Screw the Banks and Investment Firms

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can't sit still
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Mon Sep 05, 2011 7:55 pm

This pretty much says it all.
"That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees"
http://theautomaticearth.blogspot.com/2 ... while.html

Another article on central banks. http://batr.org/gulag/090411.html
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.

can't sit still
Posts: 4645
Joined: Tue Aug 23, 2005 4:21 pm
Location: SoCal

Re: Screw the Banks and Investment Firms

Post by can't sit still » Tue Sep 06, 2011 6:55 pm

Things in the Euro zone are crashing FAST. There is already talk of civil war.
http://www.zerohedge.com/news/bring-out ... -civil-war
Everybody is warning everybody else that a crash is coming;
http://globaleconomicanalysis.blogspot. ... alian.html
Not to be left off the list of doomsayers, Goldman Sachs is also predicting a collapse;
http://www.presstv.ir/usdetail/197228.html
Michael Lombardi says that it will be within 180 days. He has an enviable track record.
http://news.newsmax.com/?KKOv.YhQREN2tM ... _0904.html

OK, so ho-hum. A crash is in the making. Mish asks the question, will GOV support the banks again or support the people?
http://globaleconomicanalysis.blogspot. ... mense.html
From the sound of things, GOV may not be able to support anybody;
http://www.businessinsider.com/josef-ac ... z1X6jaeDd8

Not wanting to get caught short, Americans bought 15 million guns this year.
http://www.msnbc.msn.com/id/44375021/ns ... mbOOWOA8RI
I hope that y'all are having a great time out at the playa. Don't worry about all this small shit. I'll take care of it. :lol: 8)
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.

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Simon of the Playa
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whats that smell?

Post by Simon of the Playa » Tue Sep 06, 2011 7:17 pm

the essence of pathetic.
Frida Be You & Me

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cowboyangel
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Wed Sep 07, 2011 4:32 pm

lost...this thread to those who seem to lose a lot a stuff.....
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981

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cowboyangel
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Mon Sep 12, 2011 6:29 pm

War...What is it good for? Absolutely nothin, say it again War....

New Ellen Brown article on War Spending
http://truthphalanx.com
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981

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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Fri Sep 16, 2011 9:22 pm

If you ever wanted to autopsy the financial collapse....here are the ghouls who deserve several lifetimes of jail time:

Credit Crisis: The Result of Greatest Financial Crime in World History. Where are the Convictions?
Interview

by Prof. William K Black and James J Puplava


Global Research, September 16, 2011
http://www.financialsense.com



William Black: Why Nobody Went to Jail During the Credit Crisis
The FBI is no longer chasing white collar criminals
Jim welcomes Professor of Economics and Law William Black to Financial Sense Newshour. He explains to Jim why no one has gone to jail four years after the beginning of the historic Credit Crisis. Professor Black believes that the level of corruption and fraud is so pervasive that very few of the guilty will ever be brought to justice.

Bill Black is an Associate Professor of Economics and Law at the University of Missouri – Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.
Transcript

Jim Puplava: Joining me on the program is Professor William Black. He is a Lawyer and an Associate Professor of Economics and Law at the University of Missouri, Kansas City. He was a Director of the Institute for Fraud Prevention from 2005 to 2007. He taught at the LBJ School of Public Affairs at the University of Texas. He was also a Litigation Director for the Federal Home Loan Bank Board. He is also author of the book “The Best Way to Rob a Bank Is to Own One.”

And Professor, you played a critical role during the S&L crisis in exposing congressional corruption. During that period of time, a lot of corruption was exposed; a lot of people in the financial sector went to jail, including Charles Keating. I wonder if you would contrast that to the last credit crisis, let us say from 2007 to 2009 where a lot of money was lost, a lot of things went wrong, but nobody went to jail. Instead of going to jail, they walked out instead with multi-million dollar bonuses. What was the difference, what was behind this in your opinion?

William Black: Well, I say the both of them were driven by fraud. The Savings & Loan crisis was a tragedy in two parts. First part was not fraud, it was interest rate risk. But the second phase, which was vastly more expensive, was to defraud and the National Commission that looked into the causes of the crisis said that the typical large failure fraud was invariably present. And there were real regulators then. Our agency filed well over 10,000 criminal referrals that resulted in over 1,000 felony convictions and cases designated as nature. And even that understates the grade in which we went after the elite. Because we worked very closely with the FBI and the Justice Department, to prioritize cases—creating the top 100 list of the 100 worst institutions which translated into about 600 or 700 executives—and so the bulk of those thousand felony convictions were the worst fraud, the most elite frauds.

In the current crisis, of course they appointed anti-regulators. And this crisis goes back well before 2007 and of course it is continuing, it does not end at 2009. So the FBI warned in open testimony in the House of Representatives, in September 2004—we are now talking seven years ago—that there was an epidemic of mortgage fraud, their words, and they predicted that it would cause a financial crisis, crisis being their word, if it were not contained. Well no one thinks that it was contained.

All right so you have massive fraud driving this crisis, hyperinflating the bubble, an FBI warning and how many criminal referrals did the same agency do, in this crisis. Remember it did well over 10,000 in the prior crisis. Well the answer is zero. They completely shut down making criminal referrals and whichever administration you hate the most, you can hate because while most of this certainly occurred in the Bush Administration, the Obama Administration has obviously not changed it. Obviously did not see it as a priority to prosecute these elite criminals who caused this devastating injury.

Another way to look at it is, how much fraud is there and we know the following: There are no official statistics on sub prime and similar categories because there are no official definitions. So there is a little wishy-wishy in this but the best numbers we have are that by 2006, half of all the loans called sub-prime, were also liars loans. Liars loans means that there was no prudent underwriting of the loan. And total, about one-third of all the loans made in 2006, were liars loans.

Now that's an extraordinary number, especially when you look at the studies. And here I am going to quote from the Mortgage Bankers Association. That is the trade association of the perps and this is their Anti-Fraud Specialist Unit, and they reported this to every member of the Mortgage Bankers Association in 2006. So nobody can claim they did not know. They found three critical things, first they said this kind of loan where you do not do underwriting is, and I am quoting again, “an open invitation to fraudsters.” Second, they said “the best study of this found a 90% fraud incident.” In other words, if you look at 100 liars loans, 90 of them are fraudulent. And third they said, therefore these loans where the euphemism is stated income are Alt-A loans, actually deserve the title that the industry calls the Behind Closed Doors, and that is liars loans. The other thing we know from other studies and investigations, is that it was overwhelmingly lenders and their agents that put the ‘lie’ in liars loans. Now that is obvious when you look at the lies about appraisals, because homeowners cannot inflate appraisals. But lenders can and how they did it was shown in an investigation by then New York Attorney General Cuomo, now Governor, who found that Washington Mutual, which is called WAMU, and is the largest bank failure in the history of the United States, and indeed the history of the world, had a black list of appraisers. But you got on the black list if you were an honest appraiser, and refused to inflate the appraisal.

Similarly, we know that you could get, for example, a California jumbo mortgage, that’s one say the size of $800,000. As a loan broker, just one of these, you could get a fee of $20,000. If it hit certain parameters. And those parameters would have to do with what is the interest rate, but also what is the loan to value ratio, and what is the debt to income ratio. So the loan to value ratio is how big is the loan compared to the value of your house. Well that is an easy ratio to gimmick, and we have just explained why, by inflating the appraisal. If you inflate the appraisal then the loan to value ratio falls and the loan looks like it is a lot safer, and you can sell it to Wall Street for significantly more. The debt to income ratio, well that is even easier to gain. The debt is simply how much are you going to borrow to buy the house. And the income is, what is the income stated on the loan application for the borrower. Except that this is a liars loan, so the lender has agreed that it is not going to check. It is not going to verify whether the income is real. And so the loan broker can write down any income number he or she wants. And that will gimmick that ratio and again it will put it into the sweet spot, for all of these things, so that you could get your $20,000 fee. Now step back and ask yourself, many of these guys who are loan brokers, their previous job was literally flipping burgers, right. So are you going to leave it up to the borrower to come up magically with the right income and the right appraisal when they don’t even know what the magic numbers are and cannot inflate the appraisal? Of course not. You are going to do it as the loan broker. You are going to tell the borrower to write in a greatly inflated income number, or maybe you are afraid that they are too honest, so you may simply write it in yourself, which happened in many cases.

