Racketeering 101: bailed out Banks threaten systemic collapse if Fed discloses information

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  • Fri, Aug 28, 2009 - 01:24am

    #1

    investorzzo

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    Racketeering 101: bailed out Banks threaten systemic collapse if Fed discloses information

http://www.zerohedge.com/article/racketeering-101-bailed-out-banks-threaten-systemic-collapse-if-fed-discloses-information

  • Fri, Aug 28, 2009 - 03:59pm

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    Peak Prosperity Admin

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    Re: Racketeering 101: bailed out Banks threaten systemic …

I agree with Dogs. The eventual and inevitable crisis is only getting worse with the time we waste. Best to deal with things now. Unfortunately, our political system doesn’t really encourage prudence or longer term goals, so I’m not quite sure we’re going to deal with the systemic issues until things really collapse. It has been a year since Lehman failed, what new regulations, etc. have we actually meaningfully implemented since then? I see a regulatory system that is virtually indistinguishable from 2 years ago.

This sort of protesting reminds me of Goldman Sachs’ argument regarding the stolen high frequency trading code. It literally stated in court that a third party could “use the code to unfairly manipulate the markets.” Somehow, the public (and Congress) must have missed the question begging to be asked of Goldman at that time. While some individuals can read all the writing on the wall regarding the banks, groups of people have collectively stuck their heads in the sand. To be frank, it seems America feels disempowered, discouraged, and unconfident in themselves to allow this daylight robbery to continue.

Another fact I would point out regarding the banks is the almost shockingly high degree to which executive and legislative members of our government are invested in that sector. See here: http://www.opensecrets.org/pfds/overview.php?type=S&year=2007
The latest information on this is only from 2007, but I believe that is good enough to gauge the relative levels of investment in each sector. Further, since the decline began in 2007, there would clearly be an interest on at least some of the leaders to regain what was lost. Draw your own conclusions, but 2+2 still = 4.

The greatest trick the devil ever pulled was convincing the world he didn’t exist.

  • Fri, Aug 28, 2009 - 04:19pm

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    Peak Prosperity Admin

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    Kill the People, Save the Insiders!

The degree of backwards thinking on display by these banks is simply astounding.

The position they are taking is the equivalent of a major food producer, found to have deadly contaminated food, requesting that the FDA hold it’s identity secret for fear that consumers might dump its food and put the corporation in severe danger. 

Kill the people, save the insiders! 

Such is the motto that best describes the current state of this putrid oligarchy.

 

  • Fri, Aug 28, 2009 - 04:30pm

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    Re: Racketeering 101: bailed out Banks threaten systemic …

zo  –

Very interesting article – great find.

Which leads to the question of so what?  If the banking system is doomed anyway, why not get it over with now?  I would like to see a “systemic collapse” because then something would have to be done.

This is great information – the banks need to be careful how loudly they protest.  As more and more people begin to understand the depth of the problem they are going to realize that “systemic changes” are needed.  The louder the banking industry protests about transparency into their way of doing business, the more they are drawing attention to the incompetent good ole boy network.  It will (I hope) collapse under its own weight.

What better time to implement systemic changes than after systemic collapse?

  • Fri, Aug 28, 2009 - 05:16pm

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    Re: Racketeering 101: bailed out Banks threaten systemic …

Kick the can down the road…

Ok, it’s a year later, now what?

More kicking…

  • Fri, Aug 28, 2009 - 05:35pm

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    Re: Racketeering 101: bailed out Banks threaten systemic …

I think the Fed and the clearing houses have a point………….and whilst we’re at it, lets get rid of credit rating agencies, criminal records databases, insurance access to medical records etc etc etc.  Afterall, we would want other people or organisations to make rational decisions based on any kind of meaningful data and information that might negatively affect us personally.  If its good for them, then its good for us, right!!Wink

  • Fri, Aug 28, 2009 - 06:02pm

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    Re: Racketeering 101: bailed out Banks threaten systemic …

Great dig investorzzo, this is a threat that we should take quite seriously and it should anger all Americans.

The “Clearing House” that issued this warning are the same banks that received the bail-out money – Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.  Why are they so fearful of Bloomberg’s FOIA suit and a possible audit of the non-Federal Reserve bank?  

One reason is that many of these banks also own the non-Federal Reserve and they know that if people ever get a whiff of what they are brewing it would spell the end of the greatest scam in history.  Like the vampires they are, they know that if the light of truth ever shines on them they will wither and die in prison.

Statement from the Clearing House criminals:

The Clearing House submits this declaration because the Court’s Order threatens to impair the ability of our members to access emergency funds through the New York Fed’s Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause.

Our members have accessed the New York Fed’s Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank’s financial condition – even completely unfounded rumors – have caused competitive harm, including bank runs and failures. 

If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank’s customers, counterparties and other market participants will draw a negative inference is great. Public speculation that a financial institution is experiencing liquidity shortfalls – which would be a natural inference from having tapped emergency funds – has caused bank customers to withdraw deposits, counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans. When an institution’s customers flee and its credit dries up the institution may suffer severe capital and liquidity strains leaving it in a weakened competitive position.

