War On You: Breaking Alternative News » Federal Reserve

Iran, Russia Replace Dollar with National Currencies in Trade Exchanges

WarOnYou — Mon, 09 Jan 2012 05:24:48 +0000

Iran, Russia Replace Dollar with National Currencies in Trade Exchanges

January 8, 2012

Speaking to FNA, Tehran’s Ambassador to Moscow Seyed Reza Sajjadi said that the proposal for replacing US Dollar with Ruble and Rial was raised by Russian President Dmitry Medvedev in a meeting with his Iranian counterpart Mahmoud Ahmadinejad in Astana on the sidelines of the Shanghai Cooperation Organization (SCO) meeting.

“Since then, we have acted on this basis and a part of our interactions is done in Ruble now,” Sajjadi stated, adding that many Iranian traders are using Ruble for their trade deals.

“There is a similar interest in the Russian side,” the envoy stated, adding that that Moscow is against unilateral sanctions on Iran outside the UN Security Council, specially the recent sanctions against Iran’s Central Bank (CBI).

“The move (imposing sanction on the CBI) is unacceptable. Russians have clearly announced that they will not accept these sanctions and Iran’s nuclear issue is resolvable just through negotiations.”

Iranian President Mahmoud Ahmadinejad hit back at the US after Washington introduced new sanctions against Iran’s central bank.

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Wall Street’s “Secret Government”

WarOnYou — Sat, 03 Dec 2011 07:47:08 +0000

Wall Street’s “Secret Government”

December 2nd, 2011

Via: Alternet:

We now have concrete evidence that Wall Street and Washington are running a secret government far removed from the democratic process. Through a freedom of information request by Bloomberg News, the public now has access to over 29,000 pages of Fed documents and 21,000 additional Fed transactions that were deliberately hidden, and for good reason. (See here and here.)

These documents show how top government officials willfully concealed from Congress and the public the true extent of the 2008-’09 bailouts that enriched the few and enhanced the interests of giant Wall Streets firms.

Turns out the ‘Government Sachs’ conspiracy theorists were right all along

WarOnYou — Sat, 03 Dec 2011 07:44:12 +0000

Turns out the ‘Government Sachs’ conspiracy theorists were right all along

December 2, 2011

Print Version

By Madison Ruppert
EndTheLie.com

In a shocking article published in Reuters, Felix Salmon confirmed what the so-called conspiracy theorists have said all along: former Secretary of the U.S. Treasury Hank Paulson was giving insider tips to his cronies at Goldman Sachs and other Wall Street titans which directly benefited them.

The article is entitled, “Hank Paulson’s inside jobs,” emphasizing the fact that this wasn’t some one-off lapse of ethics on Paulson’s part, but instead a disturbingly regular practice.

For those who are unaware, Paulson was the CEO and chairman at Goldman Sachs from 1999-2006 and he clearly provided them with actionable information that epitomizes the plague upon our economy, and the greater global economic system, that is crony capitalism.

However, this isn’t quite a brand new revelation given the fact that in October of 2009 Andrew Ross Sorkin exposed that Paulson met with the entire Goldman Sachs board in a hotel suite in Moscow at the end of June 2008.

Salmon covered this at the time, after Sorkin’s book was released, which detailed the meeting held after the Goldman Sachs boys had dinner with Mikhail Gorbachev.

At the time the Treasury chief of staff Jim Wilkinson told Goldman Sachs chief of staff John Rogers, “Let’s keep this quiet,” indicating that despite the fact that the Treasury’s general counsel Bob Hoyt claimed “it wouldn’t run afoul of the ethics guidelines,” they were well aware that wasn’t the case.

Hoyt said that it was acceptable so long as it was solely a “social event”, but unsurprisingly, Paulson didn’t record the so-called “social event” in his official calendar.

It is undeniable that these individuals knew very well what they were doing, and clearly they had no misgivings whatsoever.

