Moon of Alabama Brecht quote
February 20, 2009

Markets Today

Today's share price percentage change as of now:

Citigroup Inc.   -25.10 
Bank of America Corporation  -17.05 
Allied Irish Banks, plc. (ADR)  -10.37 
Royal Bank of Scotland Group plc (ADR)  -9.32 
U.S. Bancorp  -7.81 
ICICI Bank Limited (ADR)  -7.79 
Bancolombia S.A. (ADR)  -6.46 
BBVA Banco Frances S.A. (ADR)  -6.28 
The Bank of Nova Scotia (USA)  -6.18 
Deutsche Bank AG (USA)  -5.72 

Finally people start to recognize that these banks, and others, are zombies.

A solution I can agree with:

  1. The memo goes out in the AM to every bank in America: No more lies.  If you lie, even once, your bank gets seized and you will be criminally charged personally.  Period.  I am particularly interested in Mr. Lewis' claims on national television (CNBC) that Bank America had a "great" January.  That sounds an awful lot like Dick Fuld who said he was going to "burn the shorts" and was "well-capitalized".  Oh by the way, I'd refer Mr. Fuld's statements over to Justice immediately, along with everyone else who said something similar (Bear Stearns anyone?)
  2. I would then amend OTS and OCC rules: All bank examinations are public data.  All examinations must either have every asset marked to the market or the full model and data inputs must be disclosed, without exception.
  3. Next, I would take the stage and give every bank in America 72 hours to disclose their current Tier Capital numbers under those rules.  They have 'em in the possession of their Risk Manager.  Let's have it.  In public.  You publish it, we print it.  Everyone who is under-capitalized and has been hiding it - your shares are suspended.  We'll get to you.
  4. For those who are under-capitalized: If you have sufficient capital in your debt to be crammed down, that's what happens.  Your common equity is gone.  Preferred is crammed down, if that's insufficient it is gone.  Next we do subordinateds, and repeat until sufficient capital is restored.  End of discussion.
  5. For those who cannot be crammed down we seize you.  Your deposits and good assets are auctioned off to sound institutions, spread among the physical locations of those assets and deposits so no concentration of more than 5% in one bank occurs.  The rest of the assets go the FDIC and are run down or auctioned off as they deem appropriate.
  6. Any bank with more than 5% of the deposit base has 12 months to reduce it to under 5%.  This affects fewer than 20 institutions.
  7. No bank may transact in any instrument that is (1) not a whole loan or (2) is not traded on an exchange.  Period.  Any such "assets" currently held must be disposed of within six months.  No exceptions.  I recognize that this makes banks a "utility" - entities that take deposits and make loans.  So what?  Its a good and profitable business, has been for hundreds of years, and forces proper underwriting since you must retain the risk.
  8. Any bank that finds (7) onerous (and most will) is free to split itself into two firms, one a bank and the second a non-bank affiliate held by the parent.  The affiliate may not utilize depositor capital or otherwise be cross-contaminated with bank assets and support, but is of course free to raise money via debt offerings in the marketplace such as it is.  Said non-bank firm may trade in whatever it would like, however, it will not receive any government support of any kind.  Cross-contamination of any sort between a regulated bank and a non-bank sub will be treated and prosecuted as bank fraud.  Any existing "affiliate" bank credit lines must be extinguished within 90 days and "23A letters" are explicitly disallowed.
  9. Reserve ratios are set at 8% with no exceptions.
  10. Bernanke will do as the above directs without complaint or I will exercise my lawful and Constitutional authority to issue United States Notes, bypassing The Fed entirely.  Ben and The Fed work under my direction, not the other way around.  End of discussion.
  11. Any bank that does not want TARP money may repay it immediately.  If you keep it, no employee may receive total compensation exceeding that of the President of The United States, without exception and in all forms, including stock, options as valued under Black-Scholes, deferred compensation, benefits and cash.  Period.  You are working for us, therefore we set your salaries.

Sounds like what I proposed six month ago and what Helmut Schmidt prescribed with his Six steps to curb speculation. The big point Karl Denninger misses is that this has to be done in concerted international action, not just as a U.S. solution.

Posted by b on February 20, 2009 at 02:35 PM | Permalink

Comments

Nice post, b.

Problem with #10 is JFK tried to do something very similar. I guess we could say he may have found out otherwise?

But let's hope somebody with (some very large) cojones steps up to the wealth and central bank aristocracies.

Best regards.

Posted by: Darkcloud | Feb 20, 2009 2:49:30 PM | 1

b, I know a little bit about banking: Banks are crooks, bankers are crooks and the entire concept of modern banking is crooked, so how do you wish to reform an intrinsically crooked industry?