In sum, our experience differs from the factual conclusions the Court appears to have reached about the nature of competition in the banking industry:

  • The competitive harm to institutions that are publicized as needing emergency funding is not “speculative,” but demonstrated by the recent multiple failures of financial institutions whenever information about their funding difficulty has been disclosed.

My Comment:

Yes, that’s exactly why we need disclosure, we need to know which banks are teetering on the edge of insolvency.  Disclosure is not a public relations event, it is to establish a factual basis of a banks ability to perform.  The banks will only be “embarrassed” if weakness and fraud are found.

  • The disclosure would not merely “stigmatize [ ]”the institution or make it “look [ ] weak,” but goes to its very viability.

My Comment:

That is why we need disclosure, to determine which banks are insolvent and which are viable.

  • The disclosure of accessing emergency funding is not an “inherent risk” of market participation, but an extraordinary risk in extraordinary circumstances.
  • Competitors can use the disclosure to advertise or publicize that they are financial stronger because they don’t need emergency funding.

My Comment:

The text in the first bulleted item must have been written by Alan Greenspan.  The second bullet is really a great idea, why not list banking viability/solvency reports so consumers can better decide where to place their money.

 

  • The disclosure does not involve mere “embarassing publicity” but information that could result in the immediate demise of an institution.
  • My Comment:

    If the institution is insolvent or guilty of fraud then it should meet it’s “demise” through bankruptcy and possible criminal proceedings.

     

    Dogs_In_A_Pile said:

    Which leads to the question of so what?  If the banking system is doomed anyway, why not get it over with now?  I would like to see a “systemic collapse” because then something would have to be done.

    Dogs, I see it a different way.  The system has already collapsed.  For example, we are now monetizing our own debt (see Martenson Report The Shell Game – How the Federal Reserve is Monetizing Debt).

    We are moving towards something far worse – national bankruptcy.  It is seldom talked about but during the great depression of the 1930s, the United States went bankrupt.  This official act wiped out much of the nations private and public wealth and it forever changed the way our government works while taking rights away from citizens.

    For example, the currency was devalued by over 40%, the gold held in our national vaults was seized by the Federal Reserve, the gold held by private citizens was seized at around half of the market value, the President seized emergency powers that wiped out much of the power delegated to congress – we are still operating under presidential emergency powers 75 years later.

    The last bankruptcy took us from being a constitutional republic to becoming a democracy under an imperial president.  Like the first bankruptcy, this one is part of a plan and it  will take us from the imperial president and democracy to a new world order of international  fascism.

    Larry

    • Fri, Aug 28, 2009 - 06:43pm

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      Re: Racketeering 101: bailed out Banks threaten systemic …

    Sorry to rain on your parade Larry, but the American people are going to wake up from this and WE are going to take this country back.  It is going to be painful.

    It will be a very tough challenge but your new world whatever is not going to happen.  The structure of their “system” will no longer support the weight of it’s own greed and incompetence.  I suspect (and truly hope) that in time you will get over the disappointment of that not happening, but trust me, we the people will prevail.

    • Fri, Aug 28, 2009 - 07:01pm

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      Re: Racketeering 101: bailed out Banks threaten systemic …

    [quote=Dogs_In_A_Pile]

    the American people are going to wake up from this and WE are going to take this country back.  It is going to be painful.

    [/quote]

    I can speak for myself: regardless of the desires and intentions of international bankers, elitists, and NWO mongers, I, for one, shall not participate in such a system and I will do everything in my power to educate those around me as to the nature of our problems.

    This nation does not need everyone to be 100% on board. It only needs the “critical mass” that Chris frequently speaks of. A relatively small group of highly motivated individuals can overcome the inertia baked into this system. It has been done before and the NWO is not a given.

    I’ve read that psychological studies indicate that human emotions and confidence are far more influenced by losing something than by gaining it. Fear of loss or failure apparently outweigh the greed of attainment to make a generalization. The People of this country have far more to lose than the corrupt controlling interests have to gain. In that sense, the odds are absolutely on our side. Hard work never hurt, either.

    Just guess who’s responsible for this one:

    I’m a great believer in luck, and I find the harder I work, the more I have of it”

    • Fri, Aug 28, 2009 - 07:12pm

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      Re: Racketeering 101: bailed out Banks threaten systemic …

    [quote=DrKrbyLuv]

    For example, the currency was devalued by over 40%, the gold held in our national vaults was seized by the Federal Reserve, the gold held by private citizens was seized at around half of the market value, 

    [/quote]

    Larry, 

    I’m not trying to nit-pick here, but by my calculations, the currency was devalued by 75%. Can you check my assumptions and math on this?

    The USD was backed by gold at the time.

    1 oz of gold=$20 before the devaluation.

    1 oz of gold=$35 after the devaluation.

    35-20=15 and 20/15 =.75

    So it took 75% more dollars to purchase the same amount of gold after the devaluation. 

    How am I mistaken in this calculation? Thanks in advanced.

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