Dr. Martenson says it all here. I will add one thing – the ‘finance industry’ has controlled our government for a much longer time than many of us realize. The difference now is that it’s becoming clearer to everyone. Pride is a fatal flaw – the financial people in charge (Bernanke, Summers, Geithner, Emanuel, Paulson, etc.) are giving the impression to everyone that they are above the law and are even above being questioned by the people they represent. This, in turn, is leading many people to question more of the things they are doing.
As I’ve said before – this is the type of thing that leads to revolutions. When a small group of powerful people think they can do whatever they want to a nation without the approval of the nation’s population – this will either lead to some type of dictatorship (Socialism/Communism) or it will lead to a revolution against those in power. One path leads to the nation’s bondage – the other path leads to freedom. Let’s not kid ourselves either – in this evil world, the path that leads to freedom is always the most difficult. It’s much easier for us to sit around and let those in power lead us off a cliff. It takes real courage and strength to recognize the danger and stand in the face of those in power – and refuse to go along with evil plans.
You have learned on this blog how our leaders are deceiving us and planning to morph us into a world government. The question becomes – what are you going to do about it? Are you ok with the end of the United States of America as we know it or are you willing to stand against some very evil people in order to gain your freedom?
Remember – the choice has been given to our generation. All future generations will look back in time at us. They will either be free and look at us with admiration – or they will spend their lives in bondage – and our generation will be forgotten – forever.
jg – April 14, 2009
______________________________
America is Being Looted
Tuesday, April 14, 2009, 9:20 am, by cmartenson
As cynical as I am, I just can’t keep up.
That sentence is a paraphrase of a quote by Lily Tomlin that reads, “No matter how cynical you become, it's never enough to keep up.”
I have long been a cynic of the bailouts and, unfortunately, I cannot detect even the slightest sliver of daylight between the prior and current administrations. The reason, I fear, is captured by this quote from Simon Johnson, the former Chief Economist at the IMF and current professor at MIT’s Sloan School of Management:
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
The unfortunate conclusion here is that our system and processes are fully “captured” by a tangled web of interests that serve themselves over everything else. Your future, my future, and our future is being systematically ruined by a self-interested group of insiders that can no longer distinguish between their good and the common good.
Here’s the latest string of outrages from this week.
First it is vitally important that not just the absence of conflict of interest be present when big money is involved in policy decisions, but also the appearance of conflict. Our system of money is based on confidence (after all it is a Ponzi scheme) and therefore it is vital that our checks and balances assure that the public good is not abused by a few at the expense of the many.
In order for the average person to pull hard on the yoke of life, straining to earn their daily wage, that wage has to be worth something. What is money “worth” if some of us have to work to exhaustion to obtain it while a very small minority can literally conjure trillions out of thin air and distribute it amongst themselves?
Money is a social contract, especially fiat money, and abusing the trust inherent to making that money system work is the gravest of all possible errors. I am not exaggerating here.
This week I found out that even as Lawrence Summers, in his role as President of Harvard University, was excoriating professor Cornell West for shirking is professorial duties by making a spoken-word audio CD, he was himself moonlighting for a hedge fund and various Wall Street banks earning millions. Here’s Frank Rich in the NYT:
Lawrence Summers, the president’s chief economic adviser, made $5.2 million in 2008 from a hedge fund, D. E. Shaw, for a one-day-a-week job. He also earned $2.7 million in speaking fees from the likes of Citigroup and Goldman Sachs.
Those institutions are not merely the beneficiaries of taxpayers’ bailouts since the crash. They also benefited during the boom from government favors: the Wall Street deregulation that both Summers and Robert Rubin, his mentor and predecessor as Treasury secretary, championed in the Clinton administration.
This goes well beyond “the appearance of” a conflict of interest. If Summers were a judge he’d have to recuse himself from the case. Nearly $8 million in a few years from Wall Street is a conflict of interest. A massive one.
However, if smoking guns are more your thing, then this next bit of information from the same article will be to your liking:
Summers had done consulting work for another hedge fund, Taconic Capital Advisors, from 2004 to 2006, while still president of Harvard. He tried — and, mercifully, failed — to install the co-founder of Taconic in the job of running the TARP bailouts.
Think of the judgment of a person long in the public eye who has apparently learned nothing from their past scrapes with public perception who attempts to install a past patron in a plumb post involving public money being distributed to private, already wealthy recipients.
Think of the character of a person who can rationalize the act of publicly excoriating a professor for doing something that they are secretly doing themselves, but on a much grander scale.
That person is Lawrence Summers, the man chosen by the Obama team to coordinate the bailout efforts.
Rahm Emanuel, the current white house chief of staff, comes similarly burdened:
…the banking industry recently paid Rahm Emanuel $16 million for about two years of work. That investment was recently paid back when, as President Obama's chief of staff, Emanuel led the January campaign to release another $350 billion in bank bailout funds.
But it goes deeper than that. Rahm Emanuel also took what I consider to be a lot of money serving on the board of Freddie Mac, a company that is certain to cost the taxpayers hundreds of billions of dollars.
Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.
One of those allegedly asleep-at-the-switch board members was Chicago's Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.
Before Timothy Geithner (“Turbo Tax Timmy” as he’s called in some circles) was appointed to the Treasury position, his career and connections were explored in depth in an excellent article in Portfolio.com by Gary Weiss:
After the Bear deal, the Fed wound up with $30 billion in collateral, mostly in the form of subprime-mortgage securities. Even Paul Volcker, the former Fed chairman who served on the search committee that picked Geithner and who still holds him in high regard, has expressed queasiness about the way the deal was structured. In a speech to the Economic Club of New York, Volcker said the Fed took actions that “extend to the very edge of its lawful and implied powers, transcending certain long-embedded central-banking principles and practices.” Volcker later leavened this harsh assessment a bit, telling me that the Fed’s intervention “was a proper action, but it was extraordinary—something that’s never been done before, in terms of calling upon that emergency power. It tells you how seriously they took it.”
Still, misgivings about the deal are hard to ignore, no matter how catastrophic the consequences of not intervening might have been. It doesn’t help that the deal is teeming with connections that are sure to raise questions. Dimon is one of the three class-A directors of the board of the New York Fed, and its head is Stephen Friedman, a former Goldman Sachs chairman, who still sits on the investment bank’s board. The New York Fed’s board also includes Richard Fuld of Lehman Brothers, a firm that is another oft-rumored potential candidate for a bailout. Fuld is a class-B director, meaning that he is elected by member banks, astoundingly, to represent the public. (Friedman is also supposed to be looking out for you: He was “appointed by the board of governors to represent the public.”) Thus Geithner reports to a board that is composed of people who are not only under his purview but would also benefit from any potential bailouts. The structure of the New York Fed’s board bears more than a passing resemblance to that of the New York Stock Exchange in the bad old days, when member firms, regulated by the N.Y.S.E., were heavily represented on its board.
Even more intriguing is Geithner’s informal brain trust, loaded with Wall Street luminaries. Since coming to the Fed in November 2003—recruited by then-New York Fed chairman Pete Peterson, co-founder of the Blackstone Group—Geithner has learned the ways of the financial industry at the feet of some of its biggest legends. He was almost immediately taken under the wing of Gerald Corrigan, a gregarious former New York Fed chief who is now a managing director of Goldman Sachs. Corrigan describes his relationship with Geithner as close, and it has flourished since Geithner’s first days at the Fed. Another frequent adviser—“you don’t want those things to get too formal,” Corrigan notes—is also a preeminent banker, Merrill Lynch C.E.O. John Thain, a Goldman alumnus and former head of the N.Y.S.E. Over the years, Thain has often talked to Geithner—“sometimes I talk to him multiple times a day,”
Given this extensive set of interconnections, you might think that he’d be careful to project the right image when stepping into the Treasury role but instead he saw fit to place a Goldman Sachs insider in the position as his top aide last January (before anybody was paying too much attention to all this insider self-dealing):
WASHINGTON — Treasury Secretary Timothy Geithner picked a former Goldman Sachs lobbyist as a top aide Tuesday, the same day he announced rules aimed at reducing the role of lobbyists in agency decisions.
Mark Patterson will serve as Geithner's chief of staff at Treasury, which oversees the government's $700 billion financial bailout program. Goldman Sachs received $10 billion of that money.
Just a few months later in March, when questioned about the appearance of conflict of interest, Geithner bristled at the suggestion:
"I am just asking the questions," Waters said, "because the talk is...that this small group of decision makers at the center of it is Goldman Sachs and that's what's causing a lot of the distrust, because people are thinking or believing that Goldman Sachs, because of the connections, have had a lot to do with the decisions that are being made."
Geithner took umbrage.
"I think it's deeply unfair to the people who are part of these decisions to suggest that they were making judgments that in their view were not in the best interest of the American people," Geithner said.
Apparently Mr. Geithner found it completely confusing why anybody would see anything at all wrong with a regular revolving door between positions of extreme financial power over public money and the firms set to benefit from public money.
To me, that is a sure sign that someone is too deeply embedded, too deeply conflicted, too detached from reality to even know where to draw the line. Timothy apparently cannot distinguish between the “best interest of the American people” and Goldman Sachs raking in billions of undeserved public dollars. To him, those are one and the same thing and that's a major reason why I have grave doubts that the bailouts will succeed.
Now let’s cross into the surreal. One of the more grossly mismanaged companies on the face of the planet, the one that will cost taxpayers close to a trillion dollars when all is said and done, is Fannie Mae, the Government Sponsored Enterprise, or GSE. Last night (Monday, April 14th, 2009) this came across my newswire:
7:30 [FNM] Fannie Mae Chief Executive Herb Allison to run TARP: WSJ
So who is it, do you suppose, that picked the CEO of Fannie Mae to run TARP? Could it be Summers and Geithner and Emanuel?
You bet. That’s the vetting team.
As far as I am concerned the CEO of Fannie Mae should be defending himself in court, not running a massive wealth redistribution program.
Meanwhile, Goldman Sachs reported strong earnings yesterday much of them based on the fact that Goldman Sachs received full payout from side bets it had made with AIG on which it should not have been paid a single dime. Goldman Sachs is a business run by grown-ups and knew that making bets on the unregulated OTC derivatives market did not come with any public guarantee. Nonetheless, Goldman was immediately bailed out, in full, on these side-bets by the Treasury Department.
The funny thing is, Goldman Sachs actually did the prudent thing and hedged their side bets with AIG (presumably by shorting AIG stock…that way, if AIG failed to pay off their side bets the stock price of AIG would slide thereby covering some of the losses for Goldman Sachs). So they were already "made whole" on these losses by their hedging activity.
So you might wonder how is it that a company that is not in danger of failing and has strong earnings and has prudently covered (or hedged) its bets comes to receive tens of billions of dollars of public money anyway? How can this be? More importantly, what does this tell us about the prospects for the bailout?
