Sunday, April 25, 2010


Reports of Our Recovery Are Greatly Exaggerated
By John Browne
From all outward appearances, it seems that a grim chapter in U.S. economic history has come to an end. Newsweek magazine declares that "America is Back," government statistics indicate revival, and our stock market has put in a rally for the record books (by rate of ascent, not highs - we are still more than 25% below the 2007 peak).

And yet, despite massive federal stimuli and subsidies, American unemployment clings stubbornly to the 10 per cent level, with the "underemployment" rate closer to 20 per cent. The IMF does not appear to buy into Washington's optimism; it projects a "double dip" contraction by the second half of this year. With so much conflicting sentiment, it is difficult for investors to know whether the cup is half-empty or half-full.

Fed Chairman Ben Bernanke says the economy is stable. Many people believe him. But, at the same time as he advertises economic recovery, Bernanke tells us that short-term Fed rates will be kept at zero "for an extended period." Why would he risk runaway inflation by holding interest rates down if the economy were truly rebounding?

Furthermore, despite creating and spending these trillions of new dollars, the Fed continues to resist heavy Congressional pressure to show the public where the money has gone. Rumor has it that some of the money went to institutions outside America. In today's world, can we trust the central bank?

Government pronouncements and the Wall Street media have been castigating Greece for prolific spending and false accounting. Other nations such as Ireland, Spain and Portugal are considered pending dangers to the international monetary system. The fact is that, based on deficit to GDP ratios, the UK (12.6%) lies third behind Iceland (15.7%) and Greece (12.7%)! The United States (10.6%) lies sixth behind Ireland (12.2%) and Spain (11.4%)! The risk of an international meltdown is no longer restricted to banks. It now threatens entire nations, including the great powers. The price of gold reflects just a part of this risk.

Unfortunately, the economic position of the United States and the member states of the European Union, excluding Germany, is not as healthy as our media and politicians would have us believe. The danger is even greater when measured against the relative security and economic success of China, India, Brazil, Australia, Canada and New Zealand (BIC-CAN). In such countries, economic growth and financial responsibility are real. At home, I'm afraid the reports of our recovery are greatly exaggerated.

Fraud, It’s Much Bigger Than Goldman Sachs
By Greg Hunter,
If you think this was the only shady deal dreamed up by Wall Street banks, you have another thing coming. All of the big banks have been selling securities called derivatives for at least two decades. Derivatives are usually bundles of debt. There are derivatives for mortgages, car loans, credit cards, student loans and all types of government debt, to name a few. Derivatives are complex, but when it comes right down to it, you can sum them all up as debt bets.

Derivatives are a $600 trillion market according to the Bank of International Settlements. (Some say the BIS estimate of the derivatives market is actually more than $1,000 trillion!) And here is the best part–derivatives are totally unregulated. That means there are no standards, no guarantees and no public markets. With no public market, there is no real way to price this kind of Wall Street alchemy. You just have to trust the person selling the “security.” Take the Goldman fraud case, for example. If there was a public market, Goldman would have never been able to pack crap loans into a security and sell them. The regulation and guarantees would not have allowed it. After all, regulations, guarantees and a public market make selling derivatives a lot less profitable. That’s why Wall Street has been fighting regulation of the derivatives market for years.

Now, amplify this kind of Wild West market with all the big Wall Street banks and you get something so huge and so packed with junk that you have to suspend accounting rules to keep the system solvent. That is what you have today.

Without unregulated derivatives, we would not have had the financial meltdown, mortgage giants Fannie Mae and Freddie Mac would not have failed, and we would not have problems with Greek debt and other sovereign debt. How can this $600 trillion dollar market be unwound? So far, taxpayers and investors around the world have been picking up the tab. Now it may be Wall Street’s turn to pony up some dough. Don’t be surprised if some of them get taken down by their own toxic financial waste.’s-much-bigger-than-goldman-sachs/

Speaking from the sidelines of the World MoneyShow in Hong Kong, Gloom, Boom & Doom Report mastermind, Dr. Marc Faber, told CNBC:

“I think Goldman Sachs is a very honest firm. They have a very strict compliance department compared to the others,” he remarked, adding, “they’re like an angel. But [the SEC] targeted Goldman as it stands as a symbol of Wall Street.”

