first panacea for a mismanaged nation is inflation of the
currency; the second is war. Both bring a temporary prosperity.
Both bring a permanent ruin. But both are the refuge of political
and economic opportunists." -
DISCREDIT OF USTREASURY BOND
◄$$$ GIGANTIC SEIZURE OF SMUGGLED USTREASURY
BONDS WORTH OVER $100 BILLION IN ITALY, WHICH COULD MARK A
NEW CHAPTER OF ATTACKS AGAINST THE US FINANCIAL SYNDICATES
$$$. A gigantic hoard of US$ bonds worth $134.5 billion
was captured at the Italian border entering Switzerland. It
was the largest financial smuggling case in history. The
arrested were Japanese citizens of no official standing. At
this point, it is unknown whether the securities were valid
or counterfeit, but due to volume, counterfeit is more than
extremely likely. Concern over counterfeit securities is spreading
in Asia, where fake underweight gold coins are a rising problem
in China. The international press is silent, probably due
to the clear enormous risk, and likely also because it is
widely understood that Wall Street firms and the US Central
Intelligence Agency are the biggest counterfeiters and fraud
kings in the world. And Americans thought that large scale
counterfeit and fraud was the sole privilege of the United
States!!! The bulk of the seized securities were US Federal
Reserve bonds worth $500 million each. Typically only official
state agencies deal with such large denominations and such
large amounts of money. If the bonds are legitimate and stolen,
then Italian authorities stand to gain $38 billion in awards
and fees. Italian and US secret services were called in to
assist the Italian financial police.
Several important international financial
newspapers had already reported on the existence of counterfeit
securities circulating within unofficial financial markets.
The fear of counterfeit bonds and securities has reportedly
spread across Asia, the consequence for which has been that
real securities are also viewed with suspicion and closely
scrutinized. During the World War II, a common practice
by several countries at war was to print and circulate high
quality counterfeit enemy money, launched exactly as an attack.
It has also been historically established that some central
banks, like the Bank of Italy in the 1940 decade, issued the
same securities twice. The identical registration numbers
enabled the nation at war to have more money to spend, the
cover being the legitimacy of the serial numbers. See the
Asia News article (CLICK HERE).
An interesting perspective is provided by
Zero Hedge. This really does read like a spy novel. He wrote,
" According to the Treasury, less than 1% of ' Marketable
Treasury securities' exist in bearer form. The $134 billion
is an interesting number suddenly, unless there is some nuance
to ' Marketable' here… If a theft, it would certainly
be the largest on record ever. And in such amounts, it seems
clear that only government connivance would make such an '
operation' possible. Quietly unloading Treasuries in Switzerland?
Or establishing a cash pile abroad for a bit of extraterritorial
Quantitative Easing? Buying Treasuries with credit established
with a bunch of long off-the-books Treasuries? That is pretty
recursive. I like it." See the very brief commentary
by Zero Hedge (CLICK HERE).
The implication is clear. If the USDept Treasury is correct,
that 1% is the limit on bearer bonds, then counterfeits are
involved. Only $4000 to $5000 billion in USTreasurys currently
float in the credit market, meaning no more than $50 billion
exist in bearer bond form.
One might claim that during WWII, the world
was involved in a bloody war, a situation not quite the case
today. Or is the world at war indeed? My answer is yes, with
a phony War on Terrorism to cover staggering fraud, to enable
monopolized military service provision contracts, and to offer
cover for a narcotics monopoly operation. Furthermore, a financial
war is in progress, with the enemy perceived in many major
global regions to the be USDollar and USTreasurys, backed
by a powerful USMilitary and overbearing USGovt. Wall Street
has engaged in $trillion fraud. Since not prosecuted, and
worse, since the USDept Treasury continues to be run by Wall
Street icon Goldman Sachs, foreigners must feel a strong sense
of warlike atmosphere. Foreign governments, here Japan, might
have begun a surreptitious attack against the USTreasurys,
to discredit, to weaken, to reduce value. The outrage of
both huge truckloads of new USTBond supply following clear
mortgage bond fraud might be too much for foreign entities
to tolerate. Eventual grand secretive dumping of USTreasury
Bonds by the Japanese Govt appears to have a designed for
sale in Switzerland. The hidden nature of the path to sale
must be to avoid the USGovt, its vengeance, and military retaliation,
all of which has many precedents. What a huge smuggling operation!
The US press, the intrepid lapdogs tied in my opinion to the
financial crime syndicate, still sits on the story. The
integrity of USTBonds might soon be called into question.
The US financial instruments are slowly becoming a laughingstock,
a carnival, a field of mockery. This is a new wrinkle in a
global battle to remove the United States from its coveted
role as custodian of the global reserve currency, a position
abused with hegemony and syndicate operations.
Smuggling of government bonds is occurring
with other nations. Last week, €800
thousand worth of Luxembourg securities were also seized,
the story still incomplete. See the Italian Journal article
but it is not in English.
