me will pay the price whilst a select bunch of bank bondholders will sit back and reap the profits.

Let the banks fail.

Is it not enough that during this crisis that has variously been described as the deepest and the most severe since the Great Depression of the 30s, banks have been distributing the richest and most eye popping bonuses in history??

Let the banks fail.

And by the way. We’re only talking here about a handful of banks. It is always the usual suspects. Banks have failed before in history and the world kept turning. Let them fail and force banks to share in the hardship.

Who do the IMF or the ECB really want to bailout?

November 17, 2010

As the mainstream press appears to steadily if hesitantly move towards a more objective role, the Wall Steet Journal today reports who the real beneficiaries of the bailouts really are.

Not news to us of course.

http://online.wsj.com/article/SB10001424052748704312504575618963922181240.html

All told, European banks were sitting on more than $650 billion of exposure to Ireland as of March 31, according to the Bank for International Settlements.”

[IRELAND]
And there you have it.
Banks are once again trying to skirt their primary legal and fiduciary responsibilities. Banks are businesses. Businesses make strategic decisions in an attempt to earn a profit. When decisions turn out to have been wrong, a business takes the loss or goes bankrupt. It is how it is supposed to work in open free economies.
But in our bank imposed, debt based, fiat monetary system, not only are banks perceived as indispensable to the normal functioning of the system but they have also placed themselves above the law. This would not be such a bad thing if it weren’t for the fact that banks have successfully maneuvered into this position with the ongoing connivance of the political, legislative, judicial and executive framework of presumably sovereign democratic countries.
Hence the reason banks can disregard entire swathes of accounting rules that apply to everyone else. Hence the reason banks enjoy selective legal treatment. Hence the reason banks get fined token amounts in cases where they have clearly and deliberately committed fraud, if not been criminally negligent, as is the case with the ongoing foreclosure debacle that incidentally is in the process of getting “settled” for yet more token amounts and where nobody will go to jail… yet again.
Mathematically, we’ve reached the limits of this monetary system. The upshot of this situation is that debt based fiat money conforms to the law of diminishing marginal utility so that as you reach the mathematical limits of the system, the progression accelerates till it implodes. We are literally 3 to 5 years away from total implosion.
You know my position. This implosion will bring global conflict just because neither our politicians nor, indeed, our electoral political systems are geared towards doing what needs to be done or taking responsibility for a crisis years in the making. Politicians and electoral politics are inherently expedient and short-termist in inspiration and in deed thus guaranteeing immunity from responsibility. A fall-guy will be found, a sacrificial lamb will be slaughtered and a war precipitated.
Ireland like Iceland before it, should tell the banks to go pack fudge. Bank bondholders should be forced to assume their roles as prescribed by law and take the loss. Public funds must no longer be used to safeguard bank’s deliberately reckless behavior. Bondholders must no longer be saved from the scheming ways of their own creation.
Someone has suggested recently that each citizen should buy a silver coin or a silver ingot. You needn’t spend much; less than US$50 will do. But each and every person in the world should buy a small quantity of physical silver either in coin form or in ingot form. Buy it and put it in your pocket; i.e. do not buy a certificate. Buy the real physical item. Whilst you are at it, you can do the same with gold. If every sentient and reasonable person in the world did so, the monetary authorities would be quickly brought under control. Help reason and decency prevail. Buy a little bullion.

Ireland

November 14, 2010

As the only people that held out against the Lisbon Treaty till they succumbed to the ignorance politicians, I have hopes Ireland will reject the help of the EU and/or the IMF for it is no help at all. As was the case for Fannie Mae, AIG or Greece for example, financial aid is not aimed at aiding the people nor, indeed, the country or the state. EU and/or IMF help is money that will be given to the bond holders of the debt; i.e. the banks. Ireland should simply default and force the bond holders to take their lumps. Iceland has done it. The black letter of the law stipulates that to be, in fact, the role of bond holders. Fiduciary duty says that’s the way it should happen. Personal responsibility and plain simple decency say that’s what should happen. Iclandic people went as far as investigating how the whole scam worked and naturally it turned out that 80% of the credit was distributed to bankers and their friends (echos of Friends of Angelo). Thus, rightly, Icelanders deliberately opted for default and so should all of us… if we had any balls.

I know Ireland can and have high hopes they will reject IMF help. Remember the Lisbon Treaty folks! Remember Iceland. No longer should we the people be pushovers.

From Michael Shedlock: http://globaleconomicanalysis.blogspot.com/2010/11/imf-ready-to-help-ireland-can-imf-help.html

IMF Ready to “Help” Ireland; Can the IMF “Help” Anyone?

The IMF is ready, willing, and able to “Help” Ireland according Dominique Strauss-Kahn, the IMF Managing Director.

Please consider Strauss-Kahn Says IMF Can Help Ireland’s ‘Difficult’ Situation

The International Monetary Fund stands ready to help Ireland if needed, its managing director said, as market concern about the country’s debt crisis continues.

