EU: IMF proposes huge tax on savings

It seems clear that the Cyprus savings crisis was just the beginning. Back in the day there were already voices proposing to tax savings and it seems their time has come. Faced with plummeting income sources EU states may agree to tax savings above €100,000 with a yet unclear figure, speculated to be 10%. 

Uh, just what happened in Cyprus!

Or is it a "one time ~30% tax on all assets", as Zero Hedge speculated? Or is it a 10% on all households with "positive wealth", as suggested by the Fiscal Monitor? 

They are in any case trying to impose it stealthily, "before avoidance is possible". 

Oops, just as happened in Cyprus!

Of course, the rumor is already spreading, so it may not work at all. 

In any case it illustrate the terrible woes of this deep systemic crisis, whose cost, as happened some 230 years ago in France, can't be unloaded anymore only on the shoulders of the workers.

Source: The Automatic Earth.

Japan: government announces Cyprus-like "bail-in" mechanism to face bank collapse

The Japanese government has announced this self-defeating mechanism by which savers' money will be made part of the bank's capital if the private financial corporation is at risk of bankruptcy.

The mechanism will be to convert savings deposits into preferential shares, a scam mechanism already used in Spain to massively rob small savers, or something called "subordinated bonds".

According to some Japanese-language economic media:

By having the investors shoulder part of the loss in a financial crisis, the system will reduce the burden on taxpayers.

Problem here is that savers are not investors. Investors are those who hold capital shares, aka stock, aka equity. What this system does is to force customers into forcibly becoming investors precisely when the investment is collapsing.

Large scale savers will probably have no problem here: they will already be rushing their money to overseas banks, where it will be safer, so the main victims of this scheme will unavoidably be small and middle savers, often people who have been saving all their lives in order to have something to rely on when old. 

Japan is by far the most indebted state on Earth. Its stock market woes have been driving the global ones downwards in the last weeks. 

Source: EXSKF.

The many twists of the 'Lagarde List'

If anything is showing the Lagarde List of tax evaders is that some Southern European states, especially Greece but also Spain, have corrupt political and judiciary systems that protect the wealthy oligarchs even at the expense of the state itself. Switzerland in turn is left as the unfriendly neighbor who does dirty business in your backyard, helping the mafiosi.

A very good article on the matter has been published today at Antifascist Calling:

Greek Journalist Acquitted for Blowing Tax Fraud Whistle. Widespread Corruption Linked to Private HSBC Accounts

Earlier this month, Greek investigative journalist Kostas Vaxevanis was acquitted by an Athens court of charges that he breached data privacy laws with the publication of a list of tax cheats and money launderers.

Vaxevanis, who publishes the investigative news magazine Hot Doc, faced two years in prison and a €30,000 ($38,000) fine over that publication's outing of 2,000 Greeks who hold secret banks accounts at HSBC's private banking arm in Switzerland.

Known as the "Lagarde List," data on high-profile offenders had been transferred to Greek authorities by Christine Lagarde, the former French Finance Minister and current head of the International Monetary Fund (IMF), where it languished for two years.

While the Greek people are forced into abject poverty under an "austerity" regime designed to enrich their corporate masters, a criminal class of political overseers backed by brutal police and rampaging neo-Nazis, billions of euros were shielded as successive "left" and "right" governments failed to act.

... continue reading at Antifascist Calling (must read, really).

Let's not forget that the original whistleblower, French and Italian citizen Hervé Falciani, is kept under arrest in Spain, where his revelations affected the money laundering machine of the biggest Spanish mafioso respectable investor clan: the Botín family (Banco Santander), who lost some €200 million as result (peanuts for them but still offended).

Catalonia, Andalusia... drift away from Spain

The two largest autonomous communities and, per their statutes, historical nationalities, of the Kingdom of Spain, are in direct confrontation with the central State on matters of financing. While the state has achieved better conditions from Germany and the ECB in the end, it is reserving all those benefits for the central state it is giving no truce to the embattled autonomous communities, which manage healthcare and education in many cases.

By means of that the creepy conservative government of Spain seems to have two things in mind: (1) to erode the autonomies and (2) to force them to apply the same kind of draconian cuts that they are applying in Madrid and elsewhere. 

But by means of that they may end up without a state. 

Today there was a key meeting of the autonomous communities under the state of Spain meant to dictate the ceiling of regional spending, which is being determined by the conservative PP, which controls most regions of clearer Spanish identity. 

