Tag: finance

Today's Market Correlation Pair Is…

Not Bonds (which are rallying to their low yields of the day – and have almost removed the entire post-Yellen move)… Not USDJPY (which entirely disconnected from stocks when Europe closed)… but Gold… ding ding ding… is your new correlation pair du jour…

 

 

Charts: Bloomberg


    



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Despite “Absolute Calm” Claim, Venezuela Appears Just A Little Out Of Control

President Maduro and his ministers have stated (fully supported by Argentina):

  • *PEOPLE BEHIND YESTERDAY’S VIOLENCE WILL BE PUNISHED: ORTEGA
  • *VENEZUELA ISSUED ARREST ORDER FOR LEOPOLDO LOPEZ: VOLUNTAD
  • *VENEZUELA IN ABSOLUTE CALM, ORTEGA SAYS
  • *ARGENTINA SAYS IT FIRMLY SUPPORTS VENEZUELA’S GOVERNMENT

However, between armed groups reportedly firing shots (see clip below) into the Students Assembly and the disappearance of the protest leader, the protests appear to be anything but “calm.”

 

Stunning collage of clips from the last two days…

 

and some additional images…


    



via Zero Hedge http://ift.tt/1iSYrNf Tyler Durden

Despite "Absolute Calm" Claim, Venezuela Appears Just A Little Out Of Control

President Maduro and his ministers have stated (fully supported by Argentina):

  • *PEOPLE BEHIND YESTERDAY’S VIOLENCE WILL BE PUNISHED: ORTEGA
  • *VENEZUELA ISSUED ARREST ORDER FOR LEOPOLDO LOPEZ: VOLUNTAD
  • *VENEZUELA IN ABSOLUTE CALM, ORTEGA SAYS
  • *ARGENTINA SAYS IT FIRMLY SUPPORTS VENEZUELA’S GOVERNMENT

However, between armed groups reportedly firing shots (see clip below) into the Students Assembly and the disappearance of the protest leader, the protests appear to be anything but “calm.”

 

Stunning collage of clips from the last two days…

 

and some additional images…


    



via Zero Hedge http://ift.tt/1iSYrNf Tyler Durden

US Taxpayer “Bailed Out” BNP Paribas Probed By DoJ & Fed On Sudan, Iran, Libya Deals

TARP Recipient BNP Paribas got $4.9bn of bailouts from the U.S. Taxpayer – Today, as the WSJ reports we learn BNP Paribas has been funding transactions in Iran, Syria and other countries subject to U.S. Sanctions since 2002. The bank set aside $1.1 billion to settle investigations by the Department of Justice and the Federal Reserve but as the NY Times reports, investigations are playing out on multiple fronts – centering on whether the firm did "a significant amount" of business in "blacklisted" countires (and routed the deals through the US financial system).

Via WSJ,

“…an internal probe conducted over the past few years "a significant volume of transactions" between 2002 and 2009 that could be "considered impermissible under U.S. laws and regulations...” “involving entities that were doing business in U.S.-sanctioned countries, such as Iran, Cuba, Sudan and Libya during the 2002 to 2009 period.

 

“BNP Paribas SA on Thursday became the latest bank to disclose the extent of its litigation problems in the U.S., saying it has set aside $1.1 billion against potential penalties related to transactions in countries under sanctions...

 

 In most cases, BNP provided dollar-denominated financing to companies, both French and non-French…

 

BNP is a major provider of export financing for the oil and mining industry…

 

The transactions didn't necessarily get routed through BNP units in the U.S. Yet, the U.S. is asserting jurisdiction simply by claiming that its currency was involved…”

Via NY Times,

The problem could worsen, as the American authorities might ultimately assess fines higher than $1.1 billion. The bank said that there had not yet been any discussions about the size or timing of any penalties, so the $1.1 billion provision essentially amounted to a guess.

 

“The actual amount,” the bank acknowledged, “could thus be different, possibly very different, from the amount of the provision.”

 

The bank, based in Paris, also acknowledged that it had “identified a significant volume of transactions that could be considered impermissible.” The final penalties would be linked to the number of illicit transfers.