I mean, they offer you, say, 3 % p.a. on your deposits but if you are overdrawn for even one day you are charged upwards of 18 % p.a. in interest and penalties. This type of loan-sharking is the nature of the problem on a personal level.

On a corporate level, banks by their nature possess the most 'hard cash' (there are exceptions like Siemens and Microsoft that also possess billions in cash but they're the exceptions), and banks can't achieve high growth by acting like a post office or a pure Savings and Loan, so they explore more exotic forms of 'banking' like Investment Banking and Project Finance for higher ROIs and ROEs to please their shareholders. In essence, the possession of so much depositors' cash is a temptation that few banks can resist "to put it to work".

So all the proposals in the world such as the ones above won't solve the problem, because even with stringent adherence to an 8 % capital reserve you're still going to have banks gambling with the remaining 92 %!!!

If banks are to become "responsible guardians of depositors' money" the only recommendation or rule that is of any value is No. 7 above.

Posted by: Parviz | Feb 20, 2009 3:09:59 PM | 2

Darkcloud, that is not true about JFK doing something similar.

Posted by: Obamageddon | Feb 20, 2009 3:26:29 PM | 3

@Parviz - Yep - banks are utilities and should be made to behave as such. Well regulated utilities, water etc, usually make nice but not exaggerated profits. The banks should be handled the same way.

Posted by: b | Feb 20, 2009 3:27:58 PM | 4

End private banking, but do not nationalize losses in the process. Allow the insolvent banks (calling banks zombies is obfuscatory and bandwagonish) to go bankrupt, or mandate that they enter bankruptcy, and use the liquidation proceeds to pay back the TARP. Conduct full scale investigations and prosecutions, including seizure of personal assets, for all those found guilty of using TARP funds in bad faith.

Posted by: Obamageddon | Feb 20, 2009 3:31:13 PM | 5

Obamageddon,

In my post I wrote "I guess we could say he may have..." intentionally for nondefinitive purposes. But I happen to believe it a very real possibility.

Anyway, for funsies:

http://search.yahoo.com/search?p=jfk+treasury+notes&fr=fptb-&toggle=1&cop=mss&ei=UTF-8

A wise man once said, "Nothing's impossible".

Thanks. I enjoy your posts and penname.

Posted by: Darkcloud | Feb 20, 2009 4:00:21 PM | 6

Well, it is not the solution I prefer, but the eleven points might restore confidence all around - not only to the banks but to any other business as well. Maybe even enough to get us out of this mess.

And yes, b, I agree: Not only the US needs to do this, this needs to be international action. And anybody who does not want to join needs to be cordoned off. (high tariffs, blocking of free transfer of funds in both directions, the whole spectrum...)

But unfortunatly it is still to early in the crisis to do this...

Posted by: No So Ana | Feb 20, 2009 4:09:02 PM | 7

@Obamageddon #5
To reiterate my preferred solution: Build "good banks" first with capability to do the "boring" bank stuff, like wiring money from here to there or to offer loans to whoever needs it (and has a chance to pay it back...)

Then the old banks may fall (and will fall, since noone would trust them). Plus a little bit of law enforcement, purely for the entertainment value ;-)

Posted by: No So Ana | Feb 20, 2009 4:14:44 PM | 8

Thanks, Darkcloud. The only reason I mention it is because I've spent some time researching the matter. I came across this, which seems to refute the possibility quite resolutely.

The JFK Myth

Posted by: Obamageddon | Feb 20, 2009 4:37:57 PM | 9

I am taking a dip Monday on bank shares, will exit 48 hrs later.

Posted by: Cloned Poster | Feb 20, 2009 4:54:20 PM | 10

Yes, Obamageddon, I noted your link and referenced article in my search link at my post #6, along with many others.

Here is the link again:

http://search.yahoo.com/search?p=jfk+treasury+notes&fr=fptb--s&toggle=1&cop=mss&ei=UTF-8

Best regards.

Posted by: Darkcloud | Feb 20, 2009 5:00:13 PM | 11

To Those Born After

I

To the cities I came in a time of disorder
That was ruled by hunger.
I sheltered with the people in a time of uproar
And then I joined in their rebellion.
That's how I passed my time that was given to me on this Earth.

I ate my dinners between the battles,
I lay down to sleep among the murderers,
I didn't care for much for love
And for nature's beauties I had little patience.
That's how I passed my time that was given to me on this Earth.