Catalonia (second largest and first wealthiest community) simply decided to be absent.

Andalusia (largest community), ruled by the social-democratic opposition, arrived but left soon after knowing the new impositions. 

Canary Islands and Asturias also voted against. But even two communities ruled by the conservatives broke voting discipline and abstained.

The arrogant Minister of Finance, Mr. Montoro, unable to get the parties to agree, unable to make any concession, unable to rule with any minimal element of legitimacy... declared that "coming or not coming, the law is compulsory". 

The details are not clear yet but the conditions seem tailored for the communities ruled by the PP: while Andalusia saw its debt target reduced from 15.1% to 13.2%, the conservative and extremely corrupt Valencian Community was allowed 23% instead of the previous 22%. 

While the Andalusian government seems only able to conceive an appeal to the Constitutional Court, the Catalan institutions are demanding the creation of a separate Catalan financial system. While at the moment it is just a demand, it is clear that the feeling among Catalans is secessionist and I believe that the Spanish government is setting the basis for the disintegration of the state. 

Disintegration that I would welcome as something good, of course, but that may be troublesome and painful.

The shadow of Goldman Sachs is elongated - or Draghi and the G30

(source)

As you probably know by now, Euro-bankster capo di capi Mario Draghi is a former partner of the infamous Goldman Sachs, whose political clout was enough to send the Western World to Hell just for them to stay alive, while their rivals of Lehman were left to die. As you may know also, GS employees are well known by their loyalty to the firm (or should we say "cult"?), whose global power is truly disturbing and would seem to demand chop-chop anti-monopoly action (but nope).

But we do not know everything about Draghi, arguably the most powerful man of Europe and one of the key financial players of the World. Naked Capitalism discusses today some of his story past and present:

Draghi, dubbed "a craven moneyman" by former Italian President F. Cossiga, was responsible of the European operations of Goldman Sachs from 2002 to 2005, precisely when the Greek accounts got muddied by GS intervention. Only for that reason we can well say that putting him on the ECB's gilded throne is like putting the fox to guard the chickens.

But there is more. Draghi is member of the powerful and ill-known banking lobby (promoted by the Rockefeller Foundation since 1978) which goes under the name of Group of Thirty (G30 for short), incidentally chaired by his predecessor at the ECB, Jean Claude Trichet.

The membership (32 people) of the G30 is quite revealing (in purple Goldman Sachs adepts):

• Paul Volcker - Chairman Emeritus; former Chairman of President Barack Obama's Economic Recovery Advisory Board; former Chairman of the US Federal Reserve
• Jacob A. Frenkel - Chairman of the Board of Trustees, Chairman of JPMorgan Chase International; former Chairman, Bank of Israel; former Chairman, Merryll Lynch; former Chairman, Inter-American Development Bank; former Vice-Chairman, Board of Governors, European Bank for Reconstruction and Development; Member, Trilateral Commission; Member, Investment Advisory Council to the Prime Minister of Turkey; Member, International Advisory Council, China Development Bank
• Geoffrey L. Bell - Executive Secretary; President Geoffrey Bell and Company
• Jean-Claude Trichet - Former President, European Central Bank; Honorary Governor, Banque de France
• Leszek Balcerowicz - Professor, Warsaw School of Economics; former President, National Bank of Poland
• Mark Carney - Governor, Bank of Canada; member, Board of Directors, Bank for International Settlements; Chairman, Financial Stability Board; former Partner and Managing Director, Goldman Sachs.
  
• Jaime Caruana - General Manager, Bank for International Settlements; former Governor, Banco de España
• Domingo Cavallo - Chairman and CEO, DFC Associates, LLC; former (infamous!) Minister of Economy, Argentina
• E. Gerald Corrigan - Managing Director, Goldman Sachs; former President, Federal Reserve Bank of New York - politically investigated in Britain for the Greek debt cover-up scandal
• Guillermo de la Dehesa - Director and Member of the Executive Committee, Grupo Santander; former Deputy Director, Banco de España
• Mario Draghi - Governor, European Central Bank; former Chairman, Financial Stability Board; former Governor, Banca d'Italia, former Goldman Sachs Managing Director and Partner
  
• William Dudley - President, Federal Reserve Bank of New York; Former Partner and Managing Director, Goldman Sachs
• Martin Feldstein - Professor of Economics, Harvard University; President Emeritus, National Bureau of Economic Research - a prominent Fundamentalist Neoliberal
  