 

…

 

The case is the latest sanctions investigation to buffet a major global bank (e.g. HSBC). Several major banks have been caught and penalized by United States authorities for violating international sanctions on financial transaction with countries like Cuba, Iran, Myanmar and Sudan.

 

We are sure no actual human beings were involved in these decisions and thus no actual human being will see any jail time.. .but when you can borrow (for practically free) almost $5bn from the US taxpayer (for their own good) to fund your shady dealings, then a $1 or $2 billion fine is simply "cost of doing business"…


    



via Zero Hedge http://ift.tt/1mdVY4z Tyler Durden

US Taxpayer "Bailed Out" BNP Paribas Probed By DoJ & Fed On Sudan, Iran, Libya Deals

TARP Recipient BNP Paribas got $4.9bn of bailouts from the U.S. Taxpayer – Today, as the WSJ reports we learn BNP Paribas has been funding transactions in Iran, Syria and other countries subject to U.S. Sanctions since 2002. The bank set aside $1.1 billion to settle investigations by the Department of Justice and the Federal Reserve but as the NY Times reports, investigations are playing out on multiple fronts – centering on whether the firm did "a significant amount" of business in "blacklisted" countires (and routed the deals through the US financial system).

Via WSJ,

“…an internal probe conducted over the past few years "a significant volume of transactions" between 2002 and 2009 that could be "considered impermissible under U.S. laws and regulations...” “involving entities that were doing business in U.S.-sanctioned countries, such as Iran, Cuba, Sudan and Libya during the 2002 to 2009 period.

 

“BNP Paribas SA on Thursday became the latest bank to disclose the extent of its litigation problems in the U.S., saying it has set aside $1.1 billion against potential penalties related to transactions in countries under sanctions...

 

 In most cases, BNP provided dollar-denominated financing to companies, both French and non-French…

 

BNP is a major provider of export financing for the oil and mining industry…

 

The transactions didn't necessarily get routed through BNP units in the U.S. Yet, the U.S. is asserting jurisdiction simply by claiming that its currency was involved…”

Via NY Times,

The problem could worsen, as the American authorities might ultimately assess fines higher than $1.1 billion. The bank said that there had not yet been any discussions about the size or timing of any penalties, so the $1.1 billion provision essentially amounted to a guess.

 

“The actual amount,” the bank acknowledged, “could thus be different, possibly very different, from the amount of the provision.”

 

The bank, based in Paris, also acknowledged that it had “identified a significant volume of transactions that could be considered impermissible.” The final penalties would be linked to the number of illicit transfers.

 

…

 

The case is the latest sanctions investigation to buffet a major global bank (e.g. HSBC). Several major banks have been caught and penalized by United States authorities for violating international sanctions on financial transaction with countries like Cuba, Iran, Myanmar and Sudan.

 

We are sure no actual human beings were involved in these decisions and thus no actual human being will see any jail time.. .but when you can borrow (for practically free) almost $5bn from the US taxpayer (for their own good) to fund your shady dealings, then a $1 or $2 billion fine is simply "cost of doing business"…


    



via Zero Hedge http://ift.tt/1mdVY4z Tyler Durden

Sliding Bid To Cover Leaves No Bad Aftertaste On Mixed 30 Year Auction

In a deja vu of yesterday’s 10 Year auction, which saw a slide in the Bid To Cover even as the closing yield was well through the When Issued, so today’s 30 Year saw a slide in the Bid to Cover (from 2.57 to 2.27, and well below the 2.46 TTM average) even as the closing yield of 3.69% priced through the When Issued by a whopping 1 bp. However, here the comparisons ends, because while in both the 3 and 10 year auctions from earlier this week, there was a surge in the Indirects, this time around the Indirects were more or less in line, rising to 46.0% from 45.3%, if above the 39.4% TTM average, while Dealers took down 40.8%, above the 38.1% in January. Directs ended up holding 13.9%. So a mixed auction overall, as if the market expect the Fed to continue buying the long end on one hand, even as tapering means the 30 Years will be the most convex instrument should tapering indeed mean the monetization of duration ends some time in the summer.