◄$$$ THE SMUGGLING CASE MIGHT EXPOSE
THE GREAT GAP IN HIDDEN ILLICIT FLOATING USTREASURYS, WHICH
IS UTTERLY HUGE $$$. My claim has been made to family,
friends, acquaintances, and clients for several years, that
the largest crime syndicates on earth operate under the various
wings of the USGovt, and have been for a long time. Proof
has come in the last several years, with an unending sequence
of grand fraud episodes that have dominated the news wires.
Counterfeit and fraudulent bonds are their game, enabled by
a fiat currency system, permitted in US origin by its custodial
role behind the USDollar. The opportunity for criminal fraud
on vast scale is made possible by money without basis (fiat
currency) and a criminal mindset that builds protective walls
with regulatory and law enforcement agencies, supported by
bribery and paid influence (like with USCongress). The United
States has it all!
Great discrepancies in USGovt official accounts
hide a veritable black hole. From 1990 to the present day,
Americans have sold a total of nearly $5500 billion worth
of US$-based bonds to foreigners. However, the officially
recorded net investment position of the United States can
account for an amount totaling only $2800 billion. The US
capital market seems to have a black hole at its center. Fingers
point to JPMorgan, many of whose USTreasury Bond and Enron
records conveniently vanished on 911 in the third building
at the World Trade Center. That building fell to the ground,
utterly destroyed, yet it had not been struck by any aircraft.
Counterfeit USTreasury Bond records are strongly suspected
as destroyed in the demolition. The end result is that
$2700 billion in US$ bonds vanished from known records and
official statistics. The missing $2.3 trillion Pentagon
spending on USMilitary appropriations over twenty years is
another unrelated matter. See the Financial Times brief article
from June 2006.
The following message was provided by a person who once had
numerous interactions with people at Dillon Read. Great access
was afforded to truly scummy enclaves. The topic was gross
missing money from numerous sources, for instance JPMorgan,
other Wall Street firms, Fannie Mae, Pentagon, and US security
agencies. The message was " I believe the $4 trillion
missing money was likely financed with USTreasuries issued
by the USTreasuries off balance sheet. Someone once showed
me documents on a private placement of off balance sheet Treasuries
that had been issued to Myer Lansky. He was trying to check
to see if they were authentic. I laughed because the Assistant
Secretary of Domestic Finance for the Treasury at the time
they were issued was someone I knew on Wall Street. He was
a partner at Dillon Read and then Morgan Stanley. A pretty
slick guy, he clearly had something on ' the Boys' but I could
never figure out what it was. So the idea of the US issuing
off-balance-sheet Treasuries is very possible. More ' collateral'
fraud. Question is, were they officially issued but not recorded?
Are they real?" The implications here are that a
tremendous cavern of slush money has been enabled by unofficial
USTreasury Bond issuance, conducted in darkness, distributed
at the will of the financial syndicate, AND IT IS USED AS
COLLATERAL FOR VAST CREATION OF OTHER FUNDS. It is simply
not possible for hundreds of billion$, if not trillion$, of
counterfeit or intentionally unregistered sovereign and agency
bonds to be issued and floating around the world without detection
or their surfacing. This story is proof. Watch the story be
killed in the US press.
◄$$$ DARK POOLS FLOURISH, AS INSIDER
TRADING TAKES DEEPER ROOT, AND MARKET TRANSPARENCY BECOMES
DIMMER $$$. Big banks are conducting a high volume of stock
trades internally. They are actually capitalizing on the credit
crisis. Their brands have gained much more popularity in the
last few years. While doing so, they encourage the most active
traders to leave the traditional exchanges. The so-called
' Dark Pools' enable the big investment banks to anonymously
match orders so that traders do not alert the wider market
to their intentions from the publicity, for stocks and bonds.
Thus, concerns are acute that stock pricing is no longer transparent.
Dark pools usually publish trades with very little detail
days after execution. Two of the biggest villains are the
broker dealers Goldman Sachs in the United States and Credit
Suisse in Europe. They are essentially squeezing out other
electronic trading venues, as well as exchanges, resulting
in lower fees for competitors. Dark pools owned by brokers
and large market makers accounted for 70% of all dark US equity
trade volume in April, up from 64% in December and from
58% a year earlier, according to Rosenblatt Securities, which
tracks 18 such hidden arenas. The dark pools run by banks
have only recently gained accepted usage in Europe. Their
success or failure is being observed closely. Some anticipate
the US equity markets to fan out into possibly 40 different
venues. The NYSE Euronext recently urged the Securities &
Exchange Commission to examine the impact of the early activity
at some new US trading venues, essentially urging them to
do their job. Absent new regulation, such dark pools sponsored
by the big banks will continue to grow quickly.
The US financial markets evolve in their
corruption, while at the same time control the regulatory
bodies in a virtual straightjacket. The intelligent observer
can infer such hidden market activity, by noting a simultaneous
drop in bid size and ask size, with zero information provided
to public eyes. Any claim of transparent and equilibrium based
US financial markets is loaded with total stupidity and ignorance.