So again, we got thirty, roughly one-third of all the loans by 2006, after these warnings. They rapidly increased the number of liars loans they made. One-third of them are liars loans and 90% of them are fraudulent, which is to say, that the amount of fraud annually was well over a million fraud a year. We are talking about hundreds of billions of dollars in fraudulent instruments.

Jim Puplava: Professor, I guess one question I would have is, did the guys at the top of the bank not know that this was going on? I mean I would find it hard to believe that if I am the CEO of a financial organization, that I don’t know that our loan standards, that we went to liar loans and that we were not documenting or verifying. I mean what happened to 20% down, two years worth of tax returns, I mean how would somebody at the top, not know this.

William Black: You mean you think liars loan might be a hint?

Jim Puplava: Yeah, maybe just a little (sarcasm).

William Black: Yeah, we have known for centuries, that if you don’t underwrite loans, or if you don’t underwrite insurance, you’ll get something called "adverse selection". And that means you get the worse possible borrowers or people being insured and the expected value of lending to somebody, in conditions of serious adverse selection, is negative. Or to put that in English, that means if you lend this way, you lose money. And we have known this for centuries. This is like betting against the house in Las Vegas. You could win some individual bets, but you stay at the table for three years, and you are going to lose everything. And as we say, you will lose the house, to the house. And, that is exactly what is going to happen here. So yeah, the CEO’s knew all about this. Why did they do it? And the answer is, here is the recipe, it’s got four ingredients for creating what the Nobel Prize Winner in Economics, George Akerlof and his colleague Paul Romer said in 1993 was "a sure thing". And that sure thing is what in criminology we call accounting control fraud.

So control fraud is when the person who controls a seemingly legitimate entity, uses it as a weapon to fraud. In the financial sphere, the weapon of choice is accounting. So here are the four ingredients of the recipe that produce a sure thing of record accounting income.

Grow like crazy
Make preposterously bad loans but at a premium yield.
Have extreme leverage. That means you have a ton on debt.
Put aside only ridiculously low allowances for future loan losses.

You do those four things, you are mathematically guaranteed to report record, albeit fictional, profits in the short term. You are also guaranteed with modern executive compensation, to make the Senior Executives wealthy, and you are guaranteed, because after all, if you think about those four ingredients, they are the perfect recipe as well for maximizing real losses. And that’s why the title of Akerlof and Romer’s article says it all, “Looting: The Economic Underworld of Bankruptcy for Profit.” The firm fails but the executives walk away rich. This is the same concept with my book “The Best Way to Rob a Bank Is to Own One.” It is these internal people who control the seemingly legitimate entity that can get away with financial murder. And here is the really bad news. I mean that is bad news right there, but the really bad news, is that this tends to happen as the FBI warned, and again in 2004, seven years ago. So the next time you hear some moron tell you that no one could have predicted this, it was predicted by the Premiere Law Enforcement entity in the world dealing with white-collar crime.

Jim Puplava: You know, we just talked about, with these liar loans being made, the executives at the top knew that this was going on. But it was driving record profits that they were reporting, their stock prices were going up. They were getting paid bonuses and you know their option values were worth just, you know, some of these compensation packages were just unreal. But here’s the thing that I guess some of these people did know as we mentioned the executives at the top, but some knew how to make profit from them. For example, we found out in congressional testimony that Goldman Sachs at the same time that they were selling these mortgage polls to let’s say many of it’s customers, at the same time, internal memos and e-mails said the stuff was garbage and they were shorting it, making money. Is it because they control so many of Congress that this time there was no law enforcement by the regulators coming in and looking at these guys that walked away with these bonus packages. Or the fact that you had conflicts of interest of selling bogus mortgage polls that you knew that were garbage. And at the same time you were selling them to a customer, you were taking the opposite side of the trade and shorting it.

William Black: So to just close the loop on what I was saying, if a bunch of folks follow the same strategy at the same time, they hyper-inflate a financial bubble. And when you have huge financial bubbles and they collapse, that’s when you get great recession. So your question is, so why, this is the greatest financial crime in the history of the world and no one senior, at any of the major places that drove the crisis, has gone to jail? In fact, no one has been indicted. There were some at Bear Stearns, for the real specialized stuff, but for the basic fraud we are talking about, no one has even been charged with a crime. What has happened? And the answer, the first answer is it all has to start with the regulators. The regulators have to serve as the Sherpas on something like this, in criminal prosecution. The Sherpas of course, are the folks that help you get to the top of the Himalayan Mountains. And this is a hard task, it is hard to prosecute sophisticated white-collar crimes, and they do have the best criminal defense lawyers in the world. So it is not an easy thing. And getting those thousand plus felony convictions in the Savings and Loan crisis, was a massive success for which the Department of Justice, the FBI and the agencies deserve a lot of credit. What do the Sherpas do? The Sherpas do two functions. One, they do the heavy lifting and in this context, that means they the great bulk of the investigative work. And two, they serve as the guides, they have the expertise, they’ve seen this before, they know what works and what does not. And in this context, that means they have expertise in the fraud mechanisms, the fraud schemes, identifying it and explaining it. And so a criminal referral is not just a sort of a useful thing, it is the absolutely essential thing. Criminal referral in our era might be twenty to thirty pages and have two hundred to three hundred pages of attachments of all the key documents. It would be the roadmap to continue this metaphor that says, here’s the fraud, here’s how it works, here are the key people, here is where the money moved, here are the key documents to be able to prove the case. Here are the key witnesses, this is how you contact them, right? And I told you that we went to zero criminal referrals from well over ten thousand. That has made it impossible for the FBI and the justice department to have any substantial success. But of course, this is not the question of them simply not having substantial success, they ain’t having no success. And there you have to look at what, after a brilliant start with this September 2004 warning, with no help from the regulators, well you could not get any significant number of FBI agents assigned in the Bush Administration, to investigate these cases.

Now part of what has happened is in some sense understandable, when the 9/11 attacks ten years ago occurred, we of course found that our national security FBI agents, could not infiltrate Al Qaeda. So what we could do is follow the money. And the experts at following the money are the white-collar FBI agents. So they transferred 500 white collar FBI Specialists, over to National Security. Okay, we can understand why they do that. What you cannot understand is why the Bush Administration refused to allow the FBI to replace this enormous loss of white-collar specialists. And so as a whole, white collar prosecutions fell significantly in the Bush Administration. That meant that as recently as fiscal year 2007, there were nationwide, only 120 FBI agents working all mortgage fraud cases. To give you a comparison, at the peak of the Savings and Loan Crisis, there were 1,000 FBI agents working the cases.

Jim Puplava: Wow

William Black: Eight times more FBI agents than were working the cases in fiscal year 2007. And this crisis is forty times bigger and worse than the Savings and Loan Crisis. So you would have required massively more people. To give you another idea of scope, to investigate Enron, and Enron was complex, but it was nowhere near as big and as complex as Washington Mutual. It took 100 FBI agents. So you can see that with 120 nationwide, at most you could have done one major case. But instead, they divided them up in what the military would call, Penny Packets, which is to say two or three agents per field office. And that means they cannot investigate anything substantial. So they were put on relatively smaller cases. And they being diligent FBI agents, they worked those cases, and that’s where they wrote the memos, okay we found this, prosecute these people, don’t prosecute these people. The FBI in late 2007 – 2008, figures out this cannot work. Remember I told you there were over a million cases of mortgage fraud a year and that overwhelmingly it’s lenders who foot the fraud, the lie in the liars loan. But the FBI couldn’t and didn’t investigate any of the major lenders. So it is looking at these relatively small folks, and that is what it reports back. The FBI decides you know, as I said, this cannot work. This is like going to a beach in San Diego and throwing handfuls of sand in the Pacific Ocean and wondering when you are going to be able to walk to Hawaii. Every year, with a million plus cases of fraud a year, if you prosecute a thousand of them or two thousand of them or three thousand of them, you are a million cases further behind every year, right. It is just insane. So the FBI says we got to start going after the big guys at which point Bush’s Attorney General Mukasey says no, he refuses to even create a National Task Force against mortgage fraud, saying famously, this is simply the equivalent of, and I am quoting again, “White Collar Street Crime,” little tiny stuff. Well of course he has assigned the FBI to only look at little cases and they report back, hey we’re finding little cases. And the Mukasey interprets from that, hey only little cases exist.