Here’s where we simply need to return to the opening quote:
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
My cynicism stems from the fact that as I string together the dots comprising this entire bailout fiasco I can come to only one conclusion; our “public policy” is not being conducted in the interests of the people, by the people, and for the people.
Public policy appears to be in the grip of a very powerful and self-interested cabal that seemingly has no concern for the future or the health of this country and does not even see the need to be cautious enough to mask its efforts.
The fact that the bailout trajectory did not waver in the slightest while passing from the Bush to the Obama administrations indicates that the bailout is not a function of who’s in political power, it is a function of something else, of some other power.
I fear that Simon Johnson has nailed it; “[the] recovery will fail unless we break the financial oligarchy that is blocking essential reform.”
By continuing on our current path, using the same people who created the mess to clean up the mess, we are wasting time, we are wasting money and we are wasting opportunity. Worse, we are risking the very sort of public backlash that has been thankfully missing from our cultural landscape for a long, long time.
Now, if you’ll excuse me, I have to go jogging to see if I can catch up with my cynicism.
Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts
Saturday, September 16, 2006
Goldman Sachs Trading Returns
It doesn’t appear that we’ve learned any lessons over the past few months - greed continues on Wall Street.
As Chris mentions below – a Wall St. trader who wins 60% of the time is considered an excellent trader. What did Goldman do in the last quarter? Their daily win/loss ratio was 97 to 3. What do you think would happen if you won 97 out of 100 blackjack hands in Vegas? My guess is that the pit bosses would become very interested in your methods. There’s luck – then there’s defying all laws of probability to the point that everyone knows you’re cheating.
Not surprisingly, there is a lead story on the Wall Street Journal this afternoon regarding a Justice Department investigation into Goldman Sachs’ trading ‘practices’.
If you were gaming the system to increase your trading profits – wouldn’t you at least ‘lose’ a few trades to make it more realistic to everyone?
This level of greed and arrogance is amazing.
jg
________________________________________
Goldman Sachs' Incredible Trading Returns are Literally Unbelievable
Wednesday, August 5, 2009, 10:49 am, by cmartenson (Chris Martenson)
A long while ago (September 2008), I wrote an article entitled " The Greatest Looting Operation in History" and followed it up with another entitled "America is Being Looted."
What shocked me at the time was how brazen the perpetrators were being in their efforts, almost as if they had no fear of being exposed or being asked any hard questions.
In an article that came out today, this was confirmed to an extraordinary degree.
The Goldman touch
Goldman Sachs $100 Million Trading Days Reach Record in Quarter
By Christine Harper
Aug. 5 (Bloomberg) -- Goldman Sachs Group Inc. made more than $100 million in trading revenue on a record 46 separate days during the second quarter, breaking the previous high of 34 set in the prior three months.
Trading losses occurred on two days during the months of April, May and June, compared with eight days in the first quarter, the New York-based bank said today in a filing with the U.S. Securities and Exchange Commission.
There is no possible way in a free market system where everyone has the same advantages and information for Goldman Sachs to sport a win-to-loss ratio of 46-to-2. Ergo, Goldman Sachs is running a gigantic scam at everyone's expense while the SEC, the Fed and everyone else politely looks the other way.
There are mountains of evidence pointing to the fact that markets trade in inherently unpredictable ways.
Because of this, really extraordinary traders are those that can keep their noses slightly, but consistently, above water. Turning in a win-loss ratio of 60/40 is considered extremely good.
Getting to 70/30? Best to stop now and write a "trading guru" newsletter selling your system while it still works. But 80/20? Now you are just on a lucky tear that will soon be reversed in a humbling way. Given this, what would we say about a 96.9 to 3.1 ratio? (Thanks DavidC for the correct figures here).
That's what Goldman Sachs' daily win-loss ratio works out to and it speaks of something other than "being good" or "being lucky." This is just comparing Goldman Sachs' $100 million "win" days against their total number of losing days and I admit I have no idea what their actual win/loss ratio looks like on a trade-by-trade basis. But on a daily basis alone, this sort of performance cannot be chalked up to anything but an unfair advantage.
Anybody with even a minor appreciation of statistics knows that this represents something other than "being good." This represents an unfair advantage to a degree that is truly mind-boggling.
If this seems esoteric and therefore perhaps unimportant to you, I would like to point out that when it comes to trading, someone's win is somebody else's loss. Trading is a zero sum game.
Money is not created through the act of trading. It would be a mistake to think that Goldman Sachs somehow created this money through the act of their trading genius. For Goldman Sachs to win $100 million in a day of trading means that somebody else lost $100 million. Most likely a huge collection of somebody elses.
I would suggest that the most probable source of these funds, the ultimate loser, is the taxpayer.
This means that as Goldman wins, you lose, I lose, and our future gets diminished so that a pathetically small number of already obscenely rich individuals can continue to game a rigged system to their obvious and magnificent advantage. While I am sure that somebody, somewhere has convinced themselves that it is a good thing to allow Goldman Sachs to recapitalize itself in this way, obviously rigged markets are not a good idea for a country that depends on the willing flow of foreign funds, and they are also certain to misallocate capital.
Moving along, one thing I truly despise is when unfounded statements or opinions are inserted into an article and presented as fact such as this example.
"Goldman Sachs’s trading results reflected the firm’s willingness to take on more risk during the period. "
No, the results do not reflect "the firm's willingness to take risk." This is more likely than not a direct quote from the Goldman Sachs PR department.
If all a firm needed to do to enjoy outlandish trading results was to "take on more risk" then they'd all do it and - presto! - everyone would have higher trading profits!
That's just not how things work, unfortunately. Anybody who is turning in a ratio of winning-to-losing trading days of 46-to-2 is not trading in a fair and competitive manner.
Instead we might reasonably conclude, knowing what we know about how equities markets are supposed to work, that 46-to-2 reflects an unfair advantage, not a taste for risk, as the scribe put it. One could reasonably re-write that sentence to read:
"Goldman Sachs’s trading results reflected the firm’s clever use of lobbying funds and influence to skirt the rules that everyone else abides by. Their gain was your loss. "
What these trading results tell us, as clearly as one could ever hope in this day and age, is that Goldman Sachs (and likely other major recipients of bailout money) is gaming the system to their benefit and everybody else's loss.
I suppose it would be even clearer if we received individual, hand engraved notices informing us of this fact, but, for me, the presence of only 2 days of trading losses in an entire quarter is more than sufficient.
America, you are being looted, and the pirate's name is Goldman Sachs.
As Chris mentions below – a Wall St. trader who wins 60% of the time is considered an excellent trader. What did Goldman do in the last quarter? Their daily win/loss ratio was 97 to 3. What do you think would happen if you won 97 out of 100 blackjack hands in Vegas? My guess is that the pit bosses would become very interested in your methods. There’s luck – then there’s defying all laws of probability to the point that everyone knows you’re cheating.
Not surprisingly, there is a lead story on the Wall Street Journal this afternoon regarding a Justice Department investigation into Goldman Sachs’ trading ‘practices’.
If you were gaming the system to increase your trading profits – wouldn’t you at least ‘lose’ a few trades to make it more realistic to everyone?
This level of greed and arrogance is amazing.
jg
________________________________________
Goldman Sachs' Incredible Trading Returns are Literally Unbelievable
Wednesday, August 5, 2009, 10:49 am, by cmartenson (Chris Martenson)
A long while ago (September 2008), I wrote an article entitled " The Greatest Looting Operation in History" and followed it up with another entitled "America is Being Looted."
What shocked me at the time was how brazen the perpetrators were being in their efforts, almost as if they had no fear of being exposed or being asked any hard questions.
In an article that came out today, this was confirmed to an extraordinary degree.
The Goldman touch
Goldman Sachs $100 Million Trading Days Reach Record in Quarter
By Christine Harper
Aug. 5 (Bloomberg) -- Goldman Sachs Group Inc. made more than $100 million in trading revenue on a record 46 separate days during the second quarter, breaking the previous high of 34 set in the prior three months.
Trading losses occurred on two days during the months of April, May and June, compared with eight days in the first quarter, the New York-based bank said today in a filing with the U.S. Securities and Exchange Commission.
There is no possible way in a free market system where everyone has the same advantages and information for Goldman Sachs to sport a win-to-loss ratio of 46-to-2. Ergo, Goldman Sachs is running a gigantic scam at everyone's expense while the SEC, the Fed and everyone else politely looks the other way.
There are mountains of evidence pointing to the fact that markets trade in inherently unpredictable ways.
Because of this, really extraordinary traders are those that can keep their noses slightly, but consistently, above water. Turning in a win-loss ratio of 60/40 is considered extremely good.
Getting to 70/30? Best to stop now and write a "trading guru" newsletter selling your system while it still works. But 80/20? Now you are just on a lucky tear that will soon be reversed in a humbling way. Given this, what would we say about a 96.9 to 3.1 ratio? (Thanks DavidC for the correct figures here).
That's what Goldman Sachs' daily win-loss ratio works out to and it speaks of something other than "being good" or "being lucky." This is just comparing Goldman Sachs' $100 million "win" days against their total number of losing days and I admit I have no idea what their actual win/loss ratio looks like on a trade-by-trade basis. But on a daily basis alone, this sort of performance cannot be chalked up to anything but an unfair advantage.
Anybody with even a minor appreciation of statistics knows that this represents something other than "being good." This represents an unfair advantage to a degree that is truly mind-boggling.
If this seems esoteric and therefore perhaps unimportant to you, I would like to point out that when it comes to trading, someone's win is somebody else's loss. Trading is a zero sum game.
Money is not created through the act of trading. It would be a mistake to think that Goldman Sachs somehow created this money through the act of their trading genius. For Goldman Sachs to win $100 million in a day of trading means that somebody else lost $100 million. Most likely a huge collection of somebody elses.
I would suggest that the most probable source of these funds, the ultimate loser, is the taxpayer.
This means that as Goldman wins, you lose, I lose, and our future gets diminished so that a pathetically small number of already obscenely rich individuals can continue to game a rigged system to their obvious and magnificent advantage. While I am sure that somebody, somewhere has convinced themselves that it is a good thing to allow Goldman Sachs to recapitalize itself in this way, obviously rigged markets are not a good idea for a country that depends on the willing flow of foreign funds, and they are also certain to misallocate capital.
Moving along, one thing I truly despise is when unfounded statements or opinions are inserted into an article and presented as fact such as this example.
"Goldman Sachs’s trading results reflected the firm’s willingness to take on more risk during the period. "
No, the results do not reflect "the firm's willingness to take risk." This is more likely than not a direct quote from the Goldman Sachs PR department.
