At Last A Little Good News About The Banksters.

“Fight Against Stupidity And Bureaucracy”

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Bank Logos-2

Don’t get too excited, it is only a little, but it is good news.

In a recent ruling by British regulators, the top executives and managers at banks operating there (which is practically all the major banks) could have their bonuses clawed back for up to ten years after any finding of misconduct. It will also prohibit bonuses for nonexecutive directors and for the managers of companies that are receiving financial support from the government.

The move, which is long, long overdue and still does not go far enough, extends a seven-year clawback period that one regulator, the Prudential Regulation Authority, (part of the Bank of England), introduced for so-called variable pay (read ‘bonuses’) last year as part of tougher accountability rules.

Prudential Regulation Authority

The new rules announced by the authority, which is part of the Bank of England, and by another regulator, the Financial Conduct Authority, are the latest effort by financial regulators in Europe to hold the banksters accountable for improper actions that could play a role in precipitating future financial upheavals.

The regulators say they are trying to “embed an accountable culture” in the City of London, which actually means that the authorities realize that the banksters have learned nothing from their previous catastrophic frauds and thefts. They know when the chance arrives these greedy and immoral people will try to do it all again.

bankster caricature

The new British rules, which apply to banks, building societies and investment firms regulated by the Prudential Regulation Authority, including British units of United States banks and other financial firms based outside Europe, mean that senior managers, risk managers and others at banks will also be asked to defer more of their variable pay for a longer period, making it easier for regulators and financial institutions to recover bonuses if misconduct is uncovered.

Other countries in Europe are also enacting new regulations for their banksters. Dutch lawmakers, for example, capped bonuses this year for employees in the banking, insurance and other finance sectors that limits variable pay to 20 percent of their fixed salaries. The Dutch have also banned bonuses for executives at bailed-out banks.

European rules already limit bankers’ bonuses to the equivalent of their annual salaries, or to two times their base salaries if the company’s shareholders approve it. But they know they are so greedy that they will try to find ways round that.

breaking the rules

Already some banks are making moves to get round the limits by introducing role-based remuneration and other payments, so the regulators have their work cut out for them keeping a step ahead of the thieves.

What they really need to do is confiscate ALL their ill-gotten gains, impose severe additional financial penalties AND throw these criminals in jail – for a long time.

America, which always likes to consider itself as the leader of the world, should lead in this regard too. It would be better than starting another war in some far off God forsaken country.

Unfortunately I think it will be an equally long time, and a lot more frauds, before they get to that much needed stage.

And you can take that to the bank!

Give a man a bank

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The Greeks Can’t Afford To Bear Gifts These Days

“Fight Against Stupidity And Bureaucracy”

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Greek financial crisis

I used to love listening to George W Bush when he talked about the ‘Grecians’. He was an idiot, but unlike some holders of his post I think he secretly knew it.

But, enough of that, let’s concentrate on the Grecians.

Their financial crisis is deepening and they’ve shut down all their banks. They’ve also imposed what are called ‘capital controls’, in other words what you can and cannot do with your own money –  assuming you could get to it in the first place.

Several Western countries, including the US and Britain, have issued travel warnings for Greece. Not a warning about the place being very dangerous, just a warning to have enough cash to be able to pay for things now that the banks are shut and presumably their ATMs as well.

queue at Greek ATM

This recent activity by the Greek government is because of the breakdown of talks between Athens and the European Union concerning the Grecians’ enormous debt that they clearly can’t afford to pay back. EU finance ministers rejected Athens’ request to prolong a financial assistance program.

It is also about a bit of timely government blackmail.

The Greek government has so far been unable to formulate any meaningful plans to curtail their spending significantly. The Greek people likewise have become used to living beyond their means and are reluctant to tighten their belts. The people are blaming the government and the government is blaming the people and nothing is really getting resolved.

So Greek Prime Minister, Alexis Tsipras, shut the banks and said they would stay shut until July 6, conveniently the day after a nationwide referendum on whether to accept the bailout terms proposed to Greece by its creditors.

Some commentators also think that the banks may have been shut because they don’t have enough cash left. The Greek people think the same and are panicking to get their money out of the banks. Runs on banks inevitably lead to disaster.

As Greece is part of the Euro zone it does not have control of its own monetary system. In other words, unlike America which can simply print more money if and when it needs it, the Grecians have to rely on the European Central Bank giving them cash. and it has refused to give them any more Euros.

That decision could prompt Greece to default which would probably lead to it being kicked out of the Euro zone and possibly out of the EU itself, which would be an historic first and something that would be done very reluctantly.