During the Moscow meeting Paulson spoke of “the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech,” according to Sorkin.

This wasn’t just a friend going over a speech with some old pals, as everyone knows the words of the Treasury Secretary heavily affect global markets almost instantly, just like speeches by the likes of Ben Shalom Bernanke, the Chairman of the Board of Governors of the private Federal Reserve.

Getting this kind of information ahead of time is critical, and through Sorkin’s writing it is clear that Paulson enlightened them as to the situation with Lehman Brothers, giving Goldman Sachs an unfair advantage over those who didn’t happen to have someone on the inside.

Paulson spoke of the possibility that Lehman Brothers very well might collapse, along with giving the Goldman Sachs board other insights into how he was viewing the economic climate and what was to come.

As Salmon points out, “Maybe it’s not so surprising that Goldman Sachs turned out to be so well positioned when Lehman did indeed [blow up] a few months later.”

This egregious breach of ethics is a perfect example of the corporatism that pervades Wall Street and has brought us to the brink of collapse where we are precariously perched today.

Paulson’s Moscow meeting with Goldman Sachs wasn’t an isolated incident as just a few weeks later on July 28^th, 2008, Paulson met with what Salmon characterizes as “a who’s who of the hedge-fund world” in the Eton Park Capital Management headquarters.

Unsurprisingly, Eton Park Capital Management was created by Eric Mindich, formerly of Goldman Sachs as well.

In a Bloomberg article published yesterday, Richard Teitelbaum details the meeting between roughly a dozen hedge-fund managers and Wall Street executives, including no less than five former colleagues of Paulson’s from Goldman Sachs.

Others in attendance were Stephen Mandel of Pine Capital LLC, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

During the meeting Paulson, “went on to describe a possible scenario for placing Fannie and Freddie into ‘conservatorship’ — a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.”

Teitelbaum writes, “The fund manager says he was shocked that Paulson would furnish such specific information — to his mind, leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.”

While he points out that “law professors say that Paulson himself broke no law by disclosing what amounted to inside information,” it is hardly arguable that it is ethically acceptable for the Secretary of the Treasury to furnish information to certain people which would give them an advantage over everyone else.

As Salmon points out, “Given that it’s taken two years since the release of Sorkin’s book for the Eton Park meeting to be made public, it’s fair to assume that there were other meetings, too — possibly many others.”

Indeed it is impossible to know how much trading of insider information occurs amongst the financial elite, as we only get a glimpse when sources choose to disclose this information toreporters like Teitelbaum and Sorkin.

It is quite unfortunate that this is such a rare occurrence, especially when we look at how the ultra-rich continue to profit at record rates while the rest of us struggle to pay the bills.

Surely these meetings did not occur only a couple of times, given the tight connection that Goldman Sachs – or more accurately, as is now painfully clear – Government Sachs enjoys with Washington.
Salmon sums up this issue in pointing out that the so-called conspiracy theorists have been right all along.

Salmon writes, “Paulson was giving inside tips to Wall Street in general, and to Goldman types in particular: exactly the kind of behavior that ‘Government Sachs’ conspiracy theorists have been speculating about for years. Turns out, they were right.”

Now if only the derisive label of “conspiracy theorist” would be lifted from these issues when it is far from a conspiracy theory and is indeed a conspiracy fact.

I won’t be holding my breath, because so long as governments criminally conspire with multinational corporations and others, the label of conspiracy will be denigrated in order to keep people from discussing and investigating these facts and issues.

Kucinich: Federal Reserve has captured control of our government

WarOnYou — Thu, 01 Dec 2011 07:39:02 +0000

November 30, 2011

Print Version

Source: RawStory

Rep. Dennis Kucinich (D-OH) called for the U.S. Federal Reserve to be reformed after Bloomberg reported the central bank secretly loaned nearly $8 trillion to financial institutions from 2007 to 2009.

