It Takes A Whole Criminal Cartel To Raise A Child

From the enormous and influential gangster banks that have just been fined 5.7 billions of dollars - but no one goes to jail, of course - to a national past time that creates celebrity quarterbacks that cheat and lie about it, we provide an education for the coming generations.

There are articles which assert now that the New England Patriots are not protesting NFL discipline, because the head coach cannot entirely believe the account of his star quarterback.

The Clintons made $30 millions dollars last year due to - gosh, would you believe it!? - their folksiness and God's grace.

When I write the post The Critique Of Ouroboros
http://fatherdaughtertalk.blogspot.com/2015/05/the-critique-of-ouroboros.html

I had not yet read Seymour Hersh's article trashing the official government-media-(intel-military-industrial-complex-yadda-yadda-yadda) account of the death of bin Laden. I wrote the post because I did read the criticism of Mr. Hersh, and I found the criticism so bizarre that I wrote about it.

It was so odd to me that I have looked into the matter, and I tend to side with Mr. Hersh.
The Columbia Journalism Review has harshly criticized the media and government:
http://www.cjr.org/analysis/seymour_hersh_osama_bin_laden.php
The media’s reaction to Seymour Hersh’s bin Laden scoop has been disgraceful

Seymour Hersh has done the public a great service by breathing life into questions surrounding the official narrative of the raid that killed Osama bin Laden. Yet instead of trying to build off the details of his story, or to disprove his assertions with additional reporting, journalists have largely attempted to tear down the messenger.

Barrels of ink have been spilled ripping apart Hersh’s character, while barely any follow-up reporting has been done to corroborate or refute his claims—even though there’s no doubt that the Obama administration has repeatedly misinformed and misled the public about the incident. Even less attention has been paid to the little follow-up reporting that we did get, which revealed that the CIA likely lied about its role in finding bin Laden, which it used to justify torture to the public...

How corrupt are we?

I mean, this is the bin Laden affair where barely a few months had gone by and all the Navy Seals had signed on to book deals and helped provide expert advice to the movie industry...

We live in a Stalinism of the morally deluded.

Since we have nothing of substance to function as a spiritual guide, we create anomalous fairy tales to be our guide. For example, in Syria, we follow the convenient fiction that Assad must be removed at all costs - just as we ten years earlier freely chose to be deluded that Saddam Hussein was behind 9/11 - and that forms our policy of catastrophe.

And we enforce those delusions!

And we teach them to the next generation.

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Clockwork Orange Fools

The reforms to the financial system are not sufficient to preserve it from its own folly again.

What kind of fools actively put their futures at such a risk?

Senator Ted Kaufman in Forbes:
http://www.forbes.com/sites/tedkaufman/2013/07/31/dodd-frank-and-the-next-financial-meltdown/

If you have read any of my previous posts, you know I believe Dodd-Frank has failed to achieve its announced objective: to make the systemic changes necessary to prevent another financial meltdown.

Doing nothing to reduce the size of our too-big-to-fail banks has been its greatest failure. We know our four largest banks are bigger and more complex now than they were when we bailed them out in 2008, with combined assets that amount to 97 percent of 2012 U.S. GDP. We must also acknowledge that for the foreseeable future we have nothing in place that would protect American taxpayers from another necessary bailout if one or all of those banks were in danger of failing.

Since 2009, when I co-sponsored a bill with Senators McCain and Cantwell to reinstate Glass-Steagall in an updated form, I have believed that was by far the best solution to the TBTF  (Too Big To Fail)  problem. The bill went nowhere then, and a similar bill introduced a month ago by Senators McCain, Cantwell and Warren will no doubt suffer the same fate. The Volcker Rule started out as Glass-Steagall-lite three years ago. It has been so watered down that, whatever it looks like when the regulators release it in some final form, it will do nothing about TBTF.

We are left with the “Orderly Liquidation Authority” included in Dodd-Frank—weak tea indeed for a number of reasons. Most importantly, that OLA requires agreements across national borders. Yet the G20’s Financial Stability Board has said that international regulators still lack the power to impose losses on creditors and resolve banks without taxpayer bailouts and that “few jurisdictions have equipped administrative authorities with the full set of powers to resolves banks.” Unless and until we make major changes in the size and complexity of megabanks, Dodd-Frank’s OLA is a paper tiger.

As I write this, the TV news has something about "Knockout Games" where teens go around knocking down older folks. I may as well ask why Life imitates Art so much, and why this society chooses the ignoble choices, such as Clockwork Orange to model itself after.