The city streets all led to foul swamps in my time,
My speech betrayed me to the butchers.
I could do only little
But without me those that ruled could not sleep so easily:
That's what I hoped.
That's how I passed my time that was given to me on this Earth.

Our forces were slight and small,
Our goal lay in the far distance
Clearly in our sights,
If for me myself beyond my reaching.
That's how I passed my time that was given to me on this Earth.

II

You who will come to the surface
From the flood that's overwhelmed us and drowned us all
Must think, when you speak of our weakness in times of darkness
That you've not had to face:

Days when we were used to changing countries
More often than shoes,
Through the war of the classes despairing
That there was only injustice and no outrage.

Even so we realised
Hatred of oppression still distorts the features,
Anger at injustice still makes voices raised and ugly.
Oh we, who wished to lay for the foundations for peace and friendliness,
Could never be friendly ourselves.

And in the future when no longer
Do human beings still treat themselves as animals,
Look back on us with indulgence.

Bertolt Brecht

Posted by: remembereringgiap | Feb 20, 2009 5:26:05 PM | 12

A Sad State Of Freedom

You waste the attention of your eyes,
the glittering labour of your hands,
and knead the dough enough for dozens of loaves
of which you'll taste not a morsel;
you are free to slave for others--
you are free to make the rich richer.

The moment you're born
they plant around you
mills that grind lies
lies to last you a lifetime.
You keep thinking in your great freedom
a finger on your temple
free to have a free conscience.

Your head bent as if half-cut from the nape,
your arms long, hanging,
your saunter about in your great freedom:
you're free
with the freedom of being unemployed.

You love your country
as the nearest, most precious thing to you.
But one day, for example,
they may endorse it over to America,
and you, too, with your great freedom--
you have the freedom to become an air-base.

You may proclaim that one must live
not as a tool, a number or a link
but as a human being--
then at once they handcuff your wrists.
You are free to be arrested, imprisoned
and even hanged.

There's neither an iron, wooden
nor a tulle curtain
in your life;
there's no need to choose freedom:
you are free.
But this kind of freedom
is a sad affair under the stars.


Translated by Taner Baybars

Nazim Hikmet

Posted by: remembereringgiap | Feb 20, 2009 5:32:19 PM | 13

Here's my view of the subject;

I first began questioning economic orthodoxy by trying to figure out how Paul Volcker cured inflation by raising interest rates. Yes, inflation is caused by loose money, but higher rates hurt demand, ie, the borrower, while rewarding supply, ie, the lender. How do you cure an oversupply by reducing demand through higher cost and rewarding supply? You don’t. What cured inflation was Reagan’s deficit spending. Not only was it direct demand for capital, but the public spending had a multiplier effect in the private economy. Meanwhile those loaning the money have its value supported and get paid interest. Interesting how a surplus of currency gets blamed on those lacking wealth, while those with a surplus of capital get rewarded. So I’m concerned that Volcker is now President Obama’s financial guru.

One of my arguments over the years has been that money has become a tax based public utility and our current financial system is a transition state between private banks issuing private currency, to now a publicly supported currency leased out to a private banking system and the next step will be a public banking system that will be incorporated at all levels of government, so that profits are re-cycled back through the communities which created them and depositors would naturally bank with those institutions that support the services they are most likely to use. Competition would be a function of the various communities trying to provide the best environment for people and business.

That is why it is interesting to watch the banking system being rapidly nationalized. Rather than spending untold wealth to restore it to health and return it to the private sector, it needs to be broken up and distributed to the various levels of government, from counties and towns, to cities and states, with some degree of federal oversight of the banks and control of the currency. Though even the function of currency might be dispersed as well, with state and regional currencies supplementing a broad national currency.

The problem with supply side economics is that money is saved by investing it. This means loaning it to someone else. Therefore total savings are determined by how much can be prudently loaned, not by how much can be reserved from earnings. In order to accommodate surplus savings, loan standards were lowered and fantasy investment vehicles were created, resulting in a bubble of excess circulation far greater than a few trillion can patch up. The borrower is the foundation of capitalism and when the borrower is tapped out, it's like planting seed in barren soil.

That is why it is necessary to understand money as the public commons/wealth that it is, not the private property we have been led to believe. As an analogy, you own your house, car, business, etc. but not the roads connecting them. Money is similar to the roads. It’s the interchangeability that makes it work. It is both medium of exchange and store of value, but as store of value it amounts to fat cells in the economy. Necessary in moderation and broadly dispersed, but dangerous in excess and concentration. If those administering transportation systems insisted on squeezing as much profit from the rest of the economy as possible and that they were the only ones capable of making it work, it would be viewed as corruption, pure and simple. In fact, that's what the railroads did and it was.