Jim Puplava: Yeah, but you know, in the S&L Crisis, you had some high profile cases. For example Charles Keating, and that got a lot of play. So maybe if they didn’t have the manpower, maybe going after some very high profile cases, might have made the point. You are saying they backed off from that. What about the Obama Administration?

William Black: They never did it. They didn’t even back off. They never, you can tell from the numbers that they have, in how many FBI personnel it takes to do a really sophisticated, large institutional investigation. They have never done what would have been considered a real investigation in the Savings and Loan era of any, any of the major fraudulent lenders and investment banks that created the worthless financial derivates—not worthless, but not worth very much—financial derivatives.

Jim Puplava: What about the Obama Administration? Had they came in, they continued with the same policy basically, they ignored it. Where they could have had let us say, an opportunity. Is it because Professor, that the process is you know, some have said that Congress is bought and paid for by the financial industry. I mean, is that part of the reason?

William Black: Well, it’s not just Congress of course. The President has said that he wants to raise a billion dollars in the reelection effort and despite all the press you may have heard about how the White House is despised by finance—in fact, last I read, a bigger percentage and a bigger absolute dollar amount of contributions in this effort, than in the original effort had come from finance. And so both parties are tremendously beholden to finance. That is part of it but again, the Obama Administration was better than the Bush Administration. The Obama Administration was willing to create a task force and it’s the numbers of FBI Agents have been increased, but they are still looking at relatively small cases. And they are nowhere near the numbers required and so unless something dramatic or radical changes, this is going to be the greatest case of elite fraud with impunity in the history of the world. And it is only going to change if we express our outrage as the people and demand that it is changed. Let me tell you how bad it is. The Federal Housing Finance Administration, has just last week, or about ten days ago now, filed fifteen hundred plus pages of complaints against seventeen financial entities. And about ten of them are among the biggest financial entities in the world saying, every investigation has found repeated enormous fraud at these entities. So, and there is a track record, a paper trail of that fraud. But these entities got reports saying these assets were trash and that they lied and then sold the assets to Fannie and Freddie by making acts of deceit, which is of course, the key element of fraud.

So, now that this has happened, there are really only two possibilities. Either the Federal Housing Finance Administration has gotten all those documents wrong, and there is no such record, or there is such a record in which case, where is the Justice Department, why is it not bringing criminal prosecution against most of the largest banks in the world.

Jim Puplava: You know, there was a documentary film called “Inside Job,” which won an Oscar this year, and it ended with the Director and Producer pointing out the fact that you just brought up—not one single prosecution was brought in this entire situation, what is probably the largest fraud committed in history. And yet it still goes on Professor, we still have the financial industry contributing large amounts of money to politicians in both parties, both at the national level, the local level, and so basically, what you have is influence buying here. Because it seems to me that there were so many obviously cases, even in the hearings, where I think it was, Senator Levin, basically talking about the conflicts of interest in internal e-mails. I thought my goodness, there was enough evidence to go after but not one thing was done. And even when a lot of these firms went under, as the shareholders lost everything, the taxpayers losing everything, the guys at the top walked away with some of the biggest bonus packages I’ve seen in my investment career.

William Black: Again, Akerlof and Romer have been proven correct. Akerlof and Romer worked with us and strongly support the kind of efforts that need to be done. The title of their article again is “Looting: The Economic Underworld of Bankruptcy for Profit.” The firm failed because you followed the fraud recipe that I gave you, which causes catastrophic losses but their CEO’s and other Senior Officers can walk away incredibly rich. There is, by the way, one case and was done after the movie, the documentary that you are talking about, and it’s the proverbial exception that proves the rule. The Taylor case, and it refers to a pretty obscure mortgage-banking firm in the southeast. Ten people have been convicted who were officers. But the only reason they were convicted was because these people after thousands of acts of fraud, over a ten-year period, tried to defraud the TARP Program and the Special Inspector General to the TARP Program, which is called SIGTARP, was very good. He has since left the government service. And they found this and they made the criminal referral. What we discovered in the course of that, was that Fanny Mae discovered this fraud in 2000 but refused to make a criminal referral.

They refused to make a criminal referral because it wanted to secretly dump the paper that had been provided by this mortgage-banking firm. And so the mortgage banking firm, the fraudulent mortgage banking firm, they would have been caught red handed doing the frauds. Simply went across the street, metaphorically, and defrauded Freddie Mac for nine years. So again, if people, I do not understand who have never done this, how absolutely critical the criminal referrals are.

Jim Puplava: Well, it seems like as we have seen here, as you pointed out, zero criminal referrals have been brought in this entire case, and you just cannot help but believe that this goes on and meanwhile, you and I as taxpayers, are going to have to front the bill for this. It is unfortunate. Let me ask you a final question, we supposedly as a result of all of this, we had Dodd Frank, that was supposed to bring in like Sarbanes-Oxley, all this financial legislation that would basically prevent this kind of thing from happening again. Will Dodd Frank help us in this way or is it just more red tape and which is useless if regulators and let’s say the FBI, aren’t allowed to do their job.

William Black: Dodd Frank has some individual components that are useful and the Republican Party unfortunately is trying to kill each of them. The Administration is not necessarily fighting strong for any, the Dodd Frank Bill was not created and designed to deal with the actual causes of the crisis. And so it most likely will not stop the next crisis. But the focus on legislation is a bit misleading. Under the existing laws and regulation, this was an easy crisis to prevent. People think of it as much more difficult and complex. But as I say, it was overwhelmingly driven by liars loans. Liars loans were easy to figure out. We, as regional regulators in 1990 and 1991, killed a wave of liars loans that was starting, especially in Orange Country Savings and Loans. And as a result, those lenders gave up their Federal Deposit Insurance precisely to escape our jurisdiction, and created mortgage banks. But the Fed, the Federal Reserve Board, had authority from 1994 on, in other words, a long time before the crisis, to regulate anybody that did home loans. And it was an easy call that something called a liars loan had to be stopped. Alan Greenspan and Ben Bernanke refused to do their statutory authority to stop them. Because they didn’t believe in regulation. Bernanke was reappointed by President Obama. You know, I tried as little, what one little person could, to stop that. We need to have a complete new crew. Geithner needs to go, Attorney General Holder needs to go, and Bernanke needs to go and we need to put people in who will make a high priority ending the ability to loot institutions with impunity.

Jim Puplava: Yeah, that was one of the aspects that was brought out in the documentary, “Inside Job.” A lot of the people, Larry Summers who until recently was in the Obama Administration, Geithner, Alan Greenspan tried to stop Brooksley Born on derivatives. And it seems like the guys that were behind all of this are the same people that have been put in charge of fixing it. Well listen Professor, your book once again is “The Best Way to Rob a Bank Is to Own One.” And you have written several articles so if our listeners would like to follow the work that you do, I hope you keep up the good work because we do need hopefully some day we will get honest people in there that will care more about doing what is right than about their positions and the pay that they get.

William Black: We have written hundreds of articles that if folks are interested, check out “New Economic Perspectives”, the UMKC Economics blog.

Jim Puplava: Okay, one more time?

William Black: “New Economic Perspectives”, the blog of the Economics Department at the University of Missouri at Kansas City.

Jim Puplava: All right, well we have been speaking with Professor Black, Professor thank you for coming on the program and helping to clarify why this big crime really went unpunished, which is a real tragedy for not only most Americans but all of us as taxpayers who have paid for the bill.

William Black: Thank you sir, take care.