• Roger Ferguson - President and Chief Executive Officer, TIAA-CREF; former Chairman, Swiss Re America Holding Corporation
• Stanley Fischer - Governor, Bank of Israel; Former First Managing Director, International Monetary Fund; former Vice-Chairman, Citygroup; member, Bilderberg Group
• Arminio Fraga Neto - Founding Partner, Gávea Investimentos (now owned by JP Morgan); Chairman of the Board, BM&F-Bovespa; former President of the Central Bank of Brazil; former (conservative) government advisor in Brazil
  
• Gerd Häusler - CEO, Bayerisch Landesbank; Former Managing Director and Member of the Advisory Board, Lazard and Company
• Philipp Hildebrand - Senior Visiting Fellow, Blavatnik School of Government, Oxford University; Former Chairman of the Governing Board, Swiss National Bank; Former Partner, Moore Capital Management
• Mervyn Allister King - Governor of the Bank of England; Former Professor, London School of Economics; Fellow, The British Academy
• Paul Krugman - Professor of Economics, Woodrow Wilson School, Princeton University; Former Member, Council of Economic Advisors
• Guillermo Ortiz Martínez - President and Chairman, Grupo Finaciero Banorte; Former Governor, Banco de México; Chairman of the Board, Bank for International Settlements
• Raghuram G. Rajan - Professor of Economics, Chicago Booth School of Business; Economic Advisor to Prime Minister of India
• Kenneth Rogoff - Professor of Public Policy and Economics, Harvard University; Former Chief Economist, International Monetary Fund
• Tharman Shanmugaratnam - Minister of Finance, Deputy Prime Minister Singapore; Former Managing Director, Monetary Authority of Singapore
• Masaaki Shirakawa - Governor, Bank of Japan; Former Professor, Kyoto University School of Government
• Lawrence Summers - Charles W. Eliot University Professor, Harvard University; Former Director, US National Economic Council; Former President, Harvard University; Former US Treasury Secretary
• Lord Adair Turner - Chairman, UK Financial Services Authority; Member of the House of Lords, United Kingdom
• Sir David Walker - Senior Advisor, Morgan Stanley International, Inc.; Former Chairman, UK Securities and Investments Board (now FSA)
• Axel A. Weber - Chairman, UBS Visiting Professor of Economics, Chicago Booth School of Business; Former President, Deutsche Bundesbank
• Yutaka Yamaguchi - Former Deputy Governor, Bank of Japan; Former Chairman, Euro Currency Standing Commission
• Ernesto Zedillo - Director, Yale Center for the Study of Globalization, Yale University, and Former President of Mexico
• Zhou Xiaochuan - Governor, People's Bank of China; Former President, Chinese Construction Bank; Former Asst. Minister of Foreign Trade (China)

The European Union's Ombudsman, Nikiforos Diamandouros, thinks that Draghi's membership in this lobby is incompatible with his role as Supereme Pontiff of the Euro-finances. The matter is under investigation and may take months before any conclusion is reached. 

But the real fact is that this G30 and possibly other less known forums are shadow governments (or senates if you wish) of the World's effective administration. And we all know that if banksters and super-oligarchs rule the World, the World has a big problem. 

Real Democracy Now! Banksters to the guillotine!

Tax heaven to tax... workers

The well known pirate den tax heaven offshore financial center Cayman Islands has decided to begin taxing. But worry not banksters of the world, pirate warlords, drug and human traffickers, weapon traders and pseudo-libertarian ideologists plundering Honduras and Europe... 

Worry not. 

The government of the islands has decided to tax only immigrant workers (with nothing less than 10% on salary). Your loot is in no danger, only your servants will pay.

LIBOR scandal cover-up in North America too

Glenn Ford exposes the new instance of government backing of illegal practices by the banksters at Black Agenda Report:

Obama's Justice Department Rushes to the Rescue of LIBOR Criminals

A Black Agenda Radio commentary by Glen Ford

“The reason Eric Holder is staging criminal investigations is because that’s the only way he can protect the bankers, through immunities and by gradually narrowing the scope of the case.”