If all a firm needed to do to enjoy outlandish trading results was to "take on more risk" then they'd all do it and - presto! - everyone would have higher trading profits!
That's just not how things work, unfortunately. Anybody who is turning in a ratio of winning-to-losing trading days of 46-to-2 is not trading in a fair and competitive manner.
Instead we might reasonably conclude, knowing what we know about how equities markets are supposed to work, that 46-to-2 reflects an unfair advantage, not a taste for risk, as the scribe put it. One could reasonably re-write that sentence to read:
"Goldman Sachs’s trading results reflected the firm’s clever use of lobbying funds and influence to skirt the rules that everyone else abides by. Their gain was your loss. "
What these trading results tell us, as clearly as one could ever hope in this day and age, is that Goldman Sachs (and likely other major recipients of bailout money) is gaming the system to their benefit and everybody else's loss.
I suppose it would be even clearer if we received individual, hand engraved notices informing us of this fact, but, for me, the presence of only 2 days of trading losses in an entire quarter is more than sufficient.
America, you are being looted, and the pirate's name is Goldman Sachs.
Currency Swaps and the U.S. Dollar
I’ve been searching for what could possibly cause the value of the dollar to remain somewhat steady (and even increase in value) – when everything in the market is telling us that the value of the dollar should be declining (Fed actions resulting in trillions of new dollars, massive U.S. budget deficits, U.S. account balance, etc.).
I think Chris Martenson has found the answer…….
jg - September 25, 2009
____________________________________
Currency Swaps, the Dollar, and a Tilted Playing Field
Friday, September 25, 2009, 9:48 am, by cmartenson
Some pretty big news came out on Thursday (9/24/09) regarding a seemingly obscure program to end what were called "currency infusions."
In fact, these are "currency swaps," and you might want to pay attention to them, because of their high degree of correlation with the rise and fall of the dollar. Currency swaps also offer the perfect vehicle for central banks to engage in currency intervention and manipulation, especially if one of the parties (*cough*US*cough) has a massive trade imbalance and lacks sufficient FOREX reserves to use in daily market intervention activities.
Here's the news:
World central banks trimming U.S. dollar infusions
WASHINGTON (Reuters) - Major world central banks announced on Thursday that they planned to scale back massive injections of U.S. dollars into their banking systems as financial markets stabilize after a devastating crisis.
The U.S. Federal Reserve said it would begin to scale back short-term cash auctions in early 2010, while the European Central Bank, the Swiss National Bank, and the Bank of England announced they would curtail steps taken to ensure dollar liquidity.
This isn't part of the exit strategy per se," said Chris Rupkey, an economist for Bank of Tokyo/Mitsubishi UFJ in New York. "It just recognizes that banks have less need for liquidity."
What are currency swaps? Erik deCarbonnel provides this description:
How currency swaps work
The easiest way to understand currency swaps is to think of them as two separate zero-interest loans. For example, let’s say the fed and the ECB arrange a 80 billion euros ($107 billion) swap. The ECB then lends the 80 billion euros to the US, and the US loans $107 billion dollars to the ECB. Later, at an agreed date, the currency swap is reversed: the ECB returns the $107 billion dollars to the fed, and the fed pays back 80 billion euros.
How central banks use currency swaps
Central banks use the foreign currency from swap agreements to prop up their domestic currency by:
A) Providing the foreign currency to domestic financial institutions. (If those institutions were forced to go to the exchange markets for funding, it would drive down the value of the domestic currency.)
B) Using the foreign currency to directly intervene in exchange markets.
Why currency swaps are so popular
Currency swaps allow central banks to borrow foreign currencies without revealing that their country's banking system or currency is in trouble. In other words, since both central banks involved in a currency swap borrow foreign currencies at the same time, it is difficult to tell which central bank needed them the most. It is this lack of transparency which makes currency swaps so attractive to central banks.
In late 2008, the Federal Reserve entered a massive currency swap arrangement with a variety of central banks all over the globe. Here's how the Fed describes that program:
Currency Swaps At the same time it introduced the TAF, the Federal Reserve announced it would extend currency swap lines with the European Central Bank and the Swiss National Bank. The swap lines provide these central banks with dollars, which they can use to supply liquidity to credit markets in their jurisdictions that are based on dollars. In September 2008, the currency swap lines with the ECB and SNB were increased, and new swap lines with other central banks were authorized, including the Bank of Japan, the Bank of England, and the Bank of Canada.
And here's the reason that we might care to track such programs carefully. Note the strong correlation between the currency swap program and the USD index:
Here we might note that the startling run of dollar strength that caught so many investors off guard (but not Goldman Sachs or JP Morgan, it should be noted) began just in front the steep, half-trillion US dollar currency swap operation that began in earnest in fall of 2008.
Note also that the double top in the USD and its subsequent slide all line up nicely with the swaps additions and withdrawals. Correlation is not causation, but this is a pretty cozy relationship, and it possibly explains one of the more unusual periods of dollar strengthening in recent history.
Speaking of cozy relationships, the one between the NY Federal Reserve and big Wall Street institutions stands out, as do the outsized trading returns that quite conveniently repaired more than a few large firms during this same period of time.
I would humbly submit that Goldman Sachs 97% trading win ratio for 2Q09 is perfectly acceptable evidence that the playing field is not level and that, at the very least, we can agree that the appearance of insider trading exists.
Even now Goldman is "struggling" with the PR nightmare of how to explain an "embarrassment" of riches:
Damage Control
For Goldman Sachs CEO Lloyd Blankfein, an embarrassment of riches has turned into embarrassing riches.
Goldman's bonus pool is expected to swell to an estimated $16 billion after what's expected to be another stellar quarter, and Blankfein is struggling to figure out how to pay his employees in a way that keeps them happy while avoiding another round of populist and political outrage like the bank experienced over the summer.
It really is up to the Fed to prove that they did not tip off a few favored struggling big banks (which magically repaired their balance sheets with magnificent winning trading-desk results over this time frame), than it is up to anybody else to prove that they did.
After all, in a supposedly free market economy, it is critical that the appearance, if not the fact, of an even-playing field be maintained.
This next story, which I carefully saved because I thought it provided critically important insights into the cozy relationship between Wall Street and the Federal Reserve, makes it pretty obvious that the free flow of information between the two is not a matter of speculation, but is a matter of normal daily operations:
At N.Y. Fed, Blending In Is Part of the Job
NEW YORK -- The low-slung cubicles wrap around the ninth floor of a building three blocks from Wall Street, each manned by a young staffer staring at flashing numbers on a flat-screen computer monitor and working the phones to gather the latest chatter from financial markets around the world.
It could be any investment bank or hedge fund. Instead, it is the markets group of the Federal Reserve Bank of New York, which has been on the front lines of the government's response to the financial crisis. Federal Reserve and Treasury Department officials make the major decisions, but the New York Fed executes them.
The information gathered there provides crucial insights into the financial world for top policymakers. But the bank is so close to Wall Street -- physically, culturally and intellectually -- that some economic experts worry that the New York Fed puts the interests of the financial industry ahead of those of ordinary Americans.
"The New York Fed sticks out as being not just very, very close to Wall Street, but to the most powerful people on Wall Street," said Simon Johnson, an economist at MIT. "I worry that they pay too much deference to the expertise and presumed wisdom of a sector that screwed up massively."
Even some former insiders at the Fed say the bank does not pay enough attention to the fundamental flaws in the country's financial system or to the risks associated with bailing out financial firms -- for instance, the chance that banks will be encouraged to take more unwise gambles. These experts worry that the New York Fed has adopted the mindset of a trading floor: well attuned to ripples in financial markets but not to long-term trends and dangers.
Last month, for instance, Wall Street bond traders wanted the central bank to ramp up its purchase of Treasury bonds, which would help the traders by driving up prices. But Fed officials in Washington and around the country concluded that such a move would be counterproductive in the longer run, in contrast to some New York Fed staffers, whose views more closely mirrored those on Wall Street.
New York Fed employees "play a very valuable role, day in, day out, with detailed contacts with the big financial firms," said William Poole, a former president of the Federal Reserve Bank of St. Louis who is now at the Cato Institute. "What I think is missing is a longer-run perspective. They tend to be sort of short-term in their outlook, which is true of a lot of the financial firms. Traders have a horizon of a few hours or a few weeks, at most."
Conclusion
The announcement of the unwinding of the dollar swaps seems largely to be a matter of announcing something that is already mostly over. More than 90% of the program has already been unwound, and there is only roughly $50 billion left to go.
Noting the tight correlation between the dollar index and the dollar swaps, anybody with insider information to these programs would have been ideally situated to thoroughly clean out the other market traders, who were in the dark as to the timing and magnitude of the program. It could merely be coincidence that the very same Wall Street firms with daily contact with the NY Fed staff secured outsized gains during this period of time, but it is hard to trust that this was mere coincidence, given all that we've recently learned about Wall Street's inability to control its greed.
Let me not just pick on Wall Street. Steven Friedman, the NY Federal Reserve board head in 2008, somehow could not stop himself from buying shares in Goldman Sachs, even as he was overseeing their dramatic rescue. He resigned over the scandal, but good luck locating much analysis or discussion of this amazing turn of events outside of the blogs.
Because a level playing field is vital to our market structure, it would be an enormous relief to both audit the Fed and secure testimony under oath about whether or not certain large Wall Street banks received information that allowed them to game the trading system in unfair ways.
This is not a small matter. One of the consistent reasons given for why foreigners favor our capital markets with their money is because they are large, liquid, and trusted.
As it turns out, there's no real competitive advantage or barriers to entry in capital markets. There's nothing to prevent any other capital center from taking over New York's functions. There are clever people willing to work hard for paper wealth all over the world, every bit as eager and clever as those in the US.
A vital pillar remaining at the forefront of this particular industry rests on trust. And sometimes trust requires a little transparency, especially if appearances have been compromised.
If the Fed and Wall Street have nothing to hide, then they should welcome an audit and investigation with open arms.
Otherwise, investors all across the globe may come to the unfortunate conclusion that the playing field is tilted.
I think Chris Martenson has found the answer…….
jg - September 25, 2009
____________________________________
Currency Swaps, the Dollar, and a Tilted Playing Field
Friday, September 25, 2009, 9:48 am, by cmartenson
Some pretty big news came out on Thursday (9/24/09) regarding a seemingly obscure program to end what were called "currency infusions."
In fact, these are "currency swaps," and you might want to pay attention to them, because of their high degree of correlation with the rise and fall of the dollar. Currency swaps also offer the perfect vehicle for central banks to engage in currency intervention and manipulation, especially if one of the parties (*cough*US*cough) has a massive trade imbalance and lacks sufficient FOREX reserves to use in daily market intervention activities.