Jim Puplava: Thank you
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981

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cowboyangel
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Wed Sep 21, 2011 7:29 am

A Surprise Morning March on Wall Street
Wednesday 21 September 2011
by: , Waging Nonviolence | Report

In the newly-renamed Liberty Plaza, the place that hundreds of protesters have come to call home for the last three days, nothing is quite predictable. At around 6:15 in the morning, those of us sleeping on the plaza’s hard, cold surface got the call to wake up, and someone called for a General Assembly meeting at 7. After people groggily packed up their bedding and lined up for dumpster-dived bagels, the meeting began. Its purpose was a run-down of the day’s events. Committees that were meeting the night before had decided to have marches to Wall Street at 9, 11:30, and 3:30. But then somebody came to the front and announced through the “people’s microphone”—those around him echoed one phrase at a time so others could hear—that he was heading off to march now. Wall Street bankers were walking to work as we were sitting there! He ran off and, immediately, one or two hundred others followed. They marched around the plaza, chanting “Occupy Wall Street! / All Day! All Week!” and then set off heading south on Broadway. The first weekday demonstration of the occupation had begun.

Upon arriving at Wall Street, they found that the blocks around the New York Stock Exchange, which had been barricaded completely throughout the weekend, now had open sidewalks. (The roadways themselves were still barricaded, allowing the police to move around easily.) After briefly massing at the entrance to the sidewalk, they proceeded down it, still chanting, and banging on the barricades, making a mighty noise. They were intermingled, inevitably, with those trying to get to work in that area and mainly clogged the way—which was the point. “We! Are! The 99 Percent!” they chanted. Speaking to the police, they’d sometimes replace “We” with “You.”

For almost two hours the march continued, continually evading attempts by the police to pin them in or guide them out of the area by making sudden turns and course reversals. Just as the barricades on Broad Street were opened to let them out and keep them out, they turned around and headed back up toward the Stock Exchange and along Wall Street. (This was whenDemocracy Now! called me for a report.) Then, after marching around the Exchange on all sides, the crowd turned into a long, two-directional picket line along Wall Street, going back and forth and back and forth as the opening bell was rung. “Ring! The! Bell!” they cried. With so many occupiers out, scouts made sure to check that there were still enough in Liberty Plaza to hold it.

Most bystanders and commuters in the midst of the march weren’t amused. (The goal wasn’t to amuse them.) “Shit” was something I heard a lot. A bitter dog-walker said to a security guard, “They say it’s their street”—Wall Street Is Our Street!—“but they don’t even pay taxes.” Along those lines, the “Get a job!” line was pretty common. So was ambivalence. “I hope the police protect the financial… bullshit.”

The most enthusiastic bystanders I talked with were those coming from other countries. A middle-aged woman from El Salvador with painted eyebrows and a coffee in her hand said, “We used to do this in my country in the ’70s and ’80s. They’d arrest all of us. In this country it’s different.” We can only hope. She took pictures of the police in charge and made sure I did too, just to have them on record.

When the “Let’s Go Home!” chant finally came at around quarter after nine, the march returned victoriously to Liberty Plaza and took stock. There were four arrests in the course of it, followed by several more as the day went on. But the protesters didn’t rest on any laurels. Within minutes of the marchers’ return, a meeting was convened to talk about how to do it better next time. After all, they’re not just here to march; they’re here to occupy, to discuss, to replace the country’s money-saturated politics with a leaderless and truly democratic process of their own.

Over the course of the day, media attention has intensified on the occupation. It was one thing to hang around a private park for the weekend. It’s another to stay into the work week and to disrupt the business of the Financial District with the intention of doing so more—all day, all week. The afternoon General Assembly is full of new faces, and sign-holders were facing off with a substantial line of police officers on the Broadway sidewalk. People passing by snap pictures of the vast spread of cardboard signs that is becoming Liberty’s Plaza’s new floor.
0
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Thu Sep 29, 2011 8:03 am

There are 4 banks that are holding 95.9% of $ 250 trillion in derivatives. These are collapsing and the counterparties are going to want a payoff. There is no way that the money can be made to appear. Got any spare change??? :lol:
http://www.zerohedge.com/news/five-bank ... ting-fx-de
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i suppose if you cry it enough times

Post by Simon of the Playa » Thu Sep 29, 2011 8:17 am

Image

eventually something will answer...
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Thu Sep 29, 2011 5:42 pm

This is an excellent article that delineates the difference between normal contracts and OTC contracts.

Posted by Ann Barnhardt - September 26, AD 2011 9:09 PM MST http://barnhardt.biz

Here is a piece from ZeroHedge.com that hopefully will make you all understand, once and for all, that this ain't the 1930's, and that there is absolutely no way in hell that this Republic is going to make it to November 2012.

HERE IT IS.

Summary: The five largest banks in the U.S. (JP Morgan Chase, Citibank, Bank of America, Goldman Sachs and HSBC) are carrying $238 TRILLION dollars in derivative exposure. JP Morgan alone is carrying $78 TRILLION in derivative exposure BY ITSELF.

Okay, what the hell is derivative exposure? What this is referring to are over-the-counter non-exchange traded forward delivery (or "futures") contracts of various kinds. I am a futures broker, but I only execute futures contracts on the futures exchanges, namely the Chicago Mercantile Exchange and the New York Mercantile Exchange. About ten years ago a new "novelty" emerged in the futures business - the so-called "over-the-counter" contracts. There was a kid in the office I worked in who got wind of this and had all kinds of stars in his eyes about making a killing off of these "OTC" contracts because the brokers' commissions were not a flat fee but a percent of the contract value. Here's the problem with OTC contracts: there is no exchange standing between the buyer and seller as a guarantor.

In my business, when a customer executes a trade on a futures or options contract, it makes no difference who the other guy is on the other side of the trade, be it executed electronically or in the pit. None of us have to worry for a second about the counterparty on our executions because the EXCHANGE ITSELF stands between ALL transactions as the ultimate guarantor. The exchange then enforces the financial requirement rules with the Clearing Houses, the Clearing Houses enforce the financial requirement rules with the brokers, and the brokers enforce the financial requirement rules with the customers. That is the chain of financial responsibility. So, even if a customer bugs out and fails to financially perform on a contract, the contract WILL BE MADE GOOD by extracting the money from the broker, then the Clearing House and finally the Exchange. This massive enforcement buffering is what gives the system integrity.

OTC contracts have no exchange. They are a flipping free-for-all. If someone bugs out on a contract, the poop hits the fan. The counterparty has their pants around their ankles and the broker is caught in the middle. That's why when that kid in my office years ago got all starry-eyed, I thought to myself, "I wouldn't do that OTC crap if you put a gun to my head - no matter what the commissions were. It would be Russian Roulette. Eventually someone would default and it would financially destroy the broker instantly, and perhaps the counterparty as well."

Let's take my business - cattle futures. One contract is 40,000 pounds of live cattle. The spot contract settled at $119.725 per hundred pounds today. So, 40,000 pounds X $1.19725 (shift the decimal) = $47,890 total value of the contract. Since this is an exchange traded instrument, the customer doesn't really don't have to worry about default and can go ahead and book that $47,890 today, and it will be offset at a later time, and the net of the entry and exit will be the P&L. The contract isn't going to default, so the derivative exposure is limited.

Okay. These banks are carrying these OTC futures contracts with NO exchange to guarantee anything. And they are carrying these contracts largely WITH EACH OTHER. So JP Morgan might be the long and Goldman Sachs, or some insolvent bank in Europe is the short on the other side. If these banks default, which is now a mathematical certainty because they are not only insolvent, but insolvent multiple times over and there isn't enough money in the world to bail them out, there is going to be a cascading default on all of these OTC contracts.

Now look at the value and exposure of these OTC derivatives again: the top 5 banks in the US alone have exposure of $238 TRILLION dollars.

The total GDP of the United States is $14.5 Trillion.

The total GDP of China is $6 Trillion.

The total land mass on earth is 36.8 billion acres. If every acre of land on earth was "sold" for $6467 per acre, that would total $238 Trillion.

JP Morgan BY ITSELF has derivative exposure equal to over FIVE TIMES the value of the entire US GDP.