Greek financial crisis cartoon

The rulers of the EU are in what is known as a ‘tight spot’. If they don’t take a tough line on the Grecians they can be sure other poor countries in the EU will follow suit. If they do take a tough line, then the upheaval will undoubted have an impact on the Euro currency.

A Greek default would also be another kick in the greedy teeth of the big financial institutions who own a good part of the massive €300 billion debt – you see there are positives in every situation if you look hard enough.

So it looks like emergency meetings and frantic discussions all over the place in Europe.

Despite the fact that Dubya is long gone from the political scene, I don’t think we’ve heard the last about the Grecians just yet.

By the way, Happy Independence Day to all my American visitors, bet you’re glad you’re not part of Europe these days.

Happy 4th July USA

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Jobs, Jobs, And More Jobs

“Fight Against Stupidity And Bureaucracy”

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jobs under the magnifying glasss

This post is about jobs.

You might have guessed that from the title.

Not the late Steve, the other kind.

During the past months America has been creating approximately 200,000 jobs. At least that’s what the official figures are saying. It has helped to indicate the underlying strength of the economy, led to official unemployment figures of 5.5% and propped up the USD on the foreign exchange markets.

And no one is questioning any of it.

It’s as if it’s really real.

Again it’s all a question of what you do with the numbers.

unemployment

The May 2015 figure for the labor force is 157.5 million. That is the figure the government uses to calculate it’s unemployment rate of 5.5%.

That’s what they call the ‘U3’ number. U3 is the official unemployment rate.

But there is also a ‘U5’ number that includes discouraged workers and all other marginally attached workers; and a ‘U6’ number that adds on those workers who are part-time purely for economic reasons.

Don’t ask me what happened to ‘U1’ or ‘U4’ because I don’t know. However ‘U2’ is a very successful pop group from Dublin, Ireland.

u2 image

The problem is that the “official” unemployment rate (U3) does not count discouraged workers who have settled for part-time jobs or have given up looking altogether because they believe there are no jobs out there for them.

There are about another 7.5 million or so people who were not considered ‘unemployed’ because they were employed part-time for economic reasons. Those people are also called involuntary part-time workers – working part-time because their hours were cut back or because they were unable to secure a full-time job.

If you include those individuals, (the U6 number), you get a very different figure for the nation’s unemployment rate. Unlike other jobs figures, the U6 rate actually got worse in June.

So the real unemployment rate is well in excess of 12%, more than double the official figure.

But it is even worse than that.

The economy is growing, BUT it is growing slowly, and it is growing from a very low base caused by the financial crisis that the banksters brought upon us with their fraud and greed.

In that light, an increase of 200,000 jobs or so each month is basically just replacing some of the millions of jobs lost during the bank-caused recession, not creating ‘new’ jobs as such. In other words we’re just slowly getting back to where we were.

The forecasts aren’t optimistic either. If and when the workers laid off during the recent recession find new jobs and we get to what the government calls full employment, the labor force is forecast to grow at a rate of only 0.5% for the rest of this decade. At 0.5%, we grow at a rate of about 66,000 a month — nowhere near 200,000. Next decade it’s even worse, at 0.2%.

government bureaucrats

Add to that the fact that a great number of the jobs being created are government bureaucratic jobs that cost the country money, not real jobs that produce wealth for the country and you can see that there is little for the politicians to crow about.

As I noted in my post on Wednesday, with statistics you can ‘prove’ anything. Take any government figures with a great big pinch of salt.

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SNAFU

“Fight Against Stupidity And Bureaucracy”

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snafu

It’s never pretty when some smart ass says I told you so.

But never mind that.

“I told you so.”

There I said it.

I wrote a post “The Only Way Is Up, Unless It’s Sideways” (if you want to read it click here) that all the logic in my head told me that contrary to the Fed’s threats to raise interest rates in June they wouldn’t.

They didn’t.

Gloat, gloat.

Mind you, although I’m taking all the credit that’s going, it wasn’t that hard to figure out. Despite that it did seem to be beyond most of the ‘financial advisors’ who just swallow whatever government crap that’s going and act accordingly – and usually lose money.

So it wasn’t a great surprise to me when on Friday past, after an announcement from the Bureau of Labor Statistics that reported 280,000 jobs created in May, the promised interest-rate hike expectations have moved back to this September. My guess is still that interest rates will remain near zero for considerably longer than that. (I explained my reasoning in that other post just referred to.)

SNAFU they say in the army.