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Banks and Our Society

The London Inter-Bank Overnight Rate, or LIBOR, is no longer to be allowed to be overseen and set by banks in London, because the banks in London - like everywhere else - have shown that they cannot be trusted.

Read
http://www.bbc.co.uk/news/business-19755863
on LIBOR
and
http://www.bbc.co.uk/news/business-19797396
for more on good old US banks and their shenanigans.

Make you really want to vote fer Romney.
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Future Flash Crash #3

http://fatherdaughtertalk.blogspot.com/2012/03/future-flash-crash.html
 http://fatherdaughtertalk.blogspot.com/2012/03/future-flash-crash-note.html
 http://fatherdaughtertalk.blogspot.com/2012/03/future-flash-crash-note-2.html
 http://fatherdaughtertalk.blogspot.com/2012/06/why-my-banker-thinks-me-mad.html

These are most of the posts on the coming Flash Crash. Of course, if you have been reading the paper (not ogling TV) you know that it keeps on keeping on. In the New York Times Dealbook on August 3, 2012:

 http://dealbook.nytimes.com/2012/08/03/trading-program-ran-amok-with-no-off-switch/

When computerized stock trading runs amok, as it did this week on Wall Street, the firm responsible typically can jump in and hit a kill switch.
But as a torrent of faulty trades spewed Wednesday morning from a Knight Capital Group trading program, no one at the firm managed to stop it for more than a half-hour.
Some Knight employees and New York Stock Exchange officials noticed the blizzard of erratic orders in the minutes after trading started and sent alarmed messages to Knight managers, according to the exchange and Knight employees who declined to be identified discussing the matter.

As Knight struggled to survive on Friday, employees at the company, market overseers and other electronic trading firms were asking the same basic question: Where was the off switch?
Several market insiders said that they were bewildered, because in a market where trading losses can pile up in seconds, executives typically have a simple command that can immediately halt trading.

“Even just a minute or two would have been surprising to me. On these time scales, that is an eternity,” said David Lauer, a trader at a high-speed firm until a year ago. “To have something going on for 30 minutes is shocking.”
Regulators are planning to look into why there was such a lag...

On Friday, Knight, which in the last decade grew into a leading broker for American stocks, climbed off the mat, securing emergency financing that allowed it to continue operating for the day. It also enticed some of its customers to resume sending client stock trades, two days after it disclosed a possibly fatal $440 million loss from the software problem. But it faced a desperate weekend of maneuvering to find a more permanent solution for its woes. Knight’s short-term financing was meant to keep it alive until Monday, when its executives and advisers hope to have deals completed to remove any doubt about the firm’s future.

Our financial system is continually veering out of control, and it seems that no one is willing to face the reality that events happen much too quickly for human beings to keep up with them. There will always be problems, but there is no time left to cope with them and render them harmless.

It is another big wealth-destruction nail driven into the coffins of the middle-class.
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The 2013 Crash

OK, so I'm sounding like NewsMax, the illiterate right-wing rag. I can not help it. We are all mad men thrown together in the world, are we not? We tell our tales, full of sound and fury...

Back on topic now.
The UK suffers from the same kinds of Financial problems we do: an overly complex system which relies upon people who are not skilled enough to administer it, people who are too slow to respond to its fast-as-light workings, and people who are greedy, covetous, and often crooked.

For today's variation on a theme, read the BBC story .

The doomsday scenario for 2013 is:

1) Republicans win White House and a majority in at least one branch of Congress;

2) There is a determined effort to balance the Budget on the backs of the Less-than-Rich;

3) There are problems with China of an as yet undetermined nature: China and the Chinese Communist Party has many problems, and, given that the country is enormous, these problems are enormous;

4) The Banking Sector manages to Flash-Crash, Glitch, Stumble, and Cheat its way into another Bank Failure scenario...

Hello, Saint Leibowitz and the Dark Ages once again.

ps.
You really should familiarize yourselves with the problems of the electronic banking system. Since your own efforts are your best teachers, start studying it.
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Why My Banker Thinks Me Mad Part 2

Somebody asked where I had gotten the notion that financial crashes follow each other in a series of years, the time between crashes being more or less equal to a decreasing Fibonacci series. (Why My Banker...)

Well, I would think by now that anyone would know that certain things just seem to shine into my consciousness; when they are clear and without any obvious self-interest, I pay attention. The ones filled with self-interest - like the winning lottery numbers - are baloney.
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Why My Banker Thinks Me Mad

In posting this I am taking you into my deep confidence: why my banker, who is a very understanding type, thinks me very odd, indeed. I am lucky to have found a banker who finds my eccentricities charming, rather than alarming.