And no, there will not be a 1:1 offsetting in a collapse, because the collapse will be asymmetrical, and the bankrupt party will first pursue FULL payment on its "longs" (think of these as accounts receivables) while its "shorts" (accounts payable) will only pay out 20 cents on the dollar OR LESS. In other words, these entities will tear each other apart in a mad dogfight and this dogfight will take the entire world down with it.

TWO HUNDRED AND THIRTY-EIGHT TRILLION DOLLARS.

AND THAT IS JUST FIVE BANKS.

AND THE MASSIVELY CORRUPT AND INCOMPETENT SECURITIES REGULATORS, BOTH GOVERNMENTAL AND PRIVATE, SAT BY AND WATCHED THIS HAPPEN. That is what happens when you let a group of criminals run a bureaucracy of affirmative action hires to "audit" the financial industry. Scroll down and read my post titled "There Must Be A Reckoning."

It's over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.

Here is an intellectually honest trader who was interviewed this morning by the BBC. As much as you may not want to believe it, what this guy says is correct. This iteration of human civilization is approaching an end.

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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Sun Oct 02, 2011 11:13 pm

Thanks Dan Great article. Too bad about the racially charged swipe at affirmative action regulators...what ass did this guy pull that out of? You can bet your ass that Chase and Goldman are working feverishly to engineer the greatest bailout ever performed in the galaxy. They have willing servants in Washington.


Here's another one about our so called "leaders" what utter complete bullshit.....the idea that "we" have leaders.


The Men We Trusted to Lead Us Have Failed
Friday 30 September 2011
by: Robert Scheer, Truthdig | Op-Ed

Now he tells us.

On Wednesday, Federal Reserve Chairman Ben Bernanke referred to the nation's unemployment rate as a "national crisis," a depressing if obvious fact of life for the 25 million Americans who have been unsuccessfully attempting to find full-time employment.

But to finally hear those words from the man George W. Bush and Barack Obama both appointed to lead us out of the great recession is a bracing reminder of how markedly the policies of both those presidents have failed. "We've had close to 10 percent unemployment now for a number of years, and of the people who are unemployed, about 45 percent have been unemployed for six months or more," Bernanke said. "This is unheard of."

But why is Bernanke just now discovering this after having overseen the Fed's purchase of trillions in toxic mortgage-backed securities from the too-big-to-fail banks that sacrificed people's homes in a giant Ponzi scheme? Why did he throw all of that money at the banks without getting anything back in the way of relief for the people the bankers swindled?

The housing meltdown, which has robbed Americans of a considerable portion of their net worth, has led to the continued depressed consumer confidence that is the prime cause of crisis-level unemployment. In another of his too-late-to-matter moments, Bernanke acknowledged that "strong housing policies to help the market recover" would "clearly be very useful." But he failed to suggest any.

Bernanke, along with then-New York Fed President Timothy Geithner, helped implement the Bush strategy of saving the banks in the hope that their rising tide would lift our little boats. That remained the strategy when President Obama rewarded Geithner for having saved AIG and Citigroup by naming him Treasury secretary in the incoming government.

With the Geithner appointment and the even more disturbing selection of Lawrence Summers to be his top economic adviser, Obama sealed his own fate as president. By turning to those disciples of Clinton-era Treasury Secretary Robert Rubin, a prime enabler of Wall Street greed, the new president fatally betrayed his promise of hope.

If you still need confirmation of just how decisive a betrayal those appointments were, check out Ron Suskind's new book, "Confidence Men," a devastating insider account of the Obama White House that clearly identifies as the source of this president's failure "Rubin's B-Team" -- Summers and Geithner -- "two men whose actions had contributed to the very financial disaster they were hired to solve." Suskind quotes then-Sen. Byron Dorgan, D-N.D., one of the few who dared stand up to the Wall Street lobbyists, as telling Obama, "I don't understand how you could do this; you've picked the wrong people!"

Of course, the Democrats from the Clinton era don't bear all of the responsibility for the radical deregulation of the financial industry that ended the sensible restraints on greed installed by Franklin Roosevelt in response to the Great Depression. Indeed, the inspiration came from Republicans led by Phil Gramm, then-senator from Texas, who, as head of the Banking Committee, authored the legislation that Wall Street lobbyists had long pushed unsuccessfully.

The mayhem they wrought and the subsequent big-money rewards to Rubin and Gramm do not seem to have shocked this president or the leading contenders for the Republican presidential nomination. Rubin became chairman of Citigroup and was rewarded with $120 million while he guided the bank to the edge of bankruptcy. Gramm went on to a leading position at Swiss financial services company UBS, a continually troubled institution now in the midst of its latest scandal, which involves fraudulent trading. In addition to a $45 billion direct TARP bailout, Citigroup got $99.5 billion, and Gramm's UBS received $77.2 billion from a $1.2 trillion secret Fed loan fund.

Gramm and Rubin were partners in what should be considered the crime of the century -- speaking in moral and not legal terms, since, in the financial world, the bad guys get to write the laws. Thanks to their efforts, which allowed the creation of the "too-big-to-fail banks" and a totally unregulated derivatives market in toxic home mortgage securities, we entered the Great Recession. But neither of its authors has ever been held seriously accountable for the enormous suffering he caused.

On the contrary, Gramm and Rubin's "just free Wall Street to do its thing" ideology still dominates the economic policies of both major political parties. Rubin's acolytes have controlled the Obama administration's economic strategy of saving Wall Street by betraying Main Street, and Gramm, who recently endorsed his former student at Texas A&M, Rick Perry, for president, remains the free-market-mayhem guru for Republicans. On Election Day, whoever wins, we lose.
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Mon Oct 03, 2011 6:04 pm

Cowboy, at the base of all this is STUPIDITY. WSJ leaked a report from GS stating that the entire economy was going to melt down. GS said to be in treasuries.
Apparently, nobody stopped to think this through. If / When the economy collapses, investors will demand higher interest rates. After all, the tax base has been destroyed. How is GOV going to service bonds. More risk= more interest. At the pitifully low rates of today, it still costs about $ 470 billion for bond service. It wouldn't take very much of a rise in interest rates to push that cost up past $ 1.25 trillion. The Congressional Budget Office says that debt service will take 100 % of the budget in a few years.
It would appear that GS expects GOV to abandon all of it's expenses and obligations to pay just bond service. 52.5 % of Americans rely on a check from GOV. I suspect that a complete abandonment of all obligations outside of bond service would have a serious impact on the viability of the administration.
For GS to believe that treasuries would be a safe haven, they also have to believe that GOV will cut all other outlays to zero.

There is a new discovery that might yield a solution; http://www.zerohedge.com/news/startling ... noon-humor
Here are some quotes from some well-informed honchos. Some are a bit on the pessimistic side.
#11 Ann Barnhardt, head of Barnhardt Capital Management, Inc.: “It’s over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.”
http://www.blacklistednews.com/Prophets ... 8/Y/M.html
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Tue Oct 04, 2011 11:05 am

I think the people are weary of war making. Millions in the streets in 2003 to protest Bush's illegal invasion of Iraq was just a sampler.
We need to dump global banking. Pure and simple. Before the US now is the challenge on the state level to save the country. Pure and simple. The Feds are beyond hope.
States can set up state banks modeled after North Dakota's which is solvent and a billion in surplus I believe. There's plenty of money. It has to be re-configured and re-distributed. Pure and simple.
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Tue Oct 04, 2011 11:11 pm

Financial Warfare: "Sheared by the Shorts". How Short Sellers Fleece Investors

by Ellen Brown


Global Research, September 29, 2011
WebofDebt.com



“Unrestrained financial exploitations have been one of the great causes of our present tragic condition.” -- President Franklin D. Roosevelt, 1933



Why did gold and silver stocks just get hammered, at a time when commodities are considered a safe haven against widespread global uncertainty? The answer, according to Bill Murphy’s newsletter LeMetropoleCafe.com, is that the sector has been the target of massive short selling. For some popular precious metal stocks, close to half the trades have been “phantom” sales by short sellers who did not actually own the stock.



