Sunday, July 1, 2012

PREDICTION: Future Financial Meltdown...L&C

There was a little sipet in the news this past week and even those who are aware of it were distracted by the bigger media event, the Supreme Court ruling on the Affordable Health Care Act. In both cases we all lose. I will not add my two cents into the ObamaCare debate, however I see a financial catastrophe in the Barclays conviction and what it implies and what is not stated.
by Barclays Bank to "fix" the Libor Rate which is the standard used internationally by businesses and consumers. It is a $360 trillion market. Barclays did it to increase profits and to hide their internal bank health. They were fined by agencies in the U.S. and Great Britain. Guilty of falsifying records, Barclays was fined a total of $451.4 million. One U.S. agency received $200 million and one British authority received $92.8 million and the U.S. Justice Department pulled in another $160 million for its criminal division, but of course, no criminal charges will be filed. How many years do you think you or I would have received for the same crime?
Do you want to know where it began? Derivative traders requested the scheme to the Barclay people and came up with the idea to set the loan rate which in turn affected derivative trading. Will those fines ever make their way into the pockets of the traders who were correct in their estimation of the market rate, but they were cheated by the behind-the-scenes affairs of these criminals who should be behind bars and banned from trading? No! And yeah, I know that you and me are not in this type of market, but it reflects on all the behind-the-scene actions that are rigging our markets today and killing free enterprise.
wrote the book and it is becoming gospel for greedy devils like the following Ding-Dong.
One Trader
stated in a email that he would use the firepower of his treasury to control...which translates to me as this: there are loose cannons out there with big egos who have no idea of the catastrophe that they could set in motion. I have stated to you on many occasion, the total value of all the worlds economies is around $65 trillion and these derivative traders are doing transactions over $500 trillion. No one can save us from one mistake and if their is one mistake, it could set a domino chain reaction equivalent to weapons of mass destruction. Thank you, Warren Buffett. By the way the investigation into Barclays Bank was for the period from 2007 until May 2009. Ha! Another sad joke. There are other institutions on the investigative list: Citigroup, Royal Bank of Scotland, Group Plc, UBSAG, Lloyds and Deutsche BankAG. At this pace the above group will pay their fines around 2016. Yea! All this leads to another banking problem, see L&C below.
LIARS and CROOKS: News surfaced that JPMorgan's derivative loss could be in excess of the $2 billion stated by its CEO, Jamie Dimon(I called that one at that time). However, did you know this? Jamie Dimon is the headman at the New York Fed which is one of the 12 districts that makeup the Federal Reserve? It is charged with the health and actions of the regions banks which includes JPMorga. Question: is their conflict of interest for Jamie Dimon? You betcha! You know I'm for ending the Fed, however that meme is slow to take, but in the meantime, the regulations of the Fed should be changed from a banker watching his fellow bankers into a small businessman watching the bankers. End the Fed!