The Obama Justice Department is in theater mode, again, pretending to threaten the bankster class with criminal penalties – prison time! – for their manipulation of the global economy’s benchmark interest rates. The Justice Department claims to be building criminal and civil cases in the LIBOR scandal, which in sheer scope is the biggest fraud by international capital in history. But that’s all a front, a farce. Barack Obama has spent his entire presidency protecting Wall Street, starting with his rescue of George Bush’s bank bailout bill after it’s initial defeat in Congress, in the last days of Obama’s candidacy. He packed his administration with banksters, passed his own bailout and, in collaboration with the Federal Reserve, channeled at least $16 trillion dollars into the accounts of U.S. and even European banks – by far the greatest transfer of capital in the history of the world. Obama has reminded the banksters that it was he who saved them from the “pitchforks” of an outraged public. He pushed through Congress so-called financial reform legislation that left derivatives – the deadly instruments of mass financial destruction that were at the heart of the meltdown – untouched.

Wall Street may or may not remain loyal to Obama, but Obama has been loyal to Wall Street, the guys who gave him the campaign cash to become a viable candidate. His Attorney General, Eric Holder, a corporate lawyer to the core, is busily staging a pre-emptive LIBOR prosecution of bankers in order to shield them from legal action by a host of other government agencies and, ultimately, from the global universe of parties that have been harmed by the bankster’s schemes – a list that stretches to infinity. Holder’s job is to monopolize the LIBOR case, to the extent legally and humanly possible, grabbing jurisdiction and consolidating the cases against the banks with the aim of reaching a settlement that does not further destabilize the financial system.

... full story at BAR.

The destruction of the Basque public banking system

Guinda[es]: sour cherry. 

Guindo[es]: sour cherry tree (Prunus cerasus).

De Guindos[es]: Spanish Minister of Economy who spouses brutal ugly scary looks. 

For some odd reason the humble fruit has become important in Spanish language phraseology:

• Guindar: coll. for to steal, to rob (surely from stealing sour cherries from the trees, a common teenager pass-time in days long gone).
• Caerse de un guindo: (lit. to fall from a sour cherry tree) expression that means to realize the obvious, to suffer a sudden and undesired reality check.
• Poner la guinda: (lit. to place the sour cherry... onto something) is to finish, to ultimate the last details... an obvious bakery reference, as glazed sour cherries were what went on top of the cakes traditionally or even inside some drinks as decoration and treat.

This last meaning is the one that  Guzmán Ruiz Garro, former  chose to explain, in an article for Branka[es], what is happening with Spanish (and Southern Basque) saving banks: they are being liquidated, finished. This seems to be the grand design of the IMF and the European Commission, who have decreed that all the savings banks (known as cajas) of Spain will have to be transformed into... foundations.

Yes, you read well: foundations, charities, private non-profit entities. It is anybody's guess how will they be able to ever repay their debts (those that have them) if they stop being financial entities and why would this decree apply only to Spain and not to all the EU. 

But that's what the Spanish government has accepted instead of just declaring Bankia and the other problematic cajas bankrupt, as they actually are - and only then nationalize them (privatizing them was Brussels' idea to begin with).

It is most worrisome that a long list of cajas, traditionally serving the public as easygoing semi-public local banks with a social facet, are being liquidated for good. This kind of low-tier semi-public banking is what Brussels and the IMF seem to be set on destroying - for the benefit of the Big Banksters, of course. 

I already mentioned in March how the Savings Bank of Navarre (CAN) was sold out in an scandalous maneuver by the conservative-unionists, scamming the Navarrese people (who is fiscally semi-autonomous) some €500 million. Now the danger is with the Western Basque cajas, which were fused into Kutxabank recently by means of devilish pacts of the Spanish unionists and the Basque conservatives, excluding the Basque Nationalist Left (first or second political force in the Basque Country). 

Ruiz Garro ponders that these cajas won't be able to reach the end of the year with the newly required profits (which would be turned into extra capital by decree). It could be the case that the public institutions, in this case the Western Basque chartered provincial governments (and to lesser extent town halls and the semi-federative Western Basque autonomous government). But these entities have low liquidity also these days and it may be questioned, with some reason, whether they should intervene at all. 

So he expects these savings banks to be liquidated into "foundations" as well by the end of the year, what will severely damage the financial stability of the Western Basque Country. 

He does not mention it, but luckily there are other cooperativist savings banks (Euskadiko Kutxa and Ipar Kutxa, now in a fusion process). They tend to act more like pure banks but they are still not yet your usual private bank, having the backing of the Mondragon Cooperative Network and Farmers' cooperatives. But it is still not the same as a distinct public banking system under direct control of elect institutions. 

It is a clear setback for democracy and a consolidation of the quasi-feudal aspects of late financial Capitalism. A clear attack against the Basque People and our autonomous intstitutions. We should leave EU altogether (except for Schengen): be more like Switzerland or Iceland and less like Ireland or Spain.