    



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SNoWCoCKaLYPSe NoW…


.

 

BANZAI7 NEWS–Still reeling from the aftermath of Snow Jam 2014, Atlanta Police put aside winter weather preparation this morning, shifting gears to what is now being referred to as “Snowcockalypse,” or “Dong Jam 2014.” The APD put out an all call for a criminal they are calling “The Penis Ben-dit,” whose alleged activities have put him on the top of their priority list.

Known in the Spanish-speaking areas of town as El Penis Ben-didto, the vandal trawled our white-laced city drawing what APD Major Richard Wanker described as “large, phallic images on snow-covered cars.”

One man whose car was vandalized described the images as “big ole Keynesian dicks on my car, yo!”

While there is no description of the bandit, the Atlanta Police said to be on the lookout for a specific type of person and to call 911 if you see him, or suspect you might have a lead. But the APD also warns not against approaching this individual, as they could be armed, economically delusional, or worse…attempt to draw a penis on you.

The vandal or vandals will meet the following description:

Walks outside
PhD
Likely wears some sort of mask or makeshift neck warmer (scarf) ­
Has 15 fingers
Draws dicks on cars
Looks like a dick
Chronically maladjusted Keynesian

 


    



via Zero Hedge http://ift.tt/1iSSobp williambanzai7

“The Vampire Squid Strikes Again”- Matt Taibbi Takes On Blythe Masters And The Banker Commodity Cartel

The story of how JPMorgan, Goldman and the rest of the Too Big To Fails and Prosecutes, cornered, monopolized and became a full-blown cartel – with the Fed’s explicit blessing – in the physical commodity market is nothing new to regular readers: to those new to this story, we suggest reading of our story from June 2011 (over two and a half years ago),  “Goldman, JP Morgan Have Now Become A Commodity Cartel As They Slowly Recreate De Beers’ Diamond Monopoly.” That, or Matt Taibbi’s latest article written in his usual florid and accessible style, in which he explains how the “Vampire Squid strikes again” courtesy of the “loophole that destroyed the world” to wit: “it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.” Complementary to a financial activity. What the hell did that mean?… Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination.“

Some key excerpts:

Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they’re doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government’s ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid.

…

The motive for the Kochs, or anyone else, to hoard a commodity like oil can be almost beautiful in its simplicity. Basically, a bank or a trading company wants to buy commodities cheap in the present and sell them for a premium as futures. This trade, sometimes called “arbitraging the contango,” works best if the cost of storing your oil or metals or whatever you’re dealing with is negligible – you make more money off the futures trade if you don’t have to pay rent while you wait to deliver.

 

So when financial firms suddenly start buying oil tankers or warehouses, they could be doing so to make bets pay off, as part of a speculative strategy – which is why the banks’ sudden acquisitions of metals-storage companies in 2010 is so noteworthy.

 

These were not minor projects. The firms put high-ranking executives in charge of these operations. Goldman’s acquisition of Metro was the project of Isabelle Ealet, the bank’s then-global commodities chief. (In a curious coincidence commented upon by several sources for this story, many of Goldman’s most senior officials, including CEO Lloyd Blankfein and president Gary Cohn, started their careers in Goldman’s commodities division.)

Then there are the political connections:

In 2010, a decade after the Rich pardon, Holder was attorney general, but under Barack Obama, and two Rich-created firms, along with two banks that have been major donors to the Democratic Party, all made moves to buy up metals warehouses. In near simultaneous fashion, Goldman, Chase, Glencore and Trafigura bought companies that control warehouses all over the world for the LME, or London Metals Exchange. The LME is a privately owned exchange for world metals trading. It’s the world’s primary hub for determining metals prices and also for trading metals-based futures, options, swaps and other instruments.

 

“If they were just interested in collecting rent for metals storage, they’d have bought all kinds of warehouses,” says Manal Mehta, the founder of Sunesis Capital, a hedge fund that has done extensive research on the banks’ forays into the commodities markets. “But they seemed to focus on these official LME facilities.”

