Obama and the New Aristocracy

U.S. President Barack Obama has blocked accountability, everywhere he can.

(1) Obama did it for the top officials who had caused illegal tortures to be used by the Government.

(2) Obama did it also for the top officials who had caused mega-banks to crash in 2008 (whose crimes have, in turn, led to taxpayer-bailouts of the banks that they ran and often still run, all courtesy of Bush-Obama). In order to keep their Ponzi-economy going, his Administration (including his Federal Reserve) is now letting Wall Street’s federally-backstopped mega-banks “Enron”-ize the commodities markets: oil, gas, coal, metals, even uranium, and (yet again) electricity.

(3) Obama did it also for the top officials (led by G.W. Bush himself) who had caused a certain country, which posed no threat to us, to be invaded by us in 2003, and subsequently to produce over $3 trillion in economic losses for the U.S., plus thousands of pointless deaths, and millions of unnecessary refugees, and the resulting development of today’s fanatical ISIS: this country that was raped by the U.S. is, of course, Iraq — and an unprovoked and totally propaganda-based invasion of any country is an international war crime, but the U.S. did such a thing, and no one has been punished for having done it, nor even (such as Condoleezza Rice) for having participated in it.

Obama blocked accountability, even for that  enormous crime, which was a crime against not only Iraq, but also against America itself, especially against the veterans, who suffer greatly, even today, from the hell Bush and his co-conspirators wrought there.

The masterminds, the planners, and the liars, for that invasion, have all been unprosecuted by Obama, just as they were unprosecuted by their originator and mega-criminal, President George W. Bush.

By contrast, to compare against Obama’s record of non-prosecutions against these elite mega-criminals — these people who were never held accountable for anything, but who produced immense damages to Americans and to people around the world — Obama is simply an ordinary President in his record of charging and prosecuting crimes by the far-more-numerous categories of non-elite crooks, these being the violators who had failed their responsibilities, as opposed to those elite criminals, whom Obama prohibited from being prosecuted for having violated their accountabilities. (As examples of Obama’s enforcing  responsibilities, consider that, on 31 December 2008, 21 days before Obama became President, the total population in U.S. federal prisons was 201,280. By the time of 31 December 2012, after four years with him as President, it was 217,815, or 8.2% larger. But, then, both federal and state prison populations started a decline; and, as of 16 October 2014, the federal prison population is 213,901, which still is 6.3% higher than when Obama first entered office. So, when an American has failed his responsibilities under law, Obama has been fairly harsh, he has not  left those crimes unprosecuted, and unpunished.) …..

http://www.washingtonsblog.com/2014/12/39612.html

G20 Signs Off on Cyprus-style Bail-ins to Take Deposits and Pensions

On the weekend of November 16th, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again. It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board’s “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” which completely changes the rules of banking.

Russell Napier, writing in ZeroHedge, called it “the day money died.” In any case, it may have been the day deposits died as money. Unlike coins and paper bills, which cannot be written down or given a “haircut,” says Napier, deposits are now “just part of commercial banks’ capital structure.” That means they can be “bailed in” or confiscated to save the megabanks from derivative bets gone wrong.

Rather than reining in the massive and risky derivatives casino, the new rules prioritize the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds.

“Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors.

It is a neat solution for bankers and politicians, who don’t want to have to deal with another messy banking crisis and are happy to see it disposed of by statute. But a bail-in could have worse consequences than a bailout for the public. If your taxes go up, you will probably still be able to pay the bills. If your bank account or pension gets wiped out, you could wind up in the street or sharing food with your pets.

In theory, US deposits under $250,000 are protected by federal deposit insurance; but deposit insurance funds in both the US and Europe are woefully underfunded, particularly when derivative claims are factored in. The problem is graphically illustrated in this chart from a March 2013 ZeroHedge post:


Deposits vs Reserves vs Derivs_0 #2

More on that after a look at the new bail-in provisions and the powershift they represent.

Bail-in in Plain English

The Financial Stability Board (FSB) that now regulates banking globally began as a group of G7 finance ministers and central bank governors organized in a merely advisory capacity after the Asian crisis of the late 1990s. Although not official, its mandates effectively acquired the force of law after the 2008 crisis, when the G20 leaders were brought together to endorse its rules. This ritual now happens annually, with the G20 leaders rubberstamping rules aimed at maintaining the stability of the private banking system, usually at public expense.

According to an International Monetary Fund paper titled “From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions”:

[B]ail-in . . . is a statutory power of a resolution authority (as opposed to contractual arrangements, such as contingent capital requirements) to restructure the liabilities of a distressed financial institution by writing down its unsecured debt and/or converting it to equity. The statutory bail-in power is intended to achieve a prompt recapitalization and restructuring of the distressed institution.

