Evil Syndicated

Peacenik just got back from a wilderness survival course. Some interesting stuff on mushrooms and the biomass of salamaders. Peacenik was out of the information loop, but did notice a newspaper box headline declaring the recession in Canada over. And Peacenik got some text news flashes from a Punditman correspondent, that in fact the recession was over. Peacenik goes away for one week and all the problems of society are cured. Is it time for Peacenik to admit that Doom and Gloom is dead? By the way Peacenik has CNBC on tv in the background right now. The pundits sound hysterical. Maria Bartolomo is hyperventilating. Apparently there is no limit to the upside. Was Peacenik wrong? Should Peacenik put his meagre savings into mutual funds?

Then Peacenik scanned the blogosphere. The bubble economy is back. Or is it? Was Peacenik wrong? Peacenik thinks the economy is close to absolute collapse. Read Kunstler's take on the stock market. Is Kunstler right? Peacenik thinks so. And ask yourself this. Why would you believe anything that any central banker, or corporate spokesmen or politician says about the economy?



by Jim Kunstler

By now, everyone in that fraction of the world that pays attention to something other than American Idol and their platter of TGI Friday's loaded potato skins knows that Goldman Sachs has been caught at another racket in the stock market: front-running trades. What a clever gambit, done with the help of the markets themselves - the Nasdaq in particular - in which information on trades is held back a fraction of a second from public view, while the data is shoveled to the computers of privileged subscribers who can execute zillions of programmed micro-trades before the rest of the herd makes a move. This allows them to vacuum up hundreds of millions of dollars by doing absolutely nothing of value. The old-fashioned method used by brokers was called "churning," in which stocks were bought and sold incessantly (by phone) from the portfolios of inattentive clients merely to generate commissions. In any sensible society - i.e. a society with an instinct for self-preservation - it would be against the law and the people doing it would be sent to prison.

I'm not a lawyer, but I've got to think that the actions at the Nasdaq end - shoveling the data to the privileged subscribers a fraction of a second early - is patently illegal in the first place, since the whole purpose of an exchange is to create a fair trading space. Where both parties are concerned, it should amount to a plain vanilla criminal conspiracy to commit stock trading fraud. Maybe the larger question is: since when did we become a society lacking the instinct for self-preservation - that is, a society bent on suicide? Or maybe the question is better put to Goldman Sachs's CEO Lloyd Blankfein.

Read on...

Magic Bank Profits

“Although perfectly legal, this move is also perfectly delusional, because some day soon these assets will be written down to their fair value, and it won’t be pretty.”

-Steven Roth, professor of management at the Tuck School of Business at Dartmouth College, on Bank of America’s earnings fraud

We been discussing how many of the recent profits were not “real” — i.e., based on one time sleights of hands — losing a losing month, AIG flow throughs, bailout monies, etc.

Thus, it is gratifying to see on the front page of the NYT Business section, Andrew Ross Sorkin’s article with the provocative but accurate title, Bank Profits Appear Out of Thin Air.

Read on...

Lately Peacenik hasn't mentioned the "black hole" that has been sucking the world's delusional wealth away. Obama's and CNBC's PR campaign had a lot of people thinking the worst was over. The DOW had it's best rally since 1938. But. But the black hole has not gone away. The PR is failing. Yesterday the DOW lost almost 300 points. The public is no longer believing in the banks' mysterious profits. Today the Globe reports that banks are bracing for huge credit card losses. Today we learn again that pension plans are woefully underfunded. States, provinces, countries, cities, towns, companies, and people are all broke. Can a world-wide run on banks happen in 2009? Do you have enough cash to last a couple of weeks? Peacenik's black hole sensor is tingling.

Perp Walks Instead of Bonuses

by Robert Scheer

There must be a criminal investigation of the AIG debacle, and it looks as if New York's top lawman is on the case. The collusion to save this toxic company in order to salvage the rogue financiers who conspired to enrich themselves by impoverishing millions is being revealed as the greatest financial scandal in U.S. history. Instead of taking bonuses, the culprits should be taking perp walks.

I'm not just referring to the swindlers in the Financial Products Subsidiary of AIG who devised and sold those insurance policies on derivatives that brought the world economy to its knees. They do seem deserving of a special place in hell, and presumably the same divine power that according to Scripture labeled usury a high moral crime and threw the money-changers out of the temple will consider that outcome.

Read on...