 

The JPMorgan deal seemed to be in direct violation of an order sent to the bank by the Fed in 2005, which declared the bank was not authorized to “own, operate, or invest in facilities for the extraction, transportation, storage, or distribution of commodities.” The way the Fed later explained this to the Senate was that the purchase of Henry Bath was OK because it considered the acquisition of this commodities company kosher within the context of a larger sale that the Fed was cool with – “If the bulk of the acquisition is a permissible activity, they’re allowed to include a small amount of impermissible activities.”

 

What’s more, according to LME regulations, no warehouse company can also own metal or make trades on the exchange. While they may have been following the letter of the law, they were certainly violating the spirit: Goldman preposterously seems to have engaged in all three activities simultaneously, changing a hat every time it wanted to switch roles. It conducted its metal trades through its commodities subsidiary J. Aron, and then put Metro, its warehouse company, in charge of the storage, and according to industry experts, Goldman most likely owned some metal, though the company has remained vague on the subject.

 

If you’re wondering why the LME would permit a seemingly blatant violation of its own rules, a good place to start would be to look at who owned the LME at the time. Although it eventual­ly sold itself to a Hong Kong company in 2012, in 2010 the LME was owned by a consortium of banks and financial companies. The two largest shareholders? Goldman and JPMorgan Chase.

 

Humorously, another was Koch Metals (2.32 percent), a commodities concern that’s part of the Koch brothers’ empire. The Kochs have been caught up in their own commodity-manipulation schemes, including an episode in 2008, in which they rented out huge tankers and sed them to store excess oil offshore essentially as floating warehouses, taking cheap oil out of available supply and thereby helping to drive up energy prices. Additionally, some banks have been accused of similar oil-hoarding schemes.

And then there is of course Blythe, who is now looking for a new job precisely as a result of the cartel story:

Chase’s own head of commodities operations, Blythe Masters – an even more famed Wall Street figure, sometimes described as the inventor of the credit default swap – admitted that her company’s warehouse interests weren’t just a casual thing. “Just being able to trade financial commodities is a serious limitation because financial commodities represent only a tiny fraction of the reality of the real commodity exposure picture,” she said in 2010.

 

Loosely translated, Masters was saying that there was a limited amount of money to be made simply trading commodities in the traditional legal manner. The solution? “We need to be active in the underlying physical commodity markets,” she said, “in order to understand and make prices.”

 

We need to make prices. The head of Chase’s commodities division actually said this, out loud, and it speaks to both the general unlikelihood of God’s existence and the consistently low level of competence of America’s regulators that she was not immediately zapped between the eyebrows with a thunderbolt upon doing so. Instead, the government sat by and watched as a curious phenomenon developed at all of these new bank-owned warehouses, in the aluminum markets in particular.

Finally, the big picture:

[T]he potential for wide-scale manipulation and/or new financial disasters is only part of the nightmare that this new merger of banking and industry has created. The other, perhaps even darker problem involves the new existential dangers both to the environment and to the stability of the financial system. Long before Goldman and Chase started buying up metals warehouses, for instance, Morgan Stanley had already bought up a substantial empire of physical businesses – electricity plants in a number of states, a firm that trades in heating oil, jet fuels, fertilizers, asphalt, chemicals, pipelines and a global operator of oil tankers.

 

How long before one of these fully loaded monster ships capsizes, and Morgan Stanley becomes the next BP, not only killing a gazillion birds and sea mammals off some unlucky country’s shores but also taking the financial system down with them, as lawsuits plunge the company into bankruptcy with Lehman-style repercussions? Morgan Stanley’s CEO, James Gorman, even admitted how risky his firm’s new acquisitions were last year, when he reportedly told staff that a hypothetical oil spill was “a risk we just can’t take.”

 

The regulators are almost worse. Remember the 2008 collapse happened when government bodies like the Fed, the Office of the Comptroller of the Currency and the Office of Thrift Supervision – whose entire expertise supposedly revolves around monitoring the safety and soundness of financial companies – somehow missed that half of Wall Street was functionally bankrupt.