Very briefly: I believe that the financial system will implode in 2013, that year being the end of the next interval of catastrophes, intervals equal in length of years to a Fibonacci decreasing series.
Why a Fibonacci series, God only knows. However, I thought it was obvious that the financial system was losing control over what it does: creating money at the speed of light. (And - by the by - the "printing presses of money" which the government is deemed to turn on and off at will are nothing but these here banks... we tend to think the government has its own presses somewhere in Fort Knox.) (see Future Flash Crash)

2013 is a point estimate, and there is probably an error of plus/minus one to two years at least, due to imprecision at the beginning and at the end of the intervals.

My banker walked me through 2011, through the terrors of risks, known and unknown, old and new - the new ones being domestic political risk of having idiots running the government who thought defaulting on obligations to be a "keen" idea. This risk kicked in on August 2, as I recall when the Dow plummeted 500 points.

My banker mentored me, and I owe him a great debt of gratitude. The notion of a stock market debacle is much more nuanced than that horror that exists in my imagination, and my understanding was much improved...

at least until Chase Bank lost $2 billion dollars this year...

and the most biting criticism and analysis about this debacle are written by bankers themselves in financial blogs and banking journals...

and every explanation is another form of "We lost control!"

If and when the Republicans win in 2012, financial regulation will be dead, and I think my fine, fine madness will suddenly seem old news by the end of a few years.
This does not mean the Democrats will avoid this bit of unpleasantness; the Republicans will merely accelerate and confirm it. Both parties are at fault.
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Too Big To Succeed 2

Hey, I like that title and sobriquet: too big to succeed. I just threw it down for a title.
That is exactly the future of our financial markets.
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ps
The NY Times seems to have done it first. Blast!
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Too Big To Succeed

JP Morgan Chase has revealed a $2 billion trading loss.

http://www.bbc.co.uk/news/business-18030022

For what it is worth - and it is worth almost nothing to me... blast! - I said that this is how it is all going to come apart: the global financial system will lose control of its own bodily functions, and it will succumb to its own form of Lou Gehrig's Disease.

The biggest illusion and scam running today is that the financial system knows what it is doing. I do not mean to imply they are stupid, but I do mean that they cannot handle the complexity they have built.

Since I will at some future time be presented with the check for their further debauchery, I am concerned.
As far as predicting it, the only good that comes from that is an impulse to keep my eye on the ball and nose to the grindstone, and try to establish some sort of sanctuary for the coming unpleasantness.

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Future Flash Crash Note # 2

Referring to "Future Flash Crash" and "Future Flash Crash Note" posted today, I think the point I missed was that we have an economic system of Boom or Bust.
It is pretty obvious and just about everyone knows it. When we are in the Boom phase and cycling upwards, every one is happy and every one is on cable touting stocks to buy. When we cycle into the Bust phase, Suze Orman is on cable telling us to cut up our credit cards and Congress is trying to cut our health care. It varies in some details, but it is pretty much the same schtick each time: Boom or Bust.

We have entire university departments devoted to the science of Boom or Bust. Most of the anti-green movement is devoted to Boom or Bust, sensing in their deep, overlayered ganglia that somehow the Greens want to do away with the Bust phase, probably by moderating the Boom phase, and that smells of the Latakia tobacco smoked by Socialism!

Boom or Bust: learn to love it.
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Future Flash Crash Note

Somebody just now asked me, referring to the post "Future Flash Crash"
http://fatherdaughtertalk.blogspot.com/2012/03/future-flash-crash.html

why we plunge so heedlessly (according to my opinion) ahead on these schemes which may turn out to be harmful.

The answer is Money.
There is more money to be made applying new technology, rather than in making sure it is human and humane and actually good for the planet.

There are absolutely NO lobbyists in Washington lobbying for us and the Earth... at least, none with any money to throw around.
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Future Flash Crash

 Man On A Wire... Philippe Petit at the World Trade Center

Some time ago I said that the next "big debacle" our system of economics and politics will have for us will be a breakdown of the electronic system of finance: the machine will just stop. I think I may have said it just after the flash crash of 2010; I may have said it after reading about banks establishing centers in various parts of the globe to grasp at a 10 nano-second advantage at some wondrous arbitrage in 2011.