Besides, Dr. Faber says, it’s all just an excuse for the Fed to print more money.

“Obama has lost the trust of the people,” he explained further to Kitco. “His approval rating is worse than Bush’s at this stage in the presidency. When people are dissatisfied in a democracy – you go after a minority to target – in the case of America, you go after Goldman Sachs, because it is the symbol of Wall Street and excessive money creation – and there is also a tone of anti-Semitism there.

“Maybe the intention is not to hurt Goldman Sachs, but just to gain popularity with the middle class and the lower class of America, so they will perceive Mr. Obama to have done something against the evil of Wall Street.”

He added, “Mr. Obama will do everything he can to get re-elected and that may involve some very bad decisions. He is like a roman emperor; he just gives out bread to the mob and produces games and circuses.”

Overall, Faber holds little hope for financial reform in the US. “The US should have less regulation and not more regulation – that is the origin and cause of the crisis.”

All The President's Men (With Ties To Controversial Goldman Sachs)
While President Obama assails the culture of greed and recklessness practiced by the men of Goldman Sachs, his administration is infested with them. The White House can no more disown Government Sachs than Da Boss in chief can disown Chicago politics.
Obama headed to Wall Street Thursday to demand "financial regulatory reform" — just as the U.S. Securities and Exchange Commission has filed civil suit against Goldman Sachs for mortgage-related fraud.

Question the timing?

Darn tootin'.

There are no coincidences in the perpetually orchestrated Age of O.

Everyone from disgraced former New York Attorney General Eliot Spitzer to analysts at the Brookings Institution and Barclays Capital to the GOP leadership and Rush Limbaugh has noted the reeking political opportunism in the air.

As the New York Post reported Tuesday, the Democratic National Committee immediately bought sponsored Internet ads on Google that direct Web surfers who type in "Goldman Sachs SEC" to Obama's fundraising site. "It's time to hold the big banks accountable," the money-grubbing DNC message bellows.

But just like his crony capitalist predecessor George W. Bush, Obama has relied on Goldman Sachs and Wall Street power brokers to engineer massive government intervention to "rescue" failing businesses with the tax dollars of ordinary Americans.

Strange coincidence that just as "financial reform" comes to a boil on Capitol Hill, a fraud case against Goldman Sachs is announced in an effort to enlist the public's support? Yeah, ...right. Unless this "fraud case" goes nuclear, and morphs into a criminal case with Lord Blankfein doing a perp walk, this "fraud case" will never amount to much of anything more than the token gesture, meant to quell the public's Wall Street outrage, than it presently is. This administration grows more pathetic by the day.

Need more proof? New regulation is NOT what the financial system needs...ENFORCEMENT of regulations on the books ALREADY is what it needs. That, and the Glass-Stegall Act [] needs to be reinstated IMMEDIATELY. The following links to video of the nation's TOUGHEST bank regulator are MUST SEE, and succinctly expose the fraud that is Wall Street today.

William Black Tells The Truth On Lehman's Failure: "A Story In Large Part Of Fraud"[VIDEO]
Lehman’s failure is a story in large part of fraud. And it is fraud that begins at the absolute latest in 2001, and that is with their subprime and liars’ loan operations.

Lehman was the leading purveyor of liars’ loans in the world. For most of this decade, studies of liars’ loans show incidence of fraud of 90%. Lehmans sold this to the world, with reps and warranties that there were no such frauds. If you want to know why we have a global crisis, in large part it is before you. But it hasn’t been discussed today, amazingly.

Financial institution leaders are not engaged in risk when they engage in liars’ loans — liars’ loans will cause a failure. They lose money. The only way to make money is to deceive others by selling bad paper, and that will eventually lead to liability and failure as well.

When people cheat you cannot as a regulator continue business as usual. They go into a different category and you must act completely differently as a regulator. What we’ve gotten instead are sad excuses.

Veteran regulator William K. Black, who says that Wall Street is already breaking the current rules[VIDEO]
BILL MOYERS: The F word?

WILLIAM K. BLACK The F word's fraud in this. And it's the word that explains why we have these recurrent, intensifying crisis.
BILL MOYERS: How is that? What do you mean when you say fraud is at the center of it?