Does anyone think it funny that the Bernie Madoff prosecution is over? The biggest fraud in human history and they wrapped up the case in months. Peacenik smells a coverup. Thousands of financial crimes have been committed and no one is getting arrested. Just Bernie. Is anyone even investigating the crimes? Obama is more interested in pasting together a corrupt defunct financial system that fixing anything. It is laughable to hear and read the rosy predictions that all will soon be well. No one has gone to jail. No new regulations have been made. Zombie banks continue in a zombie state. Bankrupt companies are allowed to fudge their books to pretend to stay alive.

And the Globe today headlines that major Canadian companies can't meet their pension obligations. And Chrysler wants to pay Canadians Chinese wages or they'll pull out of Canada. Peacenik wishes someone would tell these companies to just fuck off.

Treasury: Major U.S. banking institutions "Well capitalized"

Here is a joint statement by the Treasury, FDIC, OCC, OTS and the Federal Reserve:

The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses. ... we reiterate our determination to preserve the viability of systemically important financial institutions so that they are able to meet their commitments.

Read on...

This is exactly what Peacenik was talking about in the previous post. Peacenik asked for the truth and then sees this announcement from the US government. Every sentient person knows this announcement is a lie. The question is: When you know you are being lied to, what should you do? The public is now so used to being lied to that the public, the sheeple, yawn. But if you read this announcement and then invest your money in CITI bank, for example, and CITI bank goes broke next week, who has committed a fraud? The US government announcement is a fraud. Is anyone going to get arrested?

Paulson can't buy toxic mortgages, b/c they don't exist

I'm not an economist, and although I have a 401K and a few paltry investments, I mostly don't follow the stock market or speak the lingo. But since I'd been diligently listening to the news, I thought I understood a little bit about what was happening in the subprime mortgage meltdown.

It turns out, I understood much less than I thought, and maybe I'm not alone... follow me over the jump.

So we've been hearing it's the fault of greedy home buyers who ran out and purchased homes they couldn't afford. Or, conversely, maybe it was the fault of predatory lenders who made bad loans. Round and round the blame seemed to go. So I was completely baffled by Henry Paulson's announcement yesterday that it wouldn't help to buy up the toxic mortgages as promised in the bailout.

Readon...

Peacenik understands that there will be serious consequences if something isn't done to try and halt the collapse of the financial system. Peacenik is not vindictive. But shouldn't someone be charged with something by now? Shouldn't there be some high profile investigations going on? This financial collapse is the direct result of fraud. And taxpayers are now trying to save the people who committed the fraud. This post on Daily Kos links to a long story about what happened. It is worth reading.

Easthampton Burning?

by Jim Kunstler

In the typhoon of commentary that's blown around the world a step behind the financial tsunami that's wrecking everything, two little words have been curiously absent: "fraud" and "swindle." But aren't they really at the core of what has happened? Wall Street took the whole world "for a ride" and now a handful of Wall Street's erstwhile princelings have shifted ceremoniously into US Government service to "fix" the problem with a "toolbox" containing a notional two trillion dollars. This strange exercise in financial kabuki theater will shut down sometime between the election and inauguration day, when the inaugurate finds himself president of the Economic Smoking Wreckage of the United States. What will happen?

I have thought for some time that things could get dangerously out of hand in America, despite our exceptionalist notion that we are immune to the common plot-lines of history. For starters, inauguration night will seem more like Halloween, as those two little words fly in to haunt the new president. So, a large and looming question is: who will be appointed the next attorney general of the US (to replace the human sash-weight currently occupying the office), and how soon will the federal marshals be scouring the wainscoted hallways of Goldman Sachs, JP Morgan Chase, not to mention a thousand Greenwich, Connecticut, hedge fund boiler rooms, with man-sized nets?

Read on...

Kunstler seems to think that unemployed, hungry, homeless, hopeless sheeple may not react well to the new economic order. Peacenik hopes that Kunstler is wrong. Meanwhile financial planners are working overtime trying to reassure their clients to sit tight and trust the markets. Trust?

War on Terror looks like a fraud

War on Terror looks like a fraud: It's becoming pretty clear that Iraq has been "pacified" solely for the purpose of economic aggression

"The law represents no less than institutionalized raping and pillaging of Iraq's oil wealth. It represents the death knell of nationalized Iraqi resources, now replaced by production sharing agreements, which translate into savage privatization and monster profit rates of up to 75% for (basically U.S.) Big Oil. Sixty-five of Iraq's roughly 80 oilfields already known will be offered for Big Oil to exploit."

punditman says:
No blood for oil.