Anyway, you get the drift: the system stops. Why? Because we really do not have total control over it. Our control is rather tenuous, at best; things go awry:  large cruise ships run into islands in the broad daylight because the captain is waving at the islanders, markets fall 1,000 points, enormous banks cannot live without cash infusion from the middle class taxpayers, and the energy grid is woefully in disrepair, and the litany of woe goes on.
Add to that the fact that if you have the temerity to throw a handful of Skittles at someone bossing you around, they may shoot you dead, well, you have a society that is doing a good imitation of Philippe Petit doing "Man On A Wire" after a drunken debauch.

How are the plans of the Best and the Brightest coming along?
From Reuters:
http://www.reuters.com/article/2012/03/24/us-bats-trading-idUSBRE82M0W020120324?feedType=RSS&feedName=topNews&rpc=71

In a breakdown that resembled a mini version of the 2010 "flash crash," a series of glitches hit the market debut of BATS Global Markets Inc on Friday, causing the company to take the extremely rare step of withdrawing its initial public offering of shares.
The problems caused the shares of exchange operator BATS to plunge from their $16 offering price and briefly trade for less than a penny on Friday morning, creating havoc in the marketplace and again calling into question the stability of high-speed trading...

"The public should take comfort that circuit breakers are working as they should after the flash crash," said Holly Stark managing member of Efficient Frontiers, a market structure consulting firm in New York.
Since the May 2010 "flash crash" in which nearly $1 trillion in market value disappeared in minutes, the Securities and Exchange Commission under Chairman Mary Schapiro has pledged to crack down on problems in the high-speed electronic marketplace, which regulators worry has grown unstable and perhaps unfair as high-frequency trading has grown in prominence.
The BATS breakdown could trip up, once again, the march over the last decade toward increasingly automated markets in the United States, Europe and elsewhere...

 "It's just another black eye for the fragmented equity structure," said Joe Saluzzi, co-head of equity trading at Themis Trading in Chatham, New Jersey, and a frequent critic of U.S. equities market structure. "Every day we see things like flash crashes and now IPOs that can't get off the ground."

I added the emphasis... did you read that the same way I read it? "Every day we see things like flash crashes..."! "Every day..."??!!

OK. These are the same caliber of minds that are bringing us Genetically Modified Food and new improvements in fossil fuels.

Take Shelter!, as the film of the same name says.

Joe Ratterman, founder of BATS, in better times in 2010

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A Lack of Transparency

Bloomberg sued the Fed under The Freedom of Information Act to get  the data for the story they ran on November 28, 2011, reporting that $7.7 trillion were loaned to banks without any transparency or reporting to Congress. This is an amount far beyond the original TARP funds.

The question is:   If people and lawmakers had known the terrific extent of the banking fiasco, might they not have voted for more stringent financial changes and safeguards than we ended up with in Dodd-Frank?

But we did not know...

 http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html
...

“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”
Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day..

The U.S. jobless rate hasn’t dipped below 8.8 percent since March 2009, 3.6 million homes have been foreclosed since August 2007, according to data provider RealtyTrac Inc., and police have clashed with Occupy Wall Street protesters, who say government policies favor the wealthiest citizens, in New York, Boston, Seattle and Oakland, California.
The Tea Party, which supports a more limited role for government, has its roots in anger over the Wall Street bailouts, says Neil M. Barofsky, former TARP special inspector general and a Bloomberg Television contributing editor.
“The lack of transparency is not just frustrating; it really blocked accountability,” Barofsky says. “When people don’t know the details, they fill in the blanks. They believe in conspiracies.”
In the end, Geithner had his way. The Brown-Kaufman proposal to limit the size of banks was defeated, 60 to 31. Bank supervisors meeting in Switzerland did mandate minimum reserves that institutions will have to hold, with higher levels for the world’s largest banks, including the six biggest in the U.S. Those rules can be changed by individual countries.
They take full effect in 2019.
Meanwhile, Kaufman says, “we’re absolutely, totally, 100 percent not prepared for another financial crisis.”

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Holiday Shopping

Buy locally, and check to see where the things you are buying are made.
We did not do so for the longest time, and things surprised us.

It reminds me of the time 20 years ago (during the Savings and Loan debacle) when I was at a bank and I enquired about FDIC insurance, and the banker sort of laughed, saying that yeah, it was there.... but not like we would ever have a need for it...
or like the Ford salesman 12 years ago who laughed at my question about fuel efficiency; it was a different time.
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Banks and the Probability Fire Department

Reading Baysage on Banks:

http://whatpowderfingersaid.blogspot.com/2011/09/outrageous.html

and he is rightly upset at the $5 fee Bank of America is slapping on the use of their Debit Cards. The bank blames the cost of doing business brought on by the financial reform passed after the 2008 debacle.