Viewing money as a public utility would incline us to store wealth in our communities and environment, rather than drain value out to put in a bank. Like democracy, it’s about strengthening the bottom up growth process, while defining the top down control mechanism to its most efficient functions.

Growth is bottom up, not top down. The problem with treating the economy like a game of Monopoly is that when one person owns everything, the game is over and then starts again. In real life, this stage is called revolution. The economy must function as a convective cycle of rising assets and precipitating benefits, otherwise we have the current situation of large storm clouds of marginally productive wealth hanging over a parched economy.

This isn't an ideology, just an observation of how to differentiate between public and private functions. There are potential problems with any model, but this seems to me to be what the next step up the evolutionary ladder entails.

Posted by: John Merryman | Feb 20, 2009 6:04:14 PM | 14

Obamageddon: Well, if you just shoot the top bankers and then confiscate their entire fortunes, I'm sure you'd be able to reimburse a sizable portion of TARP.

In fact, I think it's time to make an example, because just saving the banking system, in a way or another, means that 30-40 years from now, they'll make the same greedy crooked mistakes, or crimes if you prefer. We must make sure people understand there are consequences to bad actions, and that such a criminal behaviour has met now such a punishment that no sane person will ever again try that kind of crap again. It's time for a massive culling of the financial sector, and the physical termination of all the top tiers of banking instutitions.
Hell, if it was good enough for the French in 1793 and the Russians in 1918, it's good enough for the world in 2009. We just have to make sure we'll be more thorough than they were and that no one will be able to slip between the net when the purges begin.

Posted by: CluelessJoe | Feb 20, 2009 6:28:01 PM | 15

Clueless Joe #15: top tiers don't topple, not in 1793, 1918, nor now. The manager is not in the wrestling ring and will not be
http://3.bp.blogspot.com/_pLWV4iq9kCU/SGN3lsOzGyI/AAAAAAAAAGM/aNQvG4b5FQQ/s1600-h/pigprudence46+copy.jpg>underwater.

Oh, that reference to 16' is from a few years ago and referring only to part of West Antarctic ice sliding. East Antarctica, not melting but increasing, is where the big ice is. I wonder about sympathetic earthquakes under there.
(NW Greenland had earthquakes for reason of lessened ice weight summer '07, as linked here before: http://www.moonofalabama.org/2007/10/ot-07-70-1.html>top comment. Greenland's good for about 20', W. Antarctica about 21', East Antarctica some number above 160'. If there were worldwide sympathetic earthquakes, lands might topple into seas as well, but our rulers won't.

The seed bank in Svalbard (mining companies are important) is over 400' above sea level. Waterbury Ct. ranges from about 200' to 800' above.

Posted by: plushtown | Feb 20, 2009 7:17:51 PM | 16

Well, if you just shoot the top bankers and then confiscate their entire fortunes

in china if you're caught swindling/fraud..i think they use the needle.

Posted by: annie | Feb 20, 2009 7:24:02 PM | 17

There is something very compelling about Karl Denniger, whom b cites, when it comes to pointing out the insanities in the financial system, and some very definite if not opinionated ways to fix it. Yet there is an undercurrent of "radical libertarianism" that I think I sense that gives me pause. The really radical ways in which I wish the existing financial structure, and the excuses given by politicians for it, were swept away and a more rational one imposed is a real feeling.

But the cross currents of social responsibilities and financial realities, and the characters who front for the differing constituencies, don't seem at all clean to me. Much of it smacks of looking for someone to blame. And the fascistic tendencies that this often brings out in us clamors to blame the little guy. So the Rick Santelli's who can get a mob of options's traders behind him to act vengeful toward over extended mortagees -- who indeed may be their neighbor or friend -- don't make me feel comfortable:

as Karl Denniger writes: "Policy-makers better listen up and do so soon. This, along with Rick Santelli (and by the way, CNBC ran a poll on the "TeaParty", and over eighty thousand people said they would show up!) is tapping into what America feels about all this nonsense".

I don't know, but I smell the odor of class/culture conflict on the horizon, and its not between Wall Street and Main Street. Its the bourgeois and the prols turning inwardly against themselves, while the bankers, financiers, and and corporate thieves laugh all the way to their offshore hideaways.

I apologize for this disconnected rambling. The crosscurrents and pieces of this puzzle are challenging to fathom much less express.

