Courtesy of Brandon Smith @ Alt-Market:
I am continually astonished at the refusal of many otherwise intelligent people to consider the evidence or even the possibility that there is, in reality, no fundamental political or philosophical conflict between the power brokers of the East and the West. As I outlined in great detail in Russia Is Dominated By Global Banks, Too, the truth is they are both working toward the same goal; and both ultimately benefit from an engineered and theatrical display of international brinksmanship.
Russia, like the United States, is utterly beholden to globalist financiers through organizations like the International Monetary Fund and the Bank for International Settlements. Russia’s global economic adviser in matters ranging from investment image to privatization is none other than Goldman Sachs.
Goldman Sachs has also worked closely with the Ukrainian government since 2011, and it started its advisory work with Ukraine for free. (Whenever Goldman Sachs does something for free, one should take special note.) Banking elites have been working both sides of the fence during the Russia versus Ukraine charade.
Russia has continued to borrow billions of dollars from Western banks, including Deutsche Bank and Credit Suisse, year after year, proving that they are not averse in the slightest to working closely with “evil Western robber barons”.
Russian President Vladimir Putin meets with Mr. New-World-Order himself, Henry Kissinger, on a regular basis; and according to Putin’s press secretary, they are “old friends.” Putin’s meetings with Kissinger began almost immediately after he first took power in 2000.
Putin’s relationship with Kissinger has been so pronounced that the Russian Foreign Ministry gave Kissinger an honorary doctorate in diplomacy, and Putin placed Kissinger at the head of a bilateral “working group” — along with former KGB head and multilateralist (globalist) Gen. Yevgeny Primakov — dealing with foreign policy. Continue reading
Well who would of thought it, Goldman Sachs and JP Morgan involved in nefarious commodity deals, forcing prices up for the very people who bailed them out. So many expletives to choose from, courtesy of Matt Taibi @ Rollingstone:
Call it the loophole that destroyed the world. It’s 1999, the tail end of the Clinton years. While the rest of America obsesses over Monica Lewinsky, Columbine and Mark McGwire’s biceps, Congress is feverishly crafting what could yet prove to be one of the most transformative laws in the history of our economy – a law that would make possible a broader concentration of financial and industrial power than we’ve seen in more than a century.
But the crazy thing is, nobody at the time quite knew it. Most observers on the Hill thought the Financial Services Modernization Act of 1999 – also known as the Gramm-Leach-Bliley Act – was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years.
Wall Street had spent much of that era arguing that America’s banks needed to become bigger and badder, in order to compete globally with the German and Japanese-style financial giants, which were supposedly about to swallow up all the world’s banking business. So through legislative lackeys like red-faced Republican deregulatory enthusiast Phil Gramm, bank lobbyists were pushing a new law designed to wipe out 60-plus years of bedrock financial regulation. The key was repealing – or “modifying,” as bill proponents put it – the famed Glass-Steagall Act separating bankers and brokers, which had been passed in 1933 to prevent conflicts of interest within the finance sector that had led to the Great Depression. Now, commercial banks would be allowed to merge with investment banks and insurance companies, creating financial megafirms potentially far more powerful than had ever existed in America.
All of this was big enough news in itself. But it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.”
Complementary to a financial activity. What the hell did that mean? Continue reading
So this is a stress test for the financial system with China Credit Trust Co. Ltd. (CCT) due to default on principle and interest on the 31st of January, time to grab the popcorn. Courtesy of ZeroHedge:
As we first reported one week ago, the first shadow default in Chinese history, the “Credit Equals Gold #1 Collective Trust Product” issued by China Credit Trust Co. Ltd. (CCT) due to mature Jan 31st with $492 million outstanding, appears ready to go down in the record books.
Of course, in a world awash and supported by moral hazard, where tens of trillions in financial asset values are artificial and only exist due to the benevolence of a central banker, it would be all too easy to say that China – fearing an all too likely bank run on comparable shadow products (of where there a many) as a result – would just step in and bail it out. However, at least until today, China has maintained a hard line on the issue, indicating that as part of its deleveraging program it would risk a controlled default detonation, in order to realign China’s credit conduits even though such default would symbolically coincide with the first day of the Chinese New Year.
In turn, virtually every sellside desk has issued notes and papers advising what this event would mean (“don’t panic, here’s a towel”, and “all shall be well”), and is holding conference calls with clients to put their mind at ease in the increasingly likely scenario that there is indeed a historic “first” default for a country in which such events have previously been prohibited. Continue reading
Courtesy of City AM:
BANK shares fell yesterday as fears mounted that global bond trading is facing a prolonged decline, after Deutsche Bank swung to a surprise loss in the final quarter of 2013.
The German lender joined Goldman Sachs and Citigroup, who last week reported weak fixed income trading revenues.
Deutsche Bank’s shares dived another 5.4 per cent, and sent shockwaves through markets – other firms heavily involved in fixed income also saw their stock fall.
Icap’s shares dived 4.31 per cent, while fellow broker Tullett Prebon’s edged down 0.85 per cent.
Barclays saw its shares dip 2.01 per cent and RBS fell 1.29 per cent – it still has bond market exposures despite slimming its investment arm. Continue reading
It comes as no surprise that JP Morgan, after getting into the commodities and warehousing racket, amongst many many others is being accused of being involved in outright fraud, again! I’ll let Bloomberg explain…
When the Federal Reserve gave JPMorgan (JPM) Chase & Co. approval in 2005 for hands-on involvement in commodity markets, it prohibited the bank from expanding into the storage business because of the risk. Five years later, JPMorgan bought one of the world’s biggest metal warehouse companies.
