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By Mike Whitney
Is it possible to make hundreds of billions of dollars in profits on securities that are backed by nothing more than cyber-entries into a loan book?
It's not only possible; it's been done. And now the scoundrels who cashed in on the swindle have lined up outside the Federal Reserve building to trade their garbage paper for billions of dollars of taxpayer-funded loans. Meanwhile, the credit bust has left the financial system in a shambles and driven the economy into the ground like a tent stake. The unemployment lines are growing longer and consumers are cutting back on everything from nights-on-the-town to trips to the grocery store. And it's all due to a Ponzi-finance scam that was concocted on Wall Street and spread through the global system like an aggressive strain of flu. This isn't a normal recession; the financial system was blown up by greedy bankers who used "financial innovation" game the system and inflate the biggest speculative bubble of all time. And they did it all legally, using a little-known process called securitization.
By Yalman Onaran
Big banks in the U.S. say they’re on the mend. The five largest were profitable in the first quarter, rebounding from record losses for the industry in the fourth quarter. Share prices have jumped, with the KBW Bank Index doubling since March 6.
Treasury Secretary Timothy Geithner, after “stress testing” 19 banks on their ability to withstand a worsening economy, declared in early May that Americans can be confident in the banks’ stability and resilience. Wells Fargo & Co. and Morgan Stanley were among banks raising $43 billion in new capital since then through share sales.
“With our capital and assets, stressed as they have been, we can go back to focusing all our attention on managing our business and restoring value,” Citigroup Inc. Chief Executive Officer Vikram Pandit said after Geithner’s examinations were completed.
The revival may be short-lived. Analysts who have examined the quarterly profits and government tests say that accounting rule changes and rosy assumptions are making the institutions look healthier than they are.
By Kurt Nimmo
As HR 1207 gains momentum and co-sponsors in the House of Representatives, the Federal Reserve is planning to fight the tide calling for an audit of its books by hiring a veteran lobbyist to “manage its relations with Congress,” according to Reuters.
The Fed plans to hire Linda Robertson, who previously worked for now-defunct energy company Enron, as well as the Clinton administration. She is currently head of government, community and public relations at The Johns Hopkins University in Baltimore. Robertson “spent eight years in senior positions at the Treasury Department, working for three secretaries: Lloyd Bentsen, Robert Rubin and Lawrence Summers,” a bio posted on The John Hopkins University website states.
Robert Rubin, as secretary of the Treasury, recommended that Congress pass legislation to reform or repeal the Glass-Steagall Act of 1933, while Lawrence Summers in the same capacity organized the looting of Russia, stripping one trillion dollars from Russia’s struggling economy in the name of the bankers.
“Members of Congress have chafed at the Fed’s bold use of its emergency powers and in particular its multibillion-dollar bailouts of investment bank Bear Stearns and insurer American International Group,” Reuters continues. “Critics also bristle at the Fed’s practice of maintaining the confidentiality of the companies that borrow directly from the central bank on the grounds that divulging their names would risk runs on those institutions.
By Stephen Lendman
Some of the best ideas are often the simplest. When applied to the global economic crisis, the solution is easier than imagined. What's hard, in fact a Gordian Knot, is the political will to embrace it. But even matters that great can be solved by a bold stoke, and according to legend, Alexander the Great's "Alexandrian solution" was achieved with one stroke of his sword, cutting the Knot in half. Applied to the global economic crisis, it means addressing it with effective policies, not ones wrecking America and other troubled nations worldwide.
Economist Michael Hudson explains that "debt leveraging is what caused our economic collapse," so piling on more ("The Recovery Plan from Hell" he calls it) makes things worse, especially the way it's done:
-- in America, by a private banking cartel Federal Reserve bailing out its members to enrich them - the key giant ones referred to as Wall Street; and
-- the US Treasury doing the same thing; it let the federal debt skyrocket to stratospheric levels and affirmed Adam Smith's dictum in The Wealth of Nations that no country ever repaid its debts, surely not huge ones in a private banking cartel run state, and therein lies the problem - easily solved with a bold stroke, thus far not taken nor will it without mass public action demanding it.
Which is why this article is written, inspired by the work of others. Economist Michael Hudson for one. Global Research.ca editor Michel Chossudovsky another, and noted author and writer Ellen Brown for her extraordinary book titled "Web of Debt" and her explanation of how "Cash-Starved States Need to Play the Banking Game" the same way as North Dakota.
By Kurt Nimo
It looks like the Federal Reserve may finally have something to worry about now that HR 1207 is finally gaining serious steam. If enacted, HR 1207 will amend title 31 of the United States Code and reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States. In other words, for the first time since 1950, the criminals at the Federal Reserve will be forced by law to open their books.
HR 1207 was sponsored and introduced by Rep. Ron Paul. On February 26, 2009, it was referred to the House Committee on Financial Services. It now has 179 co-sponsors (see the list of sponsors below).