LIBOR/EURIBOR fraud: "everyone knew and everyone was doing it"

European banks have been tampering with credit markets all the way along: they fixed the most important global interest rate indexes (London's LIBOR and Eurozone's EURIBOR) and they did it almost openly. The implications are still a bit undefined but are clearly enormous, specially since Europe and the World have been deep to the eyebrows in the worst economic crisis in many decades precisely since 2008, when the tampering began.

According to The Telegraph:

... the bank could not be seen to be borrowing at high rates, so we were putting in low Libor submissions, the same as everyone. How could we do that? Easy. The British Bankers' Association, which compiled Libor, asked for a rate submission but there were no checks. The trader said there was a general acceptance that you lowered the price a few basis points each day.
 

According to the trader, "everyone knew" and "everyone was doing it". There was no implication of illegality. After all, there were 20 to 30 people in the room – from management to economists, structuring teams to salespeople – and more on the teleconference dial-in from across the country.

The discussion was so open the behaviour seemed above board. In no sense was this a clandestine gathering.  

The implications are boundless: British, German and French banks are already plummeting in the stock markets while many British ministers are being splashed by the scandal. And this is surely only the tip of the iceberg because, you know, "everybody knew"...

Everybody who matters, as the oligarchs like to say, not you and me of course but the vampire conspiracy on top of our society.  

The big problem is that, no matter how scandalous this may be, if criminal banksters are not put in jail for good, as the terrorists they are (they toy with people's lives, often ruining them) and, instead are allowed to get away with just fines (no matter how big, banks like these will always consider worth it to pay them), the problem will persist. 

It's just as with Bankia: Rodrigo Rato and his team are still at large... the loses are being paid by Spanish and generally European citizens, who nevertheless see their homes reposessed by Bankia itself every day. There's no bail out for us commoners. 

All this only underlines how much necessary and urgent is a communist revolution in Europe. Without guillotine for the Marie Antoniettes of today... there will be no justice, no stable society and no future for our little continent.

European bank forced to pay huge fine to US pirates for servicing Cuba

Where's the European Commission when you need them? Where the World Trade Organization? 

The USA fined Dutch bank ING for servicing Cuban customers (as well as Iranian ones). Under the US pirate laws, they guarantee themselves the privilege to sanction anyone who services Cuba, causing ample disruption of the Cuban economy, which is always struggling for that reason. 

The US pirate authorities fined ING with $619 million. 

Mr. Barroso, when are you going to implement sanctions against the USA for breaching international trade freedom?

No more liquidity buffers for banks, citizens will pay all

Naked Capitalism reports that the demands of liquidity buffers for banks worldwide have been annihilated: now banks will be able to pretend that they have liquidity if they own a bunch of random volatile assets such as gold or equities (stocks). This gives wide margin for the banksters to extend and pretend, just as Bankia did with their worthless real state. 

But no problem (ahem!), now every private banking problem will be socialized to whole nations and continents and all Earth ultimately because our destinies and economies are all connected across the World, we like it or not. Citizens, now indistinct from slaves, will pay for all, governments will take care of that no matter what.

Goldman Sachs happy with European banks crumbling

The North American super-bank "eyes $2 trillion" in assets that European banks may need to sell to stay alive. For the predatory firm that ring-led the deficit fraud in Greece (while betting for Greek default and taking as prize for its manipulations the European Central Bank and the governments of Italy and Greece) the needs of European economy, which they helped to push towards the abyss are a great opportunity for even greater expansion of wealth and power. 

But in EU nobody lifts a finger against them: it is as if all would agree to that Goldman Sachs takeover. 

Ref.: Business Day.

Spain's PM babbles something to excuse the billions for Bankia

Gate of Europe or KIO towers,
formerly Kuwait Investment Office (a fiasco),
then final scenario for a fictional 'Satan's coming',
now Bankia (another fiasco)

For a President of the Government (the official title equivalent to Prime Minister or Chancellor) who has been just a few months in charge Mariano Rajoy looks like he could resign at any moment. He won't but his position is so weak, not in Parliament but in terms of real economic viability and public credibility, that he could well be about to resign. 

But in my opinion the worst is that Rajoy does not seem to have any clear ideas, babbling rather than exposing and doubting rather than directing with firm hand. And he's about the less horrible cadre that the ruling party has in stock (it's full of people who can't do anything straight, not even pretend they do). 