See " Wall Street' s Secretive & Dangerous Dark
Pools" by Tyler Durden (CLICK HERE)
for more background and detailed information on this scummy
facet to US markets.
Eric deCarbonnel of Market Skeptics claims
" Dark Pools unstated primary purpose is
insider trading, and insider trading does not coexist well
with regulation. In other words, if dark pools
are effectively regulated, they will disappear. The passage
of Reg NMS extended the trade-through rule to all US exchanges
that trade equities, including the New York Stock Exchange,
Nasdaq, and American Stock Exchange. It was the most sweeping
and controversial change to US markets in 30 years, and made
manipulating all US exchanges far easier. Growth in dark pools
equals growth in insider trading. It stands as testament to
the corruption of US capital markets. As long as there is
no penalty or risk for insider trading, more and more firms
will engage in it." If an illegal trade can be made,
assured of profit, using privileged information, the dark
pool is perfect, since it contains no records or oversight.
SERIOUS CHALLENGES TO THE
◄$$$ CHALLENGE TO US FEDERAL RESERVE
WITH A FORMAL AUDIT COMES TO THE FOREFRONT SOON $$$. A legal
challenge began in February 2009, when Congressman Ron Paul
(R-Texas) introduced HR 1207, the Federal Reserve Transparency
Act of 2009, which would force a formal accounting audit of
the USFed by the USGovt Accountability Office. Shortly after
its introduction, it boasted 11 co-sponsors, and three were
Democrats. The House of Representatives now shows 221 co-sponsors
for HR 1207. With 435 House members in all, a bill needs 218
for a simple majority. Paul has intentionally written the
bill to be quite short, thus needing very little amendment
or scrutiny for comprehension. In fact, HR 1207 is only 446
words. Last Tuesday, Rep John Boehner of Ohio, the Republican
Leader, signed on, to make 156 Republicans to join 51 Democrats
so far to support HR 1207.
The US Supreme Court has no interest in disclosure. The
central bank won a supporting vote from the US Supreme Court,
when it gave a roadblock decision against the American people
(more like flipping the bird or saying F.U.) on the challenge
by Bloomberg, using the Freedom of Information Act to request
disclosure of how the USFed used $2 trillion dollars in open
market operations. Usage of $700 billion in TARP funds is
yet another example of disbursements in darkness. The USCongress
hires the USFed as consultant agency, yet it has no clue or
control over the USFed asset management of operations. National
security is constantly invoked for currency management. Furthermore,
the USFed and Dept Treasury constantly claim the other body
has responsibility when pinned down by Congressional committees.
Without an audit, the USCongress remains ignorant of how much
gold the nation owns. The Clinton-Rubin gang borrowed almost
all of it at near 0% and sold it for private speculative gains
one decade ago. Some of today' s financial structure problems
extend from those reckless criminal sales.
The next challenge for action on the HR 1207
bill is to avoid having it tabled and set aside to collect
dust, especially since it was crafted by the minority party
(not in power). The Financial Services Committee has 71 members,
and it is responsible for decisions of bring a bill to the
House floor for debate and a vote. Right now, the bill
has 34 co-sponsors, including a handful of Democrats, meaning
that just two more co-sponsors would give the bill a majority
in the important committee. A committee majority would
almost assure approval to send the bill to the House floor.
My pragmatism only wants open debate, some press coverage,
and the light of day to shine on this challenge. The US Supreme
Court is tainted in my view, as it revealed its seamy underbelly
in November 2000, after a decade of decisions to increase
police authority on search & seizure. They have been deadly
silent on the Patriot Act for seven years, which undercuts
the entire Bill of Rights. Its integrity has faded. See a
progress report by Jake Towne, a Champion of the Constitution
which had an update with news very recently.
In my view, the US Federal Reserve started
as an institution to control the US banking system by the
Elite of London and Old Europe almost a century ago in 1913.
After the Vietnam War, it gradually functioned on the side
as an oversight group for money laundering on CIA narcotics
sales. In the last decade, it slid further into disrepute
when it sanctioned Wall Street mortgage bond fraud, condoned
Fannie Mae bond fraud, and was the actual site for JPMorgan
counterfeit of USTreasury Bonds. Simply stated, it is a chemical
factory and sewage treatment plant and criminal shell game
and money laundering operation that coordinates actions with
the USGovt regulatory bodies, the USDept Treasury, several
Wall Street firms, and various US security and military independent
wings. My claim is that the USFed is the center for
the financial crime syndicate.
The momentum behind initiatives to force
accountability and transparency on the USFed could contribute
to bringing down the USTreasury Bond structure built atop
the USDollar, and hasten the demise of the US$ itself.