Tens of thousands of documents obtained by Bloomberg under the Freedom of Information Act showed that banks reaped an estimated $13 billion in profits thanks to the low-interest loans. JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley accounted for $4.8 billion of that total.

“Remember the great debate we had here over the 700 billion in TARP funds?” he said on the House floor Tuesday. “There was no debate over the 7.7 trillion the Fed gave the banks.”

“Did Congress have a clue?” he continued. “There is another game going on way over our heads, and our constituents are struggling while the banks with the help of the Feds have captured control of our government.”

“Now the rating services are threatening us, if we don’t come up with a deal they’ll downgrade U.S. debt. Could the threat to our national sovereignty be any clearer?

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Fed secretly handed out $8 trillion

WarOnYou — Tue, 29 Nov 2011 08:27:50 +0000

Fed secretly handed out $8 trillion

November 28, 2011

Print Version

Source: RT

We knew the last bailout from the Federal Reserve was pretty big, but not until now did we have statistics on the actually tally. If you thought that the $700 billion bailout for TARP was big, get a load of this.

Just exactly how big was the Federal Reserve’s bailout of the banks between the years of 2008 and 2010? Thanks to a Federal Request of Information Act gone fulfilled, America now knows the truth behind a colossal cover-up: almost $8 trillion.

Ever since the Fed stepped in to bail out the biggest banks in the country, Ben Bernanke and company have gone to great lengths to keep the exact details of the transactions a secret, citing that the truth would cause concern for the world financial crisis far greater than what was already at hand, saying in particular that investors would step away from the “too big to fail” banks that were benefiting from the bailout. And while Fed Chairman Ben Bernanke went on the record to call the bailouts to even the most “sound institutions” only “marginal,” details of the FOIA request obtained by Bloomberg News now reveals that the Federal Reserve spent nearly half of the entire production output of the US during that span of less than two years — the biggest bailout in the country’s history — while going to great lengths to keep Congress and the American people in the dark.

By March of 2009, the Fed had already dished out $7.77 trillion to save the US financial system, dwarfing other assistance programs several times over. As the financial sector was on the brink of collapse, neither the Fed nor the banks involved came clean with the truth, instead lying through their teeth to keep the total facts a mystery. Until now.

While the banks kept the bailout a secret from Congress, they lobbied to the Legislative Branch to imply more lax governmental regulations on the industry, something that would haven arguably been near impossible had the truth surfaced at the time.

The website Naked Capitalism explains it pretty clearly in not so many words: “The bottom line is everybody close to the process lied like crazy.”

On November 26, 2008, Bank of America Chief Executive Officer Kenneth D. Lewis told shareholders that he ran “one of the strongest and most stable major banks in the world.” On that very day, BofA was indebted to the Fed something to the tune of nearly $90 billion. Less than two weeks later, the Federal Reserve blew $1.2 trillion total in a single day to bail out the breaking financial institutions.

All the while, of course, banks were borrowing loans at interest rates of as low as 0.01 percent. “No one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates,” writes Bloomberg now.

That’s not the worst part, either. As the Fed continues to operate without oversight from the Executive, Legislative and Judicial branches, further bailouts are guaranteed to keep being generated at the cost of the American taxpayer while a recession still seems imminent — if not already occurring. Critics including presidential hopeful Congressman Ron Paul have lobbied to abolish the Federal Reserve once and for all. Could the next president help make that dream a reality? In the meantime, don’t be surprised if billions get borrowed at America’s expense minute by minute.

U.S. boosts estimate of auto bailout losses to $23.6B

WarOnYou — Fri, 18 Nov 2011 08:37:28 +0000

U.S. boosts estimate of auto bailout losses to $23.6B

November 17, 2011

Print Version

Source: Detroit News

The Treasury Department dramatically boosted its estimate of losses from its $85 billion autoindustry bailout by more than $9 billion in the face of General Motors Co.’s steep stock decline.

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The big increase is a reflection of the sharp decline in the value of GM’s share price.