After claiming that one plus one is not two or, more precisely, that the current lack of credibility of the Spanish state in the debt markets is not caused by the crisis of Bankia, he appealed to "Europe" in vague terms and fantasized that the debt goals will be met, what mean that the €23.5 billions will be extracted from the budget. 

After controversially cutting already €27 billions there is few room to operate. More so when most of those cuts directly affect not just the well being of citizens (social services) but the very economical engine (public investment, internal demand).

However, even if its common sense, the chief manager of Spain did not even consider dropping Bankia, as has been demanded by many already. In an exercise of hypocrisy he equated the collapse of the bank (which could be managed so small customers don't suffer at all, as is normal) with the bankruptcy of Spain, when in fact it is obvious that the opposite is the truth: that saving Bankia is going to cost dearly to the Spanish state. 

And most will be taken from the people: education, health care, pensions... not from the pathetic king nor the hated police nor the useless military nor the salaries of sus señorías...

Rajoy did not consider either to persecute those guilty of this scam, declaring with that action full accomplice. Let's not forget that Mariano Rajoy and Rodrigo Rato are party buddies and used to be vice-presidents in the Aznar government, so bootlicking of George Bush Jr. and his hateful invasion of Iraq. 

The precise evidence may never come but the clear message is: we PP buddies have plundered Bankia and now you stupid common Spanish citizens will pay for it, haw haw. I'm not playing the blame game here: it was the first PP government who organized this disaster of the brick bubble in the time when their partners in the USA (Bush Jr.) and Britain (Blair) did exactly the same. Just that in Spain it's always a tad more extreme when it comes to farce.

Among the most implicated are Rodrigo Rato (former Economic Vice-President along Rajoy, former IMF Director) and Esperanza Aguirre (President of Madrid Economic Community), some of whose closest associates are deep in the mud, several marquises, the whole Government of the Valencian Community (knowingly corrupt but re-elected by a brainless citizenry), etc. 

Aguirre, who was Minister of Culture with Aznar, became back in the day the laughing stock of the whole country after comitting several public gaffes that evidenced her utmost ignorance in matters of culture. However she has strong support in the most fascist-mafioso sectors of the Spanish Right and became President of the Region of Madrid. Now we can only imagine that the capital of the state is full of finance holes and what the Spaniards call chanchullos: petty corruption - or maybe not so petty.

Rajoy seems to be announcing that other saving banks will follow suit. He mentioned Catalunya Caixa and Nova Caixa Galicia. It is not clear however if he says so we get ready for the worst or just to deflect the political impact, as the culprits in these two cases may be not so directly related with his own party.

Nobody knows why precisely €23.465 billion. The figure seems to have been agreed between the new administrator and the government but no details have been provided. Worse: there is an announcement of a stockholders' assembly in a month that hopes to issue stock for value of €60 billion. Does that mean that the bank has a hole for the value of almost 30% the Spanish budget? Many wonder

Foreseeing? What is now the see of Bankia was once the scenario of a film on the Apocalypse: El Día de la Bestia

If so, how many Spanish budgets are needed to bail out all the Spanish banking system? 

Naturally we can't but understand at this point why Raxoi cries desperately to Brussels for some sort of help, whatever, but what I do not understand is why the system is not cleaned as it deserves: bankruptcy for all, guaranteeing just the current accounts and the savings up to a ceiling. 

Sure, this could trigger a domino of bankruptcies all around the world, but better that than wasting not just some public money but a lot of it. 

I even doubt that Spain can assume such massive payments without dissolving itself as state and becoming a new Somalia of sorts. A state can't guarantee the financial system, no way: it should not, it must not and it cannot. 

This is Ireland to the Nth power. It could be Iceland but Spain has the wrong government, the wrong opposition and the wrong everything.

Ref.: Gara[es], Spanish budget project 2012[es].

Anonymous sets up financial whistleblower site

We all know that the world of business is full of crimes, from bribery to "creative accountancy", from extortion and cronyism to murder. However very little of that is ever known and that's because reporting it will probably destroy someone's career. 

For that reason some members of the loose hacker club Anonymous have set up Anonymous Analytics, a Wikileaks of sorts focused on finance, where you can report your corrupt boss or your extortionist undesired partner without fear of repression. Let the party begin!

Source: Naked Capitalism.