Posted by: DonS | Feb 20, 2009 8:55:08 PM | 18

Sorry, Darkcloud, I didn't look at your link prior to posting mine. I believe Kennedy was assassinated by the deep state, but not because he wished to abolish the Federal Reserve. I think he was was part of the establishment, so there was no way he would ever contemplate such a radical approach. Hell, even FDR didn't contemplate such a radical approach. At this point in History, I don't think there's any possibility of a rogue President reaching the throne, if there ever was a posiibility, so any chance of abolishing the Federal Reserve at the behest of the populace without a revolution is near impossible.

Posted by: Obamageddon | Feb 20, 2009 8:56:34 PM | 19

Clueless Joe, I agree, it is time for Justice to be served. In fact, it's been long overdue....say, since the dawn of uncivilization. Any reforms without a proper accounting of the past and the dispensation of Justice is just kicking the can further down the road. Problem is, that can is now a snowball of monumental proportions, and its now rolling downhill under its own impressive momentum, and humanity, and the fate of planet earth, lays directly in its path.

Posted by: Obamageddon | Feb 20, 2009 9:03:00 PM | 20

DonS, no need to apologize, I have very similar thoughts. There appears to be a very negative Zeitgeist heading our way.

Posted by: Obamageddon | Feb 20, 2009 9:06:40 PM | 21

The seed bank in Svalbard

A prime example of the destructive and undemocratic consequences of wealth accumulation. It's touching that Mr. Gates wants to be the Johnny Appleseed of the new world, and has the money to see that goal realized.

Posted by: Obamageddon | Feb 20, 2009 9:12:36 PM | 22

i have been rereading the work journals of bertolt brecht & those notations especially those written during the war - reflect deeply how i feel towards what is happening around us, through us & against us

when i hear obama i hear an earnest sunday school teacher who doesn't believe a word he is saying - if there is a constant feeling - it is one of dread, that is finally the most convincing

sometimes, with all the tools we possess to understand the history we are living through - there are moments - when you know, you absolutely know that those who rule from the roll of dollars simply do not understand anything, i mean anything outside their most immediate greed

40 years of almost constant conservative, neoconservative control of the west & they have not produced one leader of distinction, one thinker of distinction - they are like warhol's creations, empty - visibly empty

& it is their emptiness - because their politics is simply just another name for savagery - which creates the fear tthat the great majority of us feel

Posted by: remembereringgiap | Feb 20, 2009 10:15:32 PM | 23


how about random public audits of all bank & finance entities.
It kills 2 birds with one stone. First, its guaranteed to discourage the casual or incidental banksters whose presence creates the pond in which the hard-core bankster swims. Also helps reveal problems & issues that are unrelated to fraud. And its critical to catch these early as they are often a big part of the motivation and/or incentive for bankster activity.

another issue is political, How does one measure a sound economy ? How does one measure a sound financial system. And lets set aside fairness & equity for now. Also, lets just talk about bank/finance. How do we measure the drift from soundness. The fact is that the systemic signs of massive bank & corporate drift (away from soundness) have been there all along but have been mis-characterized as higher efficiencies/productivities/technology/systemic-evolutions. And once the pace of drift exceeds our ability to adjust our models of soundness, we are screwed.

its been obvious for maybe 20 years that bank wages were sky-rocketing while real wages on Main Street have frozen or dropped. Not a sound model. The growth in GDP attributed to the finance system was exploding. Not a sound model. The growth in the banks share of loan spreads had exploded. Not a good model. Derivatives & other bank securities had taken a life of their own, nobody understands them or how to unwind them without bleeding. Very bad model. People had forgotten (brain-wash) how to save or live within their means. Bad model again. Unregulated & unsupervised computer-programs making more & more critical decisions for us. Very stupid model.

In a good model, we would want to know understand exactly why a bank CEO takes home two hundred million dollars a year. In a good model, we would have recognized that the housing bubble was a giant Ponzi scheme. Every college in America should offer a class "If it looks like a Ponzi, if it talks like a Ponzi ,,, its probably a Ponzi" because its going to happen again as soon as they figure out how to mask, lip-stick & sugar-coat the next one.

Posted by: jony_b_cool | Feb 21, 2009 2:25:16 AM | 24

jony_b_cool, educating the general public is a great start, not just in economics but in politics, so children learn from a very early age to think for themselves and forgo easy solutions.

The problem is that it's going to be very difficult for the U.S.A. in particular, which started this whole Supply-Side Capitalist Excess, to teach both a "New History of America" and a "New History of Capitalism" to a nation born and bred on violence and greed.

When the cheerleading and flag-waving stops, common sense can breed.

Posted by: Parviz | Feb 21, 2009 2:53:36 AM | 25

Beautiful @12

r'giap thank-you. I haven't read the other yet, as the words to twelve are still resonating and processing in my head.