A bear raid is the practice of targeting a stock or other asset for take-down, either for quick profits or for corporate takeover. Today the target is commodities, but tomorrow it could be something else. When Lehman Brothers went bankrupt in September 2008, some analysts thought the investment firm’s condition was no worse than its competitors’. What brought it down was not undercapitalization but a massive bear raid on 9-11 of that year, when its stock price dropped by 41% in a single day.



The stock market has been plagued by these speculative attacks ever since the four-year industry-wide bear raid called the Great Depression, when the Dow Jones Industrial Average was reduced to 10 percent of its former value. Whenever the market decline slowed, speculators would step in to sell millions of dollars worth of stock they did not own but had ostensibly borrowed just for purposes of sale, using the device known as the short sale. When done on a large enough scale, short selling can force prices down, allowing assets to be picked up very cheaply.



Another Great Depression is the short seller’s dream, as a trader recently admitted on a BBC interview. His candor was unusual, but his attitude is characteristic of a business that is all about making money, regardless of the damage done to real companies contributing real goods and services to the economy.



How the Game Is Played



Here is how the short selling scheme works: stock prices are set by traders called “market markers,” whose job is to match buyers with sellers. Short sellers willing to sell at the market price are matched with the highest buy orders first, but if sales volume is large, they wind up matched with the bargain-basement bidders, bringing the overall price down. Price is set by supply and demand, and when the supply of stocks available for sale is artificially high, the price drops. When the bear raiders are successful, they are able to buy back the stock to cover their short sales at a price that is artificially low.



Today they only have to trigger the “stop loss” orders of investors to initiate a cascade of selling. Many investors protect themselves from sudden drops in price by placing a standing “stop loss” order, which is activated if the market price falls below a certain price. These orders act like a pre-programmed panic button, which can trigger further selling and more downward pressure on the stock price.



Another destabilizing factor is “margin selling”: many speculative investors borrow against their holdings to leverage their investment, and when the value of their holdings goes down, the brokerage may force them to come up with additional cash on short notice or else sell into the bear market. Again the result is something that looks like a panic, causing the stock price to overreact and drop precipitously.



Where do the short sellers get the shares to sell into the market? As Jim Puplava explained on FinancialSense.com on September 24, 2011, they “borrow” shares from the unwitting true shareholders. When a brokerage firm opens an account for a new customer, it is usually a “margin” account—one that allows the investor to buy stock on margin, or by borrowing against the investor’s stock. This is done although most investors never use the margin feature and are unaware that they have that sort of account. The brokers do it because they can “rent” the stock in a margin account for a substantial fee—sometimes as much as 30% interest for a stock in short supply. Needless to say, the real shareholders get none of this tidy profit. Worse, they can be seriously harmed by the practice. They bought the stock because they believed in the company and wanted to see its business thrive, not dive. Their shares are being used to bet against their own interests.



There is another problem with short selling: the short seller is allowed to vote the shares at shareholder meetings. To avoid having to reveal what is going on, stock brokers send proxies to the “real” owners as well; but that means there are duplicate proxies floating around. Brokers know that many shareholders won’t go to the trouble of voting their shares; and when too many proxies do come in for a particular vote, the totals are just reduced proportionately to “fit.” But that means the real votes of real stock owners may be thrown out. Hedge funds may engage in short selling just to vote on particular issues in which they are interested, such as hostile corporate takeovers. Since many shareholders don’t send in their proxies, interested short sellers can swing the vote in a direction that hurts the interests of those with a real stake in the corporation.



Lax Regulation



Some of the damage caused by short selling was blunted by the Securities Act of 1933, which imposed an “uptick” rule and forbade “naked” short selling. But both of these regulations have been circumvented today.



The uptick rule required a stock’s price to be higher than its previous sale price before a short sale could be made, preventing a cascade of short sales when stocks were going down. But in July 2007, the uptick rule was repealed.



The regulation against “naked” short selling forbids selling stocks short without either owning or borrowing them. But an exception turned the rule into a sham, when a July 2005 SEC ruling allowed the practice by “market makers,” those brokers agreeing to stand ready to buy and sell a particular stock on a continuous basis at a publicly quoted price. The catch is that market makers are the brokers who actually do most of the buying and selling of stock today. Ninety-five percent of short sales are done by broker-dealers and market makers. Market making is one of those lucrative pursuits of the giant Wall Street banks that now hold a major portion of the country’s total banking assets.



One of the more egregious examples of naked short selling was relayed in a story run on FinancialWire in 2005. A man named Robert Simpson purchased all of the outstanding stock of a small company called Global Links Corporation, totaling a little over one million shares. He put all of this stock in his sock drawer, then watched as 60 million of the company’s shares traded hands over the next two days. Every outstanding share changed hands nearly 60 times in those two days, although they were safely tucked away in his sock drawer. The incident substantiated allegations that a staggering number of “phantom” shares are being traded around by brokers in naked short sales. Short sellers are expected to cover by buying back the stock and returning it to the pool, but Simpson’s 60 million shares were obviously never bought back to cover the phantom sales, since they were never on the market in the first place. Other cases are less easy to track, but the same thing is believed to be going on throughout the market.



Why Is It Allowed?



The role of market makers is supposedly to provide liquidity in the markets, match buyers with sellers, and ensure that there will always be someone to supply stock to buyers or to take stock off sellers’ hands. The exception allowing them to engage in naked short selling is justified as being necessary to allow buyers and sellers to execute their orders without having to wait for real counterparties to show up. But if you want potatoes or shoes and your local store runs out, you have to wait for delivery. Why is stock investment different?



It has been argued that a highly liquid stock market is essential to ensure corporate funding and growth. That might be a good argument if the money actually went to the company, but that is not where it goes. The issuing company gets the money only when the stock is sold at an initial public offering (IPO). The stock exchange is a secondary market – investors buying from other stockholders, hoping they can sell the stock for more than they paid for it. In short, it is gambling. Corporations have an easier time raising money through new IPOs if the buyers know they can turn around and sell their stock quickly; but in today’s computerized global markets, real buyers should show up quickly enough without letting brokers sell stock they don’t actually have to sell.



Short selling is sometimes justified as being necessary to keep a brake on the “irrational exuberance” that might otherwise drive popular stocks into dangerous “bubbles.” But if that were a necessary feature of functioning markets, short selling would also be rampant in the markets for cars, television sets and computers, which it obviously isn’t. The reason it isn’t is that these goods can’t be “hypothecated” or duplicated on a computer screen the way stock shares can. Short selling is made possible because the brokers are not dealing with physical things but are simply moving numbers around on a computer monitor.



Any alleged advantages to a company or asset class from the liquidity afforded by short selling are offset by the serious harm this sleight of hand can do to companies or assets targeted for take-down in bear raids. With the power to engage in naked short sales, market makers have the market wired for demolition at their whim.



The Need for Collective Action



What can be done to halt this very destructive practice? Ideally, federal regulators would step in with some rules; but as Jim Puplava observes, the regulators seem to be in the pockets of the brokers and are inclined to look the other way. Lawsuits can have an effect, but they take money and time.