“Everybody knows that the situation with Ireland, it’s a difficult situation,” IMF Managing Director Dominique Strauss-Kahn told reporters today in Yokohama, Japan. “So far I haven’t received any kind of request. I think they can manage well. If at one point in time, tomorrow, in two months or two years, the Irish want support from the IMF, we will be ready.”

Bailing out Ireland’s financial system could cost as much as 50 billion euros under a “stress case” scenario compiled by the Finance Ministry and central bank. The country’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said yesterday.

Can the IMF “Help” Anyone?

Inquiring minds are asking “Can the IMF Help Anyone?”

That’s a good question. Mish readers may be shocked by my answer: “Yes It Can!”

The irony is no country in its right mind should ever accept “help” from the IMF.

This apparent paradox can be explained by the fact that “help” from the IMF is akin to tossing an anchor to a struggling swimmer.

Help does not go to the country accepting the offer of help. Rather “help” goes to the creditor nations who would otherwise bear the risk of a default by the debtors.

In this case, the IMF will not help Ireland. Instead, the IMF would screw the citizens of Ireland while bailing out the bondholders. Who are those bondholders?

The answer of course is banks in Britain, Germany, the United States and France.

Irish banks, bonds hit as EU eyes survival plan

Please consider Irish banks, bonds hit as EU eyes survival plan

Shares in Ireland’s banks hit record lows and national borrowing costs reached new euro-era highs Monday as the government presented its latest plans for financial survival to the European Union’s economic commissioner, who has the power to order changes.

The interest rates charged on the treasuries of Ireland, as well as fellow indebted euro-zone members Portugal and Spain, have been rising ever since German Chancellor Angela Merkel last month said she expected any future EU bailouts to come with new rules requiring bondholders to absorb some losses.

But Ireland is experiencing by far the greatest skepticism from would-be lenders, who look with horror at Ireland’s projected deficit of 32 percent of GDP, a modern European record.

Bank of Ireland and Allied Irish have received billions in state aid to cover their dud loans to bankrupt construction tycoons, while Irish Life & Permanent has received no bailout help but is most exposed to Ireland’s depressed market for residential property.

Traders said a widely read article in the Irish Times by University College Dublin economics Professor Morgan Kelly – known in Ireland as “Dr. Doom” because of his accurate forecasts of the death of the Celtic Tiger economy – added to the gloom.

Kelly forecast that state support for banks would cost taxpayers an extra euro30 billion beyond the euro45 billion to euro50 billion declared last month by Lenihan. He accused the government of maintaining “a dreary and mendacious charade” on the true scale of property-based losses in the pipeline.

Kelly called the current deficit-fighting push “an exercise in futility” and rated Ireland’s financial fate alongside that of the Titanic. He said there was no point trying to cut billions from the budget “when the iceberg of bank losses is going to sink us anyway.”

“We are no longer a sovereign nation in any meaningful sense of that term. From here on, for better or worse, we can only rely on the kindness of strangers,” Kelly concluded.

As the traditional owners of Irish treasuries – chiefly banks in Britain, Germany, the United States and France – seek to dump them because of their falling value and increased perceived risk, new sellers can be attracted only by offering higher yields.

Traders say the main buyer of Irish bonds in recent weeks has been the European Central Bank.

Reject Phony Offer of Help

Irish voters, if they have a chance, should reject this phony offer of “help” from the IMF, the EU or whoever. Merkel has it ALMOST correct when she said “any future EU bailouts to come with new rules requiring bondholders to absorb some losses.”

I say “almost” because the future is now. In addition, I say “almost” because “some of the losses” is inadequate. Bondholders should suffer losses down to the last penny. If they are wiped out, so be it.

The citizens of Ireland should not be responsible for those losses. In short, they should tell the IMF to “Go to Hell”. The simple way to do that is default.

To get its economy functioning again, Ireland will still need austerity measures, public sector reforms, bank reforms and other initiatives, but it certainly does not need any anchors from the IMF. Ireland has enough problems already.

Fraud

October 15, 2010

Talk of fraud is now going main stream. Even previously willfully blind media companies like CNBS are now at the very least mentioning the word. Spitzer, Ratigan, the NYT, and a handful of other media companies appear, at least momentarily, to be joining the chorus too.

The trigger this time is what is now known as Foreclosure Gate. But it could have easily been any of a plethora of other things that triggered the sudden realization that fraud is a deliberate tool of the authorities.

But Foreclosure Gate, or the deliberate choice to allow banks to disregard accounting compliance, or government giving public funds to select private companies or any of a list of other actions that are blatantly and factually illegal are only symptoms of a dynamic that is well known and that leads to a logical conclusion that, too, is known. We know why this is happening and we know how it ends.

How do we know?

Because it has happened before; several times in fact. And every time it ended the same way.

So, absolutely, let’s make a big deal of Foreclosure Gate. It is right we should and hopefully someone will get indicted.

But Foreclosure Gate is only a symptom. What we need is for someone with clout to take up the matter of the monetary system. The monetary system is THE ultimate cause of this all too predictable and politically mandated debacle.

 

 

 

Wall Street Pay: a record $144Billion

October 14, 2010

What is lost in the soul searching and hand-wringing (or hand rubbing depending on who you are), is that this is not a surprise. It is not and should not be a surprise.