The current estimate of losses is based on GM’s Sept. 30 closing price of $20.18, down one-third over the previous quarterly price.

GM’s stock closed Monday at $22.99, up 2 percent. The government won’t reassess the estimate of the costs until Dec. 30.

Read More…

Gadhafi’s Gold-money Plan Would Have Devastated Dollar

WarOnYou — Sun, 13 Nov 2011 09:31:08 +0000

Gadhafi’s Gold-money Plan Would Have Devastated Dollar

November 12, 2011

Print Version

Alex Newman – New American

It remains unclear exactly why or how the Gadhafi regime went from “a model” and an “important ally” to the next target for regime change in a period of just a few years. But after claims of “genocide” as the justification for NATO intervention were disputed by experts, several other theories have been floated.

Oil, of course, has been mentioned frequently — Libya is Africa‘s largest oil producer. But one possible reason in particular for Gadhafi’s fall from grace has gained significant traction among analysts and segments of the non-Western media: central banking and the global monetary system.

According to more than a few observers, Gadhafi’s plan to quit selling Libyan oil in U.S. dollars — demanding payment instead in gold-backed “dinars” (a single African currency made from gold) — was the real cause. The regime, sitting on massive amounts of gold, estimated at close to 150 tons, was also pushing other African and Middle Eastern governments to follow suit.

And it literally had the potential to bring down the dollar and the world monetary system by extension, according to analysts. French President Nicolas Sarkozy reportedly went so far as to call Libya a “threat” to the financial security of the world. The “Insiders” were apparently panicking over Gadhafi’s plan.

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State Debts Total Over $4 Trillion

WarOnYou — Tue, 25 Oct 2011 22:46:40 +0000

State Debts Total Over $4 Trillion

October 25th, 2011

Via: Reuters:

The total of U.S. state debt, including pension liabilities, could surpasses $4 trillion, with California owing the most and Vermont owing the least, according to an analysis released on Monday.

The nonprofit State Budget Solutions combined states’ major debt and future liabilities, primarily for pensions and employee healthcare, unemployment insurance loans, outstanding bonds and projected fiscal 2011 budget gaps. It found that in total, states are in debt for $4.2 trillion.

The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make “do not offer a full picture of the states’ liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit.”

The housing bust, financial crisis and economic recession caused states’ tax revenue to plunge, and huge holes have emerged in their budgets over the last few years. Because all states except Vermont must end their fiscal years with balanced budgets, states have scrambled to cut spending, hike taxes, borrow and turn to the federal government for help.

Are The Conspiracy Theorists Right? Study shows that one ‘super-corporation’ pulls the strings of the global economy

WarOnYou — Thu, 20 Oct 2011 06:29:52 +0000

Are The Conspiracy Theorists Right? Study shows that one ‘super-corporation’ pulls the strings of the global economy

October 19, 2011

Print Version

Source: Daily Mail

A University of Zurich study ‘proves’ that a small group of companies – mainly banks – wields huge power over the global economy.

The study is the first to look at all 43,060 transnational corporations and the web of ownership between them – and created a ‘map’ of 1,318 companies at the heart of the global economy.

The study found that 147 companies formed a ‘super entity’ within this, controlling 40 per cent of its wealth. All own part or all of one another. Most are banks – the top 20 includes Barclays and Goldman Sachs. But the close connections mean that the network could be vulnerable to collapse.

The 1318 transnational corporations that form the core of the globalised economy – connections show partial ownership of one another, and the size of the circles corresponds to revenue. The companies ‘own’ through shares the majority of the ‘real’ economy

‘In effect, less than one per cent of the companies were able to control 40 per cent of the entire network,‘ says James Glattfelder, a complex systems theorist at the Swiss Federal Institute in Zurich, who co-wrote the research, to be published in the journal PLoS One.