 

Now that many of those financial companies have been bailed out, those same regulators who couldn’t or wouldn’t smell smoke in a raging fire last time around are suddenly in charge of deciding if companies like Morgan Stanley are taking out enough insurance on their oil tankers, or if banks like Goldman Sachs are properly handling their uranium deposits.

 

“The Fed isn’t the most enthusiastic regulator in the best of times,” says Brown. “And now we’re asking them to take this on?”

Read the full story here (Rolling Stone link), or alternatively for those curious, here is a presentation highlighting all the key aspects of the aluminum price manipulation story by the big banks.


    



via Zero Hedge http://ift.tt/1bsA21m Tyler Durden

"The Vampire Squid Strikes Again"- Matt Taibbi Takes On Blythe Masters And The Banker Commodity Cartel

The story of how JPMorgan, Goldman and the rest of the Too Big To Fails and Prosecutes, cornered, monopolized and became a full-blown cartel – with the Fed’s explicit blessing – in the physical commodity market is nothing new to regular readers: to those new to this story, we suggest reading of our story from June 2011 (over two and a half years ago),  “Goldman, JP Morgan Have Now Become A Commodity Cartel As They Slowly Recreate De Beers’ Diamond Monopoly.” That, or Matt Taibbi’s latest article written in his usual florid and accessible style, in which he explains how the “Vampire Squid strikes again” courtesy of the “loophole that destroyed the world” to wit: “it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.” Complementary to a financial activity. What the hell did that mean?… Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination.“

Some key excerpts:

Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they’re doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government’s ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid.

…

The motive for the Kochs, or anyone else, to hoard a commodity like oil can be almost beautiful in its simplicity. Basically, a bank or a trading company wants to buy commodities cheap in the present and sell them for a premium as futures. This trade, sometimes called “arbitraging the contango,” works best if the cost of storing your oil or metals or whatever you’re dealing with is negligible – you make more money off the futures trade if you don’t have to pay rent while you wait to deliver.

 

So when financial firms suddenly start buying oil tankers or warehouses, they could be doing so to make bets pay off, as part of a speculative strategy – which is why the banks’ sudden acquisitions of metals-storage companies in 2010 is so noteworthy.

 

These were not minor projects. The firms put high-ranking executives in charge of these operations. Goldman’s acquisition of Metro was the project of Isabelle Ealet, the bank’s then-global commodities chief. (In a curious coincidence commented upon by several sources for this story, many of Goldman’s most senior officials, including CEO Lloyd Blankfein and president Gary Cohn, started their careers in Goldman’s commodities division.)

Then there are the political connections:

In 2010, a decade after the Rich pardon, Holder was attorney general, but under Barack Obama, and two Rich-created firms, along with two banks that have been major donors to the Democratic Party, all made moves to buy up metals warehouses. In near simultaneous fashion, Goldman, Chase, Glencore and Trafigura bought companies that control warehouses all over the world for the LME, or London Metals Exchange. The LME is a privately owned exchange for world metals trading. It’s the world’s primary hub for determining metals prices and also for trading metals-based futures, options, swaps and other instruments.

 

“If they were just interested in collecting rent for metals storage, they’d have bought all kinds of warehouses,” says Manal Mehta, the founder of Sunesis Capital, a hedge fund that has done extensive research on the banks’ forays into the commodities markets. “But they seemed to focus on these official LME facilities.”

 

The JPMorgan deal seemed to be in direct violation of an order sent to the bank by the Fed in 2005, which declared the bank was not authorized to “own, operate, or invest in facilities for the extraction, transportation, storage, or distribution of commodities.” The way the Fed later explained this to the Senate was that the purchase of Henry Bath was OK because it considered the acquisition of this commodities company kosher within the context of a larger sale that the Fed was cool with – “If the bulk of the acquisition is a permissible activity, they’re allowed to include a small amount of impermissible activities.”