And although, I'm against the 'death penalty' annie's right, give the needle... they are, as others have said, empty. Empty carbon, with no thought of their hurtful actions, perhaps the they can come back and earn a soul.

Posted by: Uncle $cam | Feb 21, 2009 3:20:18 AM | 26

We can start with this guy...

Prince of Darkness Denies Own Existence

By Dana Milbank
Friday, February 20, 2009; Page A03

Listening to neoconservative mastermind Richard Perle at the Nixon Center yesterday, there was a sense of falling down the rabbit hole.

In real life, Perle was the ideological architect of the Iraq war and of the Bush doctrine of preemptive attack. But at yesterday's forum of foreign policy intellectuals, he created a fantastic world in which:

1. Perle is not a neoconservative.

2. Neoconservatives do not exist.

3. Even if neoconservatives did exist, they certainly couldn't be blamed for the disasters of the past eight years.

"There is no such thing as a neoconservative foreign policy," Perle informed the gathering, hosted by National Interest magazine. "It is a left critique of what is believed by the commentator to be a right-wing policy."


As another said, "Sad state of affairs that he is permitted to walk with impunity amongst humans masquerading as one of us."

Posted by: Uncle $cam | Feb 21, 2009 3:32:01 AM | 27

Just as above, where I lament the empty shells of the robber barons, so too, are our hall of justice and it's other institutions.

Define Irony.

Posted by: Uncle $cam | Feb 21, 2009 3:58:05 AM | 28


Gone in 60 Days: Citi and Bank of America Won’t Live to See

Citigroup (C) and Bank of America (BAC) won’t live to see May. The government will take them over within the next 60 days. The announcement may come as soon as tomorrow evening.

If there’s one thing our readers know, it’s that ChartingStocks.net has made some bold calls in the past which seemed controversial and highly unlikely at the time. Our January 2007 post warned of the coming stock market crash at a time when the market was making new all time highs. In February 2007 we warned about the breakdown of the brokerage stocks and singled out Bear Stearns (Trading at $160), Merrill Lynch (Trading at $87), and Morgan Stanley (Trading at 7Cool. In September 2007, we warned of a selloff in the coming weeks. The market peak and decline began 4 weeks later.

We’re going to make another bold prediction. Bank of America and Citigroup won’t live to see May. The two banks will be nationalized in the coming weeks, and we think that the announcement can come as soon as tomorrow evening (Friday evenings are when major bank announcements and failures occur).


The US government has already committed half a trillion dollars to these two firms which is more than 10 times the amount it would cost to buy and control both companies. The market doesn’t believe that $500 billion is enough to save these companies.
All the kings horses and all the kings men can’t put humpty dumpty back together again.

Today both banks made fresh new lows with Citi closing at $2.51 and Bank of America closing at $3.93. The 1 year charts below show the short term price movements. You should understand that when a bank stock’s chart looks like this, even a HEALTHY bank would be in trouble. Nobody wants their deposits tied up in a company that trades at $2. The outflows of deposits from Bank of America and Citi must be catastrophic.

We don’t watch the news for the information, we watch if for THE LIE. If you know that our mainstream media is simply a licensed PR firm for the US government, you can get vital information which you can use in trading. Always ask yourself - What opinion are they trying to insert? What are they selling? What’s the underlying agenda?

Welcome to the theater, please take your seats, the show will begin momentarily...

Posted by: Uncle $cam | Feb 21, 2009 4:14:09 AM | 29

Volcker: Economy falling faster than in Depression

Posted by: Uncle $cam | Feb 21, 2009 6:09:39 AM | 30

Obamageddon @ 19:

You make some excellent points: part of the establishment, radical approach, FDR, no possibility of a rogue President or abolishing the Federal Reserve.

Though I do greatly fear the egos in the aristocracy. Maybe the Fed Chairman under Kennedy made a pass at Marilyn Monroe?

Just kidding, just kidding, just kidding - - but I must admit to a sometimes hyper-wild imagination and a delight in getting the juices of others flowing. All part of staying true to my penname, of course.

And if I had time to read or write a book on the topic I would!

Posted by: | Feb 21, 2009 8:56:54 AM | 31

Sorry, sign in didn't take at 31.

Posted by: Darkcloud | Feb 21, 2009 9:00:31 AM | 32

jony_b_cool #24:

Every college in America should offer a class "If it looks like a Ponzi, if it talks like a Ponzi ,,, its probably a Ponzi"

Actually, ought to be in grade school, (one of my rants for 20 years) along with how to read a newspaper, how to use a library, how to use a map, and the brilliant mother's advice: If a man says "trust me", don't.