By Mathew Scott
It appears that credit card issuers are insisting upon exercising their right to abuse their customers in the name of higher profits. A survey of recent activities by the top eight credit card issuers reveals that since the Federal Reserve announced rule changes designed to curb unfair credit card industry practices last December, the companies have implemented even more onerous practices, raised interest rates more aggressively and increased the number of fees that they can impose on their customers.
The Center For Responsible Lending (CRL) released its findings on Monday and according to the report, Citigroup (C), Bank of America (BAC), J.P. Morgan Chase (JPM), Capital One (COF), HSBC (HBC), Discover (DFS), American Express (AXP) and Well Fargo (WFC) have each increased interest rates on existing balances for many of their account holders on an "any time, any reason" basis within the last six months. This practice will be illegal under the new Fed rules which take affect in July 2010. The CRL estimates that at least 10 million card holders have been affected, and some have seen increases of 10 percentage points or more on their existing rate at a time when many consumers are having trouble staying afloat.
Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went, and the trillions of off balance sheet obligations. Inspector General Elizabeth Coleman responds that the IG does not know and is not tracking where this money is.
The biggest crime with regards to this whole mortgage nightmare is that the BANKS DID NOTHING TO EARN THE MONEY THEY CLAIM TO HAVE LENT PEOPLE. The fractional reserve banking scam allows the bankers to literally create money out of thin air. They do this after they get someone to sign on the dotted line. They then make a computer journal entry and WA LA, the banks claim ownership of the digital dollars and then lend them to the so-called new homeowner. On top of this, the bank then lists the new mortgage as an asset upon which they can lend out 10 times more money. So when they put a $200,000 mortgage on their books, they can then create another 2 million dollars out of thin air to lend to a bunch of other schmucks. So not only do they steal 3 times the value of your house in mortgage and interest payments, they ramp that $200,000 mortgage asset into $2 million which they then makes 3 times the value on as well through the interest charges they tack onto to those loans.
None of the money banks lend come out of their assets. It's ALL created out of thin air. So the banks cannot prove they've actually suffered any loss since they did nothing to earn the money they lend in the first place. It's the biggest fraud in the history of the planet. Please see "The Money Masters" for a complete history on money and banking and learn exactly how we've been ripped off for centuries by the loan sharks, liars and thieves called bankers.
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I received this story about what the banks are really doing to "help" people from one of our supporters . She said:
"I notice that Organizing for America (Obama's Web Site) has “testimonials” of how the Obama presidency is helping ordinary folks. I happen to know my story is not unique. After I sent my story to several people I know, I have received replies that my experience is not atypical of dealing with Citimortgage. Where’s the messiah now?"
I wonder whether you will have the courage to share my story. Here is an example that demonstrates how the housing program is significantly flawed. I happen to know that my story is highly representative of the way in which this "good intention, poor execution" program works in the REAL world. By the REAL world, I am speaking of those way beyond the alleged 9 million you assert you help. For example, do you realize that there are more than 20 MILLION this "good intention, poor execution" marketing scam works? Here's my story. All the facts are readily verifiable.
I have owned my home for 12 1/2 years. In 2005 I agreed to refinance to an interest-only loan, consolidating my 1st and 2nd mortgage which were used, in part, to cover the cost of my daughters' college education. The new payment was just about 25% of my income, which was (and is) well within acceptable guidelines for income-to-payment ratios. My new mortgage was $395,000 at 5.5% on a 5 year option-ARM loan. The mortgage amount was just over 80% of its appraised value at the time (approx. $495,000). I figured that, even if the market would drop a little, and I had to sell the house, I would still be in a position to make up the difference and not be terribly hurt. From 2004-2007 my income exceeded $175,000 (I was the only income producer in my family.) I have NEVER been late in 12 1/2 years of owning this home. NEVER. In fact, once I took over the finances for my family, I began paying down the principal.
By Albert Bozzo
In the world of banking, too-big-to-fail may be in the process of morphing into too-big-to-exist.
After hundreds of billions in federal aid and even more in lost investment capital, both the government and investors may be ready for a big sea change.
The only question, for some, is how quickly it will happen.
“In the next few months, we'll see the tacitly nationalized banks—Bank of America, Citigroup —sold off rapidly into pieces, turned into much smaller banks,” Sanders Morris Harris Group Chairman George Ball predicted on CNBC Thursday, adding the government wants to send a strong message, to “punish too-big-to-fail banks that have blotted their copy and not exonerate their management.”
“Five years from now, these banks will be broken up,” is how FBR Capital Markets bank analyst Paul J Miller sees it.
The degree to which bankers have seized total control of our government and are raping and pillaging is truly mind boggling. They have absolutely no shame, no conscience. It is wholesale stealing on a scale never before seen on this planet. In this interview, William Black exposes the total fraud of what the bankers are doing, and confirms that they are using the bailout money, OUR MONEY, to buy each others worthless assets at massively inflated prices to make them appear to be on sound footing again. It's total absolute FRAUD!