iBankCoin
Joined Nov 11, 2007
31,929 Blog Posts

“Pretty Soon We Will Own the Fucking Air That You Breathe”

 

“Giant bank holding companies now own airports, toll roads, and ports; control power plants; and store and hoard vast quantities of commodities of all sorts. They are systematically buying up or gaining control of the essential lifelines of the economy. How have they pulled this off, and where have they gotten the money?

In a letter to Federal Reserve Chairman Ben Bernanke dated June 27, 2013, US Representative Alan Grayson and three co-signers expressed concern about the expansion of large banks into what have traditionally been non-financial commercial spheres. Specifically:

[W]e are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining.

After listing some disturbing examples, they observed:

According to legal scholar Saule Omarova, over the past five years, there has been a “quiet transformation of U.S. financial holding companies.” These financial services companies have become global merchants that seek to extract rent from any commercial or financial business activity within their reach.  They have used legal authority in Graham-Leach-Bliley to subvert the “foundational principle of separation of banking from commerce. . . .

It seems like there is a significant macro-economic risk in having a massive entity like, say JP Morgan, both issuing credit cards and mortgages, managing municipal bond offerings, selling gasoline and electric power, running large oil tankers, trading derivatives, and owning and operating airports, in multiple countries.

A “macro” risk indeed – not just to our economy but to our democracy and our individual and national sovereignty. Giant banks are buying up our country’s infrastructure – the power and supply chains that are vital to the economy. Aren’t there rules against that? And where are the banks getting the money?

How Banks Launder Money Through the Repo Market

In an illuminating series of articles on Seeking Alpha titled “Repoed!”, Colin Lokey argues that  the investment arms of large Wall Street banks are using their “excess” deposits – the excess of deposits over loans – as collateral for borrowing in the repo market. Repos, or “repurchase agreements,” are used to raise short-term capital. Securities are sold to investors overnight and repurchased the next day, usually day after day.

The deposit-to-loan gap for all US banks is now about $2 trillion, and nearly half of this gap is in Bank of America, JP Morgan Chase, and Wells Fargo alone. It seems that the largest banks are using the majority of their deposits (along with the Federal Reserve’s quantitative easing dollars) not to back loans to individuals and businesses but to borrow for their own trading. Acquiring a company or a portion of a company mostly with borrowed money is called a “leveraged buyout.” The banks are leveraging our money to buy up ports, airports, toll roads, power, and massive stores of commodities.

Using these excess deposits directly for their own speculative trading would be blatantly illegal, but the banks have been able to avoid the appearance of impropriety by borrowing from the repo market. (See my earlier article here.) The banks’ excess deposits are first used to purchase Treasury bonds, agency securities, and other highly liquid, “safe” securities. These liquid assets are then pledged as collateral in repo transactions, allowing the banks to get “clean” cash to invest as they please. They can channel this laundered money into risky assets such as derivatives, corporate bonds, and equities (stock).

That means they can buy up companies. Lokey writes, “It is common knowledge that prop [proprietary] trading desks at banks can and do invest in a variety of assets, including stocks.” Prop trading desks invest for the banks’ own accounts. This was something that depository banks were forbidden to do by the New Deal-era Glass-Steagall Act but that was allowed in 1999 by the Gramm-Leach-Bliley Act, which repealed those portions of Glass-Steagall.

The result has been a massively risky $700-plus trillion speculative derivatives bubble. Lokey quotes from an article by Bill Frezza in the January 2013 Huffington Post titled “Too-Big-To-Fail Banks Gamble With Bernanke Bucks“:

If you think [the cash cushion from excess deposits] makes the banks less vulnerable to shock, think again. Much of this balance sheet cash has been hypothecated in the repo market, laundered through the off-the-books shadow banking system. This allows the proprietary trading desks at these “banks” to use that cash as collateral to take out loans to gamble with. In a process called hyper-hypothecation this pledged collateral gets pyramided, creating a ticking time bomb ready to go kablooey when the next panic comes around.

That Explains the Mountain of Excess Reserves….”

Full article 

[youtube://http://www.youtube.com/watch?v=la8wY-R_fqU 450 300]

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Behind the Veil

[youtube://http://www.youtube.com/watch?v=gTUcvKO3js8 450 300]

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De Novo

[youtube://http://www.youtube.com/watch?v=bZsazm0VCXA 450 300]

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Documentary: 20/20 Hindsight – Censorship on the Front line

“He who passively accepts evil is as much involved in it as he who helps to perpetrate it. He who accepts evil without protesting against it is really cooperating with it.”

Martin Luther King, Jr.

[youtube://http://www.youtube.com/watch?v=WINDtlPXmmE 450 300]

This documentary has 9 parts. The continuing clip will appear in the upper left hand corner after the current clip has ended.

[youtube://http://www.youtube.com/watch?v=WHOujO-Qnlw&list=PL72B7DEA62E80469A 450 300]

 

 

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Absolutely Criminal

So all the activists and truthers were ridiculed when they cried that the gulf oil spill should be cleaned up with a natural enzyme found in the ocean.