For those who don’t know, SNAFU means ‘situation normal, all f***ed up’, because that’s how it always seems in the military. Usually however they muddle through because they can always count on being bailed out by the government.

With the government it’s different. There’s no one to bail them out.

US-Gross-National-Debt-1972-2014-B

The American economy, which is currently built around a staggeringly enormous debt of $18 trillion, is slowing.

Add to that equation sluggish economic recovery on the back of a collossal and prolonged printing of money by the Fed — Quantitative Easing, they called it.

And you do not have a sound enough foundation to support raising interest rates.

Some wiser voices in the Fed – maybe just a wise voice – realize the whole thing is out of control. The Fed has hinted, prodded and sometimes just asked plainly for the government to stop reckless spending habits. But the government hasn’t tightened its belt, nor doesn’t seem likely to.

dollar bill stash

What this really means is that a hike in interest rates too soon or too fast risks not only a market crash, but also a catastrophic mess for the government — and as I said in  my previous article on the subject 2016 is an election year so there probably won’t be much boat rocking going on.

Stay tuned for what happens in September, I still have some humble pie in the freezer if I need it.

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They Got Away With It AGAIN!

“Fight Against Stupidity And Bureaucracy”

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banks admit forex manipulation

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Last week several of the ‘BIG’ banks – you remember, the ones that are too big to let go bust – were fined in the region of $5.7 billion for illegal manipulation of the currency markets.

The usual suspects were included, J P Morgan, Citibank, Barclays  and RBS all pleading guilty – but only after they were sure what the medicine they would be getting would be.

It’s a huge amount of money, there’s no denying that. And losing it will make the banksters hurt a bit. But only a bit.

And that’s the problem.

Yet again the United States government has failed to bring these criminals to justice after more of their deliberate fraud and theft.

In other words, they let them get away with it AGAIN!

Major Banks

Now, if I walk into a branch of, for example, Citibank and try to steal the money that their customers have deposited with them for safe-keeping, I would be videoed, photographed, and if I was lucky enough to get out of the premises, pursued by the police and even the FBI for as long as it took to capture me.

And I couldn’t have any complaints because that’s the way it should be. Thieves should be sought out, captured and after due process thrown into jail.

However, if I am a bankster, have good government contacts, and ply money and favors to those in government, then I am treated very differently.

big banks get out of jail free

I can embark on insider trading (which is essentially what the banksters were doing when they were illegally manipulating the currency markets), I can sell loans to people that clearly can’t afford them, then take their houses away or sell on their debt wrapped up in a ‘AAA’ bundle to my richer customers, and after all that steal even more of the money my customers have entrusted to me by awarding myself and my collaborators big bonuses that none of us have earned or are entitled to.

In this scenario am I pursued by the police and FBI?

Nope.

Am I thrown in jail to be the bitch of Skull-cracker Jones or Scarface Smith?

Nope.

Will I have to personally pay back the money I stole?

Nope, again.

So what will happen to me if I am a bankster?

At worst I will get a slap on the wrist and told not to do it again. Even though recent history has proved that this is no deterrent and I will do it again at the first opportunity I get.

And, of course, I don’t have to personally pay the government’s fine no matter how big it may be. Instead my company has to cough up on my behalf.

Not that the company is much bothered either because when it runs out of money it goes back to the government which hands it back at least the value of the fine and usually much, much more.

Think this system is fair?

Neither do I.

jail the banksters

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The Only Way Is Up, Unless It’s Sideways.

“Fight Against Stupidity And Bureaucracy”

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Federal-Reserve-Seal-logo

It has been nine years since the ‘Fed’ put up interest rates in the US. Not a day goes by when some pundit or other is explaining why an interest rate rise is imminent whilst yet another is warning that the US dollar is about to collapse in a heap.

There’s even a fed funds futures market for people to bet which way they think it is going to go.

For what it’s worth, I think the US dollar will weaken from its current position because a lot of the support it is getting lies solely in the belief that interest rates are about to start going up.

Much of that dollar support is created by continual talk from Yellen and the Fed about raising rates. But the fact is that every time they reach the point at which they said interest rates would rise, they chicken out.

us dollar

So why does the Fed keep making big promises that it hasn’t the nerve to keep?

Good question, I’m glad you asked.

Although it might make them look a bit foolish, what their continual rate rise threats also do is to help to discourage speculation in US stocks and bonds – not a healthy thing for any economy.

If they do, do it, I don’t think they will until very late in 2015 – maybe not until 2016.

2016?

But wait.

2016 is an election year.