Some of the assumptions underlying the study have come in for criticism – such as the idea that ownership equates to control. But the Swiss researchers have no axe to grind: they simply applied mathematical models usually used to model natural systems to the world economy, using data from Orbis 2007, a database listing 37 million companies and investors.

Economists such as John Driffil of the University of London, a macroeconomics expert, told New Scientist that the value of its study wasn’t to see WHO controlled the global economy, but the tight connections between the world’s largest companies.

The collapse of 2008 showed that such tightly-knit networks can be unstable.

‘If one company suffers distress,’ Glattfelder says, ‘This propagates.’

Protest against global capitalism outside St Paul’s cathedral, London: But it seems unlikely that the 147 corporations at the heart of the world economy could wield real political power – they represent too many interests

The research requires more analysis, but it could be used to look for the weaknesses in the network of global wealth, and prevent future financial disaster.

Looking at ‘connectedness’ also puts paid to conspiracy theories about the world’s wealth – companies connect to highly connected companies for business reasons, rather than world domination.

The ‘core’ of 147 companies also represents too many interests to wield real political power – but it could act ‘as one’ to defend common interests. Sadly for market reformers, resisting change may be one such common interest.

Click here to read more.

US State Department Funded Agitator in DC Advising Occupy Wall Street crowds

WarOnYou — Wed, 19 Oct 2011 06:00:30 +0000

US State Department Funded Agitator in DC Advising Occupy Wall Street crowds

October 18, 2011

Print Version

By Tony Cartalucci

Wired Magazine has just reported that Ahmed Maher, of the infamous US-funded Egyptian “April 6″ revolutionary movement that helped the US topple Egypt’s government early in 2011, is now back in Washington D.C. “advising” Occupy Wall Street protesters, face-to-face in McPherson Square. The article claims that protesters throughout the US movement have cited (ironically) protests in Cairo as their “inspiration” to rise up against corruption in their government and financial institutions.

From the US to Serbia, to Egypt and back again, US State Department-funded, trained, and equipped agitator Ahmed Maher poses at the scene of “Occupy D.C.” Ironically, Americans claim Maher and his “April 6″ movement have inspired them to rise up against their corrupt government, unaware that his movement was insidiously created by the US government. Photo: courtesy Ahmed Maher, Spencer Ackerman

….

While the Wired piece doesn’t explain where Maher honed his “revolutionary” skills, it does mention vaguely that he was in D.C. on invitation from an unnamed university professor and that next he would be headed to New York City to “advise” protesters there.

This of course isn’t Maher’s first trip to the United States. Years before the Egyptian revolution, the United States was quietly preparing a global army of youth cannon fodder to fuel region wide conflagrations throughout the world, both politically and literally. Maher’s April 6 organization had been in New York City for the US State Department’s first “Alliance for Youth Movements Summit” in 2008. His group then traveled to Serbia to train under the US-funded “CANVAS” organization before returning to Egypt in 2010 with US International Crisis Group (ICG) operative Mohamed ElBaradei to spend the next year building up for the “Arab Spring.”

Considering the depth of planning and preparation by the US State Department, with the cooperation of other US agencies, departments, and corporations, including the mainstream-media, we can now see the full measure of collective duplicity throughout America’s establishment. As many may remember, the United States acted with total surprise as the “Arab Spring” unfolded, despite having engineered it years in advance and having financial and tactical contacts with all the leading opposition groups.

In Egypt’s case, Mohamed ElBaradei and his “April 6″ organization led by Maher, were in direct contact with some of America’s most influential power brokers, including Zbigniew Brzezinski and George Soros and to a lesser extent, Samuel Berger, Kenneth Adelman (Freedom House), General Wesley Clark, and Richard Armitage via the ICG. Additionally, ICG includes Shimon Peres, President of Israel, as well as Stanley Fischer, governor of the Bank of Israel. Israel too feigned great displeasure, uncertainty, and surprise over a regional gambit they most certainly played a role in.