Here's the news:
World central banks trimming U.S. dollar infusions
WASHINGTON (Reuters) - Major world central banks announced on Thursday that they planned to scale back massive injections of U.S. dollars into their banking systems as financial markets stabilize after a devastating crisis.
The U.S. Federal Reserve said it would begin to scale back short-term cash auctions in early 2010, while the European Central Bank, the Swiss National Bank, and the Bank of England announced they would curtail steps taken to ensure dollar liquidity.
This isn't part of the exit strategy per se," said Chris Rupkey, an economist for Bank of Tokyo/Mitsubishi UFJ in New York. "It just recognizes that banks have less need for liquidity."
What are currency swaps? Erik deCarbonnel provides this description:
How currency swaps work
The easiest way to understand currency swaps is to think of them as two separate zero-interest loans. For example, let’s say the fed and the ECB arrange a 80 billion euros ($107 billion) swap. The ECB then lends the 80 billion euros to the US, and the US loans $107 billion dollars to the ECB. Later, at an agreed date, the currency swap is reversed: the ECB returns the $107 billion dollars to the fed, and the fed pays back 80 billion euros.
How central banks use currency swaps
Central banks use the foreign currency from swap agreements to prop up their domestic currency by:
A) Providing the foreign currency to domestic financial institutions. (If those institutions were forced to go to the exchange markets for funding, it would drive down the value of the domestic currency.)
B) Using the foreign currency to directly intervene in exchange markets.
Why currency swaps are so popular
Currency swaps allow central banks to borrow foreign currencies without revealing that their country's banking system or currency is in trouble. In other words, since both central banks involved in a currency swap borrow foreign currencies at the same time, it is difficult to tell which central bank needed them the most. It is this lack of transparency which makes currency swaps so attractive to central banks.
In late 2008, the Federal Reserve entered a massive currency swap arrangement with a variety of central banks all over the globe. Here's how the Fed describes that program:
Currency Swaps At the same time it introduced the TAF, the Federal Reserve announced it would extend currency swap lines with the European Central Bank and the Swiss National Bank. The swap lines provide these central banks with dollars, which they can use to supply liquidity to credit markets in their jurisdictions that are based on dollars. In September 2008, the currency swap lines with the ECB and SNB were increased, and new swap lines with other central banks were authorized, including the Bank of Japan, the Bank of England, and the Bank of Canada.
And here's the reason that we might care to track such programs carefully. Note the strong correlation between the currency swap program and the USD index:
Here we might note that the startling run of dollar strength that caught so many investors off guard (but not Goldman Sachs or JP Morgan, it should be noted) began just in front the steep, half-trillion US dollar currency swap operation that began in earnest in fall of 2008.
Note also that the double top in the USD and its subsequent slide all line up nicely with the swaps additions and withdrawals. Correlation is not causation, but this is a pretty cozy relationship, and it possibly explains one of the more unusual periods of dollar strengthening in recent history.
Speaking of cozy relationships, the one between the NY Federal Reserve and big Wall Street institutions stands out, as do the outsized trading returns that quite conveniently repaired more than a few large firms during this same period of time.
I would humbly submit that Goldman Sachs 97% trading win ratio for 2Q09 is perfectly acceptable evidence that the playing field is not level and that, at the very least, we can agree that the appearance of insider trading exists.
Even now Goldman is "struggling" with the PR nightmare of how to explain an "embarrassment" of riches:
Damage Control
For Goldman Sachs CEO Lloyd Blankfein, an embarrassment of riches has turned into embarrassing riches.
Goldman's bonus pool is expected to swell to an estimated $16 billion after what's expected to be another stellar quarter, and Blankfein is struggling to figure out how to pay his employees in a way that keeps them happy while avoiding another round of populist and political outrage like the bank experienced over the summer.
It really is up to the Fed to prove that they did not tip off a few favored struggling big banks (which magically repaired their balance sheets with magnificent winning trading-desk results over this time frame), than it is up to anybody else to prove that they did.
After all, in a supposedly free market economy, it is critical that the appearance, if not the fact, of an even-playing field be maintained.
This next story, which I carefully saved because I thought it provided critically important insights into the cozy relationship between Wall Street and the Federal Reserve, makes it pretty obvious that the free flow of information between the two is not a matter of speculation, but is a matter of normal daily operations:
At N.Y. Fed, Blending In Is Part of the Job
NEW YORK -- The low-slung cubicles wrap around the ninth floor of a building three blocks from Wall Street, each manned by a young staffer staring at flashing numbers on a flat-screen computer monitor and working the phones to gather the latest chatter from financial markets around the world.
It could be any investment bank or hedge fund. Instead, it is the markets group of the Federal Reserve Bank of New York, which has been on the front lines of the government's response to the financial crisis. Federal Reserve and Treasury Department officials make the major decisions, but the New York Fed executes them.
The information gathered there provides crucial insights into the financial world for top policymakers. But the bank is so close to Wall Street -- physically, culturally and intellectually -- that some economic experts worry that the New York Fed puts the interests of the financial industry ahead of those of ordinary Americans.
"The New York Fed sticks out as being not just very, very close to Wall Street, but to the most powerful people on Wall Street," said Simon Johnson, an economist at MIT. "I worry that they pay too much deference to the expertise and presumed wisdom of a sector that screwed up massively."
Even some former insiders at the Fed say the bank does not pay enough attention to the fundamental flaws in the country's financial system or to the risks associated with bailing out financial firms -- for instance, the chance that banks will be encouraged to take more unwise gambles. These experts worry that the New York Fed has adopted the mindset of a trading floor: well attuned to ripples in financial markets but not to long-term trends and dangers.
Last month, for instance, Wall Street bond traders wanted the central bank to ramp up its purchase of Treasury bonds, which would help the traders by driving up prices. But Fed officials in Washington and around the country concluded that such a move would be counterproductive in the longer run, in contrast to some New York Fed staffers, whose views more closely mirrored those on Wall Street.
New York Fed employees "play a very valuable role, day in, day out, with detailed contacts with the big financial firms," said William Poole, a former president of the Federal Reserve Bank of St. Louis who is now at the Cato Institute. "What I think is missing is a longer-run perspective. They tend to be sort of short-term in their outlook, which is true of a lot of the financial firms. Traders have a horizon of a few hours or a few weeks, at most."
Conclusion
The announcement of the unwinding of the dollar swaps seems largely to be a matter of announcing something that is already mostly over. More than 90% of the program has already been unwound, and there is only roughly $50 billion left to go.
Noting the tight correlation between the dollar index and the dollar swaps, anybody with insider information to these programs would have been ideally situated to thoroughly clean out the other market traders, who were in the dark as to the timing and magnitude of the program. It could merely be coincidence that the very same Wall Street firms with daily contact with the NY Fed staff secured outsized gains during this period of time, but it is hard to trust that this was mere coincidence, given all that we've recently learned about Wall Street's inability to control its greed.
Let me not just pick on Wall Street. Steven Friedman, the NY Federal Reserve board head in 2008, somehow could not stop himself from buying shares in Goldman Sachs, even as he was overseeing their dramatic rescue. He resigned over the scandal, but good luck locating much analysis or discussion of this amazing turn of events outside of the blogs.
Because a level playing field is vital to our market structure, it would be an enormous relief to both audit the Fed and secure testimony under oath about whether or not certain large Wall Street banks received information that allowed them to game the trading system in unfair ways.
This is not a small matter. One of the consistent reasons given for why foreigners favor our capital markets with their money is because they are large, liquid, and trusted.
As it turns out, there's no real competitive advantage or barriers to entry in capital markets. There's nothing to prevent any other capital center from taking over New York's functions. There are clever people willing to work hard for paper wealth all over the world, every bit as eager and clever as those in the US.
A vital pillar remaining at the forefront of this particular industry rests on trust. And sometimes trust requires a little transparency, especially if appearances have been compromised.
If the Fed and Wall Street have nothing to hide, then they should welcome an audit and investigation with open arms.
Otherwise, investors all across the globe may come to the unfortunate conclusion that the playing field is tilted.
Friday, September 15, 2006
Goldman Sachs and the Next Phase of this Crisis
I find it interesting that after a couple of years – the SEC is finally getting around to prosecuting those responsible for the subprime CDO debacle. Why now? I believe the most likely answer is that the world’s stock markets are about to be taken down – and this is just another reason that those in power can point to as the cause.
As you’ve seen me say before – we are dealing with the world’s most deceptive people. They are producing a grand show for the world to see – while true motives and actions remain hidden behind the curtain. They are taking down the markets – and giving you their explanation. It’s a lie – but few people can see this.
Nathan Martin (http://www.economicedge.blogspot.com/) sums it up:
“Is the U.S. Government really getting serious about going after these guys? NO WAY. There are always token fall guys and this is all theatre and show.
Think about the timing of this. It comes just as I have been talking about a “triggering event” that will take the blame for turning the markets. This suit was reported AFTER the open on OPTIONS EXPIRATION day. Why now? My suspicious mind says that it was timed to allow the options sellers and contract speculators to walk away and to instill maximum damage on the retail buyers of the ALL TIME RECORD number of option call buyers who were in the market just yesterday.
Markets almost always turn on such sentiment extremes, but I know that Goldman controls the government and absolutely is in control of the S.E.C. too! It’s almost a joke to me that they would turn the markets by allowing the S.E.C. to bring suit against themselves. And I’m willing to bet the majority of people will believe there’s no way they would do that. Want to bet?
Watch future events unfold, I can almost guarantee that there will be fines that are later mitigated, that a few people may take a fall, but nothing real or meaningful will come of it other than an opportunity to profit on the short side after running the market up to bubble extremes. It’s a nice game to play when you control all the pieces on the board. Meanwhile the people of the world are simply played as fools and pawns. How’s that feel, were you long the market?”
Here’s the link to Nathan’s entire post:
http://economicedge.blogspot.com/2010/04/breaking-sec-sues-goldman-sachs-for.html
This action against Goldman Sachs was announced on Friday (April 16, 2010).
Today (Monday – April 19, 2010) we’re told that this investigation will expand to include other big Wall Street firms. There is also an investigation ongoing into the collapse of Countrywide Financial.
This is what happens when a group of individuals get consumed by greed and the pursuit of power. All of the things they thought would bring themselves more power and wealth – are now leading to their ruin.
This will not end well.
jg – April 19, 2010
As you’ve seen me say before – we are dealing with the world’s most deceptive people. They are producing a grand show for the world to see – while true motives and actions remain hidden behind the curtain. They are taking down the markets – and giving you their explanation. It’s a lie – but few people can see this.
Nathan Martin (http://www.economicedge.blogspot.com/) sums it up:
“Is the U.S. Government really getting serious about going after these guys? NO WAY. There are always token fall guys and this is all theatre and show.