A truly independent audit of the USFed' s assets (both bond
collection and gold hoard) could reveal its bankrupt insolvent
condition. As confidence and reputation are lost, what could
follow might be a panic that turns global in a rout of the
USDollar. Watch the US Supreme Court for clues on defense
or lost control. One particular source suggests that in the
midst of US banking system turmoil, failed US banking function,
uncontrolled USGovt deficits, and bloated USFed balance sheets,
the USFed might resign its contract with the USCongress. That
would result in a technical immediate USTreasury Bond default,
since no further sales or refunds could follow.
◄$$$ INDICATIONS GROW LOUDER THAT USFED
CHAIRMAN BERNANKE IS SOON TO BE REPLACED $$$. The most likely
candidate is the current head of White House Council of Economics
Advisors, Lawrence Summers. By the way, he is the only economics
advisor with an office in the White House wing. Bernanke won
the job by his preachings that the USEconomy could be saved
with rampant free money dropped upon households, by using
the monetary printing press at essentially zero cost, by flooding
the banking system in such a way as never to permit deflation
to occur. Those reasons all qualify as heretic to the entire
central bank treatise. After three years on the job, Bernanke
can now serve as a fall guy in the rear view mirror, as
the cost of monetization appears to be lost credibility for
the USFed, a deluge of uncontrollable liquidity facilities
for banks, a tacit attempt to replace elements of the US banking
system with adjunct roles by the USFed itself, a runup on
long-term USTreasury bond yields, and diverse foreign revolt.
His legacy would be complete and total monetary inflation,
the well-known historical cause for capital destruction. With
Bernanke painted as the fall guy, history can continue to
revere Alan Greenspan, a very erroneous unjustified tribute.
When Summers came into focus and entered
the spotlight last week, the message seems to grow louder.
He gave what seemed like an introductory speech on his philosophy,
which might have been deemed out of place without expectation
of his new appointment as USFed Chairman. Summers is much
more a political animal than Bernanke, much more arrogant
too. He has a long list of people who hate working with him,
even talking to him. His selection would be fit a scenario
where the USFed came crashing down in the next couple years.
However, he is NOT so much a Goldman Sachs creature. He is
more a Harvard School of thought disciple, a former president
of the university (home of the Enron design and experiment,
its criminal fraud execution, and insider trading). The rivalry
between Quantitative Monetarists in Chicago and Keynesians
in Harvard is strong. My theory all along is that the posts
go to the losers and crime syndicate leaders. This fits since
Keynesian principles have been totally discredited, without
much realization. Bernanke has misread every chapter of this
disaster. He is the passive professor, the avowed inflation
engineer, with no previous political or banking connections
to the crime syndicate seats of power. His only apparent advantage
is willingness to crank every conceivable liquidity mechanism,
but in REACTION.
EVIDENCE ON 911 & IRAQ
◄$$$ MORE CHEMICAL EVIDENCE HAS CONFIRMED
THE WORLD TRADE CENTER DEMOLITIONS ON 911 FOLLOWING THE AIRCRAFTS
SLAMMING INTO THE BUILDINGS. NO DISPUTE ON THE INITIAL CRASHES,
BUT PLENTY OF CONTROVERSY ON THE DEMOLITION AFTERWARDS WITH
OVER 2200 PEOPLE STILL IN THE BUILDINGS WHEN THE BOMBS WENT
OFF $$$. (Personal warning: If you choose to make conclusions
first, then dismiss evidence when the issue is far too disruptive
to a belief system, do not read further!)
This story is too important to leave alone.
In April of 2009 a scientific paper was published in a respectable
peer-reviewed journal, the Open Chemical Physics Journal.
The paper is entitled " Active Thermitic Material
Discovered in Dust from the 9/11 World Trade Center Catastrophe"
released by the prestigious journal. This paper provides
indisputable evidence that a highly engineered explosive
called nano-thermite was found in the dust of all three buildings
at the World Trade Center site. This advanced explosive incorporating
nano-technology is only available to sophisticated military
labs. So a finger is pointed possibly at the USMilitary,
which was ordered to stand down (lower guard). Distinctive
reddish gray chips discovered in all four sets of samples
collected from separate sites show marked similarities. The
properties of these chips were analyzed using optical microscopy,
scanning electron microscopy, X-ray energy dispersive spectroscopy,
and differential scanning calorimetry. One would expect all
explosive material to be incinerated, fully burned, but not
so, thus evidence of the genocide crime. The red portion of
these chips is found to be an unreacted thermitic material
and highly energetic. That explains why the ruins smoldered
for a full month after 911, with few questions asked by the
lapdog press. See the Prudent Press article (CLICK HERE).
A few hundred eyewitness accounts of numerous
large explosions in the basements of the WTC buildings continue
to circulate among police, firemen, and emergency medical
staff. They were there at the scene on 11 September 2001.
None of their accounts ever were entered into the official
911 Commission report, nor appeared in news network reports,
much to the frustration of widows who pushed for more investigation.