WILLIAM K. BLACK Well, first, when you deregulate or never regulate, mortgage bankers were never regulated, you effectively have decriminalized that industry, because only the regulators can serve as the sherpas, that the FBI and the prosecutors need to be able to understand and prosecute these kind of complex frauds. They can do one or two or maybe three on their own, but when an entire industry is beset by wide scale fraud, you have to have the regulators. And the regulators were the problem. They became a self-fulfilling prophecy of failure, because they, President Bush appointed people who hated regulation. I call them the anti-regulators. And that's what they were.

This is the unvarnished truth: US Government sponsored fraud has destroyed our financial system. The regulators charged with enforcing the regulations either turned a blind eye, or were watching porn:

SEC staffers watched porn as economy crashed The Associated Press

Senior SEC staffers spent hours at work looking at porn websites Los Angeles Times

Sen. Chris Dodd and his Democratic Senate cronies are not interested in fixing our broken financial system, they are determined to perpetuate it by giving the hacks that destroyed it even more power to commit and hide Wall Street fraud.

Obama vs. Wall Street: It's All Politics
President Obama rode into Manhattan today threatening to slay the dragon of Wall Street greed. As usual, theatrics were uppermost. He spoke at the Cooper Union where Abraham Lincoln famously argued against slavery and exhorted his colleagues to work together to resolve their differences, doing “nothing through passion and ill temper.” Would that Mr. Obama’s quest was as laudable or clearheaded. Instead, the president comes to Wall Street demanding passage of a 1,300 page financial reform bill that will almost certainly not prevent another financial meltdown, but that further clogs the regulatory gutters and that might boost the president’s approval ratings.

Think about this: taxpayers are currently funding a Financial Crisis Inquiry Commission, a bipartisan committee formed last year to investigate the causes of the financial meltdown. It is holding hearings, investigating the actions of financial execs and generally rooting around trying to find out what went wrong. Presumably, the effort is aimed at preventing a reoccurrence. The report from this group is due December 15. Wouldn’t it make sense to see what the committee’s finding are before pushing through a massive overhaul of our financial regulations?

No-- it’s all about politics.

And FRAUD. There is fraud from one end of Wall Street to the other. There is fraud from Washington Wall Street and back again. With Goldman Sachs insiders now ensconced throughout the US Government, laws are being changed to empower the criminals from Wall Street that have effectively stolen the government from the people, and trampled the US Constitution in the process. The Democrats are silent on the $994,795 in Goldman Sachs campaign cash that Obama received, while demanding Republicans cough theirs up. Both party's are complicit in the sell-out to Wall Street. Both party's should be purged at the polls this fall, and the criminals they work with to steal the wealth of our nation should be run out of Washington with one way tickets to the nearest federal penitentiary.

What do both parties have in common? Wall Street
WASHINGTON -- Although painting Republicans as pawns of Wall Street is a cornerstone of the Democratic strategy to overhaul financial regulation, financial interests have given campaign money generously to both political parties for years.

"No one party has any firm hold on righteousness here," said David Levinthal, a spokesman for the Center for Responsive Politics, which tracks donations.

In the past two election cycles, when Democrats controlled Congress, the Democrats benefited most. So far in the 2010 cycle, the finance/insurance/real estate sector has given $65.2 million, or 56 percent of its contributions, to Democrats. Republicans have received $51.7 million.

People and political committees affiliated with securities and investment banking interests have been particularly kind to Democrats, giving them $21.7 million, or 63 percent of their donations so far.

Commercial banks, though, prefer Republicans; they've given GOP hopefuls $4.7 million so far, or 54 percent of their total.

According to the Sunlight Foundation, an independent research group, lobbyists with connections to the financial sector have hosted 10 fundraisers this year for members of the Senate Banking and Agriculture committees - six for Democrats and four for Republicans. The two panels wrote different parts of the financial overhaul bill.

The Senate is expected to begin consideration of the financial overhaul bill on Monday.

Several factors go into who gets money, including who needs it and who's on key committees. Securities and investment banking interests, for instance, gave more to Republicans in the 1996 to 2004 cycles, when the GOP controlled Congress.