 

What’s more, according to LME regulations, no warehouse company can also own metal or make trades on the exchange. While they may have been following the letter of the law, they were certainly violating the spirit: Goldman preposterously seems to have engaged in all three activities simultaneously, changing a hat every time it wanted to switch roles. It conducted its metal trades through its commodities subsidiary J. Aron, and then put Metro, its warehouse company, in charge of the storage, and according to industry experts, Goldman most likely owned some metal, though the company has remained vague on the subject.

 

If you’re wondering why the LME would permit a seemingly blatant violation of its own rules, a good place to start would be to look at who owned the LME at the time. Although it eventual­ly sold itself to a Hong Kong company in 2012, in 2010 the LME was owned by a consortium of banks and financial companies. The two largest shareholders? Goldman and JPMorgan Chase.

 

Humorously, another was Koch Metals (2.32 percent), a commodities concern that’s part of the Koch brothers’ empire. The Kochs have been caught up in their own commodity-manipulation schemes, including an episode in 2008, in which they rented out huge tankers and sed them to store excess oil offshore essentially as floating warehouses, taking cheap oil out of available supply and thereby helping to drive up energy prices. Additionally, some banks have been accused of similar oil-hoarding schemes.

And then there is of course Blythe, who is now looking for a new job precisely as a result of the cartel story:

Chase’s own head of commodities operations, Blythe Masters – an even more famed Wall Street figure, sometimes described as the inventor of the credit default swap – admitted that her company’s warehouse interests weren’t just a casual thing. “Just being able to trade financial commodities is a serious limitation because financial commodities represent only a tiny fraction of the reality of the real commodity exposure picture,” she said in 2010.

 

Loosely translated, Masters was saying that there was a limited amount of money to be made simply trading commodities in the traditional legal manner. The solution? “We need to be active in the underlying physical commodity markets,” she
said, “in order to understand and make prices.”

 

We need to make prices. The head of Chase’s commodities division actually said this, out loud, and it speaks to both the general unlikelihood of God’s existence and the consistently low level of competence of America’s regulators that she was not immediately zapped between the eyebrows with a thunderbolt upon doing so. Instead, the government sat by and watched as a curious phenomenon developed at all of these new bank-owned warehouses, in the aluminum markets in particular.

Finally, the big picture:

[T]he potential for wide-scale manipulation and/or new financial disasters is only part of the nightmare that this new merger of banking and industry has created. The other, perhaps even darker problem involves the new existential dangers both to the environment and to the stability of the financial system. Long before Goldman and Chase started buying up metals warehouses, for instance, Morgan Stanley had already bought up a substantial empire of physical businesses – electricity plants in a number of states, a firm that trades in heating oil, jet fuels, fertilizers, asphalt, chemicals, pipelines and a global operator of oil tankers.

 

How long before one of these fully loaded monster ships capsizes, and Morgan Stanley becomes the next BP, not only killing a gazillion birds and sea mammals off some unlucky country’s shores but also taking the financial system down with them, as lawsuits plunge the company into bankruptcy with Lehman-style repercussions? Morgan Stanley’s CEO, James Gorman, even admitted how risky his firm’s new acquisitions were last year, when he reportedly told staff that a hypothetical oil spill was “a risk we just can’t take.”

 

The regulators are almost worse. Remember the 2008 collapse happened when government bodies like the Fed, the Office of the Comptroller of the Currency and the Office of Thrift Supervision – whose entire expertise supposedly revolves around monitoring the safety and soundness of financial companies – somehow missed that half of Wall Street was functionally bankrupt.

 

Now that many of those financial companies have been bailed out, those same regulators who couldn’t or wouldn’t smell smoke in a raging fire last time around are suddenly in charge of deciding if companies like Morgan Stanley are taking out enough insurance on their oil tankers, or if banks like Goldman Sachs are properly handling their uranium deposits.

 

“The Fed isn’t the most enthusiastic regulator in the best of times,” says Brown. “And now we’re asking them to take this on?”

Read the full story here (Rolling Stone link), or alternatively for those curious, here is a presentation highlighting all the key aspects of the aluminum price manipulation story by the big banks.


    



via Zero Hedge http://ift.tt/1bsA21m Tyler Durden

Banks: You Can Bank on It!