In the meantime, Puplava advises investors to call their brokers and ask if their accounts are margin accounts. If so, get the accounts changed, with confirmation in writing. Like the “Move Your Money” campaign for disciplining the Wall Street giants, this maneuver could be a non-violent form of collective action with significant effects if enough investors joined in. We need some grassroots action to rein in our runaway financial system and the government it controls, and this could be a good place to start.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981

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Re: Screw the Banks and Investment Firms

Post by can't sit still » Wed Oct 05, 2011 6:00 pm

The bankers fought tooth-and-nail to get the laws changed so there would be no transparency. The investment community knows, in general, that things are BAD at many banks. Since there is no transparency, The investment community is abandoning ALL banks.
http://www.ritholtz.com/blog/2011/10/ba ... ed-wounds/
Too-big-to-fail has become too-big-to-dodge. The banks have huge losses of ; funds, loans, bondholders, stockholders, reserves. AND confidence. They're so desperate for income that they plan to charge for debit-card use.
http://www.zerohedge.com/news/boycott-b ... -usage-fee
They're pissing off their customers to make up for a 20 cent-per-transaction loss from merchants. Pretty damn desperate.
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Wed Oct 05, 2011 6:54 pm

Yeah, that's right Dan. Just watching the slime creatures go through their paces is amusing. Screw them. They're gonna go for more bailouts but this time will find a major opposition, very major
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981

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Re: Screw the Banks and Investment Firms

Post by can't sit still » Fri Oct 07, 2011 4:31 pm

All of you know that the Japanese put all of their considerable savings into the GOV postal bank. All of you know that GOV spent all of this money on stimulus. The saver's money eventually ended up supporting zombie banks. I'm sure that all of you know that 401Ks and IRAs were severely reduced a few years ago. Even with all the bailouts, the banks are very short of money. The temptation to dip into deposits has apparently become to strong for the VERY weak morals of the bankers.
There is a report that the bankers are stealing deposits from clients retirement funds.
http://kingworldnews.com/kingworldnews/ ... sions.html
One of the banks named is New Mellon. The CAFR report for the federal GOV claims that New Mellon is trading accounts for the federal GOV that are worth a few hundred $ trillion. It is difficult to make these two claims "rectify" Dunno

The IMF-o-philes have been badmouthing and downgrading all the Euro-ites as fast as they can. Spain and Italy have just been further downgraded. The strange new development is that British banks have been downgraded. It seemed like the Anglo-Americans were going to try to support each other. Maybe not. It's possible that the IMF-o-philes are going to take no prisoners. http://finance.yahoo.com/news/Moody-Dow ... 0.html?x=0

Meanwhile the Governor of the bank of england says that this is the worst financial crisis in history. That is quite a stretch considering some of the previous spectacular collapses. http://www.telegraph.co.uk/finance/fina ... -says.html
The somewhat strange part is that he came out and said it. The cheerleaders are working feverishly to try to maintain confidence,,, and then, he fires a major torpedo.
There are numerous claims that the banking industry is purposely trying to crash the system to bring in central world banking. Maybe the governor has switched gears for a reason. London was the world center of banking for quite a while. It's possible that there is a London-New York rivalry.
There is no doubt that Europe is beyond saving.
The politicians chant EU EU EU EU but, when push comes to shove, they can't agree on anything.
"Europe will never reach a consensus because the ultimate price of a European bailout is the absolutely certain suicide of the currently ruling political class. Alas, none of those bureaucrats wants to (or can) do anything else but "rule"...

And if the IMF advisor is right, Europe has less than a month to prove us wrong. "
http://www.zerohedge.com/news/euro-rumo ... ement-efsf
The politicians have NO fucking clue of just how fast all of this is moving. They schedule summits a few months in the future. A "few months in the future", the original problem has been eclipsed by problems 20 times worse.

in America, the solution is more debt and more cheerleaders;
http://www.zerohedge.com/contributed/to ... hould-know

The Governor of the BOE says worst in history. Sounds like an exaggeration. maybe yes,,, maybe no.
The 2 questions of over-riding importance are; will oil continue to be pumped and refined and transported.... will food continue to be produced and transported?
Y'all might want to give it some thought,,, in your spare time. :mrgreen:
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Sat Oct 08, 2011 4:12 pm

Manufacturing has dropped drastically in America. The role of finance has risen greatly.
"The corporate profits of the financial industry ballooned from eight per cent of the U.S. economy in 1948 to 45 per cent in 2002. In short, the financial industry is suddenly dominating the North American economy."
"It's no coincidence the dramatic rise of the financial industry corresponds with longer workdays, workaholism, "debt slavery" and parents who don't play with their kids. Whole societies are running like rats on a wheel to keep up with a system that has no real human or environmental measure. Because of it's epidemic nature, a study released this week by the British Chartered Institute of Personnel Development named stress the "Black Death of the 21st century."
http://www.montrealgazette.com/business ... story.html

So, the American economy is dominated by a business that does not produce anything. What kind of economy is the result?
"I have argued that a period of prolonged Credit excess created a financial and economic structure requiring in the neighborhood of $2.0 TN annual net non-financial Credit growth – to keep the economic wheels rotating and (speculative) asset markets levitating"
"As much as policymakers will never admit it, impaired economic structures are at the heart of an unquantifiable global Credit crisis of confidence. "
"The issue is certainly not a lack of “money” – but rather a lack of confidence and trust – the bedrock of Credit. "
http://dollarcollapse.com/the-economy/d ... %E2%80%9D/

Because of the STRUCTURE of our economy, it needs $ 2 trillion in credit growth to keep afloat. There is $ 1.25 trillion in excess reserves sitting in the banks. NOBODY wants it. The # ONE shithead from Princeton is under the mistaken impression that; if he drives down interest far enough, people will borrow this money,,, drive up employment and inflation [to inflate away the debt], and all will be well,,, in the garden.
The bailout was to be a temporary measure to float the banks until the economy resumed. The banks used regulatory--capture to supersize their profits. They also bet against their own clients. This resulted in giant bonuses and a total loss of confidence in the system. In their shortsighted view, the banks didn't care about confidence. In a perfect example of "blowback", the system is crashing because ALL credit is dependent on confidence. The banks traded trust for money.

Since a HUGE part of "money" is credit, no confidence equals no money. The weakening of the banks has put THEM in the position where they can be eaten alive by short-sellers. Most of the very biggest banks in Europe have been downgraded. GOV has no money to save them. The stabilization fund has spent 17 billion Euros of a possible 440 billion. The 17 billion isn't performing well. Following the Greek example, it's doubtful that the whole fund will be thrown down the hole. It's also doubtful that GOV will nationalize the failed banks. They would be on the hook for all the losses. The banks will eventually crash. The Euro will crash. The U.S. banks will crash several weeks after that.
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Mon Oct 10, 2011 5:15 pm

Very interesting news on J P Morgan. Bear Stearns traders admitted in E-mails that they sold fraudulent stuff. A bunch of whistle blowers have come forward. JPM is on the hook for Bear Stearns stuff. "It has a rumoured $1 trillion of ex-BS off the balance sheet worthless paper sitting on its back."
I'm sure that they would like to continue to hide this stuff but, the lawsuits are bringing it to light.
http://www.ukcolumn.org/articles/front- ... n-collapse.
Investors are deserting bank stocks. There is a possibility that they know that the worthless paper will soon be marked-to-market.
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Mon Oct 10, 2011 5:24 pm

Bear Sterns was not in very different shape than the rest of them. There was a concerted effort to bring it down with the help of the British Exchequer.
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Mon Oct 10, 2011 7:07 pm

It looks like French banks only have a very short future;
http://dailybail.com/home/pimcos-el-eri ... -to-1.html
There has been a huge run on European banks. Every time somebody figures out how much they need for a bailout, the figure doubles in a few days.
BNP Parabais, Societe General, etc. They are all feeling the flight. A modern bank-run is when a BUNCH of people click a mouse and withdraw everything.
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Tue Oct 11, 2011 8:34 pm

This is an interesting article. EVERYTHING that it espouses is a disaster. We've been screwed badly. One group, consultancy powerhouse Boston Consulting Group, proposes a 30% tax on all wealth. There are other proposals in the article,equally unlikely and unfair.
http://www.zerohedge.com/news/muddle-th ... out-crisis
"Namely a one-time wealth tax: in other words, instead of stealth inflation, the government will be forced to proceed with overt transfer of wealth."
Why does this sound unlikely?
The article is from Zero Hedge. The various measures that it calls for would save the banks,, more or less. It would destroy everyone else. "They" call for re-industrialization. Consumer demand has been destroyed. Re-industrialization could be possible but, where are solvent consumers going to come from if everybody is working for a global-mean wage? China pays just about exactly 1/10 American wages. The jobs won't come back.
The world aggregate wage is falling like crazy. Re capitalizing the banks by impoverishing the consumer will NOT result in more loans and more consumption.
Banks aren't loaning because consumer demand has hit a wall. Like many others, "they" talk about killing retirements. 10,000 baby-boomers sign up for SS every day. This will go on for decades. Wipe out all their spending power and you've just drastically reduced the number of consumers.
The ensuing deflation would allow the banks to buy up the whole country at fire sale prices. Without a tax-base, GOV will move to privatization. That should ensure perpetual poverty. It worked that way for Argentina.
http://monthlyreview.org/2002/04/01/the ... ine-crisis
Permanent poverty for the previous middle-class. Permanent wealth for the non-producing bankers.
If this article represents the mindset for our problem-fixers and decision-makers, things will get very rough.
:( Dan
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Re: Screw the Banks and Investment Firms

Post by BBadger » Wed Oct 12, 2011 5:36 am

Whoa guys, do you need a room?
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Wed Oct 12, 2011 12:01 pm

no....but you need some friends......
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981

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Re: Screw the Banks and Investment Firms

Post by can't sit still » Wed Oct 12, 2011 6:51 pm

Here's another Bozo predicting some sort of crash. Hmmm, apparently he's a well-informed Bozo. "Dr. Robert Shapiro, advisor to Presidents Clinton and Obama, and now the IMF, as offered on BBC Newsnight on October 5, 2011:" BFD, just another Bozo with generalities,,, nothing specific.

