FedUpUSA

Archive for the ‘Citigroup’ Category

Sandy Weill: ONE DOLLAR OF CAPITAL! (Light)

Now I’ve heard it all.

This is the man who created the “bankster superstore”; he built Citigroup, he pioneered unlimited leverage and game-playing in the financial system, and this morning he repudiated it all and called for:

1. 100% mark-to-market (!) of all bankster assets.

2. A complete split between deposit-taking banks that make loans and investment banks that have no access to credit-money creation via revolving depository doors.

This takes the entire capital markets structure and makes it run on actual capital.  No off-balance sheet anything, no derivative games, everything is marked to the market every single day.

This is ONE DOLLAR OF CAPITAL folks — “lite”, to an extent, for deposit-taking institutions, butabsolute for everyone else.

Wall Street Legend Weill: Breaking Up Big Banks – Video Interview

Now Bloomberg and everyone else get exercised?

Libor and its euro counterpart, the Euribor, are benchmark rates determined by bank estimates of how much it would cost them to borrow from one another, in different timeframes and currencies. The banks submit sheets of numbers every weekday morning, London time. An adjusted average of the rates determines the size of payments on mortgages and corporate loans worldwide. The rates also serve as an indicator of the health of the banking system. Because some submissions aren’t based on real trades, the potential exists for manipulation.

So the submissions aren’t required to be based on actual trades eh?  In other words the banks involved can just make it up!  And they did.

A Barclays banker responsible for reporting borrowing rates was told to make the bank look healthier by not revealing that borrowing costs had risen. An e-mail he wrote to a supervisor confirms that he complied: “I will reluctantly, gradually and artificially get my libors in line with the rest of the contributors as requested,” he wrote. “I will be contributing rates which are nowhere near the clearing rates for unsecured cash and therefore will not be posting honest prices,” he continued, referring to rates in the overnight money market.

Got it?

No, you probably don’t.

Libor and Euribor are benchmarks that are used as a base to set rates for damned near all lending in the economy in one form or another — directly or indirectly.

You, personally, got screwed.  Everyone who borrowed money got screwed.  You might have been screwed by a few pennies a day, but you still got screwed.

This sort of rigging was absolutely standard, it appears:

Here’s an e-mail about the three-month rate from a senior Barclays trader in New Yorkto the London banker who submitted the rates: “Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the lib or fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.”

Bankers submitting rates responded to such requests as if they were routine: “For you, anything,” and “done … for you big boy,” according to the e-mails. Not that the efforts went unappreciated: “Dude. I owe you big time!” one trader wrote to a Libor submitter. “Come over one day after work and I’m opening a bottle of Bollinger.”

Yeah.  An outright scam and the guy who did it was rewarded too.

Heads should roll at other banks, too. Regulators and criminal prosecutors, including the U.S. Justice Department, are investigating at least a dozen other firms to determine whether they colluded to rig the rate. Among them: Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc and UBS AG.

Heads should roll all right.  But until the Just-US Department along with other alleged regulators and “law enforcement”, which have proved to be nothing other than lapdogs for the banksters, ignoring outright criminal conduct as a matter of business and refusing to bring criminal charges against both people and institutions, change their stripes and start enforcing the law I will not be expecting anything other than “more of the same.”

The simple fact of the matter is that until we, the people, rise and demand that this crap stop and the people involved go to prison, and back up our demand with our willingness to act, this will not change.

Showing up at some protest and waving a sign may feel good, but if you go home at the end of the day and then vote for the same jackasses who are in office now, or one who doesn’t insist on and demand prosecution of this activity you’ve told the politicians that you have and will consent to this lawless behavior.

I will not vote for, support, endorse or otherwise give legitimacy to any politician who fails or refuses to demand and make as one of his first and foremost priorities the return of the Rule of Law and criminal prosecution for this, and all other myriad economic frauds. 

Those who argue that I should do so, irrespective of why, have in the past and will continue to get my middle finger in response — both publicly and privately.

Period.