One subscriber from New York has a personal friend on the
police staff, who personally witnessed explosions. My conclusion
remains: this was the largest and most heinous crime on US
soil in a century, covering a grand bank heist of gold bullion,
bearer bonds, and diamonds. My information comes from over
ten sources. The fact that the USGovt and press networks continue
to run with the official story tells me of complicity at the
highest level of government. The War on Terrorism is phony,
and an insult to our intelligence.
◄$$$ IRAQ DEATH SQUAD GROWS AS USMILITARY
RETREATS, BRINGING YET ANOTHER SHAMEFUL CHAPTER TO A WAR THAT
HAD A FALSE FOUNDATION, HAS CLAIMED WELL OVER ONE MILLION
CIVILIAN LIVES, AND REVEALS OVER $50 BILLION MISSING FROM
ITS RECONSTRUCTION SLUSH FUNDS $$$. (Personal warning: If
you choose to support any and all military action, and wave
the flag, then do not read further!)
Mine is a different criterion for patriotism,
that excludes stolen funds on a grand scale, bloated slush-filled
service contracts, mass civilian deaths, usage of experimental
weapons on civilians, and especially narcotics trafficking,
as troops are now in my opinion being abused and exploited.
An elite special death squad operates inside Iraq. Its
mission is both political and military. The Iraq Special Operations
Forces (ISOF) is staffed by nine battalions and 4564 men,
making it approximately the size of the US Army Special Forces
in Iraq. They are well equipped, well trained, and act efficiently
and covertly in killing their targets from opposing political
parties and suspected militia groups.
They call themselves ' The Dirty Brigade'
and boast to the family members of their victims during their
abductions. Those who oppose the brigade publicly are typically
murdered the next day. The brigade was designed and constructed
by the USMilitary, but is free of many of the controls that
most governments employ to rein in such lethal forces. It
is unaccountable to Iraqi ministries and the normal political
process. Regard the force as a special private army or security
agency (Gestapo) that answers directed to prime minister Nuri
al-Maliki, commanded independently of the police and army.
By design and Maliki directive, the Iraqi Parliament has no
influence over the ISOF Gestapo and knows little about its
mission. The Nation wrote " The
ISOF will become Maliki' s personal death squad. The
prime minister is looking for re-election, and there are not
that many restraints on his ability to target political opponents…
They kill and no one will hold them accountable, because they
belong to the Americans." US Special Forces claim
this independent chain of command ' might be the perfect structure'
for counter-terrorism worldwide. President Obama has said
he will institutionalize irregular warfare capabilities, an
indirect blessing. One might scratch the head and ask who
the terrorists are? Clearly, this is a sordid side to the
' Liberation' movement to install freedom. See the article
in The Nation (CLICK HERE).
◄$$$ THE USA RECEIVED A LOW RANKING
ON PEACE FACTOR $$$. The folks at the Global Peace Index gave
the United States a ranking of #83, behind every single industrial
nation, and behind many nations known for little integrity.
Their criteria include gun registration, military activity,
prison population, prevalence of crime, and level of violence.
The US prison population exceeds far too many entire countries.
In many respects, the US remains stuck in the Old West mentality
of aggression, violence, and lawlessness, except now it originates
at the top, with leadership.
THE GRAND T.A.R.P. FUND FRAUD
◄$$$ TARP FUND REPAYMENT IS A STORY
IN EXTORTION & FRAUD, A MIXED CONFUSING CONTROVERSIAL
STORY, WHERE THE TRUTH IS NOT A DESIRABLE ENDPOINT $$$. Begin
with the official story, totally sanitized for public consumption,
with editorial comments interspersed. Ten of the nation's
largest banks were given approval last week to repay $68 billion
in USGovt bailout money from the TARP funds. They will soon
be free from restrictions on executive compensation that makes
it hard to keep their top-performing executives, as they complain.
More like the banks are sick to death of USGovt meddling
with pay packages for corrupt bank executives, who failed
miserably and brought about the death of their banks, or turning
them into zombies. The USDept Treasury has officially
approved the repayment of funds from the Troubled Asset Relief
Program created by the USCongress in October. Analysts claim
that for the 10 banks to return $68 billion in bailout money
shows some stability has returned to the system. The Stress
Tests were used as cover for the approval, even though they
were absurdly unrealistic and rigged. All eight banks that
received TARP money and passed the USGovt Stress Tests confirmed
they received permission to repay the bailout funds. They
are: JPMorgan Chase, American Express, Goldman Sachs, US Bancorp,
Capital One, Bank of New York Mellon, State Street, and BB&T.
Morgan Stanley failed the low-fence test, but it raised enough
capital to repay its TARP money, now approved. Northern Trust
was not among the 19 banks involved in the Stress Tests, but
was given permission to repay the TARP bailout funds.