In recent days, critics and journalists have been asking lawmakers to return certain funds, notably those from Goldman Sachs. Most lawmakers find the suggestion ridiculous.

By Ellen Brown
While the SEC is busy investigating Goldman Sachs, it might want to look into another Goldman-dominated fraud: computerized front running using high-frequency trading programs.

Market commentators are fond of talking about “free market capitalism,” but according to Wall Street commentator Max Keiser, it is no more. It has morphed into what his TV co-host Stacy Herbert calls “rigged market capitalism”: all markets today are subject to manipulation for private gain.

Keiser isn’t just speculating about this. He claims to have invented one of the most widely used programs for doing the rigging. Not that that’s what he meant to invent. His patented program was designed to take the manipulation out of markets. It would do this by matching buyers with sellers automatically, eliminating “front running” – brokers buying or selling ahead of large orders coming in from their clients. The computer program was intended to remove the conflict of interest that exists when brokers who match buyers with sellers are also selling from their own accounts. But the program fell into the wrong hands and became the prototype for automated trading programs that actually facilitate front running.

Also called High Frequency Trading (HFT) or “black box trading,” automated program trading uses high-speed computers governed by complex algorithms (instructions to the computer) to analyze data and transact orders in massive quantities at very high speeds. Like the poker player peeking in a mirror to see his opponent’s cards, HFT allows the program trader to peek at major incoming orders and jump in front of them to skim profits off the top. And these large institutional orders are our money -- our pension funds, mutual funds, and 401Ks.

When “market making” (matching buyers with sellers) was done strictly by human brokers on the floor of the stock exchange, manipulations and front running were considered an acceptable (if morally dubious) price to pay for continuously “liquid” markets. But front running by computer, using complex trading programs, is an entirely different species of fraud. A minor flaw in the system has morphed into a monster. Keiser maintains that computerized front running with HFT has become the principal business of Wall Street and the primary force driving most of the volume on exchanges, contributing not only to a large portion of trading profits but to the manipulation of markets for economic and political ends.

It should be obvious by now that there is no recovery, just financial markets rigged to give the illusion of a recovery. This illusion is essential for the government to keep the public's confidence. This confidence, however, appears to be waning with the recent Pew Research poll revealing that 78% of Americans do not trust their government. And most loathe the US Congress. A token accusation of fraud by Goldman Sachs from the SEC will do little to boost the public's confidence in their government. Much to the dismay of the Oracle Of Orwell, this distrust of the government is likely to intesify as the fraud behind this "recovery" is revealed for what it is: the BIGGEST FINANCIAL SWINDLE in world history.

By Addison Wiggin
Brace yourself for what's about to go down as the BIGGEST FINANCIAL SWINDLE in world history, engineered by none other than Wall Street and Washington, D.C.

How does their scam work? It's a crafty "triple-swindle" just clever enough that most Americans won't even see it happen... until it's too late.

The short of it is, every three days, these flim-flam artists use this strategy to secretly suck wealth out of your savings account.

Nobody's immune.

Call it a fraud. Call it a swindle.

A hoax, a hoodwink, even a bamboozle...

Whatever you do, let's just be clear...

Every word you've heard so far about today's "recovery" is worse than just a big LIE... it's a cover-up for what's easily the largest, most devious wealth swindle of all time.

How does this "swindle" work?

In short, it's a government-backed shell game that cheats you in three separate ways...

First, this "triple-swindle" starts when bureaucrats prop up their fake "recovery" with tax-funded bailouts and huge "cash advances" from foreign lenders...

Second, it goes deeper — as our Fed secretly funnels billions of dollars to foreign lenders then borrows it back again just to keep the scam from collapsing...

And finally, the "swindle" goes public, as Washington openly BUYS BACK their own debt using hundreds of billions more that they called out of thin air.

The government calls these "Scheduled U.S. Treasury Securities Auctions"... you might know them better as "bond auctions"... but either way, they're essentially swap meets for debt.

Mutual funds and pension funds, state governments, Wall Street banks, foreign central banks — they're the buyers. And the seller is our Treasury, who essentially gives away shares of your future savings... in exchange for huge cash loans, redeemable today.