Goldman Sachs takes a major hit: director for Europe quits and denounces the company's practices against their own customers

Greg Smith, executive director and head of Goldman Sachs’s United States equity derivatives business in Europe, the Middle East and Africa, resigned explosively by means of a letter of denounce (NYT, pay per view) of the bad practices of the super-bank, which systematically rips off clients and pays bonuses to managers for doing it. 

Naturally this is a bomb and GS stocks have fallen four points since the letter was published today. And it's probably just the beginning. 

According to Matt Taibbi at Rolling Stone:

The essence of Smith’s piece is devastating. He points to one simple, specific problem in the company: the fact that Goldman routinely screws its own clients.

Smith confesses his ultimate disgust about the company's practices:

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as "muppets," sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on.

Muppets? That's professional!

In a higher tier and more uptight magazine, Forbes, Peter Cohan writes:

What is so bad about Blankfein’s Goldman? In Smith’s view, it gives power to the people who make the most money — and it encourages people to do that by shifting complicated financial instruments that Goldman wants off its own balance sheet onto those of its clients.

In other words: they sell junk to clients so GS can have more profits.

He also posts three possible reasons why GS still have customers in spite of its many wrongdoings and increasingly bad reputation:

• That they still make some benefits in spite of all
• That they are naive enough to be blinded by GS' name the same that they or others were by Maddoff
• That they have no alternative: GS is a monopoly in its market segment

Maybe a combination of the three, although I doubt that you can make any benefits trusting someone who calls you muppet on your back.

Still, one wonders if all this is little more than a maneuver, to prepare the return of Henry Paulson (yes the Paulson who bailed out Goldman Sachs while he was Secretary of Treasury under Bush Jr.) to the most powerful corporation on Earth (or otherwise replace current CEO Lloyd Blankfein by someone else, like his second on board Gary Cohn).

One also wonders what implications this may have on the widespread domination of GS over today's European Union or even if the inter-penetration of GS and the European crisis have something to do with it. 

I can even imagine secret ethic wars between the WASP, the Jewish and the Italian mafias within this corporation. But I do not know. 

Not yet at least but it is a matter to watch carefully, not in vain this is probably the most powerful bank and economists' mafia on Earth.

External article: The $16 trillion bailout to US banks you never heard of (more than all the US GDP!)

I admittedly changed the title of this article of major general interest by and at Global Research. Originally it is titled: Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks?, but it was too long and unappealing for my taste. What it denounces however is most important news you may have never heard of:

What you are about to read should absolutely astound you.  During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.  Do you remember the TARP bailout?  The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the "too big to fail" banks.  Well, that bailout was pocket change compared to what the Federal Reserve did.  As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the "too big to fail" banks between 2007 and 2010.  So have you heard about this on the nightly news?  Probably not.  Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture.  The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down.  The Federal Reserve has been actively picking "winners" and "losers" in the financial system, and it turns out that the "friends" of the Fed always get bailed out and always end up among the "winners".  This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

That is an astonishing amount of money.

Keep in mind that the GDP of the United States for the entire year of 2010 was only 14.58 trillion dollars.

... continue reading. 

US bailout not repaid and other Goldman's illusionist tricks

Washington Blog deals today with the big banks and how they are yet to pay (against what is often claimed) the infamous bail-out (TARP) of the late Bush administration.

However, as Barry Ritholtz notes:

Pro Publica has been maintaining a list of bailout recipients, updating the amount lent versus what was repaid.

So far, 938 Recipients have had $607,822,512,238 dollars committed to them, with $553,918,968,267 disbursed. Of that $554b disbursed, less than half — $220,782,546,084 — has been returned.

Whenever you hear pronunciations of how much money the TARP is making, check back and look at this list. It shows the TARP is deeply underwater.

So only some 40% has been repaid. And yet we have to hear how good payers those vampires are and how the state is even making money out of that loan. All lies (but a thousand-times repeated lie becomes a truth... until some kid laughs at the naked emperor, that is).

There is a lot more information in that article on how the state is transferring funds from the citizens to the banks for nothing and how Goldman Sachs particularly is taking advantage of its quasi-monopoly to manipulate markets and make even more money out of it.

Just read the whole story at Washington Blog.

Who loses if Greece, Ireland, Portugal or Spain go bankrupt?

I just found this macroeconomic report of the Bank of International Settlements:

BIS Quarterly Review, September 2010

Among other macroeconomic data, it details the exposure by country (page 16) to the loans of the four Eurozone countries targeted for "revision" by the media and some authorities: Greece, Ireland, Portugal and Spain.