(My interest is pure academic, because my wife and I have exactly one debit card, it is not from Bank of America, and we have never used a debit card in our entire lives; credit cards are swiped freely and with a swashbuckling finesse, but never a debit card.)

The 2008 Financial Unpleasantness was NOT caused by the folks that contracted into the sub-prime mortgages.

It was caused by the financial system itself which effectively hid the sub-primes in bundles of financial instruments called Derivatives:  once the sub-prime was bundled, trying finding that needle in the derivatives haystack!
Foreclosure cannot begin if you cannot find the mortgage, and recall that many times the paper work associated with mortgages (Florida comes to mind) could not be found anywhere!

If the sub-prime had been left alone as individual mortgages, they would have gone bad, they would be real losses on the books of  banks, they would be easily identifiable, foreclosures would have been instituted. It would have been unpleasant, but it would work the way it was supposed to work.
In other words, the whole process following on a mortgage gone bad would have occurred. The problem became finding where the bad mortgages were hidden. Nothing about this part of finance could work the way it was supposed to work any longer.
It reached the point in 2008 where banks would not loan to other banks, because there was so much bad paper, and no one knew where it was.
That's why reform was needed. That's the usual scenario: a system breaks down, you fix it.

The process was a lot like this:
There once was a large city with many, many buildings, all wooden structures built closely to each other.In the old bygone days, when a fire call came in, the caller gave the exact location of a fire. The fire fighters went out to that address and took care of the blaze.

In the good modern days just before 2008, it was determined that it was too expensive to actually sit on the telephone, talking to the caller, and writing down the location of a fire. So a new fire-call system was instituted, and now when there was a fire, a red light lit up, and the fire department had to guess where the fire actually might be.

They could draw addresses from a hat and use a fair coin to toss and chose among them.
Then they went out to battle the blaze. If they found it, they fought the fire the exact same way they always had.
The worst part of the whole fire fighting process was finding where the fire was.
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Banks

I do not understand the government's approach to Toxic Assets and the banks which hold them. From the ASIA TIMES: http://www.atimes.com/atimes/Global_Economy/KD03Dj02.html Geithner's dirty little secret By F William Engdahl ...Today, five US banks, according to data in the just-released Federal Office of Comptroller of the Currency's Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default. The top three are, in declining order of importance: JPMorgan Chase, which holds a staggering $88 trillion in derivatives; Bank of America with $38 trillion, and Citibank with $32 trillion. Number four in the derivatives sweepstakes is Goldman Sachs, with a mere $30 trillion in derivatives; number five, the merged Wells Fargo-Wachovia Bank, drops dramatically in size to $5 trillion. Number six, Britain's HSBC Bank USA, has $3.7 trillion. After that the size of US bank exposure to these explosive off-balance-sheet unregulated derivative obligations falls off dramatically. Continuing to pour taxpayer money into these five banks without changing their operating system, is tantamount to treating an alcoholic with unlimited free booze... Why has the criminal Commodity Futures Modernization Act of 2000 , which created the playing field for these abuses, not been repealed? This is the act which forbade regulatory oversight of derivatives. If you forget, there was a serious infection of derivatives in the 90's. I remember something about how the pension fund for Orange County, California, had lost some incredible amount back then, because it had invested in derivatives. Why did then Senator Phil Gramm exempt it from scrutiny? Why has Gramm not been called to account for his crimes? Why has he not been summoned to testify before Congress? ( I think he was, but he was handled with the respect due a law-maker.)

A Theme Gone Awry

My theme was like this:
The Poor and all their Hustlings and Machinations and Skulduggery spent trying to outwit, fool, and scam the Man, the Rich, the Banks, etc., is symbolized by Brer Rabbit;
The Government, seemingly educated and erudite, yet basically a scoundrel, is symbolized by Brer Fox;
 The Big Banks, stupid, slow, and brainless - always being tricked into bad deals by the Poor (i.e., Brer Rabbit ), and being lectured to and whupped by the Government is Brer Bear.

The problem is that all the TARP money that Brer Fox has given to Brer Bear has been used to enrich Brer Bear and his fellow Bears, and precious little has been used for its intended goal. In this, Treasury Secretary Paulson - like Alan Greenspan before him - had "faith" in the goodness and wisdom of Wall Street and Big Banks.

However, Brer Bear outfoxed Brer Fox.

Brer Rabbit? He jus' laughin'.

(He also sayin' not to throw him into that Foreclosure Patch. That must be yet another scam the Poor and Improvident are fixin' to run on us!)

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