This is the cash our government uses to prop up the fake "recovery" with stimulus and bailouts and "cash for clunkers"... but it's also cash you and your grandchildren will have to pay back down the line... out of the personal savings you thought you were setting aside.

I ask you, how long do you think someone can pile up "cash advances" before a creditor comes and asks for his money... or threatens to cancel the credit line?

Not long at all.

When lenders threaten to expose our "sham recovery" by not showing up with cash to lend... the bond auctions I told you about threaten to fail. At least once this year, that's already happened.

Even one more failed bond auction could signal to the rest of the world that the gig is up... that the U.S. is done for and that it's time to bring the lend-borrow cycle to an end.

With the bailouts and this fake "recovery" already looking like it will cost $23.7 trillion before it's all said and done, you can bet the Fed and the Treasury don't want to let any more failed bond auctions show up in the headlines.

Which is why they've taken their "swindle" to a whole new level... by deciding not to just to fake the "success" of the recovery... but to fake the success of the bond auctions that are supposed to pay for it!


By transferring billions of dollars to our lenders... then paying them interest while we borrow back our own cash! See, for this scam to keep working, it has to look like foreigners still crave our debt.

So the Fed hits a few keystrokes... prints out billions of dollars... then uses a clever buyback strategy to stuff those billions into one of our foreign lenders accounts... so they can keep on pretending they want to buy more of our debt.

What's the strategy the Fed uses to make these huge cash transfers?

It works almost like a money laundering scam. We write the foreign government for big chunks of bad "agency debt" — like bonds sold by failed agencies Fannie Mae and Freddie Mac — then they write us a check, using the cash we just gave them, to buy more of the Treasury's bonds.

Just so long as our government can pretend the buyers still show up.

With the U.S. borrowing up to $100 billion through these bond auctions per week... and another bond auction happening, on average, every three days... that's a lot of opportunity for the Fed to "launder" money in the way I just described.

So far, the Fed has already used this backdoor cash swap strategy to snap up over $640 billion in toxic assets from our foreign lenders... with the implied promise they'll show up at the next bond auction and throw some of that cash back our way.

When that happens, you take a beating twice over — first as all that printed money weakens even more of your saved-up purchasing power... and second, because our Treasury now has to pay interest on the money it borrowed back!

Dimwit finance? You bet.

Banks May Not Be Lending, But They Are Buying Treasurys
Though banks continue to be hesitant to lend to consumers, they have stepped into the market for Treasurys that help finance the government's burgeoning debt.

With credit conditions still tight and Congress likely to clamp down on risk in the financial industry, banks are turning toward the safety of government debt, helping keep interest rates low but still not providing credit to consumers.

"Not only has lending been tight but demand for loans has been pretty small," says Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco. "The Treasury market offers banks an attractive alternative."

Surprisingly strong Treasury auctions in March had help from banks, which normally stay away from such events.

Banks snapped up $5.7 billion of the total $34 billion auctioned in 10-year notes and 30-year bonds, providing demand for auctions that many analysts thought would flop. The auctions occurred as inflation fears began to grow and amid signs that investor appetite for the massive supply of government debt was beginning to wane.

At the same time, bank credit fell 5.1 percent in the month and loans and leases dropped 6.4 percent, according to the Federal Reserve.

"The pattern suggests that banks have been starting to put their large cash balances to work, but is not an indication that bank balance sheets as a whole have started to grow," Deutsche Bank said in a research note.

The suggestion is that banks are using Treasurys as a way to get some return on their money that they might otherwise reap from making loans.

That banks would get so involved with long-dated securities came as additional surprise since they aren't usually such active participants at auctions and generally buy mostly short-dated notes. Under normal circumstances banks don't have much interest in keeping long-term rates low as that could compress the yield curve and cut into the profits they could make on lending.

Yet combined with their purchase of agency-backed debt such as mortgages and student loans, banks bought a total of $40 billion from the Treasury in March, according to analysts at Deutsche Bank.

But there's also another less-obvious reason banks could be stepping in to the Treasury market: A type of tacit quid pro quo with the Federal Reserve to keep short-term rates low by helping the government finance its debt through Treasury auctions.