2016 US Election year

Will Obama deliberately burst Hilary’s Democrat Party bubble by allowing interest rates to rise? He might do it out of spite I suppose. There’s no love lost between them since Obama beat her for the candidacy and then won the Presidential election eight years ago.

But I think the election year may mean we are looking at 2017 for those rate hikes.

So who is right, me and people who think like me or the great unwashed of the media who are still predicting an imminent rate hike.

I wouldn’t bet the farm on it, but I think I might risk a few zero interest dollars that they are wrong and I’m not.

Stay tuned for some gloating or a big spoonful of humble pie come June this year.

humble pie

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The Banksters Balls It Up Again!

“Fight Against Stupidity And Bureaucracy”

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I wrote a post a few weeks ago about the effect that low oil prices would have on the banks. (Click here if you want to read it.) and another the week before last about the reasons for the decline in the oil price (click here if you want to read that)

As they always do, the idiots that run these financial institutions saw something they thought was going to last forever and threw their money and their clients’ money at it without reason.

Nowhere was this type of recklessness more apparent than during the sub-prime fraud when the banksters lent money to people who clearly could not afford it and then sold on those loans as bogus ‘AAA’ securities to their wealthy customers and other buyers who mistakenly thought that the banks would not try to con them.

cartoon happy banker

Well the banks have done more or less the same today.

Banks have been lending hand over fist to oil companies and those who service the energy sector. They have lent billions of dollars that  –  now the oil price has plummeted  –  has no chance of being paid back. They have underwritten bonds, lent money on expensive fracking operations and even financed the speculative building of homes for oil workers.

It was good while it lasted. But it didn’t last long!

In the 1980s something similar happened when energy prices also slumped. Texas was particularly hard hit and many banks either collapsed or had to be rescued because of their bad loans to oil companies and to local real estate developers speculating on the oil boom.

It’s going to happen again.

The bankster’s greed and stupidity means that their banks are going to take another financial hit, they are going to lose more of their customers’ money. Time for another round of big bonuses, if the last disaster is anything to go by!

Obviously they have been too stupid to learn from the past. Not surprising really.

cartoon sad banker

But the big question is what will government do this time?

Has it learned anything?

Will the government let the banks suffer the consequences of their own stupidity, as they should have when the sub-prime catastrophe hit?

Or will they again use OUR money to bail the banks out, making some nonsense excuse that these companies “are too big to allow to go under”?

And we are talking about BIG banks. Wells Fargo, for example, a huge financial powerhouse, made approximately 15 percent of its investment banking revenue from the oil and gas industry during 2014. Another biggie, Citigroup, was much the same, with this sector accounting for around 12 percent.

And it’s not just in America that the pain is being felt this time.

In Canada, which largely avoided the worst of the sub-prime debacle, some of their leading banks could face an even sharper decline in revenues, so reliant is the whole country on the energy and resources sectors. One of Canada’s biggest banks, Scotiabank, derives approximately 35 percent of its investment banking revenue from oil and gas companies, according to 2014 figures.

wall_street_crooks

Then there’s Wall Street.

Usually they make loans like these and sell them off to unsuspecting investors, however, with the very public fall in oil prices that everyone knows about, firms that financed energy deals are now finding it harder to offload this debt.

As an example of their problems, according to a recent NYT report, Morgan Stanley, was among a group of banks that made $850 million of loans to Vine Oil and Gas, an affiliate of Blackstone, a private equity firm. They are still trying to sell on that debt, but no one is buying. Goldman Sachs and UBS led a $220 million loan last year to the private equity firm Apollo Global Management to buy Express Energy Services. Not all that debt has been sold to other investors either so they are left holding that baby too.

That’s only loans to the oil companies and speculators. Some of the worst loans made by the banks have been to a multitude of companies that provide services to the oil industry. Some of these services companies, lured by the oil boom, are relatively new and/or small and probably under-capitalized so their debt burden can quickly drag them under when projected profits fail to materialize.

Naturally you can expect that the banksters will use all their lobbying and political power to make sure the government steps in again.

But the truth is the government really does not need to (they didn’t the last time either). The ‘to-big-to-fail’ banks may lose on their energy bets, but they will recoup a lot of that money from ordinary people like you and I.

Lower oil prices means that we need less cash to fill up our gas tanks or heat our homes, so the chances are we will feel a bit freer to use that credit card or maybe even take out a mortgage.

Of course, for the banksters that’s a slow way to riches. They want that business for sure, but they will also want the government to write off their other bad loans too.

Let’s see what happens this time.

collapsing bank sign

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