The amounts the banks would repay to the
USGovt are: JPMorgan $25 billion, Morgan Stanley $10 billion,
Goldman Sachs $10 billion, US Bancorp $6.6 billion, Capital
One $3.6 billion, American Express $3.4 billion, BB&T
$3.1 billion, Bank of New York Mellon $3.0 billion, Northern
Trust $1.6 billion, and State Street $2.0 billion.
Even President Obama admitted, "
This is not a sign that our troubles are over, far from it."
Some alert bank analysts questioned whether the repayment
of TARP money obscures dangers in the broader banking industry.
Smaller banks suffer with billion$ in failing commercial real
estate loans. Large banks continue to hold voluminous toxic
mortgage bonds and other credit assets, as the toxic waste
remains and is valued with gross exaggeration. To date more
than 600 banks have received nearly $200 billion in TARP funds,
while 22 smaller banks already have repaid borrowed funds.
The 10 banks are set to return funds initially used to buy
preferred shares in the banks. They trade like stocks but
act like bonds, paying regular dividends.
Some of the TARP funds were disbursed more
widely, unlikely to be recovered. The $70 billion used to
cover raging fires at failed insurance giant American International
Group ended up in the pockets of insider syndicate players.
Goldman Sachs steered a criminal reimbursement to itself,
above market values for its Credit Default Swaps, with continued
controversy. In no way will the USGovt recoup more than half
of the entire $700 billion, even with tiny exaggerated profits
from the banks. The US banking sector remains in dire straits,
best characterized by INSOLVENCY, a problem yet unaddressed.
Upon granting TARP funds, the USGovt received warrants from
the banks. As a result of higher bank stock prices, the warrants
provide substantial profits for taxpayers. This is a motive
for the USGovt to cooperate with a return phony FASB accounting
rules. Dividend payments received by the USGovt from the
TARP participants total $4.5 billion to date. Three of the
biggest US banks (Citigroup, Wells Fargo, Bank of America)
are still deeply rooted to the bailout. Both Citigroup and
Bank of America are dead, and Wells Fargo is near death, all
deception and malarkey aside.
After repayment of TARP funds, these banks
remain dependent on USGovt support, such as debt guarantees
from the Federal Deposit Insurance Corp (FDIC) and direct
USFed credit lines. American Express and US Bancorp claim
that repayments will reduce earnings for the quarter. Mark
Williams, a finance professor at Boston University and former
USFed examiner, argued that the banks should keep as much
capital as possible until the USEconomy turns around. He believes
they are motivated too much to eliminate TARP politics from
their internal management. He said, " We are not at
the bottom of the banking crisis, so why is it that
the regulators are letting these banks reduce their capital
cushion? Should they stumble again, taxpayers will
have to come to rescue." Banks have been chafing
under limits on executive compensation, as well as restrictions
to hire foreign employees. They claim key employees have been
leaving to join small private firms and foreign banks.
The Stress Tests justified integrity of these
dead financial ruined structures, and enabled 16 of the 19
banks to raise $75.2 billion in stock sales. What an orchestrated
fraud perpetrated on the investment community for the direct
purpose of recapitalization! Geithner cautioned senators in
early June that the USDept Treasury needs continued flexibility
to inject money into the financial sector, but warned that,
despite Congressional wishes, fund repayments would not necessarily
be used to reduce federal debt. Geithner has reassured that
the fund paybacks made less likely any additional money to
be requested from the USCongress. Regulators like the FDIC
want to avoid the embarrassment and mismanagement of directing
repayment of TARP funds only to have banks return months later
in worse shape, seeking another handout. See the Finance Yahoo
article (CLICK HERE).
◄$$$ THE UNWIND OF TARP IS A MAJOR
BLACK EYE $$$. My view on the TARP funds has many sides,
almost none being conventional, which are to be summarized.
The big banks are involved in many illegal activities, ranging
from bond fraud to naked shorting of USTreasurys to money
laundering of narcotics funds to payoffs under violent threat
possibly. They want to remove prying eyes to crime syndicate
activity by underlings at the Dept Treasury and the USCongress,
which contains numerous committees and staff members. Some
suspicion swirls that banks receiving TARP funds have been
forced to purchase USTreasurys as part of the deal, which
they wish to stop. The bank stock rally was phony and contrived,
designed to lift prices for planned secondary stock sales.
The banks attempted to relieve their insolvency, as they raised
$75.2 billion in stock sales. Controversy remains from executive
perks, lavish parties, and usage for $4.5 billion in dividends.
A valid concern is for bank executives at a few levels not
wishing to work closely with USGovt officials, much like unwilling
subsidiaries of the Dept Treasury. Dividends should have been
eliminated entirely, like the European banks did. In fact,
the stocks should have been taken down to zero, but raising
funds for bank equity would have been made impossible.