But the powers that be had CoRexit at the ready which magnified the problem and harmed innocent people.

An Australian 60 minutes report reveals the horrors of  a 3 year study called Crude Solutions:

Part 1

Part 2

images (9)

 

 

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The Big Chill

It appears the NASDAQ has been closed for nearly two hours now. The boob tube has no answers and rumors are circulating that high frequency trading orders may have clogged the system….perhaps dark pools need to do some desk to desk block orders in secret.

The NASDAQ is not saying anything other than they are trying to get the exchange open ASAP.

Developing…

[youtube://http://www.youtube/watch?v=jPnZZTVp_2A&list=PL3C0F0835165F4DCD 450 300]

images (22)

 

images (3)

 

hammock1

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UNCLE ScAM

Check out the folly in accounting. Perhaps more than folly as the title suggests…

Infograph

Perhaps the missing money ended up here:

 

[youtube://http://www.youtube.com/watch?v=FfkZ1yri26s 450 300] [youtube://http://www.youtube.com/watch?v=ynTUL2zTQMg 450 300]

 

 

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CHRONIC HISTORY

[youtube://http://www.youtube.com/watch?v=bwc9pBSsr7k 450 300]

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100 Miles of Fascism

[youtube://http://www.youtube.com/watch?v=lq0B1bdk6PU 450 300] [youtube://http://www.youtube.com/watch?v=Pa525QD-tbs 450 300]

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Busting Popular Myths

[youtube://http://www.youtube.com/watch?v=ptDd9ftNaq8 450 300]

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KASHMIR

[youtube://http://www.youtube.com/watch?v=sfR_HWMzgyc 450 300]

Farvahar001

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Have Uncle Sam and the State Pay Your Debts

“……”Chap 48, 48 Stat. 112” is the Remedy

Since the Federal Government took away the gold coin money in 1933, thus causing the States to suspend operations by preventing them from honoring their obligation to pay their debts in gold and silver coin, then there had to be a remedy. “Chap 48, 48 Stat. 112” is the remedy, not just for the States, but also for the sovereign men and women who created the States. Until gold and silver coinage is reinstated in sufficient quantities for general circulation, that remedy cannot be repealed. Congress may have repealed some parts of “HJR-192”, or even all of it, because “HJR-192” is merely a resolution for Congress and its subjects. However, the true remedy is provided to the people by Public Law: “Chap 48, 48 Stat. 112”.

Until Lawful Money Returns, the Remedy will ALWAYS be there

Until the State Governments come out of suspension, by the Federal Government’s placing sufficient quantities of lawful money into general circulation, your remedy, pursuant to “Chap 48, 48 Stat. 112” cannot be repealed and will continue to be there. The remedy of the subjects/citizens found at “HJR-192” might not be there because their remedy is nothing but a resolution, but the remedy of the sovereign found at Public Law: “Chap 48, 48 Stat. 112” will still be there because a sovereign’s remedy is Public Law.

If, as many uninformed sovereigns claim, the promise that the Federal Government will pay your debts, dollar for dollar, is no longer valid, then these sovereigns have no basis for claiming their remedy by using the 1099-OID process for the refund of out-of pocket funds expended to pay their debts. Either (1) you believe that the Federal Government repealed your remedy, and therefore, there is no 1099-OID refund process available to you, or (2) you believe the Government has an obligation to pay your debts, dollar for dollar, and therefore, the 1099-OID process for a refund is your remedy and you can use it to recover the funds you expended to take care of your debt obligations. You can’t believe your remedy has been repealed, and then try to claim your remedy by asking for a refund using the 1099-OID process….”

Full article

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A Public Service Announcement for All $GOOG Chrome Users

Have not checked on  the claims here, but perhaps you should be aware of the possibility:

“Daniel G. J.
PrisonPlanet.com
August 17, 2013

One of the most popular features of Chrome is its ability to store passwords. That way they pop up automatically when you go to a function like email or Facebook. Elliot Kember, a software developer, discovered that anybody who clicks on the Chrome settings icon can see all of the passwords on that computer if he or she goes to the show advanced settings and passwords and forms sections.

The passwords are obscured, but clicking next to them causes them to appear in plain text. The text can be easily copied and emailed or seen by anybody that uses the computer. That means it would be easy for a hacker or malicious stranger that opened a computer with Chrome on it to see all of your passwords.

What’s really disturbing is that the head of Chrome development at Google, Justin Schuh, told The Guardian that he knows all about the flaw…..”

Full article 

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Hindenburg Omen Reaches Highest Levels Since 2008 Crash

“Are we heading for a major stock market decline?  Warnings about a crash of the financial markets are quite common these days, and usually they don’t materialize.  But this time may be different.  A number of top analysts are pointing out the fact that the biggest cluster of “Hindenburg Omens” has appeared since the last stock market crash.  And those that have studied this insist that the more “Hindenburg Omens” there are in a cluster, the stronger the signal is.  Meanwhile, another very disturbing sign is the fact that the yield on 10 year U.S. Treasuries is starting to soar again.  On Tuesday it shot up from 2.62% to 2.727%.  As I have written about previously, the yield on 10 year U.S. Treasuries is the most important number in the U.S. economy right now.  If that number continues to rise, it is going to be very, very bad news for the financial system.