Maher’s return to the United States may or may not hold any significance depending on just how much “advising” he does and the intended duration of his stay. It also depends largely on whether or not the corporate-media leaps on the story and sensationalizes it. However it is rather alarming that Americans who claim Maher and his April 6 Movement as an inspiration for their bid to rein in a corrupt government and financial system, are ignorant of the fact that Maher and his movement are both products of that very corrupt, insidious system.

For those wondering where the US-funded revolution led Maher’s fellow Egyptians, the answer is a military dictatorship and Maher’s American sponsors parading through Cairo preparing to ransack it with “economic liberalization” and the spread of Wall Street-London economic hegemony over Egypt. While some may consider that a failure – in reality that is exactly what the US State Department and the corporate-financier interests that fund and steer US policy had intended all along. Maher, for his part, may have been naive enough to believe he was receiving help to usher in real change for Egypt, and maybe not.

If Egypt should inspire any American participating in the Occupy Wall Street movement, it should be because it serves as a reminder to always follow the money, identify the associations between groups and personalities, name names, use logic and reason ahead of emotions, and understand exactly what your goals are and where they will lead you. More specifically, these goals must be pragmatic more than anything else. A very specific program with a timetable and enumerated means to carry it out would be a start.

However, boycotting and replacing Wall Street while using local and state government to reclaim our sovereignty from the overreaching tyranny of the Federal government would be far more effective than simply congregating in the streets and hoping for a completely compromised system, with the audacity to sow revolution across the globe, to somehow be hoist with its own petard. Egypt’s fate may not be far off from that of America. There is a very real threat of a military dictatorship riding in under false “heroic” pretenses in the US as well. Street mobs are this government’s specialty, no one understands them better, and no one on earth is better prepared to deal with them – especially mobs that are disorganized, aimless, and incapable of discerning that those walking amongst them, inspiring them, even leading them, are literally agents of the very system they seek to reform.

For more solutions, please see the Solutions Archives.

The Federal Reserve and Bank of America Initiate a Coup to Dump Billions of Dollars of Losses on the American Taxpayer

WarOnYou — Wed, 19 Oct 2011 05:59:29 +0000

The Federal Reserve and Bank of America Initiate a Coup to Dump Billions of Dollars of Losses on the American Taxpayer

October 18, 2011

Print Version

Source: Washington’s Blog

Bloomberg reports that Bank of America is dumping derivatives onto a subsidiary which is insured by the government – i.e. taxpayers.

Yves Smith notes:

If you have any doubt that Bank of America is going down, this development should settle it …. Both [professor of economics and law, and former head S&L prosecutor] Bill Black (who I interviewed just now) and I see this as a desperate move by Bank of America’s management, a de facto admission that they know the bank is in serious trouble.

The short form via Bloomberg:

Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation…

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

Now you would expect this move to be driven by adverse selection, that it, that BofA would move its WORST derivatives, that is, the ones that were riskiest or otherwise had high collateral posting requirements, to the sub. Bill Black confirmed that even though the details were sketchy, this is precisely what took place.

And remember, as we have indicated, there are some “derivatives” that should be eliminated, period. We’ve written repeatedly about credit default swaps, which have virtually no legitimate economic uses (no one was complaining about the illiquidity of corporate bonds prior to the introduction of CDS; this was not a perceived need among investors). They are an inherently defective product, since there is no way to margin adequately for “jump to default” risk and have the product be viable economically. CDS are systematically underpriced insurance, with insurers guaranteed to go bust periodically, as AIG and the monolines demonstrated. [Background.]

The reason that commentators like Chris Whalen were relatively sanguine about Bank of America likely becoming insolvent as a result of eventual mortgage and other litigation losses is that it would be a holding company bankruptcy. The operating units, most importantly, the banks, would not be affected and could be spun out to a new entity or sold. Shareholders would be wiped out and holding company creditors (most important, bondholders) would take a hit by having their debt haircut and partly converted to equity.