Many far more credible factors are involved,
each receiving extremely little publicity. The plan is to
keep the dead banks functioning, or appearing to function,
to raise capital at grossly inflated prices, to continue the
fraud enough to steal more money, to dominate in Congressional
fund provisions, to enable more corporate mergers (using inflated
worthless paper stock), and worse. The USGovt has to minimize
the risk of a repeat episode, a return by the banks for more
TARP funds soon after, a certain embarrassment, and certain
to include mammoth political fights. The financial crime syndicate
wants no more publicity or public duels than the Mafia does.
One might assume that the banks must pass certain requirements,
must make certain promises, if permitted to exit gracefully,
much like a crime syndicate for its members. An effort is
underway to deflect anti-bank political sentiment, preferential
elite welfare programs, and subsidized heavy executive perks,
all of which have angered the public to a great degree. Recall
that the US Congressional Inspector has recommended 40 criminal
investigations for fraud related to TARP fund usage. No
legal action has taken place. So perhaps a deal has been cut
with the USCongress, not to prosecute any fraud if a grand
initiative to repay TARP funds occurs.
◄$$$ MOZILO OF COUNTRYWIDE IS CHARGED
WITH FRAUD BY THE SEC $$$. In the US District Court of California,
the Securities & Exchange Commission has charged Angelo
Mozilo (Chief Executive Officer), David Sambol (Chief Operating
Officer), and David Sieracki (Chief Financial Officer) with
securities fraud. Opening lines of the formal document stating
criminal charges includes:
" To support this false characterization,
Mozilo, Sieracki, and Sambol hid from investors that Countrywide,
in an effort to increase market share, engaged in an unprecedented
expansion of its underwriting guidelines from 2005 and into
2007. Specifically, Countrywide developed what was referred
to as a ' supermarket' strategy, where it attempted to offer
any product that was offered by any competitor. By the end
of 2006, Countrywide' s underwriting guidelines were as wide
as they had ever been, and Countrywide was writing riskier
and riskier loans. Even these expansive underwriting guidelines
were not sufficient to support Countrywide' s desired growth,
so Countrywide wrote an increasing number of loans as ' exceptions'
that failed to meet its already wide underwriting guidelines,
even though exception loans had a higher rate of default…
Thus, each of the defendants was aware, but failed to disclose,
that Countrywide' s current business model was unsustainable."
The parade of prosecutions has thus begun,
although the Powerz might be offering mere sacrificial lambs
outside the New York jurisdiction for slaughter and quick
shift of attention once completed. The Mozilo thug is offered
for imprisonment, but he is from California, and has few connections
to the Wall Street crime syndicates. See the formal complaint
If justice were really served, at least 80 indictments would
be served from leading executives at several dozen banks and
top financial firms operating in New York City, like American
Intl Group and Fannie Mae, even major private equity firms.
Unfortunately, the guilty parties are working under the aegis
of USGovt protection after nationalization, or run the Dept
Treasury from the Goldman Sachs revolving doors. It will
be a long wait before any criminal prosecution occurs for
any of several easy marks who worked or work at executives
on Wall Street firms. Numerous fraud kings continue to
ply their trade, with total impunity and protection by the
law enforcement officials and regulators they own.
CALIFORNIA DREAM TURNED A
◄$$$ CALIFORNIA IS THE LARGEST SCALE
ZONE OF ECONOMIC WRECKAGE IN THE NATION, A PLIGHT, A TRAGEDY
$$$. Unemployment takes a severe toll on households, families,
communities, and at times entire states. California is unique
always. To begin with, it probably is the most gorgeous state
in the entire union, with breathtaking panoramas, seacoasts,
national parks, and by far the prettiest city in San Francisco.
It is a trendsetter state. It tests social norms and runs
risks with new concepts, occasionally with unfortunate results,
like with insanely risky home loans. It is the center for
Option ARM mortgages, those nasty adjustable rate mortgages
that permitted people to buy too big a house, make too little
a monthly payment, and eventually suffer the trigger event
when rising loan balances. All the while home equity has
shriveled from declining home prices, burning the homes from
The nation has over 25 million jobless. The
USEconomic recession has so far put over six million people
out of work, and destroyed over $11 trillion in household
wealth. This is in no way a common recession. California now
stands out in home foreclosures as a leader, in home price
declines as a leader, and in state budget crises as a leader,
all tragic story items. My interest in the state is for its
exemplary role, and spearhead in nation patterns, as a national
economic, political, and social upheaval is in progress. Also,
12.5% of Hat Trick Letter subscribers hail from the Golden
State. Its unemployment has the distinction of producing 12
of the top 20 MSA (metropolitan statistical areas) in the
jobless rate. Michigan only produces two of the other 8 MSA
regions, since its devastation is concentrated in Detroit,
actually Flint where the carmaker plants are located.
The MyBudget publication made the following
comments in clarification. They wrote, " First, there
is a misconception with California. What is portrayed on the
media is this all powerful and extremely wealthy state (well,
maybe before our budget flew off a cliff at least). Yet
the reality is more akin to a Banana Republic run by a small
ruling elite. The next two groups are those struggling
to remain in the Middle Class while the other half of the
state barely makes ends meet. That is why we find that 12
of the 20 top unemployment rates come from California. California
now has the highest unemployment rate since World War II,
coming in at 11 percent."