Posted by: | Feb 21, 2009 9:48:31 AM | 33

33 was me.

Posted by: plushtown | Feb 21, 2009 9:49:07 AM | 34

Plushtown, I would replace "how to read a newspaper" with "never read a newspaper." They're misdirectional rags, at best.

Posted by: Obamageddon | Feb 21, 2009 10:19:57 AM | 35

If there's a silver lining, it's flushing the corrupted money (immeasurably damaging lack of innovation via trillions of Big Oil subsidies world-wide since 1945) of ill-begotten gains. In stark contrast, study Brazil, Denmark (both since the 1970's) and later Germany, Sweden. Now the U.K wants to retrofit 7 million houses.
It's not Humpty Dumpty anymore, it's chicken and egg.

Related Reading:
http://www.guardian.co.uk/environment/2009/feb/09/eco-homes-refit-emissions
http://blogs.telegraph.co.uk/milo_yiannopoulos/blog/2009/02/17/leading_climate_change_cheerleader_james_hansen_has_lost_the_plot
http://ergobalance.blogspot.com/

Posted by: Sustain | Feb 21, 2009 10:48:37 AM | 36

The present flap about the tax evaders in UBS accounts is due to:

- a long standing and concerted attack against CH banking secrecy, against the Swiss Bankassurance, which has too large a market share according to the Anglos. Many countries (Austria, Belgium, Singapore...) have the same or similar laws.

Tthe USuk have their perfectly ‘legal’ according to them locales for ‘offshore’ accounts, which are even more protected, notably against detection of money laundering. (jersey, cayman islands, etc.) One US State - Delaware - has anonymous accounts (..don’t know the details.)

- The IRS. Only two countries in the world tax their citizens (or ‘green card holders’) when they live abroad, or, in the case of the US, give up their passport - the USA and Lybia. For US (ex or no) citizens, escaping the IRS when you live in Spain or Thailand can take 10 years.

- The UBS’ fraudulent actions, prospecting for and signing up US clients and making some kind of ‘montage’ that would let them escape US tax.

- The submisiveness of the CH federal council, who folds to US pressure. They have done it twice now in the past 18 months. First, for the Khan/Tinner brothers nuclear proliferation scandal, for which they invoked ‘emergency powers’ - for the first time afaik since just after WW2 - and destroyed a pile of documents that would have implicated the CIA. At least that went the legal route. That decision has now been condemned, too late of course.

Second, they tried to deal with the US, by giving them the names of the 250 or so fraudsters, under the understanding that no penal complaint would be lodged against the UBS. The Fed council did this by leaning on the Bank regulatory / surveillance authority, to make them carry the can, make up some tortured language about ‘fraud’ that would fit the various agreements and treaties that bind the US-CH. (These have been blithely ignored by the IRS.) One day after they gave the names a new penal complaint was lodged in a Miami court; and one or two days later the case the 8 of the 250 have brought in the Fed Swiss court was judged; their names could not be communicated, although they already have been.

This local story shows: International finance is ‘unregulated’, it is not just ‘banks’ aka one’s local credit Union, or whatever benevolent and proper entity one might reasonably imagine; agreements and regulations are incomplete, opaque, and in many cases not applicable anyway in a globalized world. It is a jungle where the strongest wins with threats. A competition for capting ‘illegal’ money (drugs, arms, slave trade, corporate fraud, gvmt. fraud), where one can skim off the top without the client complaining is the heart of the matter (imho) as well as secret agreements we know nothing about.

For the nuke scandal, google> Tinner nuclear / Tinner brothers / Kahn / etc.


Posted by: Tangerine | Feb 21, 2009 12:18:24 PM | 37

Having faced the fact that Switzerland's a fishbowl now with no privacy protection, UBS moved to a 'mass affluent' niche. Now they serve libertarian dentists and assorted crooked pissants. Serious money launderers and tax evaders know that the best place to hide money is in a small private bank right in London. LGT in Leichtenstein was very trustworthy but someone acquired a mole and stole account information. The state of the art now depends not so much on choice of jurisdiction as on dispersing and moving funds around.

I don't see the persecution of UBS as a fight for market share. I always attributed it to two other motives: Money follows freedom and the rule of law, and you can't have that in a totalitarianism regime. So you need antiterror and AML surveillance. And now the new and more urgent spur to AML is the need to impose capital controls before you debase the currency, otherwise capital flight will destroy the financial sector.