Think about the timing of this. It comes just as I have been talking about a “triggering event” that will take the blame for turning the markets. This suit was reported AFTER the open on OPTIONS EXPIRATION day. Why now? My suspicious mind says that it was timed to allow the options sellers and contract speculators to walk away and to instill maximum damage on the retail buyers of the ALL TIME RECORD number of option call buyers who were in the market just yesterday.
Markets almost always turn on such sentiment extremes, but I know that Goldman controls the government and absolutely is in control of the S.E.C. too! It’s almost a joke to me that they would turn the markets by allowing the S.E.C. to bring suit against themselves. And I’m willing to bet the majority of people will believe there’s no way they would do that. Want to bet?
Watch future events unfold, I can almost guarantee that there will be fines that are later mitigated, that a few people may take a fall, but nothing real or meaningful will come of it other than an opportunity to profit on the short side after running the market up to bubble extremes. It’s a nice game to play when you control all the pieces on the board. Meanwhile the people of the world are simply played as fools and pawns. How’s that feel, were you long the market?”
Here’s the link to Nathan’s entire post:
http://economicedge.blogspot.com/2010/04/breaking-sec-sues-goldman-sachs-for.html
This action against Goldman Sachs was announced on Friday (April 16, 2010).
Today (Monday – April 19, 2010) we’re told that this investigation will expand to include other big Wall Street firms. There is also an investigation ongoing into the collapse of Countrywide Financial.
This is what happens when a group of individuals get consumed by greed and the pursuit of power. All of the things they thought would bring themselves more power and wealth – are now leading to their ruin.
This will not end well.
jg – April 19, 2010
Damon Vrabel - Goldman Sachs, Chess, and the Godfather
Great article by Damon Vrabel posted on Nathan’s Economic Edge (http://economicedge.blogspot.com/) regarding the recent SEC charges against Goldman Sachs. I have posted on my website some informative videos created by Damon regarding the current economic crisis and the new world order.
Damon is someone who understands the truth of what is happening and he has come to the correct conclusion:
“What is the end game? The ownership class is attempting to restructure the world under a new financial system.”
Here’s a link to the article:
http://economicedge.blogspot.com/2010/04/damon-vrabel-goldman-sachs-chess-and.html
jg – May 3, 2010
____________________________
FRIDAY, APRIL 30, 2010
Damon Vrabel - Goldman Sachs, Chess, and the Godfather
Just this morning I was discussing that there were obviously games being played with Goldman. According to Mr. Vrabel, that game is chess.
And look at who he points to as a probably power behind the scenes, none other than the very same JPMorgan mentioned this morning:
Goldman Sachs, Chess, and the Godfather
Between the SEC charges and the congressional panels, the government is finally doing its job going after Goldman Sachs, right? And this last week in April ends with the Justice Department picking up the baton, which puts Goldman under threat of criminal prosecution. Things have suddenly gotten serious.
Two weeks ago on a radio interview, I suggested the SEC investigation will either be a chump charge to pacify the masses or it might potentially be the beginning of the sacrifice of Goldman Sachs for reasons explained below. The Justice Department referral makes the latter more probable.
Criminal prosecution is indeed appropriate. Goldman deserves to be broken up. In fact, all banks of that size need to be broken up so that power is passed down to state and local economies, and countries are no longer held hostage by the mega firms. Is that what is happening here? Are we being saved from the financial parasites that have destroyed our economy?
Childlike Perspective: Left vs. Right
The left thinks so. The major media establishment is suddenly, as if by script, trumpeting the idea that government is cracking down on boogie man Goldman Sachs. This view says, “Yey! Our good government servants that have our best interests at heart are fixing those greedy Wall Street parasites.” That’s the entire purpose of the congressional panels—a stageshow for the Wall-Street-funded media to promote this narrative. But those very same government officials were the ones who did what Goldman Sachs representatives and the real powers behind Wall Street told them for the last 20+ years. They still get all of their money from Wall Street. Have they suddenly turned on the very people who feed them? Of course not.
The right thinks this crackdown is bad because Wall Street and Goldman represent a benevolent free market. This view goes beyond childlikeness and approaches insanity, like Goldman CEO Lloyd Blankfein thinking of himself as an angel from God. Wall Street, the Fed cartel, is a government creation. There is nothing “free market” about it. It is the most powerful monopolized cartel in the history of the world. Conservative media mouthpieces who trumpet Wall Street do not have a clue about our monetary system. They have never looked beyond the false religion of neoclassical economics, which conveniently ignores the issue of money.
Conclusion: rule out the simplistic view of the left and right. The Washington DC government has served Wall Street and big business for decades. There is no divide between big government and big business. They go hand in hand. Neither could exist without the other.
Adolescent Perspective: “They’re All Criminals”
Another group of people, far more accurate than the left vs. right disciples, think that Wall Street is just a predatory bunch. Bringing down Goldman Sachs would therefore be a good thing in their view. But they think DC government is a predatory bunch as well. They see through the salesmanship and PR pumped through the corporate media. They understand that frat boy behavior creates a self-serving clique whether on Wall Street or in Washington DC. In fact, they understand how the boys in both groups get their power from working together. It is all one club.
Conclusion: as correct as this view is, it leaves us paralyzed. Adolescents are brilliant at seeing through adult facades, but they may fail to see the higher level picture.
The Godfather: Who the Criminals Work For
The key to what is really happening is to understand that the suits we see on television are not in charge. A bunch of random self-serving people would not be able to pull off strategic, coordinated plans—the adolescent view is only half correct. There are people far above the pay grade of a senator like Chris Dodd or a wage servant like Lloyd Blankfein. He may be the top operating officer at Goldman, but by definition that means he is a servant of the ownership class—the Anglo mafia—that controls all money in the system. The fact that he earns a wage and gets a W2 at the end of the year means he and his firm are not in charge.
Goldman Sachs is effectively a capo regime. It is a powerful player in a game of controlled chaos. It was given a territory and was then expected to deliver the goods. And Goldman delivered better than all the other capos in the system. It reaped the rewards. Goldman’s officers were paid better than any other regime throughout the last several decades. Its hit men were the most productive. The most loyal—Rubin, Paulson, etc—have been inducted into the upper level circle around the Godfather and removed from the stressful street jobs that bring public scrutiny. Those guys made their hundreds of millions and no longer care whether Goldman exists or not. And from the Godfather’s perspective, there comes a time when capos have served their purpose. At that point, their life is in danger.
“The Game of the Century:” Bobby Fischer and the Queen Sacrifice
But capos typically are not sacrificed unless doing so would serve a Machiavellian purpose. So what would be the purpose of sacrificing Goldman? Well, in one of the more famous games in chess history, 13-year-old Bobby Fischer brilliantly pounced on his opponent and guaranteed victory by boldly sacrificing his queen on move 17. The queen is the most powerful chess piece. Average people would narrowly play a game defensively protecting their queen and assuming any chance to take your queen would lead to victory. But that elementary view would be precisely the weakness upon which a true chess mind, a Godfather, would prey. Beware of the bait being laid in front of you.
Goldman Sachs is very much analogous to a queen in the chess game being played by the ownership class—the richest pools of private capital controlled by multi-generational wealthy families that hover above countries via the central banking system. It has been one of the most potent pieces on the board for many years, its most recent attack being on the entire nation of Greece. But as the endgame comes into view, perhaps the most brilliant play to reach checkmate is now the queen sacrifice. Goldman employees had better be sending their resumes to JP Morgan Chase—a critical chess piece in the endgame that will be protected at all costs.
The Great Global Restructuring
What is the end game? The ownership class is attempting to restructure the world under a new financial system. We have had a global currency for a long time—the US dollar—but it has run its course. Wall Street has leveraged up the dollar as far as possible. The dollar now holds most nations hostage thanks to the power of the bond market, the central banking system. The ownership class needs a new debt-based currency and banking structure to maintain control as they pump the capital engine through the 21st century. This is why the G20 is working feverishly to build up the IMF, BIS, and new global financial rules. This time the production center will be China rather than the US, which is why China and Japan are the most asset-rich countries in the world while the western world is the most indebted. The west is on track for decades of slow decline while Asia is on the verge of seeing “the rising sun.”
So unfortunately the government vs. Goldman Sachs story has nothing to do with reforming Wall Street in the interest of average Americans. Rather it is a strategic move to further the endgame of consolidating Wall Street power, focusing public rage on Goldman to protect JP Morgan Chase, fueling new regulations to clamp down on the smaller banks that we so desperately need, and creating a global structure even bigger than the already “too big to fail” banking system. This may be setting up one of the biggest, most successful queen sacrifices in history. We should take the queen by all means—Goldman is a predator. But heed the lesson from 13-year-old Bobby Fischer. Be wary of checkmate.
Damon is someone who understands the truth of what is happening and he has come to the correct conclusion:
“What is the end game? The ownership class is attempting to restructure the world under a new financial system.”
Here’s a link to the article:
http://economicedge.blogspot.com/2010/04/damon-vrabel-goldman-sachs-chess-and.html
jg – May 3, 2010
____________________________
FRIDAY, APRIL 30, 2010
Damon Vrabel - Goldman Sachs, Chess, and the Godfather
Just this morning I was discussing that there were obviously games being played with Goldman. According to Mr. Vrabel, that game is chess.
And look at who he points to as a probably power behind the scenes, none other than the very same JPMorgan mentioned this morning:
Goldman Sachs, Chess, and the Godfather
Between the SEC charges and the congressional panels, the government is finally doing its job going after Goldman Sachs, right? And this last week in April ends with the Justice Department picking up the baton, which puts Goldman under threat of criminal prosecution. Things have suddenly gotten serious.
Two weeks ago on a radio interview, I suggested the SEC investigation will either be a chump charge to pacify the masses or it might potentially be the beginning of the sacrifice of Goldman Sachs for reasons explained below. The Justice Department referral makes the latter more probable.
Criminal prosecution is indeed appropriate. Goldman deserves to be broken up. In fact, all banks of that size need to be broken up so that power is passed down to state and local economies, and countries are no longer held hostage by the mega firms. Is that what is happening here? Are we being saved from the financial parasites that have destroyed our economy?
Childlike Perspective: Left vs. Right
The left thinks so. The major media establishment is suddenly, as if by script, trumpeting the idea that government is cracking down on boogie man Goldman Sachs. This view says, “Yey! Our good government servants that have our best interests at heart are fixing those greedy Wall Street parasites.” That’s the entire purpose of the congressional panels—a stageshow for the Wall-Street-funded media to promote this narrative. But those very same government officials were the ones who did what Goldman Sachs representatives and the real powers behind Wall Street told them for the last 20+ years. They still get all of their money from Wall Street. Have they suddenly turned on the very people who feed them? Of course not.
