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The Scam Wall Street Learned From the Mafia

by cmaukonen 6/21/2012 - 4:55 pm

USA v. Carollo involved classic cartel activity: not just one corrupt bank, but many, all acting in careful concert against the public interest. In the years since the economic crash of 2008, we've seen numerous hints that such orchestrated corruption exists. The collapses of Bear Stearns and Lehman Brothers, for instance, both pointed to coordi­nated attacks by powerful banks and hedge funds determined to speed the demise of those firms. In the bankruptcy of Jefferson County, Alabama, we learned that Goldman Sachs accepted a $3 million bribe from J.P. Morgan Chase to permit Chase to serve as the sole provider of toxic swap deals to the rubes running metropolitan Birmingham – "an open-and-shut case of anti-competitive behavior," as one former regulator described it.

More recently, a major international investigation has been launched into the manipulation of Libor, the interbank lending index that is used to calculate global interest rates for products worth more than $3 trillion a year. If and when that case is presented to the public at trial – there are several major civil suits in the works here in the States – we may yet find out that the world's most powerful banks have, for years, been fixing the prices of almost every adjustable-rate vehicle on earth, from mortgages and credit cards to interest-rate swaps and even currencies.

 

[Kind of makes you wonder how man others were involved and how many cities - both here and abroad. Like picking up a hay stack and having needles fall down at your feet. Chances are the thing is stiff with needles.]

Read the full article at http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-from-the-mafia-20120620

Mandatory reading should be required. Everyone should read this and get the sense of the corruptness.

Thanks C,

The coordinated attacks and the subsequent collapse of Bear Stearns and Lehmman, destroyed the real estate/housing asset class. 

It makes me angry to think, the bankers got the bailout and the homeowners and the working class got the shaft. 

It should be heads on pikes, for these traders  traitors.

But watching how Congress fawned over Jamie D?.

Everyone but the peasants got rich

The bankers got the gold, we got hope. 

by Resistance 6/21/2012 - 8:15 pm

It's worse than that. I didn't post it here, but Ellen Brown did a piece on how JPmorgan an others have been propping up the national debt using interest rate sways in a scam that would make Henry Gandorf proud.

That is one obvious answer, but financial analysts Jim Willie and Rob Kirby think it may be something far larger, deeper, and more ominous.  They contend that the $3 billion-plus losses in London hedging transactions that were the subject of the hearing can be traced, not to European sovereign debt (as alleged), but to the record-low interest rates maintained on U.S. government bonds.

The national debt is growing at $1.5 trillion per year.  Ultra-low interest rates MUST be maintained to prevent the debt from overwhelming the government budget.  Near-zero rates also need to be maintained because even a moderate rise would cause multi-trillion dollar derivative losses for the banks, and would remove the banks’ chief income stream, the arbitrage afforded by borrowing at 0% and investing at higher rates.

The low rates are maintained by interest rate swaps, called by Willie a “derivative tool which controls the bond market in a devious artificial manner.”  How they control it is complicated, and is explored in detail in the Willie piece here and Kirby piece here.

Kirby contends that the only organization large enough to act as counterparty to some of these trades is the U.S. Treasury itself.  He suspects the Treasury’s Exchange Stabilization Fund, a covert entity without oversight and accountable to no one. Kirby also notes that if publicly-traded companies (including JPMorgan, Goldman Sachs, and Morgan Stanley) are deemed to be integral to U.S. national security (meaning protecting the integrity of the dollar), they can legally be excused from reporting their true financial condition.  They are allowed to keep two sets of books.

Consider that now.

by cmaukonen 6/21/2012 - 8:38 pm (re: Resistance)

How long before the crash?

When it does; you think there'll be a revolution then?  

im·pe·ri·al·ism  n.

1. The policy of extending a nation's authority by territorial acquisition or by the establishment of economic and political hegemony over other nations.
2. The system, policies, or practices of such a government.
by Resistance 6/21/2012 - 9:15 pm (re: cmaukonen)

I really do not know. In fact I think a lot of people don't think there will be on. They maybe surprised and from an unexpected source.

by cmaukonen 6/21/2012 - 9:50 pm (re: Resistance)

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