With Greg Hunter on USAWatchDog: Banks Will Take Deposits in the Coming Financial Meltdown, LIBOR Rate Rigging and More
Sixteen of the world’s largest banks have been caught colluding to rig global interest rates. Why are we doing business with a corrupt global banking cartel?
United States Attorney General Eric Holder has declared that the too-big-to-fail Wall Street banks are too big to prosecute. But an outraged California jury might have different ideas. As noted in the California legal newspaper The Daily Journal:
California juries are not bashful – they have been known to render massive punitive damages awards that dwarf the award of compensatory (actual) damages.For example, in one securities fraud case jurors awarded $5.7 million in compensatory damages and $165 million in punitive damages. . . . And in a tobacco case with $5.5 million in compensatory damages, the jury awarded $3 billion in punitive damages . . . .
The question, then, is how to get Wall Street banks before a California jury. How about charging them with common law fraud and breach of contract? That’s what the FDIC just did in its massive 24-count civil suit for damages for LIBOR manipulation, filed in March 2014 against sixteen of the world’s largest banks, including the three largest US banks – JP Morgan Chase, Bank of America and Citigroup. Continue reading
Today’s guest on “It’s Our Money” is Nomi Prins, speaking on her blockbuster new book All the Presidents’ Bankers. Listen to the archive here.
Also check the archives for Kevin Zeese and Margaret Flowers on the burgeoning activist movement; Prof. Robert Hockett on the use of eminent domain to help underwater homeowners; and Prof. Timothy Canova on the Federal Reserve.
Great fun interviewing our favorite experts, on topics we think will interest you!
Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. According to an SEIU report:
Derivatives . . . have turned into a windfall for banks and a nightmare for taxpayers. . . . While banks are still collecting fixed rates of 3 to 6 percent, they are now regularly paying public entities as little as a tenth of one percent on the outstanding bonds, with rates expected to remain low in the future. Over the life of the deals, banks are now projected to collect billions more than they pay state and local governments – an outcome which amounts to a second bailout for banks, this one paid directly out of state and local budgets.
It is not just that local governments, universities and pension funds made a bad bet on these swaps. The game itself was rigged, as explained below. The FDIC is now suing in civil court for damages and punitive damages, a lead that other injured local governments and agencies would be well-advised to follow. But they need to hurry, because time on the statute of limitations is running out. Continue reading
Walt McRee and I just started a new radio program, “It’s Our Money,” on Progressive Radio Network at noon PST/3pm EST every second Wednesday (we’re working up to weekly!).
Today’s program features Kevin Zeese and Margaret Flowers, our favorite activists. Listen to archive here.
Our first show, on March 12th, featured Professor Tim Canova, who is a wealth of knowledge on the Federal Reserve; and ended with an interview of public banking catalyst Mike Krauss. The archive is here.
Our second show, on March 26th, featured Professor Bob Hockett — also a wealth of knowledge — on the plan to take underwater mortgages by eminent domain and renegotiate them on behalf of homeowners. The archive is here.
Coming soon, journalist and author Nomi Prins, senior fellow at Demos, on her new book All the Presidents’ Bankers. Stay tuned!
Links and writeups to all this are below.
“As things stand, the banks are the permanent government of the country, whichever party is in power.”
– Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011)
On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed. Continue reading
Investigative reporter Greg Palast is usually pretty good at peering behind the rhetoric and seeing what is really going on. But in tearing into Senator Elizabeth Warren’s support of postal financial services, he has done a serious disservice to the underdogs – both the underbanked and the US Postal Service itself. Continue reading
The comment below to my eminent domain article merited a detailed response, so I sent it to Professor Robert Hockett, the Cornell University law professor who was the principal author of the Richmond plan. His answer was so useful that I thought I would submit it as a separate post, also below. Thanks Bob and Marc! Continue reading
In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorganChase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands.
Gayle McLaughlin, the bold mayor of Richmond, California, has gone where no woman dared go before, threatening to take underwater mortgages by eminent domain from Wall Street banks and renegotiate them on behalf of beleaguered homeowners. Continue reading
The credit card business is now the banking industry’s biggest cash cow, and it’s largely due to lucrative hidden fees.