This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. [Background.] So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.

The FDIC is understandably ripshit. Again from Bloomberg:

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

Well OF COURSE BofA is gonna try to take the position this is kosher, but the FDIC can and must reject this brazen move. But this is a bit of a fait accompli,and I have NO doubt BofA and the craven, corrupt Fed will argue that moving the derivatives back will upset the markets. Well too bad, maybe it’s time banks learn they can no longer run roughshod over regulators. And if BofA is at that much risk that it can’t survive undoing this brazen move, that would seem to be prima facie evidence that a Dodd Frank resolution is in order.

Bill Black said that the Bloomberg editors toned down his remarks considerably. He said, “Any competent regulator would respond: “No, Hell NO!” It’s time that the public also say no, and loudly, to this new scheme to loot taxpayers and save a criminally destructive bank.

Professor Black provided a “bottom line” summary in a separate email:

1.The bank holding company (BAC) is moving troubled assets held by an entity not insured by the public (Merrill Lynch) to the Bank of America, which is insured by the public
2. The banking rules are designed to prevent that because they are designed to protect the FDIC insurance fund (which the Treasury guarantees)
3. Any marginally competent regulator would say “No, Hell NO!”
4. The Fed, reportedly, is saying “Sure, no worries” by allowing the sale of an affiliate’s troubled assets to B of A
5. This is a really good “natural experiment” that allows us to test whether the Fed is protects the public or the uninsured and systemically dangerous institutions (the bank holding companies (BHCs))
6. We are all shocked, shocked [sarcasm] that Bernanke responded to the experiment by choosing to protect the BHC at the expense of the public.

Karl Denninger writes:

So let’s see what we have here.

Bank customer initiates a swap position with Bank. In doing so they intentionally accept the credit risk of the institution they trade with.

Later they get antsy about perhaps not getting paid. Bank then shifts that risk to a place where people who deposited their money and had no part of this transaction wind up backstopping it.

This effectively makes the depositor the “guarantor” of the swap ex-post-facto.

That the regulators are allowing this is an outrage.

If you’re a Bank of America customer and continue to be one you deserve whatever you get down the line, whether it comes in the form of higher fees and costs assessed upon you or something worse.

Stand Up to the Coup

Bank of America has repeatedly become insolvent due to fraud and risky bets, and repeatedly been bailed out by the government and American people. The government and banks are engineering an age of permanent bailouts for this insolvent, criminal bank (and the other too big to fails). Remember, this is the same bank that is refusing to let people close their accounts.

This is yet another joint effort by Washington and Wall Street to screw the American people, and to trample on the rule of law.

The American people will be stuck in nightmare of a never-ending depression (yes, we are currently in a depression) and fascism (or socialism, if you prefer that term) unless we stand up to the overly-powerful Fed and the too big to fail banks.

Meet the Guy Who Snitched on Occupy Wall Street to the FBI and NYPD

WarOnYou — Sun, 16 Oct 2011 18:22:35 +0000

Meet the Guy Who Snitched on Occupy Wall Street to the FBI and NYPD

October 16th, 2011

My guess is that we would all be taken aback if we could know the complete list of agencies working that thing.

Via: Gawker:

The Occupy Wall Street protests have been going on for a month. And it seems the FBI and NYPD have had help tracking protesters’ moves thanks to a conservative computer security expert who gained access to one of the group’s internal mailing lists, and then handed over information on the group’s plans to authorities and corporations targeted by protesters.

Since the Occupy Wall Street protest began on September 17, New York security consultant Thomas Ryan has been waging a campaign to infiltrate and discredit the movement. Ryan says he’s done contract work for the U.S. Army and he brags on his blog that he leads “a team called Black Cell, a team of the most-highly trained and capable physical, threat and cyber security professionals in the world.” But over the past few weeks, he and his computer security buddies have been spending time covertly attending Occupy Wall Street meetings, monitoring organizers’ social media accounts, and hanging out with protesters in Lower Manhattan.