Discussion (registration required to post)

No folks, it’s not just one bank.

It appears it was basically all of them.

If you transacted in any loan that was tied to this rate at any time in the last several years, you probably got rooked, whether it was for pennies or thousands.

According to the WSJ:

Other banks that have disclosed they are under investigation include Citigroup Inc., C-2.77% HSBC Holdings HBC -3.88% PLC, J.P. Morgan Chase JPM -3.45% & Co., Lloyds Banking Group LLOY.LN -5.79% PLC and Royal Bank of Scotland Group PLC. None of these banks have been charged with any wrongdoing in the matter by U.S. or U.K. regulators.

Isn’t that special?  Why yes, it is.

Now if we could just see something approaching accountability.

But we won’t, you know, just as we didn’t when JP Morgan was involved in the disastrous Jefferson County Alabama scheme that landed several local folks in Alabama in prison on various corrupted-related charges.

The people — who got screwed blind and sideways with permanently-larger sewer bills as a result of the corruption, got nothing back from the banksters – they are still paying for the screwing they had inflicted on them.

I’m not one for vigilante justice, but one does have to wonder — at what point do the people simply stop putting up with this crap?

They still write fluff pieces in the WSJ trying to convince you that an admission of criminal conduct isn’t actually an admission and thus couldn’t be prosecuted….

A former top U.S. official in charge of investigating the financial crisis said the government has concluded that many inquiries of wrongdoing by financial executives can’t succeed as criminal prosecutions.

“There’s been a realization and a more deliberate targeting by the Department of Justice before we launch criminally on some of these cases” said David Cardona, who was a deputy assistant director at the Federal Bureau of Investigation until he left last month for a job at the Securities and Exchange Commission. The Justice Department has decided it is “better left to regulators” to take civil-enforcement action on those cases, he said.

Uh huh.  Let’s remember that Citi’s former chief risk officer testified under oath before the FCIC, presenting written documentation, that the firm — all the way into the executive suite — was fully aware that 80% of the loans it was writing and selling on in 2007 did not meet quality standards.

Yet they sold them anyway without disclosing this fact to the buyers.

Were this a food quality case where 80% of the meat sold by a slaughterhouse was known to contain contaminants and led to the death and/or sickness of thousands of people, or a steel quality case where 80% of the steel was known to contain imperfections that led to the collapse of a building and the death of thousands, the executives in question would be sitting in the graybar motel and the firm involved would be out of business.

This is not a singular example.  Wachovia, for example, entered a deferred prosecution agreement — a guilty plea, in effect — for money laundering to the tune of hundreds of millions of dollars of funds laundered for Mexican Drug gangs.  Then there’s the Jefferson County Alabama case in which municipal officials and related parties were actually convicted and went to prison and yet nobody from any of the financial firms involved was criminally prosecuted, nor were the firms themselves.

The latter is especially galling since in order to receive a bribe (the base allegation of corruption that was proved to a criminal standard and led to imprisonment) someone else must offer said bribe and the victims of this scheme were the entirety of the citizens of the county who are stilling paying for the corrupt practices involved and have received no restitution nor do they have any hope of it in the future.

While the apologists say that these cases are “hard to prove” this assertion does not pass the smell test — in many of these cases that I have bird-dogged for years now we have sworn testimony as evidence, in others (e.g. the cases outlined in the 60 Minutes piece that I covered the other day) there are actual whistleblowers who have and will testify and in still others there are actual prosecutions of people on the “other side” of the transactions in question that have led to convictions — that is, cases where the required standard of proof has been met!

You are free to come to whatever conclusion you’d like as to the reason for the lack of prosecution of financial firms and the executives running them, but the “mainstream media” apologist game does not stand up to even the most-cursory level of inquiry.

There’s one folks.  Just one.

NEW YORK — A federal judge Wednesday challenged the SEC’s plan to settle a fraud case against Citigroup for $285 million, saying that the deal would recoup only a fraction of investors’ losses and would leave the firm free to proclaim its innocence in private lawsuits over the remaining damages.