Art Cashin, director of floor operations at UBS, noted after the 30-year auction suspicions among traders about who was doing the buying. In remarks to CNBC, he spoke of "all manner of conspiracy theories floating around. Is the Fed putting on a fake moustache and a raincoat and coming in as an indirect buyer?"

While there's disagreement among analysts whether the actions are part of an explicit pact between the two sides, some suspect a gentleman's agreement in which both sides benefit.

"Banks are stealing money from the public, giving consumers zero percent interest on deposits, and instead of turning over risk to the over-indebted consumers, they're loaning money to the government," says Michael Pento, chief economist at Delta Global Advisors in Parsippany, N.J. "I'm sure it's at the behest of (Fed Chairman) Ben Bernanke-we're going to keep rates low but you must facilitate the Treasury auctions going off smoothly.";_ylt=Av_ZWmelBewK5JvpnG9rIme7YWsA;_ylu=X3oDMTE1bW1ka2VyBHBvcwM2BHNlYwN0b3BTdG9yaWVzBHNsawNiYW5rc21heW5vdGI-?x=0&sec=topStories&pos=4&asset=&ccode

In short...

How the Banks Print Their Money
By: Adrian Ash, BullionVault
...borrowing short and lending long has been a regular license to print money. No matter whether the banks bleed tax-payers or private savers for the ink. And never mind that those two fast-whitening corpses are one and the same.

"In effect," gasps one commentator, "American taxpayers are now subsidizing the profits of Wall Street." He puts the profit at "200 basis points and up."

"The easiest and most profitable risk-adjusted trade for the banks," swoons
another, "is to borrow billions from the Fed...and then to lend the money back to the US Treasury. The imbedded profit – of some 2.5 percentage points – is an outright and ongoing gift from American taxpayers to Wall Street."

But where's the shock? American and British taxpayers have long subsidized Wall Street and the City. Progressively more so over the last 25 years, sure. Without any payback since 1981, in fact. And spectacularly so during the
last 3 recessions, too. Just check out those peaks above!

But 'twas ever so, at least since "Big Bang" in the mid-1980s. Nothing much in this scam is new. Banks print money, quite literally and despite the monopoly that the Fed and Bank of England apparently hold. Only the pace of production has picked up as the number of forgers has shrunk, leaving a small but swollen cartel of banks running the racket. And to keep the cops off their back, they've got tax-payers hostage, and will keep them tied up, for as long as "saving the banks" – instead of just letting them fail – remains the approved political fix.

What if the savers make a run for the door?

Treasury to sell $129 bln in notes, bonds, TIPS
WASHINGTON (MarketWatch) -- The Treasury Department said it plans to sell $129 billion in notes and bonds next week. The U.S. government said it will auction $44 billion in 2-year notes, $42 billion in 5-year notes, and $32 billion in 7-year notes. These amounts are unchanged from last month's auctions. Treasury also said it will auction $11 billion in 5-year Treasury Inflation Protected Securities, also know as TIPS. This is $3 billion more than the last 5-year TIP auction.

Do you still believe the recovery is real? Do you still believe there is legitimate demand for US Government debt? The American financial system is the proverbial "house of cards". One fraud props up another, and then another, and so on, and so on. The barometer of this fraud is the Gold market. It is the number one reason the US Government and the bullion banks have gone to the "edge of the earth" with an elaborate and cocky fraud leveraged to the tune of 100 to one in an effort to stifle Gold. When the Gold market breaks these shackles of fraud, the house of cards will fall swiftly, and America will cease to be a financial and military superpower. The entire balance of the world will shift eastward, as the west crumbles into the depths of the Depression that the Oracle Of Orwell had assured the public had been averted.

After an unusual break from their bi-weekly debt scam, the Treasury will open the auction cupboard again this week, and the Fed will refire their printing presses. $129 BILLION of new treasury Debt are scheduled to be sold this week. Yes, shocking...

Also this week we will witness a Fed interest rate meeting confirming their zero interest rate policy will continue. Options expiration in the Precious Metal futures markets. And our first look at 1st quarter GDP numbers for the phoney American recovery. Gold is sure to be beat on repeatedly this week to assure the TRUTH about the fraud that is America remains silenced. But for how much longer?


    PROFIT UP TO $10,000 PER WEEK.

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