As part of their intelligence-gathering operation, the group gained access to a listserv used by Occupy Wall Street organizers called September17discuss. On September17discuss, organizers hash out tactics and plan events, conduct post-mortems of media appearances, and trade the latest protest gossip. On Friday, Ryan leaked thousands of September17discuss emails to conservative blogger Andrew Breitbart, who is now using them to try to smear Occupy Wall Street as an anarchist conspiracy to disrupt global markets.

Insane Ban on Cash Transactions in Louisiana

WarOnYou — Thu, 13 Oct 2011 20:40:44 +0000

Insane Ban on Cash Transactions in Louisiana

October 13th, 2011

Via: Ackel and Associates:

This summer, the State Legislature and Governor of Louisiana passed a law that bans individuals and businesses from transacting in cash if they are considered a “secondhand dealer”. House Bill 195 of the 2011 Regular Session (Act 389) broadly defines a secondhand dealer to include “… Anyone, other than a non-profit entity, who buys, sells, trades in or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a non-profit entity, shall be deemed as being in the business of a secondhand dealer. ” The law then states that “A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property. Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property…” The broad scope of this definition can essentially encompass everyone; from your local flea market vendors and buyers to a housewife purchasing goods on ebay or craigslist, to a group of guys trading baseball cards, they could all be considered secondhand dealers. Lawmakers in Louisiana have effectively banned its citizens from freely using United States legal tender.

Boston police impose curfew for protesters

WarOnYou — Wed, 12 Oct 2011 01:45:02 +0000

Boston police impose curfew for protesters

October 11, 2011

Print Version

Source: Boston.com

Boston police moved in and began arresting scores of Occupy Boston protesters who refused to leave a large part of the Rose Fitzgerald Kennedy Greenway early this morning.

At 1:20 a.m., the first riot police officers lined up on Atlantic Avenue. Minutes later, dozens of sheriff vans and police wagons arrived and over 200 officers in uniforms and riot gear surrounded the Greenway.

Police Superintendent William Evans and Commissioner Edward F. Davis watched from across the street. Evans gave the crowd two minutes to disperse from the park, warning that they would be locked up if they did not comply.

The crowd of protesters, energized by the sudden appearance of the Boston and Transit police officers, chanted, ‘‘The people united will never be defeated,’’ “This is a peaceful protest,” and “the whole world is watching.’’

About 10 minutes later, the first officers entered the park and surrounded the group. Evans, using a loudspeaker, gave one more warning and then each protester was individually put on his or her stomach, cable-tied, and dragged off as others tore down tents and arrested and detained people on the fringe of the park.

Read full report here

Wall Street Protesters Plan ‘Millionaires March’ to Tycoons’ New York City Homes

WarOnYou — Wed, 12 Oct 2011 01:42:35 +0000

Wall Street Protesters Plan ‘Millionaires March’ to Tycoons’ New York City Homes

October 11, 2011

Print Version

Source: Fox News

NEW YORK – Protesters from the Occupy Wall Street movement plan to leave their downtown Manhattan headquarters Tuesday and head uptown as part of a “Millionaires March” visiting the homes of some of New York City’s wealthiest residents.

Between 400 and 800 people are expected to take part in the demonstration targeting the homes of JP Morgan Chase CEO Jamie Dimon, billionaire businessman David Koch, financier Howard Milstein, hedge fund maven John Paulson and News Corp. Chairman and CEO Rupert Murdoch, Crain’s New York Business reported.

The marchers will hold oversize checks they say demonstrate how much less the wealthy will pay when New York State’s 2 percent tax on millionaires expires at the end of the year.

“Ninety-nine percent of the residents of New York are going to suffer from this tax giveaway so the 1 percent who already live in absolute luxury can put more money in their pockets,” Doug Forand, one of the march organizers, told the New York Daily News. “This is fiscally, economically and morally wrong.”

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