The judge used the Citigroup case to mock the SEC’s traditional way of doing business — allowing defendants to settle without admitting or denying wrongdoing.

The unproven allegations, U.S. District Court Judge Jed S. Rakoff said, “are no better than rumor or gossip.”

“Does not the SEC of all agencies have an interest in establishing what the truth is?” Rakoff asked.

Well yes, it should.  But it doesn’t.  And here’s the real problem: This isn’t the first offense.

In fact Citi has already promised not to do it again many years ago.  And yet they did it again.  This is not unique; let’s remember NY Fed board member Kindler

New York-based Pfizer agreed to pay $430 million in criminal fines and civil penalties, and the company’s lawyers assured Loucks and three other prosecutors that Pfizer and its units would stop promoting drugs for unauthorized purposes.

What Loucks, who’s now acting U.S. attorney in Boston, didn’t know until years later was that Pfizer managers were breaking that pledge not to practice so-called off-label marketing even before the ink was dry on their plea.

On the morning of Sept. 2, 2009, another Pfizer unit, Pharmacia & Upjohn, agreed to plead guilty to the same crime. This time, Pfizer executives had been instructing more than 100 salespeople to promote Bextra, a drug approved only for the relief of arthritis and menstrual discomfort, for treatment of acute pains of all kinds.

Yeah.  This disgusting practice is spread all over our financial system along with virtually all other areas of “rich and powerful” firms and individuals.

Claims that this is an “isolated incident” are blatant lies; among financial firms alone out of 19 firms you can count 51 offenses:

Source: http://publicintelligence.net/banks-dont-make-promises/

The problem with such “fines” is that the record demonstrates that they provide no deterrent at all.  As I have repeatedly pointed out if the penalty for robbing a bank was that you had to give back 1/3rd of the loot — and that’s all — the bank would be robbed literally every hour on the hour.

The political folks who utterly refuse to address this issue – including the so-called “Tea Party” (Joe Walsh anyone?  Or how about Steve Southerland?) are simply pointing out that you are considered peasants and under the boot of an imperious King who grants those in his favor the right to screw you with impunity.

If you continue to support and vote for these jackals on either side of the aisle — if you continue to provide consent of the governed to the government under those terms — then you’re consenting to being screwed.

It’s that simple folks

You want to know why “OWS” is right?  It’s found right here in this sort of so-called “justice” that the SEC is trying to mete out.  And don’t start this crap about it only being “Democrats” that do this sort of thing: The Republican Party controls The House which means it also controls appropriation of funds and could literally close any department or agency that refused to bring actual prosecutions and demand actual jail sentences.

The so-called “Rule of Law” party likes to run pretty commercials, and in fact Herman Cain’s campaign just called me seeking money a few minutes ago.

I told them that I’d give them a donation when hell freezes over, as not only does Judge Rakoff discern that this sort of “settlement” is a sham but so do I, and I’m not funding any more of that crap. 

The “nice girl” on the other end of the phone hung up on me.  Well f$#c you very little Herman, along with the rest of the Republican field.

The Tea Party had every opportunity to stand on exactly this principle and demand handcuffs and real solutions, and in fact Santelli’s Scream was founded on this very principle, as has been my advocacy since I started this publication.  But that foundation — The Rule of Law and equality under the law — was almost-immediately co-opted by pretty-face Palin and others who immediately turned the focus to things that had nothing to do with how our economy got to be where it is.

If the “Tea Party” wishes to avoid being buried by history then it needs to get in front of this issue now and join with the only group of people who are currently out in the street protesting this exact crime.  They need to refuse to go home until the jackals that caused this economic mess are in the dock for their offenses.  This singular focus and the dismantling of the fraudulent edifices that permeate our financial system can be accomplished; what’s more important is that doing so now is infinitely preferable to continuing the Ponzi and winding up with even more damage to be absorbed.  There’s an opportunity here but the time remaining to take advantage of it is fleeting and soon will be gone if not seized.

That existing group, incidentally, is called Occupy Wall Street.