 
 Click here to follow ZeroHedge in Real-time on FinancialJuice

We all knew that cultures were different and that we all had a unique way of doing things that run our daily lives. In Europe they tell the banks that they will die if they are weak (apparently, after the statement issued by Danièle Nouy, overseer of the Singe Supervisory Mechanism). In the US, it’s only the cost of lawsuits and legal expenses that stopped the banks from making all-time record highs in 2013 and still there is hardly a line written about the money that is being raked in. In the UK, they intend to sack 12, 000 people and say thank you very much by dishing out the biggest bonuses this-side of the Atlantic (for the top dogs, not the redundant low-life). Yay! If your kids are looking for something to do when they grow up, they need to become a high-flying banker. Even better, one of the fat cats that gets the cream, does the dozing and slips off with the sandman. Even better than better: Mr. Sandman could always throw the sand into the eyes of those that are losing their jobs, being made redundant and into the eyes of the public so that they don’t get to see it.

EU

Danièle Nouy says that banks that are weak will have to say goodbye to the high life and die. But, please, this is Europe, she is French and there has to be a certain panache about this death. Even death has to be original, confident and accompanied by reckless courage and flamboyant acts. Let’s watch them go out with a glass of champagne. Remember, she wants them to die ‘in an orderly fashion’. Does that mean there won’t be any ‘crime passionnel’? The only crime of passion that will be committed may indeed be on Nouy herself when the people discover that she will have whittled down the banks to a handful that hold the purse strings even tighter. How very fitting that the one part of the male anatomy that she will have us all held by is also the very same word for ‘purse’ (‘bourse’) where she comes from.

USA

The USA is doing pretty well with the six biggest banks in the country (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley). How have they been treated since being the main instigators of the financial crash which has put us in the predicament that we are in now? They have been treated very well indeed. Those six paid out $18.7 billion to settle lawsuits against them last year for financial misdemeanor and violations of the Banking Secrecy Act as well as misrepresentation of mortgage-backed securities. The list could go on. Even so, those six still made more profit than they had made before the financial crash (all we have to do is go back to 2006 to see figures higher than these ones).

Net income for the six rose by 21% and reached $74.1 billion. That was all thanks to the rise in the stock market, due to false hopes from the Federal Reserve and virtual booming of the economy. All of that looks today as if it may actually continue since Janet Yellen is announcing that it’s not time to pull the plug completely and the economy is still not out of danger. In 2006, when the housing bubble was raking in more money than ever before (right at the peak before it burst), those six earned $84.6 billion. JPMorgan Chase, for example, is expected to make $23 billion in profit alone this year. Wells Fargo is expected to see an increase in profit for the fifth year in a row, hitting $21 billion.

UK

In the UK, things are marginally worse (if that is at all possible). Take Barclays Bank, for example. Not only have they leaked 27, 000 files related to customer data accidentally, but they have also just announced that they will be incurring a 32% fall in profits, making 12, 000 employees redundant and at the same time (in one fell swoop) they have decided to give investment bankers £1.6 billion in bonuses. Is this one of the weaker banks of the ilk spoken about by the French lady espousing the passions of crime? Total bonuses in fact stand at £2.4 billion (up by £0.2 billion from last year). Profits have fallen from £7 billion to £5.2 billion. So the bank is not weak, it’s just ‘misguided’, ‘mismanaged’…? Antony Jenkins, who was promoted to head Barclays after the £290-million Libor scandal defends the decision to make thousands of employees redundant. He shall have slightly more trouble rendering it more acceptable to swallow the bitter pill of losing the data (and subsequently not contacting any more than 300 customers) as well as handing out the bonuses. Barclays says they are ‘Fluent in Finance’. We obviously no longer speak the same language.

The Sandman has sent us all to sleep over the years while the banks are making more money today than they ever were in the past. Continually, it seems, we are still going round in circles. Once upon a time, the banks sacked the employees and paid the shareholders and gave the top financiers hefty bonuses. Now, even the shareholders are not getting as much as they used to. How long will it go on for until the financiers get lynched?

 

Originally posted: Banks: You Can Bank on It!

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