The right thinks this crackdown is bad because Wall Street and Goldman represent a benevolent free market. This view goes beyond childlikeness and approaches insanity, like Goldman CEO Lloyd Blankfein thinking of himself as an angel from God. Wall Street, the Fed cartel, is a government creation. There is nothing “free market” about it. It is the most powerful monopolized cartel in the history of the world. Conservative media mouthpieces who trumpet Wall Street do not have a clue about our monetary system. They have never looked beyond the false religion of neoclassical economics, which conveniently ignores the issue of money.
Conclusion: rule out the simplistic view of the left and right. The Washington DC government has served Wall Street and big business for decades. There is no divide between big government and big business. They go hand in hand. Neither could exist without the other.
Adolescent Perspective: “They’re All Criminals”
Another group of people, far more accurate than the left vs. right disciples, think that Wall Street is just a predatory bunch. Bringing down Goldman Sachs would therefore be a good thing in their view. But they think DC government is a predatory bunch as well. They see through the salesmanship and PR pumped through the corporate media. They understand that frat boy behavior creates a self-serving clique whether on Wall Street or in Washington DC. In fact, they understand how the boys in both groups get their power from working together. It is all one club.
Conclusion: as correct as this view is, it leaves us paralyzed. Adolescents are brilliant at seeing through adult facades, but they may fail to see the higher level picture.
The Godfather: Who the Criminals Work For
The key to what is really happening is to understand that the suits we see on television are not in charge. A bunch of random self-serving people would not be able to pull off strategic, coordinated plans—the adolescent view is only half correct. There are people far above the pay grade of a senator like Chris Dodd or a wage servant like Lloyd Blankfein. He may be the top operating officer at Goldman, but by definition that means he is a servant of the ownership class—the Anglo mafia—that controls all money in the system. The fact that he earns a wage and gets a W2 at the end of the year means he and his firm are not in charge.
Goldman Sachs is effectively a capo regime. It is a powerful player in a game of controlled chaos. It was given a territory and was then expected to deliver the goods. And Goldman delivered better than all the other capos in the system. It reaped the rewards. Goldman’s officers were paid better than any other regime throughout the last several decades. Its hit men were the most productive. The most loyal—Rubin, Paulson, etc—have been inducted into the upper level circle around the Godfather and removed from the stressful street jobs that bring public scrutiny. Those guys made their hundreds of millions and no longer care whether Goldman exists or not. And from the Godfather’s perspective, there comes a time when capos have served their purpose. At that point, their life is in danger.
“The Game of the Century:” Bobby Fischer and the Queen Sacrifice
But capos typically are not sacrificed unless doing so would serve a Machiavellian purpose. So what would be the purpose of sacrificing Goldman? Well, in one of the more famous games in chess history, 13-year-old Bobby Fischer brilliantly pounced on his opponent and guaranteed victory by boldly sacrificing his queen on move 17. The queen is the most powerful chess piece. Average people would narrowly play a game defensively protecting their queen and assuming any chance to take your queen would lead to victory. But that elementary view would be precisely the weakness upon which a true chess mind, a Godfather, would prey. Beware of the bait being laid in front of you.
Goldman Sachs is very much analogous to a queen in the chess game being played by the ownership class—the richest pools of private capital controlled by multi-generational wealthy families that hover above countries via the central banking system. It has been one of the most potent pieces on the board for many years, its most recent attack being on the entire nation of Greece. But as the endgame comes into view, perhaps the most brilliant play to reach checkmate is now the queen sacrifice. Goldman employees had better be sending their resumes to JP Morgan Chase—a critical chess piece in the endgame that will be protected at all costs.
The Great Global Restructuring
What is the end game? The ownership class is attempting to restructure the world under a new financial system. We have had a global currency for a long time—the US dollar—but it has run its course. Wall Street has leveraged up the dollar as far as possible. The dollar now holds most nations hostage thanks to the power of the bond market, the central banking system. The ownership class needs a new debt-based currency and banking structure to maintain control as they pump the capital engine through the 21st century. This is why the G20 is working feverishly to build up the IMF, BIS, and new global financial rules. This time the production center will be China rather than the US, which is why China and Japan are the most asset-rich countries in the world while the western world is the most indebted. The west is on track for decades of slow decline while Asia is on the verge of seeing “the rising sun.”
So unfortunately the government vs. Goldman Sachs story has nothing to do with reforming Wall Street in the interest of average Americans. Rather it is a strategic move to further the endgame of consolidating Wall Street power, focusing public rage on Goldman to protect JP Morgan Chase, fueling new regulations to clamp down on the smaller banks that we so desperately need, and creating a global structure even bigger than the already “too big to fail” banking system. This may be setting up one of the biggest, most successful queen sacrifices in history. We should take the queen by all means—Goldman is a predator. But heed the lesson from 13-year-old Bobby Fischer. Be wary of checkmate.
Goldman Sachs Defies Laws of Probability Once Again - May 11 2010
Once again, Goldman Sachs overcomes all laws of probability and manages to have another quarter where they made money on every single trading day.
If I was playing poker and someone at the table was dealt 5 straight royal flushes – I would probably ask to change the deck. There’s luck – then there’s something that defies all logic and probability – even if I can’t see exactly what it is.
Karl Denninger does the math below.
Our markets have become an absolute joke.
They are no longer ‘free’ – they are controlled.
You can’t trade in this environment and expect to win.
jg – May 11, 2010
_____________________________
Unbelievable: Goldman Has Zero Trading Loss Days In Last Quarter
http://www.zerohedge.com/
Submitted by Tyler Durden on 05/10/2010 07:54 -0500
If you ever wanted to see what monopoly looks like in chart form, here it is:
In the quarter ended March 31, Goldman made money on every single trading day. The firm did not record a loss of even $0.01 on even one day in the last quarter. That's 63 days profitable out of 63 trading days. The statistic probability of this event is itself statistically undefined. Goldman is now the market - or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins. Congratulations America: you now have far, far better odds in Las Vegas that you have making money with your E-Trade account.
Adding to the alice in wonderland insanity of this announcement, the firm made over $100 million daily on 35 different days. Of Goldman's $9.7 billion in total Q1 revenue, 76% came from trading. Forget investment banking, forget underwriting, forget advisory: over three quarters of the firm's value is based on being the house to the biggest corrupt casino in existence. Ever.
_____________________________________
Tuesday, May 11. 2010
Posted by Karl Denninger in Company Specific at 10:59
More On Goldman's "Perfect Record"
A bit of math for the geeky among you... or those interested in the odds of Goldman's "perfect trading record" being achievable.
Let's take a simple game of chance. We flip a coin and call "heads" a winning day, and "tails" a losing day. A pure game of chance with a 50% set of odds for each "trial."
If we perform one flip, half the time it will come up heads, half the time tails (we will ignore the tiny chance of it landing on the EDGE and balancing - not exactly zero odds of that, but close enough.)
So what about if we perform four trials? What are the odds that the coin comes up "heads" all four times?
This is easily determined as 0.5 (odds on one trial) ^ 4, or the odds times itself four times over (to the 4th power)
This comes out to 6.25%. That is, if you did 100 sets of these four flips, in about six of them you would expect to have all four comes up "heads."
In the first quarter there were 12 full weeks and four days, for a total of 64 week days. A couple of those days, however, were holidays during which the market was closed (Good Friday, New Year's Day, etc.) so we will call it 60 trading days. This is a reasonable estimation for any given quarter.
So what are the odds that in a pure game of chance the coin would come up "heads" all 60 times?
That would be 8.67 x 10-19, or 8.67 times in 10,000,000,000,000,000,000 attempts (if I counted my zeros correctly.)
A trillion is 1,000,000,000,000,000, or 1015; this is about 1,000 times less likely than one in a trillion.
In the "real world" we have had 234 years of history in America. There have been, on average, 240 days (approximately) of trading in each of those years, or 56,160 trading days, and there have been 936 quarters. The NYSE was founded in 1792, so in fact there haven't been that many days on which stocks have traded in the United States, but that's close enough.
The odds of this outcome happening in any one quarter since the founding of the nation are approximately 8.1 x 10-16 or quite significantly (by close to 100 times) less likely than a one-in-a-trillion chance.
To put this in perspective you have a 1-in-500,000 chance each year of being hit by lightning while retrieving your mail, walking your dog, or taking a hike.
In comparison to that risk in ordinary life the odds of Goldman pulling this off in a game of chance are approximately forty million times LESS than the probability either of that event happening to you in the next year (again, assuming I've checked my zeros correctly.)
Should such an outcome happen on the street with the outcome subject to the exchange of money (that is, a wager) the gullible would hand over the wager. A person with a bit of knowledge of mathematics and even the tiniest bit of street smarts would react to such an event by pulling his sixgun and drilling the coin-flipper, as he would be certain (within HIS knowledge of having just been robbed) that the coin was rigged.
Now certainly trading is not a pure game of chance. Indeed, quite to the contrary; trading is allegedly a game of skill in the main.
I will leave it to you, and those who investigate frauds, to determine whether the application of skill, without any sort of cheating such as front-running client orders, insider information or other forms of rigging the markets, can turn the random chance odds of 8.67 x 10-19 into an event that has, in fact, actually occurred.
If I was playing poker and someone at the table was dealt 5 straight royal flushes – I would probably ask to change the deck. There’s luck – then there’s something that defies all logic and probability – even if I can’t see exactly what it is.
Karl Denninger does the math below.
Our markets have become an absolute joke.
They are no longer ‘free’ – they are controlled.
You can’t trade in this environment and expect to win.
jg – May 11, 2010
_____________________________
Unbelievable: Goldman Has Zero Trading Loss Days In Last Quarter
http://www.zerohedge.com/
Submitted by Tyler Durden on 05/10/2010 07:54 -0500
If you ever wanted to see what monopoly looks like in chart form, here it is:
In the quarter ended March 31, Goldman made money on every single trading day. The firm did not record a loss of even $0.01 on even one day in the last quarter. That's 63 days profitable out of 63 trading days. The statistic probability of this event is itself statistically undefined. Goldman is now the market - or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins. Congratulations America: you now have far, far better odds in Las Vegas that you have making money with your E-Trade account.
Adding to the alice in wonderland insanity of this announcement, the firm made over $100 million daily on 35 different days. Of Goldman's $9.7 billion in total Q1 revenue, 76% came from trading. Forget investment banking, forget underwriting, forget advisory: over three quarters of the firm's value is based on being the house to the biggest corrupt casino in existence. Ever.
_____________________________________
Tuesday, May 11. 2010
Posted by Karl Denninger in Company Specific at 10:59
More On Goldman's "Perfect Record"
A bit of math for the geeky among you... or those interested in the odds of Goldman's "perfect trading record" being achievable.