The language is a bit obscure, but here are some points to note:

  • What was formerly called a “bankruptcy” is now a “resolution proceeding.” The bank’s insolvency is “resolved” by the neat trick of turning its liabilities into capital. Insolvent TBTF banks are to be “promptly recapitalized” with their “unsecured debt” so that they can go on with business as usual.
  • “Unsecured debt” includes deposits, the largest class of unsecured debt of any bank. The insolvent bank is to be made solvent by turning our money into their equity – bank stock that could become worthless on the market or be tied up for years in resolution proceedings.
  • The power is statutory. Cyprus-style confiscations are to become the law.
  • Rather than having their assets sold off and closing their doors, as happens to lesser bankrupt businesses in a capitalist economy, “zombie” banks are to be kept alive and open for business at all costs – and the costs are again to be to borne by us. …..

http://www.washingtonsblog.com/2014/12/new-rules-cyprus-style-bail-ins-take-deposits-pensions.html

“Kids Say No to Pharma” Rebels Take Medical Cartel by Storm

Satire, dear ones, but uplifting…

kids say no to pharma

Given all the powerful and heavily armed opposition, Henry asked Jungle Girl what she thought about KSNP’s prospects for the future.

With a ferocity that Henry has only seen once — when he told the CEO of PfizerGlaxo-SmithKline that his yearly bonus had been cut from $28 million to $17 million — Jungle Girl said:

“We’re here to stay — whatever it takes.  We’re here to save humanity.  We’ll never stop.”

Read the full article at “Kids Say No to Pharma” Rebels Take Medical Cartel by Storm.

Giant Banks Take Over Real Economy As Well As Financial System, Enabling Manipulation On a Vast Scale

Top economists, financial experts and bankers say that the big banks are too large … and their very size is threatening the economy.  They say we need to break up the big banks to stabilize the economy.  They say that too much interconnectedness leads to financial instability.

But – as shown below – the big banks are getting bigger and bigger … and getting into ever more interconnected markets.

Indeed, big banks aren’t even really acting like banks anymore.  Big banks do very little traditional banking, since most of their business is from financial speculation. For example, we noted in 2010 that less than 10% of Bank of America’s assets come from traditional banking deposits.

The big banks are manipulating every market.   They’re also taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.

And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year. More from Matt Taibbi, FDL and Elizabeth Warren.

A 2-year bipartisan probe by the Senate Permanent Subcommittee on Investigations has shined a light on this problem, culminating in a new 400-page report.

Senator Levin – the Chair of Subcommittee – summarizes the findings from the investigation:

“Wall Street’s massive involvement in physical commodities puts our economy, our manufacturers and the integrity of our markets at risk,” said Sen. Carl Levin, D-Mich., the subcommittee’s chairman. “It’s time to restore the separation between banking and commerce and to prevent Wall Street from using nonpublic information to profit at the expense of industry and consumers.”

“Banks have been involved in the trade and ownership of physical commodities for a number of years, but have recently increased their participation in new ways,” said Sen. John McCain, R-Ariz. “This subcommittee’s hearing is an opportunity to examine that involvement, determine whether it gives rise to excessive risk, and identify potential causes for concern that warrant further oversight by Congress and financial regulators.”

One focus for the subcommittee is the management of Detroit-area metal warehouses run by Metro Trade Services International, the largest U.S. warehouse company certified to store aluminum warranted by the London Metal Exchange for use in settling trades. Since Goldman bought Metro in 2010, Metro warehouses have accumulated up to 85 percent of the U.S. LME aluminum storage market.

Since Goldman took over the warehouses, the wait to withdraw LME-warranted metal has increased from about 40 days to more than 600 days, reducing aluminum availability and tripling the regional premium for storage and delivery costs.

The investigation revealed a number of previously unknown details about these deals: that Goldman’s warehouse company paid metal owners to engage in “merry-go-round” deals that shuttled metal from building to building without actually shipping aluminum out of Metro’s system; that the deals were approved by Metro’s board, which consisted entirely of Goldman employees; and that a Metro executive raised concerns internally about the appropriateness of such “queue management.”

Goldman didn’t just store aluminum; it was involved in massive trades of aluminum at the same time its warehouse operations were affecting aluminum availability, storage costs, and prices. After Goldman bought Metro, it accumulated massive aluminum holdings of its own, and in 2012, added about 300,000 metric tons of its own aluminum to the exit queue at its warehouses. …

Of course, the Federal Reserve – instead of regulating the banks, encouraged them to buy all of these physical assets. As Reuters notes:

[The Senate report] also points the finger at the Federal Reserve, saying the central bank has taken insufficient steps to address the risks taken by financial holding companies gathering physical commodities. The Fed in some cases was unaware of the growing risk, the report said.

Pam Martens points out:

Adding to the hubris of the situation, the Wall Street banks’ own regulator, the Federal Reserve, gave its blessing to this unprecedented and dangerous encroachment by banking interests into industrial commodity ownership and has effectively looked the other way as the banks moved into industrial commerce activities like owning pipelines and power plants. …