The nation must retool for a totally new
fast changing world. The temporarily cheap oil prices and
gasoline prices are no more, as crude oil sits above $70 per
barrel. Home prices must come down another 20% to match wage
cuts or job losses, since aggregate demand has been severely
weakened. The Elkhart Indiana MSA serves a perfect illustration
of a community that was based on an industry that cannot remain
intact in the United States. It is the center of the recreational
vehicle (RV) industry. Many people already feel like they
are living in depression level situations. See the MyBudget360
article (CLICK HERE).
◄$$$ THE CALIFORNIA BUDGET IS A TRAIN
WRECK, ONE WORTH WATCHING, SINCE THE FEDERAL GOVT WILL SOON
BE FORCED TO ENTER THE PICTURE WITH SUBSTANTIAL STATE AID
PACKAGES $$$. Until now, the USGovt has pandered its colossal
aid to Wall Street and the financial crime syndicate that
controls both the USDept Treasury and key power centers in
the USCongress. Fannie Mae is a Congressional playground of
fraud, theft, and influence. The 50 states are in trouble,
at least 75% of them, big trouble, but to date have been largely
ignored, with all attention given to Wall Street and its appendages.
California is the most likely state to win USGovt
aid on a huge scale, which would open the gateways for numerous
states to win aid. Their state bonds and municipal
bonds have been the source of steady distress and growing
crisis. The USGovt federal deficit is soon to escalate from
massive state aid. California is at the forefront.
California faces a possible shutdown in the
next six to eight weeks, or even sooner. They have exhausted
all channels for revenue and credit, and will soon run out
of cash. Approval of past budgets helps little, since it faces
a $24.3 billion deficit again already. Governor Schwarzenegger
has already proposed massive cuts to education, health care,
and prisons. Early prisoner release sounds like a dangerous
option. He is pursuing structural reform to install more efficiency,
but now with knives. He proposes to eliminate and consolidate
more than a dozen state departments, boards, and commissions,
a gesture made in the past. A few months ago, the state began
consolidating information technology groups. The governator
has proposed a consolidation of agencies that oversee financial
institutions and tax collection operations. He pins some hope
on tax code modernization concepts to arrive in July, which
are hoped to make revenues more reliable and less volatile,
thus avoiding some budget crises.
California state Controller John Chiang has
reported that state revenues in May fell by $1.14 billon,
a 17.7% drop from a year ago. Worse, the revenues in the
current fiscal year fell short of official estimates in the
budget plan by $827 million, indicating either mismanagement
or deteriorating conditions. Chiang said, " Without
immediate solutions from the governor and legislature, we
are less than 50 days away from a meltdown of state government.
A truly balanced budget is the only responsible way out of
the worst cash crisis since the Great Depression."
A state revenue collapse is in progress, which match the USGovt
federal tax revenue decline. State revenues from personal
income taxes tumbled by 39.3% in May from a year ago, while
revenues from corporate taxes fell by 52.1%, and revenues
from sales taxes sagged by 7.6%, according to the controller
office. The state cannot seem to get out of its own way,
since a two thirds majority is required to pass any budget
legislation. Sacramento seems stuck constantly in deadlocks,
while its house burns.
Governor Schwarzenegger has many spending
cuts on the table, but other measures have sparked controversy.
He has proposed state borrowing from local governments and
the scrapping of some state programs like the welfare program.
Rivals have countered with their own budget plan that includes
spending cuts but saves key programs. The showdown battle
approaches with the new fiscal year on July 1st. A final budget
approval enables California to raise short-term funds by selling
revenue anticipation notes (RAN) on the municipal debt market.
If pressed, California could sell revenue anticipation warrants
(RAW), an idea widely opposed since it costs more. State Treasurer
Bill Lockyer cites $7 billion to $9 billion is needed in short-term
debt notes to sell. See the Pacific Business News article
and the Reuters article (CLICK HERE).
Very big risks loom for some social reaction
to deep economic distress, beginning in California. Usually
the source is over food or fuel. Their population is extremely
active and vocal, with many racial groups well represented.
The state is slowly becoming a tinderbox, needing only a spark
to erupt. Distress, despair, and loss will soon give way to
frustration, anger, and violence. Much precedent exists from
past riots in recent decades. It is coming in an unstoppable
manner. As William Buckler of The Privateer
says, " California faces a deadline at the end of
June. It cannot balance its budget which now is in deficit
to the tune of $US 24.3 billion. Instead of raising taxes,
it has to cut spending by $US 24.3 billion. This is the economic
territory of spontaneous social upheaval. A tiny spark, an
everyday next to nothing incident, can set off a chain reaction.
As has happened before, the National Guard is called out to
quell the riots. Emergencies are declared with night curfews
and mass arrests follow."