Let's take a simple game of chance. We flip a coin and call "heads" a winning day, and "tails" a losing day. A pure game of chance with a 50% set of odds for each "trial."
If we perform one flip, half the time it will come up heads, half the time tails (we will ignore the tiny chance of it landing on the EDGE and balancing - not exactly zero odds of that, but close enough.)
So what about if we perform four trials? What are the odds that the coin comes up "heads" all four times?
This is easily determined as 0.5 (odds on one trial) ^ 4, or the odds times itself four times over (to the 4th power)
This comes out to 6.25%. That is, if you did 100 sets of these four flips, in about six of them you would expect to have all four comes up "heads."
In the first quarter there were 12 full weeks and four days, for a total of 64 week days. A couple of those days, however, were holidays during which the market was closed (Good Friday, New Year's Day, etc.) so we will call it 60 trading days. This is a reasonable estimation for any given quarter.
So what are the odds that in a pure game of chance the coin would come up "heads" all 60 times?
That would be 8.67 x 10-19, or 8.67 times in 10,000,000,000,000,000,000 attempts (if I counted my zeros correctly.)
A trillion is 1,000,000,000,000,000, or 1015; this is about 1,000 times less likely than one in a trillion.
In the "real world" we have had 234 years of history in America. There have been, on average, 240 days (approximately) of trading in each of those years, or 56,160 trading days, and there have been 936 quarters. The NYSE was founded in 1792, so in fact there haven't been that many days on which stocks have traded in the United States, but that's close enough.
The odds of this outcome happening in any one quarter since the founding of the nation are approximately 8.1 x 10-16 or quite significantly (by close to 100 times) less likely than a one-in-a-trillion chance.
To put this in perspective you have a 1-in-500,000 chance each year of being hit by lightning while retrieving your mail, walking your dog, or taking a hike.
In comparison to that risk in ordinary life the odds of Goldman pulling this off in a game of chance are approximately forty million times LESS than the probability either of that event happening to you in the next year (again, assuming I've checked my zeros correctly.)
Should such an outcome happen on the street with the outcome subject to the exchange of money (that is, a wager) the gullible would hand over the wager. A person with a bit of knowledge of mathematics and even the tiniest bit of street smarts would react to such an event by pulling his sixgun and drilling the coin-flipper, as he would be certain (within HIS knowledge of having just been robbed) that the coin was rigged.
Now certainly trading is not a pure game of chance. Indeed, quite to the contrary; trading is allegedly a game of skill in the main.
I will leave it to you, and those who investigate frauds, to determine whether the application of skill, without any sort of cheating such as front-running client orders, insider information or other forms of rigging the markets, can turn the random chance odds of 8.67 x 10-19 into an event that has, in fact, actually occurred.
The Purpose Behind an Engineered Economic Collapse - August 18 2010
This article speaks to many of the reasons why people do not believe a small group of ‘elitists’ could control the world’s governments and financial system.
Believe it.
jg – August 18, 2010
_________________________
_________________________
Guest Post: The Purpose Behind Engineered Economic Collapse
Submitted by Tyler Durden on 08/17/2010 08:47 -0500
The Purpose Behind Engineered Economic Collapse
By Giordano Bruno, of Neithercorp Press
“From now on, depressions will be scientifically created.” — Congressman Charles A. Lindbergh Sr., 1913
Everyone loves money. Even people like myself who abhor the abuse of money and commerce, who understand the fraudulent nature of the system we live in, still work hard and save so that we might attain a sense of stability within that system. Many people see money as a focal point to their existence. But is it really money that they are after, or is it something else entirely? In truth, money represents ‘security’ in the minds of the masses. Money affords us the ability to survive, and the more of it we have, the safer we all feel. Because we subconsciously associate the extension of our very life with the variable health of the economic structure in which we live, we tend to become unwitting devotees to its continued existence, even if it is corrupt and condemned to failure. We gullibly deny the system or the currency that supports it is doomed to the contrary of all evidence because, even though it has beaten us bloody, we have never known anything else.
In light of this entrenched way of perceiving things, especially in the U.S., it is difficult enough to convince some people that the economy is in fact not providing the security they desire, but is actually destroying their future completely. To explain to them that this is deliberate, that the economy is designed to self-destruct, that is another prospect altogether.
Many people hit a proverbial wall on this issue because they simply cannot fathom that certain groups of men (globalists and central bankers) view money and economy in completely different terms than they do. The average American lives within a tiny box when it comes to the mechanics and motivations of finance. They think that their monetary desires and drives are exactly the same as a globalist’s. But, what they don’t realize is that the box they think in was BUILT by globalists. This is why the actions of big banks and the decisions of our mostly corporate establishment run government seem so insane in the face of common sense. We try to rationalize their behavior as “idiocy”, but the reality is that their goals are highly deliberate and so far outside what we have been taught to expect that some of us lack a point of reference. If you cannot see the endgame, you will not understand the steps taken to reach it until it is too late.
In the past we have covered numerous instances in which global bankers have admitted to fraud on a massive scale, fraud which is now crushing our already fragile economy. We have covered the private Federal Reserve and how it knowingly facilitated the creation of the housing bubble, as well as how it is now inflating a Treasury bubble which is soon to implode. We have covered Goldman Sachs and its efforts to promote and sell toxic derivatives all over the world while at the same time betting against those derivatives on the open market. We have covered the manipulation of gold and silver markets by companies like JP Morgan, which have recently been exposed by whistleblowers and GATA investigations. And, most importantly, we have executed in-depth analysis on the growing weakness of the U.S. dollar in preparation for severe currency devaluation. These revelations raise questions, which is natural, but they also illicit misconceptions and reckless knee-jerk reactions, especially when broaching the fact that the illegal strategies of international banks are part of a greater agenda.
Below, we will examine some of the most common narrow minded responses to the issue of engineered economic collapse, as well as why people think the way they do when the “semi-sacred” subject of money is involved…
1. The economy is too complex to be controlled by just a handful of people…
This response often comes from people who make presumptions on economics, rather than actually educating themselves on how the system works. From the outside looking in, the world of finance appears chaotic; a mixture of mathematical and legal standards swirling in a void of mass psychology. Many Americans are either frightened off by the seemingly complicated field of study, or they find it rather boring and not worth their time. This, however, does not stop them from assuming that they know how money works.
The problem is that just because a person participates in his economy daily, it does not mean he has any understanding of how it operates. Many watch television on a daily basis, but few have any idea how the picture actually gets onto the screen, or how to fix a television once it is broken. Sadly, our egocentric culture has led a substantial portion of the public to imagine that they are experts on EVERYTHING, and thus, true researchers in the fields of economics and globalism get reactions like the one above constantly.
At bottom, once all the quasi-technical biz-babble used by mainstream talking heads is removed from the equation, economics is rather simple. Supply and Demand will always be at the center of any and every economy, regardless of the political atmosphere it exists in. These two fundamental factors can be manipulated to a point, by the creation of artificial supply, or the conjuring of false demand. This is achieved in many ways by global bankers, but primarily through domination of the issuance of currency, the ability to change interest rates at will, as well as the ability to inject or remove incredible sums of money from any market.
A perfect example is the suppression of silver prices by JP Morgan:
Gold and silver represent competing currencies to the fiat dollars created by the Federal Reserve, and suppressing the value of these commodities helps to ensure that the public will never see them as a viable alternative to paper assets. JP Morgan, who along with other international banks has the ability to throw around massive quantities of capital wherever they please, suppresses the value of physical silver by issuing paper securities for silver that doesn’t actually exist (creating an artificially high supply), and naked short selling silver markets to drive them lower (creating the false impression of low demand).
Another good example of economic manipulation is the private Federal Reserve’s strategy during the 90’s under Alan Greenspan to artificially lower interest rates, allowing banks to issue credit at historical levels for over a decade. Linked below is an article from Ron Paul’s ‘Texas Straight Talk’ dated March, 2007, before the housing market even began its full swan-dive. In it, he discusses the Federal Reserve’s direct role in the creation of the housing bubble:
Men like Ron Paul, Peter Schiff, Gerald Celente, Jim Rogers, and many others were able to predict long before hand that the Federal Reserve’s actions were creating an explosive mortgage and credit bubble, yet, we are supposed to believe that the Federal Reserve had “no idea” that their actions would result in a debt implosion?
Catherine Austen Fitts, former Assistant Secretary of Housing and Commissioner of the U.S. Department of Housing and Urban Development under the first Bush Administration stated conversely that the mortgage bubble was absolutely not an accident, and that she had witnessed outright and deliberate fraud on the part of the U.S. government and the Federal Reserve Bank in creating the bubble. The fact that disturbed her most, however, was her discovery that only a small handful of international banks were responsible for the perpetuation of toxic mortgage debt, not just in America, but around the world:
Goldman Sachs (one of the primary globalist banks involved in the igniting of the debt crisis) was caught red-handed selling toxic derivatives to investors and governments all over the planet while at the same time betting against those derivatives on the market. Goldman even bet against mortgage securities the bank itself created!
This is sort of similar to a car maker selling vehicles without brake lines, then placing bets that their clients will crash and burn. Essentially, it is blatant and sociopathic fraud! Goldman’s actions directly contributed to credit collapses in numerous countries, including Greece, and here in the U.S.
The idea that global banks can turn the economy on and off like a light switch may be a stretch, but the vast majority of evidence shows that they do have the ability to shift the direction of markets to a point, as well as the ability to spur the growth of bubbles that eventually lead to recessions, depressions, and beyond. In fact, if one examines the U.S. economy from the inception of the Federal Reserve in 1913, they would find that the past century has been nothing but a series of engineered equity bubbles designed to slowly hobble, but not completely cripple, our financial system and our currency, at least, until recently. Like a steam locomotive on a collision course with a bottomless canyon, globalist banks can slow or speed up the pace of our descent, but the final destination never changes.
Now that we have established that market collapses can be created by a small handful of bankers and done knowingly, lets move on to the next most common sheeple-like talking point.
2. Yes, international banks triggered the meltdown, but the “greed of Capitalism” is truly to blame (i.e. Its all the Republican Party’s fault)…
First off, if you’re parroting the fiscal debate points of two dimensional socialist gatekeepers like Michael Moore, then you’re already hopelessly lost in the mind warping hedge maze of the false left/right paradigm. You should stay as far away as possible from adult conversions on economics, especially if you plan on associating the “greed” of capitalism and corporatism with the Republican Party alone.