While the Fed has never explained why it let that happen, the central bank announced July 19 that it’s reviewing a 2003 precedent that let deposit-taking banks trade physical commodities. Reversing that policy would mark the Fed’s biggest ejection of banks from a market since Congress lifted the Depression-era law against them running securities firms in 1999.
“The Federal Reserve regularly monitors the commodity activities of supervised firms and is reviewing the 2003 determination that certain commodity activities are complementary to financial activities and thus permissible for bank holding companies,” said Barbara Hagenbaugh, a Fed spokeswoman. She declined to elaborate.
“When Wall Street banks control the supply of both commodities and financial products, there’s a potential for anti-competitive behavior and manipulation,” Brown said in an e-mailed statement. Goldman Sachs, Morgan Stanley and JPMorgan are the biggest Wall Street players in physical commodities.
Of course, when one is a monopoly the revenues follow easily and flow like champers at a bankers part-ay. The trick, of course, is to keep Congress very much unaware of said monopoly and let the fraud continue.
The 10 largest banks generated about $6 billion in revenue from commodities, including dealings in physical materials as well as related financial products, according to a Feb. 15 report from analytics company Coalition. Goldman Sachs ranked No. 1, followed by JPMorgan.
While banks generally don’t specify their earnings from physical materials, Goldman Sachs wrote in a quarterly financial report that it held $7.7 billion of commodities at fair value as of March 31. Morgan Stanley had $6.7 billion.
On June 27, four Democratic members of Congress wrote a letter asking Fed Chairman Ben S. Bernanke, among other things, how Fed examiners would account for possible bank runs caused by a bank-owned tanker spilling oil, and how the Fed would resolve a systemically important financial institution’s commodities activities if it were to collapse.
It’s good to hear that these questions are finally being asked by the US Congress but I have a question. Why has it taken so long for the illustrious leaders of America to figure out that a company, such as JPM or Goldman Sachs, have used monopolistic behaviour to control the majority of commodity markets, control the price and make vast sums of money from driving prices up? This effects billions of people and is not a free market capitalist system, it is so far from it. So why has it taken so long? It wouldn’t have anything to do with the banks being massive contributors to all political parties and employing armies of lobbyists now would it? I’m getting too cynical in my old age. Just a quick point, the Fed works purely to benefit America’s banks and to provide them with whatever top-line amenities they need and are confident they can pass by under the noses of dumb congressmen paid off and as guilty in said corruption.
Now, “it is virtually impossible to glean even a broad overall picture of Goldman Sachs’s, Morgan Stanley’s, or JPMorgan’s physical commodities and energy activities from their public filings with the Securities and Exchange Commission and federal bank regulators,” Saule T. Omarova, a University of North Carolina-Chapel Hill law professor, wrote in a November 2012 academic paper, “Merchants of Wall Street: Banking, Commerce and Commodities.”
The added complexity makes the financial system less stable and more difficult to supervise, she said in an interview.
“It stretches regulatory capacity beyond its limits,” said Omarova, who is slated to be a witness at the Senate hearing. “No regulator in the financial world can realistically, effectively manage all the risks of an enterprise of financial activities, but also the marketing of gas, oil, electricity and metals. How can one banking regulator develop the expertise to know what’s going on?”
Now here is the clincher…..
In February 2010, Goldman Sachs bought Romulus, Michigan-based Metro International Trade Services LLC, which as of July 11 operates 34 out of 39 storage facilities licensed by the London Metal Exchange in the Detroit area, according to LME data. Since then, aluminum stockpiles in Detroit-area warehouses surged 66 percent and now account for 80 percent of U.S. aluminum inventory monitored by the LME and 27 percent of total LME aluminum stockpiles, exchange data from July 18 show.
Traders employed by the bank can steer metal owned by others into Metro facilities, creating a stockpile, said Robert Bernstein, an attorney with Eaton & Van Winkle LLC in New York. He represents consumers who have complained to the LME about what they call artificial shortages of the metal.
“The warehouse companies, which store both LME and non-LME metals, do not own metal in their facilities, but merely store it on behalf of the ultimate owners,” said DuVally, the Goldman Sachs spokesman. “In fact, LME warehouses are actually prohibited from trading all LME products.”
Goldman Sachs, doing gods work and humanity a favor and not like when it was shorting RMBS, when Goldman was merely “making markets.” In the meantime, aluminum prices.
Buyers have to pay premiums over the LME benchmark prices even with a glut of aluminum being produced. Premiums in the U.S. surged to a record 12 cents to 13 cents a pound in June, almost doubling from 6.5 cents in summer 2010, according to the most recent data available from Austin, Texas-based researcher Harbor Intelligence. Warehouses are creating logjams, said Chris Thorne, a Beer Institute spokesman.
In conclusion and just like the repeal of Glass Steagall allowed banks to mix deposit collecting and risk-taking divisions, so did the Fed’s landmark 2003 decision which allowed banks to intermingle financial and physical commodities. While the US government and the public seem largely ignorant and without a care that they end up overpaying billions more to Goldman’s and JPM’s employees
which in turn goes on more coke and hookers. Bare in mind that one country where commodities are exceptionally fragmented in their use as both a financial and physical commodity is China. Their growth and figures are questionable but messing with China is a dangerous game to play. Goldman, JPM and BlackRock are brave and have a plan, they have amassed 80% of the world’s copper “on behalf of investors” for non-profit reasons. Looking forward to this was one playing out with all of China’s gold.
Courtesy of the IMF/Goldman Sachs Global ECS research, I present the Euro and periphery growth charts…this as good as it will get and expect the majority to turn red in the near future. I will point out that Spain should be outlined in blue as it received a bailout but hey the figs are from the IMF (insolvent) and Goldman Sachs (also insolvent) so what do you expect.