Bail-in of big banks as an ongoing strategy

Was Cyprus a one-off situation? At Alternet, Ellen Brown says no, and she indicates that the repeal of Glass-Steagall, "too big to fail" and the subsequent $230 trillion derivatives boondoggle should make many of us wary.

The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles here and here. “Too big to fail” now trumps all. Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks. The big risk behind all this is the massive $230 trillion derivatives boondoggle managed by US banks . . . The tab for the 2008 bailout was $700 billion in taxpayer funds, and that was just to start. Another $700 billion disaster could easily wipe out all the money in the FDIC insurance fund, which has only about $25 billion in it.
Under the guise of protecting taxpayers, Dodd-Frank makes depositors of failing institutions are to be de-facto subordinated to interbank claims. Brown writes: "The FDIC was set up to ensure the safety of deposits. Now it, it seems, its function will be the confiscation of deposits to save Wall Street." The urgent solution, is to repeal the super-priority status of derivatives, so that the banks themselves lose out to the security of the depositors.

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Business as usual at J.P. Morgan Chase

Nothing has changed for the better at J.P. Morgan Chase, as described by Matt Taibbi. It's clearly time to break up the big Wall Street banks.

If you can fight through the jargon, what this basically means is that Chase decided to go into the fiction business and invent a new way to value its crazy-ass derivative bets, using, among other things, a computerized model the company designed itself called "P&L predict" which subjectively calculated the value of the entire fund toward the end of every business day. If this all sounds familiar, it's because it's the same story we've heard over and over again in the financial-scandal era, from Enron to WorldCom to Lehman Brothers - when the going gets tough, and huge companies start to lose money, they change their own accounting methodologies to hide their screw-ups, passing the buck over and over again until the mess explodes into the public's lap. The difference is that Chase is a much bigger and more dangerous company to be engaging in this kind of behavior. An even scarier section of the report regards the reaction of the Office of the Comptroller of the Currency, or OCC, the primary government regulator of Chase. The report exposes two huge problems here. One, Chase consistently hid crucial information from the OCC, including the sort of massive increases in risk the OCC was created precisely to monitor. Two, even when the bank didn't hide stuff, the OCC was either too slow or too disinterested to take notice of potential problems.

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Considering Cults and the Need for Meaning

Recently, I finished reading Lawrence Wright’s new book, Going Clear: Scientology, Hollwood, & the Prison of Belief, about Scientology. It’s a lucid history and examination of the movement. [More . . . ]

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New documentary on the Iraq War Hoax

Why did the U.S. spend $3 trillion and squander thousands of live in Iraq. For no good reason. A new documentary titled "Hubris." Here's an excerpt of the review at Huffpo:

The yellowcake uranium supposedly bought by Saddam in Niger, the aluminum tubes supposedly used to process uranium into weapons-grade material, the supposed connection between Saddam and Osama bin Laden—the documentary features intelligence analysts and experts who at the time were saying and warning that the intelligence on these topics was wrong or uncertain. Yet administration officials kept using lousy and inconclusive intelligence to push the case for war.

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Cult of personality

Glenn Greenwald points out that many Democrats have been exposed as hypocrites, supporting abhorrent Bush era policies simply because Obama is now implementing them.

That many Democratic partisans and fervent Obama admirers are vapid, unprincipled hacks willing to justify anything and everything when embraced by Obama - including exactly that which they pretended to oppose under George W Bush - has also been clear for many years. Back in February, 2008, Paul Krugman warned that Obama supporters are "dangerously close to becoming a cult of personality." In May, 2009, a once-fervent Obama supporter, New York Times columnist Bob Herbert, wrote a column warning that Obama was embracing many of the worst Bush/Cheney abuses and felt compelled - in the very first sentence - to explain what should be self-evident: "Policies that were wrong under George W. Bush are no less wrong because Barack Obama is in the White House." The same month, former Bush DOJ official Jack Goldsmith - who provided the legal authorization for the illegal Bush NSA warrantless eavesdropping program - went to the New Republic to celebrate that Obama was not only continuing the core Bush/Cheney approach to terrorism, but even better (from his perspective), was strengthening those policies far beyond what Bush could achieve by transforming Democrats from opponents of those policies into supporters.
Many, including Greenwald have repeated attacked our policy allegedly justifying the assassination of Americans. A much bigger concern to me is that we are, through the use of drones, waging illegal undeclared wars in a many other countries. Also consider these domestic and foreign policy actions of Obama. How many Democrats would support them if a Republican President had been responsible?

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