But before I discuss rising interest rates any further, I want to talk about this unusual cluster of Hindenburg Omens that we have just witnessed.  In a previous article, I shared a list of the criteria that are commonly used to determine whether a Hindenburg Omen has appeared or not…

1. The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

2. The smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.

3. That the NYSE 10 Week moving average is rising.

4. That the McClellan Oscillator ( a market breadth indicator used to evaluate the rate of money entering or leaving the market and interpretively indicate overbought or oversold conditions of the market)is negative on that same day.

5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs).

When the Hindenburg Omen makes an appearance, it is supposedly a signal that the U.S. stock market will likely experience a significant decline within the next 40 days.

But of course this has not always happened when a Hindenburg Omen has appeared.  However, what we are seeing right now is a highly concentrated cluster of Hindenburg Omens.  According toSentimenTrader’s Jason Goepfert, the last time such a cluster appeared was before the last stock market crash…

Sometimes a topic in the market takes hold and it’s hard to shake it off. One of those is the technical “market crash” signal called the Hindenburg Omen.

It has its boosters and its detractors, and we’re not going to get caught up in debating its merits. We’ve discussed it for 12 years, always with the same arguments.

On June 10th, we outlined the market’s historical performance after suffering at least 5 signals from the Hindenburg Omen within a two-week period. Stocks were consistently weak afterward, and proved to be so again, at least for a while.

With the latest market rally, the Omens are flaring up again.There have been 5 Omens triggered out of the past 8 trading sessions (your data may vary—we’re using the same sources we’ve always used for historical data). That’s actually the closest-grouped cluster since early November 2007.

It’s extremely rare to see as many Omens occurring together as we’ve seen over the past 50 days. The last time was prior to the bear market in 2007.

The time before that was prior to the bear market in 2000.

Will the pattern hold up this time?

We’ll see.

But without a doubt we have been witnessing some very unusual activity in the markets over the past couple of weeks.  In fact, according to Tyler Durden of Zero Hedge, we have now seen a Hindenburg Omen occur five times in the last seven trading days…

For the 5th time in the last 7 days, equity market internals have triggered an anxiety-implying Hindenburg Omen. Based on our data, this is the most concentrated cluster of new highs, new lows, advancing/declining based confusion on record. The last few occurrences have not ended well (though obviously not disastrously) but as the creator of the ‘Omen’ notes, the more occurrences that cluster, the stronger the signal.

But the Hindenburg Omen is not the only sign that a stock market crash may be coming.  Marc Faber, the publisher of the Gloom, Boom & Doom Report, says that the markets are repeating the exact same patternthat we saw just before the stock market crash of 1987…

“In 1987, we had a very powerful rally, but also earnings were no longer rising substantially, and the market became very overbought,” Faber said on Thursday’s “Futures Now.” “The final rally into Aug. 25 occurred with a diminishing number of stocks hitting 52-week highs. In other words, the new-high list was contracting, and we have several breaks in different stocks.”

Faber says that’s exactly where we find ourselves this August.

Faber is projecting a stock market decline of “20 percent, maybe more” in the month ahead.

Meanwhile, as I mentioned at the top of the article, the yield on 10 year U.S. Treasuries shot up to 2.727% today.  The Federal Reserve is starting to lose control of long-term interest rates, and the only way that Fed officials are going to be able to get control back is to substantially raise the level of quantitative easing that they are doing, but of course that would create a whole bunch of other problems.

For now, the Fed keeps dropping hints that “tapering” is coming.  But if the Fed does “taper”, there might not be any support for bond prices from the private sector.  BAML credit strategist Hans Mikkelsenrecently detailed why this is the case…

Since the financial crisis, Treasuries have been supported by numerous types of investors, including mutual funds/ETFs, banks, [emerging market] central banks and the foreign official sector (in addition to the Fed of course). However, these four sources of Treasury demand are unlikely to support the market in the short term going forward.

First, with continued outflows from non-short term high grade bond funds, money managers are unlikely to provide support for Treasuries any time soon.

Second, with increasing loan demand reducing the need for banks to support profitability by buying Treasuries, as well as significant mark-to-market losses in [available-for-sale] portfolios that in the future will count against capital, banks are unlikely to add long-duration assets in a rising interest rate environment.

Third, in light of continued depreciation of [emerging market] currencies, it appears unlikely that [emerging market] countries are experiencing inflows that need to be reinvested in Treasuries.

Finally, custody holdings of Treasuries continue to decline, suggesting foreign official sales of Treasuries.

If the yield on 10 year U.S. Treasuries continues to rise sharply over the coming months, that could potentially cause the 441 trillion dollar interest rate derivatives bubble to implode.  As John Embry recently told King World News, that would be “disastrous” for the global financial system…”

Full article 

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