Posted by: ...---... | Feb 21, 2009 3:23:40 PM | 38

Hey, b --

this is just a message to let you know that your RSS feed seems to have a bug.

Here's the page for the W3C validation service; the result of this is that my RSS reader now can't access your pages:

http://validator.w3.org/feed/check.cgi?url=http%3A//www.moonofalabama.org/atom.xml

Cheers!

ch

Posted by: china_hand2 | Feb 21, 2009 11:59:21 PM | 39

Brzezinski: ‘Hell, There Could Be Even Riots’

Brzezinski fears class warfare. Not Mika. Zbigniew. And not Barney-Frank-on-Meet-the-Press class warfare. Real, blood-in-the-streets riots.

Jimmy Carter’s former National Security Adviser expressed his concern about the possibility of riots on Morning Joe today. To stave them off, he proposes the creation of a voluntary National Solidarity Fund, whose contributors would be those who made out very well in recent times.

JOE SCARBOROUGH: You also talked about the possibility of class conflict.

ZBIGNIEW BRZEZINSKI: I was worrying about it because we’re going to have millions and millions of unemployed, people really facing dire straits. And we’re going to be having that for some period of time before things hopefully improve. And at the same time there is public awareness of this extraordinary wealth that was transferred to a few individuals at levels without historical precedent in America . . . And you sort of say to yourself: what’s going to happen in this society when these people are without jobs, when their families hurt, when they lose their homes, and so forth?

We have the government trying to repair: repair the banking system, to bail the housing out. But what about the rich guys? Where is it? [What are they] doing?

It sort of struck me, that in 1907, when we had a massive banking crisis, when banks were beginning to collapse, there were going to be riots in the streets. Some financiers, led by J.P. Morgan, got together. He locked them in his library at one point. He wouldn’t let them out until 4:45 AM, until they all kicked in and gave some money to stabilize the banks: there was no Federal Reserve at the time.

Where is the monied class today? Why aren’t they doing something: the people who made billions, millions. I’m sort of thinking of Paulson, of Rubin. Why don’t they get together, and why don’t they organize a National Solidarity Fund in which they call on all of those who made these extraordinary amounts of money to kick some back in to [a] National Solidarity Fund?

A bit later, Zbig made his fears explicit.

BRZEZINSKI: And if we don’t get some sort of voluntary National Solidarity Fund, at some point there’ll be such political pressure that Congress will start getting in the act, there’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!

Note: This might have been Zbig’s first Morning Joe appearance since he sneeringly dismissed Scarborough as “stunningly superficial.” Unfortunately, from a selfish entertainment-value perspective, there was no renewal of those fireworks, all parties being on their best behavior. Mika, apparently off on vacation, is certainly relieved.

Emphasis mine.. The above is the transcript, but there's also vid of it too.

Posted by: Uncle $cam | Feb 22, 2009 4:43:29 AM | 40

@china hand 2 - yep - that's because I copied that table from another side. Sorry, will try to fix it later.

Posted by: b | Feb 22, 2009 8:10:18 AM | 41

...---... posted at 38: Having faced the fact that Switzerland's a fishbowl now with no privacy protection, UBS moved to a 'mass affluent' niche. Now they serve libertarian dentists and assorted crooked pissants..

Heh that made me laugh, and it’s bang on.

At autumn 07 I thought the UBS might fall. It might happen still, I give it 50%, always an easy bet. Fall, that is taken up by the Gvmt. (fdic type stuff) with pieces of it sold, etc. The latest incendiary article in one popular newspaper calls for it right now - and these articles are more serious than in the Anglo press where scare mongering is daily fare to titillate. In this one, the head of the banking association (who has his bread to defend and a lot of power as well as being a spokesman for the whole bankassurance community) speaks of lost honor, i.e. our opinion has turned agaisnt this black sheep...(!!) http://www.lematin.ch/actu/suisse/pierre-mirabaud-ubs-perdu-honneur-87839>link in french

New bank run here on Monday. Still snowing which will slow it down a bit. In the Valais, at 2000 meters there are 6 meters of snow.

Posted by: Tangerine | Feb 22, 2009 8:44:27 AM | 42

Interesting article - UBS afraid to lose its American banking license?!. I expected UBS to gnaw off its leg to get out of the trap, and just sell the American brand. It's not like they've got any assets there, aside from nice fungible accounts. Their financial advisors are drawn from the ranks of the last hired, first fired, and they make them beg for pencils and paper. Why did they run it on a shoestring, if not to allow for easy exit? Maybe they hope to get some US bailout money.

Posted by: ...---... | Feb 22, 2009 10:40:13 AM | 43

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