In a debt based fiat monetary system, as the dynamic of debt based currency develops, the system must gradually but necessarily become more statist. The logic of debt based money must necessarily lead to the state becoming progressively more intrusive as it gradually and by necessity becomes the largest actor in the economy.

By implication, this means two things – first: at the outset, nominal and intrinsic value are closely related but as the fiat money dynamic develops nominal value decouples from intrinsic value at increasing speed (financial value decouples from intrinsic value) – second: as financial value runs away from intrinsic, profit gradually concentrates in fewer and fewer sectors till towards the end only the financial sector enjoys any profit. This is because the financial sector is first in line to make use of the currency thus it benefits most and, as the currency implodes, it benefits last too.

http://online.wsj.com/article/SB10001424052748704518104575546542463746562.html

Excerpts and comments:

Profits, which were depressed by losses in the past two years, have bounced back from the 2008 crisis.

Profits have bounced back due to government direct and indirect intervention. Direct intervention took the form of the various support programs like TARP that gave public funds outright to banks and financial corporations. Indirect intervention takes the form of preferential and exclusive accounting treatment of financial institutions that are allowed to disregard losses. Indirect intervention is in fact much more insidious and destructive because as government allows banks to appear solvent, banks can attract institutional money from pension and insurance funds for example. Thus, the public is robbed twice. The first time it is done overtly if by coercion but the second time it is done by stealth without the express knowledge of the public.

The pay numbers show that firms, benefiting from low interest rates and strong international markets, continue to base their pay on economic and market conditions rather than the level of pressure coming from regulators in Washington and overseas.

Economic conditions!? Usage of food stamps is at an all time high and increasing, unemployment as counted by U6 is at an all time high and increasing, the currency markets are in disarray, there is gross industrial overcapacity and waning demand globally, Credit Default Swaps on sovereign debt are increasing … and bank bonuses reflect market conditions???? Can you imagine what bonuses would be like if the economy was actually doing well?

Goldman’s revenue is expected to decline by 13.5% this year to $39.1 billion from $45.2 billion in 2009. Compensation remains projected higher than last year, up 3.7% to $16.8 billion, from $16.2 billion in 2009, according to the Journal survey.

Compensation is taken out of total revenue. When government allows banks to appear solvent, banks can attract institutional money thus enhancing total revenue. Do you understand how the gig works?

 

Prosecution of fraud

April 19, 2010

I am not sure what is happening but it would really appear that various branches of government may be at the very least half serious in their intention to prosecute fraud starting with Goldman Sachs.

I am puzzled because I am not at all convinced this is what is going on.

After years during which fraud was blatant and tolerated, the SEC appears to have done an about face and now seems to actually want to do what its mandate actually states they should do and were supposed to have done all along since their inception.

I mean; seriously folks! It does not take a degree in mathematics to figure out that there is something going on when a company is allowed to report “hidden” assets. The entire construct of free markets and fiduciary duty revolves around transparency. When you allow a company to legally obscure the nature of their assets then you are intentionally compromising one of the pillars of fiduciary duty. If the company in question is a bank, then you are intentionally aiding and abetting the deliberate raping of the public. Especially if said bank is a very large institution with global reach.

So, after several dozen instances when the authorities could have intervened over the past fifteen years, why should they get a wake-up call now? And why so suddenly after the banks in particular have been brought back from the brink with public funds but then allowed to pay off the largest bonuses in history to their employees; this, at a time when the current crisis is variously described as the severest, the most damaging, the most far reaching since the great depression. It beggars belief!

So, something is certainly going on but for now I have no idea what it is or why. Could it be that politicians are actually beginning to feel the effects of public anger and have figured they need to toss this dog a bone? Because if the establishment is really intent on sacrificing Goldman Sachs, I can guarantee that some very high ranking politicians are not going to come out of this one unscathed. Goldman Sachs has spawned some of the highest ranking public officials for now well over two decades and has acted as a half way house for them as they joined subsequent administrations alternating between assignments in the public and private sphere of business. If GS is to go down, they are not going down alone and some bodies are guaranteed to turn up here and there. Besides, if anyone should be sacrificed, why sacrifice the largest and best connected player and the player that has the thickest black book on some of the key people of administrations current and past? It is not like GS was the only one playing fast and loose with the rules. They were just more successful but a whole bunch of other institutions are just as guilty. All you need to do to see the greatest perpetrators of the con is to see which banks have the largest Special Purpose Vehicles on their books (or Special Investment Vehicles, or Entity or similar). JPMorgan, wells Fargo, Bank of America they are all at it including Fannie Mae and Freddy Mac…. just there in this handful of names, you are looking at several hundred Trillion Dollars of funny accounting… that’s hundreds of Trillions!

So, what’s going on?

Aberrations of the fiat monetary logic

December 14, 2009

http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

No surprise here. A fiat monetary system necessarily leads to government becoming the largest actor in the economy resulting in choices and actions aimed purely at maintaining the system alive in spite of any moral or legal obligations.