It is an interesting data to review. Let's see:

Greece

The main state exposed to a possible Greek bankruptcy is France, with more tha 1/3 of total exposure, followed by Germany, the USA and the broad category of other EU countries (Benelux and/or Nordic countries surely). Spain, Italy, the UK and the rest of the world have rather low exposures.

Ireland

Roughly half the Irish exposure is split between the UK and Germany. The USA, France and the other EU group are also quite exposed. The overall exposure to an Irish bankruptcy is almost three times larger than in the cases Greece and Portugal, in spite of Ireland being a country almost three times smaller than these two.

It is clear that Ireland has been lent to quite liberally in the recent past.

Portugal

The most exposed country is Spain, what makes Portugal the first real case of possible "contagion" senso stricto (there's a lot of chatter about "contagion" and "domino effect" but actually this is the only case where a the main creditor is also among the "red tagged" countries). Spain holds about 1/3 of Portuguese exposure, followed at a good distance by Germany, France, the USA and the UK.

Spain

Spain is much larger than any of the others by all measures (4 times larger than Portugal or Greece and ten times Ireland, by population). It also has the largest foreign exposure, which is however only somewhat larger than that of Ireland ($1100 billion compared to $843 billion).

The Spanish exposure is shared roughly at similar apportions by France, Germany, the USA, the UK and the other EU group. Each has, very roughly, 1/5 of the exposure.

Who loses more where?

All lose the most in the event of a Spanish bankruptcy, except the UK that would lose more in the Irish case. However for some countries (Germany, UK) the loses are quite even in the Irish and Spanish cases. France stands to lose the most in Spain and Greece and has few interests in Ireland. The USA is most exposed in the Spanish and Irish cases but being a much larger country and economy the blow would be rather light in any case. Spain stands to lose the most in the case of a Portuguese bankruptcy.

I believe that these are interesting figures and concepts to get familiar with for whatever may lay ahead, which does not look pretty in any case.

USA: the mortgage fraud reaches 60% and should cause a new financial crisis

That is what I understand from Washington Blog's latest report on this incredibly scandal of both dramatic and comic nature.

The case is that a ghostly entity known as Mortgage Electronic Registration Systems Inc. (MERS), with no employees, has been attributed with all mortgages by many banks and financial entities since the 1990s in a petty and ridiculously over-complicated attempt to avoid county recording fees. It creates a situation in which, according to established US legal principles, there is no mortgage whatsoever to begin with. Or more exactly: the mortgage exists but there is nobody actually owning it, or nobody with a clear claim to it, which may in the end render all those mortgages effectively void.

According to a law expert:

The mortgage is still owed, but there's going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you're stealing my money. You're going to then have trusts that don't have any assets that have been issuing securities that say they're backed by a whole bunch of assets, and you're going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they're going to do, and you're going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.

You might? I'd say you will have all that happening in no time because housing is so extremely costly, the investment of a life in most cases, that any legal costs are worth it if you have a reasonable chance of getting your mortgage declared void, your payments returned, etc.

It is a clear case of someone being so twisted as to kick himself in the ass, but with this someone being a huge fraction of bankers and financial managers who should know better.

Another expert says that the actual loans were apparently not.

The incredible thing is that this massive fraud of law has been going on for nearly two decades unnoticed in the face of all, what increases the potential damage to the financial system as hardly anything could. It is already being compared to the Lehman Brothers weekend of 2007, but the Lehman case is clearly being favored in the comparison.

More expert legal opinions:

The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Id. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. Id. The mortgage loan became ineffectual when the note holder did not also hold the deed of trust.

And:

There is a compelling legal argument that loans originated through the MERS system fail to create enforceable liens.

And:

... in Chauncey [a legal case], the trial court, intermediate appellate court and New York’s highest court all agreed that the attempt to convey an “in blank” mortgage failed. The Court of Appeals explained, “No mortgagee or obligee was named in [the security agreement], and no right to maintain an action thereon, or to enforce the same, was given therein to the plaintiff or any other person. It was, per se, of no more legal force than a simple piece of blank paper.”

And there is more like that at the original article. 

So brace yourselves for the greatest ever legally valid private debt default in history. I have no doubt that the bankers will not fall without a hard fight but legally at least their case seems clearly lost, so they can only resource to illegal violence... at the central country of the current global political and economical status quo? Can they do that? Which will be the consequences if they resort to such extreme measures?

Brace yourselves, really.