You pay off your credit card balance every month, thinking you are taking advantage of the “interest-free grace period” and getting free credit. You may even use your credit card when you could have used cash, just to get the free frequent flier or cash-back rewards. But those popular features are misleading. Even when the balance is paid on time every month, credit card use imposes a huge hidden cost on users—hidden because the cost is deducted from what the merchant receives, then passed on to you in the form of higher prices. Continue reading
“Epic in scale, unprecedented in world history.” That is how William K. Black, professor of law and economics and former bank fraud investigator, describes the frauds in which JPMorgan Chase (JPM) has now been implicated. They involve more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; failing to disclose known risks, including those in the Bernie Madoff scandal; and engaging in multiple forms of mortgage fraud.
Governor Jerry Brown and his staff are exchanging high-fives over balancing California’s budget, but the people on whose backs it was balanced are not rejoicing. The state’s high-wire act has been called “the ultimate in austerity budgets.”
Welfare payments, health care for the poor, and benefits for the elderly and disabled have been slashed. State workers have been downsized. School districts in need of cash have been reduced to borrowing through “capital appreciation bonds” bearing 300% interest. In one notorious case, the Santa Ana school district actually borrowed at 1,000% interest. And the governor acknowledges that California still faces a “wall of debt” amounting to $28 billion. Some analysts put it much higher than that. Continue reading
After many months of preparation and peer review, the Vermonters for a New Economy group has finally completed the study of the economic impacts of a public bank in Vermont. Highlights include:
- over 2,500 new jobs created
- over $190M in new economic value added
- over $340M in additional gross state product
- the existing institutions already have the capital to establish a bank, no new appropriation or bonding needed.
- recommendation that VEDA’s authority be expanded to include banking, which is what S. 204 proposes this year.
Read the study here.
December 23rd, 2013, marks the 100th anniversary of the Federal Reserve, warranting a review of its performance. Has it achieved the purposes for which it was designed?
The answer depends on whose purposes we are talking about. For the banks, the Fed has served quite well. For the laboring masses whose populist movement prompted it, not much has changed in a century. Continue reading
December 23rd marks the 100th anniversary of the Federal Reserve. Dissatisfaction with its track record has prompted calls to audit the Fed and end the Fed. At the least, Congress needs to amend the Fed, modifying the Federal Reserve Act to give the central bank the tools necessary to carry out its mandates.
The Federal Reserve is the only central bank with a dual mandate. It is charged not only with maintaining low, stable inflation but with promoting maximum sustainable employment. Yet unemployment remains stubbornly high, despite four years of radical tinkering with interest rates and quantitative easing (creating money on the Fed’s books). After pushing interest rates as low as they can go, the Fed has admitted that it has run out of tools. Continue reading
“Control oil and you control nations,” said US Secretary of State Henry Kissinger in the 1970s. “Control food and you control the people.”
Global food control has nearly been achieved, by reducing seed diversity with GMO (genetically modified) seeds that are distributed by only a few transnational corporations. But this agenda has been implemented at grave cost to our health; and if the Trans-Pacific Partnership (TPP) passes, control over not just our food but our health, our environment and our financial system will be in the hands of transnational corporations.
In Costa Rica, publicly-owned banks have been available for so long and work so well that people take for granted that any country that knows how to run an economy has a public banking option. Costa Ricans are amazed to hear there is only one public depository bank in the United States (the Bank of North Dakota), and few people have private access to it.
So says political activist Scott Bidstrup, who writes:
For the last decade, I have resided in Costa Rica, where we have had a “Public Option” for the last 64 years.
There are 29 licensed banks, mutual associations and credit unions in Costa Rica, of which four were established as national, publicly-owned banks in 1949. They have remained open and in public hands ever since—in spite of enormous pressure by the I.M.F. [International Monetary Fund] and the U.S. to privatize them along with other public assets. The Costa Ricans have resisted that pressure—because the value of a public banking option has become abundantly clear to everyone in this country.
During the last three decades, countless private banks, mutual associations (a kind of Savings and Loan) and credit unions have come and gone, and depositors in them have inevitably lost most of the value of their accounts.
But the four state banks, which compete fiercely with each other, just go on and on. Because they are stable and none have failed in 31 years, most Costa Ricans have moved the bulk of their money into them. Those four banks now account for fully 80% of all retail deposits in Costa Rica, and the 25 private institutions share among themselves the rest. Continue reading