News Flash! Barack Obama received far more in corporate campaign donations (including donations from BP and Exxon) than McCain did. Both Bush Jr. and Obama increased government spending to record levels meaning Neo-Conservatives are in no way “conservative” (as a true Republican is supposed to be). Obama has consistently surrounded himself with banksters and corporate lobbyists, including various hobgoblins from the bowels of Goldman Sachs. BOTH major parties are owned and operated by global banks. This is a cold hard undeniable truth of our political system. There is no way around it. Learn it, accept it as reality, and stop trying to blame one side or the other for problems that both sides created! If you cannot do this, your view of our cultural state of affairs will always be horribly skewed and your insights on our social problems will be utterly worthless.
While wannabe socialists desperately clamor to point fingers at the free market ideology as the cause of all our ills, the fact is that none of us have ever lived in a truly free market system. Since the inception of the Federal Reserve in 1913, all markets and even our own currency have become more and more vulnerable to manipulation by the banking elite. We have lived our entire lives in a rigged market, not a free market. To blame the very concept of Capitalism for our current dire circumstances is not only naïve, it is dangerous. Globalists would like nothing better than to promote the illusion that “too much freedom” led us to this disaster, and that severe controls must be put into place to ensure that it “never happens again”.
3. Global banks would never engineer the collapse of the U.S. economy or the Dollar. It makes them too much money…
This often heard song and dance ties in with the number two comment above. Again, the assumption is that the globalists only do what they do out of an “uncontrollable greed for money”. This perpetuates a couple fallacies. First, it encourages the false belief that the end concern for the Elite is the accumulation of riches. Central bankers have the ability to PRINT all the money they want from thin air! Remember, the Federal Reserve has never been subjected to a full audit, meaning they could easily create billions if not trillions without any oversight whatsoever. Greed for money, to them, is surely an absurd notion. What they do want, more than anything else, is social power. They want control over every living human being without question. All other concerns are secondary.
The next fallacy underlying the above argument is the conjecture that the U.S. economy is somehow indispensable to global banks. This is simply not so. Where we see the economy as an extension of our culture and ourselves, the Elites see financial systems as mere tools in the pursuit of a greater goal: World Government. Imagine you are building a house. Once your saw has fulfilled its intended role of cutting the wood, do you cling to it, or do you throw it aside and pick up a hammer? This is how globalists look at financial systems. They are perfectly willing to cast off the U.S. economy like a snake shedding skin if it brings them closer to attaining their ultimate aim.
The same goes for the Dollar. The Greenback may be the premier world reserve currency now, but that can and likely will change very quickly over the next couple years. The Dollar is a device that has outlived its usefulness as far as global bankers are concerned. The IMF has on several occasions made it clear that they eventually intend for the SDR (Special Drawing Rights) to replace the Dollar as the world reserve currency, and they have openly admitted that it will one day be established as a global currency. IMF press releases make this development sound far off and away, but SDR accumulations by countries around the world have risen dramatically in the past year. This along with other factors we will cover (namely China’s preparations to dump their U.S. T-bond holdings) show that IMF actions indicate they are preparing for a collapse of the Dollar now!
4. China would never dump U.S. Treasuries because it would hurt them as much as it hurts us…
The theory that China is somehow fused to the U.S. in a kind of symbiotic seesaw relationship that can never be broken is so ingrained among mainstream American financial analysts it simply will not die, regardless of how much contradictory evidence you show them. It really is like a mental disease which causes MSM pundits to go into involuntary Tourettic convulsions every time you mention the words “Treasury bond dump”. America and China are not conjoined twins, and one can survive without the other. We have covered the China issue over and over again, and I will not rehash all that evidence here. To lay it out simply: China has re-engineered its economy towards consumption and importation rather than relying on exports. The IMF has talked about this on many occasions with apparent excitement:
China has also finalized the ASEAN trading bloc which has combined export markets at least equal to that of the U.S. Meaning, China already has another place to send its exports besides America.
Most importantly, China must increase their currency’s value if their new consumer based system is to survive. Allowing the Yuan to rise sharply in value will revitalize the buying power of the Chinese populace making greater consumption possible. Indeed, China MUST dump their Treasury holdings and pump up the Yuan if they are to hold their economy together. And, the Federal Reserve has given China every reason to turn its back on Treasuries through never ending liquidity injections. This is not to say that a U.S. collapse will not affect them, it would negatively affect the entire world. However, China has positioned itself to survive, and perhaps even thrive with their economic expansions into Africa, and their new financial agreements with Germany.
Finally, the Chinese have been very forthcoming over the past week about plans to drop Treasuries. China has dumped over 7.7% of their U.S. T-Bond holdings since January, including the biggest T-bond dump on record this month. They have openly admitted to a plan to diversify away from the Dollar:
http://www.bloomberg.com/news/2010-08-17/china-cuts-long-term-treasury-holdings-by-most-ever-as-u-s-yields-decline.html
I’m always fascinated by those economists who vehemently deny China will ever turn away from the U.S. Dollar while they are doing so right in plain view. Are MSM analysts simply crazy? I don’t know, but it would explain a lot…
I’m always fascinated by those economists who vehemently deny China will ever turn away from the U.S. Dollar while they are doing so right in plain view. Are MSM analysts simply crazy? I don’t know, but it would explain a lot…
5. Sure, bankers took advantage, but it’s really the American people’s fault for getting suckered…
Yes, a sizable portion of the American public can be gut wrenchingly stupid. It hurts my head and my feelings to see people act so idiotic, it really does. The problem with this argument though is that when it is taken too far it becomes an attempt to divert blame away from the criminals and place it on the victims. If you knowingly leave your front door unlocked in a bad neighborhood and you find your home ransacked the next day, then you are partly responsible. But, we cannot forget that the neighborhood is “bad” in the first place because of the criminals, not the people who don’t lock their doors.
Just because global banks can sucker the public doesn’t mean they should, or that they cannot be judged for it. The crime ultimately rests on those men who made the conscious effort to destroy this country, and the blame rests with them as well. I see the attempt to parlay the economic collapse into the lap of the American people very often lately, especially from bankers who now claim that it’s the American public’s fault entirely. Why? Because they will not spend more, they will not take on more debt, they will not take on more risk, and they will not believe hard enough in the recovery that never was. Imagine a serial rapist behind a podium admonishing women for carrying pepper spray. It’s eerily similar…
6. Ok, maybe the banks are causing a collapse, but to say the government is helping them is just crazy conspiracy theory…
Why is it that the Federal Reserve has never been fully audited? Why is it that when Ron Paul tried to pass HR 1207 Federal Reserve Transparency Bill, it was muddled in committees and then eventually derailed? Why is it that banks like Goldman Sachs have been caught, yes caught, setting the stage for an economic implosion in this country, yet no government indictments have been formed to criminally prosecute them? Why are these men still roaming free like locusts to continue pillaging at will? Are we supposed to feel lucky that we get table scraps like Bernie Madoff behind bars while the Federal Reserve commits Ponzi fraud on a scale that dwarfs his?
Our government, both major parties, is owned lock stock and barrel. This is why there are no satisfactory answers for the questions posed above. Elements of the U.S. Government including almost every president since 1912 have not only turned a blind eye to Globalist activities, they have offered their full support to the bankers.
Nixon removed the Dollar from the gold standard in 1971 giving the Fed free reign to print as much fiat as they wished without limitations. In 1980 the Depository Institutions Deregulation and Monetary Control Act was passed placing all banks essentially under the rules of the Federal Reserve. The Glass-Steagall Act which kept investment banks and depository banks separate was repealed under a Republican majority in the Senate, and then finalized by Democratic President Bill Clinton in 1999. 30 years ago, banks that held your home mortgage were for the most part required to keep that mortgage until it was finally paid. But, a series of government decisions spanning that period and influenced by global banks allowed for the “securitization” of mortgages, leading to the creation of “derivatives”, which were then used by corporate mobsters like Goldman Sachs to destroy our financial system. Last, but certainly not least, both the Bush and Obama Administrations pressured Congress into passing highly unpopular bailout legislation which basically rewarded the same banks that created the credit crisis with trillions in taxpayer dollars (yes, the bailouts are now actually in the trillions, not billions). This led to the coining of the term “too big to fail” (or “too big to jail”). Our Government has been nothing but complicit in the banker takeover of this country. To debate otherwise is to invite embarrassment.
I haven’t even scratched the surface of government involvement in the collapse of our economy. Cases like the Savings and Loan crisis of the 1980’s led to serious prosecutions and jail time for more than 1100 criminal bankers, but this only caused the government to respond by changing investigation rules to make it even more difficult to catch the high level fraudsters in the act! Linked below is an interview between Max Keiser and bank regulator Prof. William K Black who outlines our government’s complicity in the breakdown of the country it is mandated to protect:
Elites destroy cultures to make way for new philosophies; their philosophies. Its not so much “conspiracy theory” as it is a widely admitted methodology. Corporate globalists believe in global government on their terms and they barely try to hide it. If someone thinks this sounds “fantastical” then they haven’t been paying the slightest attention. When one understands how Elites view economy, and realizes their primary motivations, the fact that they purposely triggered a collapse is perfectly logical. Nothing besides all out war inspires more fear and desperation in a society than a financial upheaval. Such elements on a mass scale allow changes in our collective psychology that were never possible before. Most people tend to falter under such an overwhelming threat and turn towards any authority (or fake authority) to save them from harm. Some people scoff at this idea, but it is likely they have never actually been in the wake of a real national catastrophe before. Men, especially those who know little of themselves, can change quickly in the face of calamity. The Elites recognize this, engineer tragedy, then waltz into the aftermath to merrily lord over the rubble.
Will their plan work? I think not, but I’m an optimist (no, really). The pursuit of total control and total power seems rather infantile to me, be it on an impressively psychotic level. Although, if we are made to forget who the real enemy is, then I think they do have a chance at success. That is how they have remained successful to this point. Only now does the average man have such immense knowledge at his fingertips, the knowledge to bring down a line despots and tyrants that have reigned for centuries. If only the average man was not so easily deterred by WMD’s (Weapons of Mass Distraction). The Elites will likely ignite some wars, tempt us into in-fighting, and fabricate enemies like Al Qaeda out of the ether. As the slogan goes, “Order Out Of Chaos”. Whatever happens, our eyes must remain fixed on the root of the problem; the bankers, and nothing else.
Globalists are not invincible, they are not untouchable, they are not even all that brilliant. They are human, and they have made many mistakes. The engineering of an economic meltdown really changes nothing. Hired thugs, useful idiots, corrupt officials, even hyperinflation, all tiny obstacles when considering the world we could have if the Elites were finally made to face the reckoning they deserve. Americans once took on the greatest empire on Earth. We once took a feared king to task. Are a bunch of frothing corporate bankers really so daunting? All that is needed is a principled movement with the will to see justice done, and I believe we have that already.
You can contact Giordano Bruno at: giordano@neithercorp.us
Subscribe to:
Posts (Atom)