"If they cannot address this [the sovereign debt crisis in Europe] in a credible way, I believe within perhaps two to three weeks, we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. " SEE, nothing important. :wink: :lol: 8)
http://www.chrismartenson.com/blog/big- ... wing/63455
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Thu Oct 13, 2011 5:01 pm

Dedicated to BBadger
The Public Option in Banking: Another Look at the German Model
Thursday 13 October 2011
by: Ellen Brown, Truthout | News Analysis



Publicly owned banks were instrumental in funding Germany's "economic miracle" after the devastation of World War II. Although the German public banks have been targeted in the last decade for takedown by their private competitors, the model remains a viable alternative to the private profiteering being protested on Wall Street today.

One of the demands voiced by protesters in the Occupy Wall Street movement is for a "public option" in banking. What that means was explained by Dr. Michael Hudson, professor of economics at the University of Missouri in Kansas City, in an interview by Paul Jay of the Real News Network on October 6:

[T]he demand isn't simply to make a public bank, but is to treat the banks generally as a public utility, just as you treat electric companies as a public utility.... Just as there was pressure for a public option in health care, there should be a public option in banking. There should be a government bank that offers credit card rates without punitive 30% interest rates, without penalties, without raising the rate if you don't pay your electric bill. This is how America got strong in the 19th and early 20th century, by essentially having public infrastructure, just like you'd have roads and bridges.... The idea of public infrastructure was to lower the cost of living and to lower the cost of doing business.

We don't hear much about a public banking option in the United States, but a number of countries already have a resilient public banking sector. A May 2010 article in The Economist noted that the strong and stable publicly owned banks of India, China and Brazil helped those countries weather the banking crisis afflicting most of the world in the last few years.

In the US, North Dakota is the only state to own its own bank. It is also the only state that has sported a budget surplus every year since the 2008 credit crisis. It has the lowest unemployment rate in the country and the lowest default rate on loans. It also has oil, but so do other states that are not doing so well. Still, the media tend to attribute North Dakota's success to its oil fields.

However, there are other Western public banking models that are successful without oil booms. Europe has a strong public banking sector; and leading it is Germany, with 11 regional public banks and thousands of municipally owned savings banks. Germany emerged from World War II with a collapsed economy that had degenerated into barter. Today, it is the largest and most robust economy in the eurozone. Manufacturing in Germany contributes 25 percent of gross domestic product, more than twice that in the UK. Despite the recession, Germany's unemployment rate, at 6.8 percent, is the lowest in 20 years. Underlying the economy's strength is its Mittelstand - small to medium sized enterprises - supported by a strong regional banking system that is willing to lend to fund research and development.

In 1999, public banks dominated German domestic lending, with private banks accounting for less than 20 percent of the market, compared to more than 40 percent in France, Spain, the Nordic countries and Benelux. Since then, Germany's public banks have come under fire; but local observers say that is due to rivalry from private competitors rather than a sign of real weakness in the sector.

As precedent for a public option in banking, then, the German model deserves a closer look.

From the Ashes of Defeat to World Leader in Manufacturing

Germany emerged phoenix-like from its disastrous defeat in two world wars to become Europe's economic powerhouse in the second half of the 20th century. In 1947, German industrial output was only one-third its 1938 level, and a large percentage of its working-age men were dead. Less than ten years after the war, people were already talking about the German economic miracle; and 20 years later, its economy was the envy of most of the world. By 2003, a country half the size of Texas had become the world's leading exporter, producing high quality automobiles, machinery, electrical equipment and chemicals. Only in 2009 was Germany surpassed in exports by China, which has a population of over 1.3 billion to Germany's 82 million. In 2010, while much of the world was still reeling from the 2008 financial collapse, Germany reported 3.6 percent economic growth.

The country's economic miracle has been attributed to a variety of factors, including debt forgiveness by the Allies, currency reform, the elimination of price controls and the reduction of tax rates. But while those factors freed the economy from its shackles, they don't explain its phenomenal rise from a war-torn battlefield to world leader in manufacturing and trade.

One overlooked key to the country's economic dynamism is its strong public banking system, which focuses on serving the public interest rather than on maximizing private profits. After the Second World War, it was the publicly owned Landesbanks that helped family-run provincial companies get a foothold in world markets. As Peter Dorman describes the Landesbanks in a July 2011 blog:

They are publicly owned entities that rest on top of a pyramid of thousands of municipally owned savings banks. If you add in the specialized publicly owned real estate lenders, about half the total assets of the German banking system are in the public sector. (Another substantial chunk is in cooperative savings banks.) They are key tools of German industrial policy, specializing in loans to the Mittelstand, the small-to-medium size businesses that are at the core of that country's export engine. Because of the landesbanken, small firms in Germany have as much access to capital as large firms; there are no economies of scale in finance. This also means that workers in the small business sector earn the same wages as those in big corporations, have the same skills and training, and are just as productive. [Emphasis added.]

The Landesbanks function as "universal banks" operating in all sectors of the financial services market. All are controlled by state governments and operate as central administrators for the municipally owned savings banks, or Sparkassen, in their area.

The Sparkassen were instituted in Germany in the late 18th century as nonprofit organizations to aid the poor. The intent was to help people with low incomes save small sums of money, and to support business start-ups. The first savings bank was set up by academics and philanthropically minded merchants in Hamburg in 1778, and the first savings bank with a local government guarantor was founded in Goettingen in 1801. The municipal savings banks were so effective and popular that they spread rapidly, increasing from 630 in 1850 to 2,834 in 1903. Today the savings banks operate a network of over 15,600 branches and offices and employ over 250,000 people, and they have a strong record of investing wisely in local businesses.

Targeted for Privatization

The reputation and standing of the German public banks were challenged, however, when they emerged as competitors in international markets. Peter Dorman writes:

[T]he EU doesn't like the landesbanken. They denounce the explicit and implicit public subsidies that state ownership entails, saying they violate the rules of competition policy. For over a decade they have fought to have the system privatized. In the end, the dispute is simply ideological: if you think that public ownership should only be an exception, narrowly crafted to address specific market failures, you want to see the landesbanken put on the auction block. If you think an economy should be organized to meet socially defined needs, you would want a large part of capital allocation to be responsive to public input, and you'd fight to keep the landesbanken the way they are. (There is a movement afoot in the US to promote public banking.)

The vicissitudes of German banking in the last decade were traced in a July 2011 article by Ralph Niemeyer, editor in chief of EUchronicle, titled "Commission's Dirty Task: WESTLB Devoured by Private Banks." He notes that after 1999, the major private banks left the path of sustainable traditional banking to gamble in collateralized debt obligations, credit default swaps and derivatives. Private German banks accumulated an estimated €600 billion in toxic assets through their investment banking branches, for which German taxpayers wound up providing guarantees. Deutsche Bank AG was feeding its record profits almost exclusively through its investment banking division, which made a fortune trading credit default swaps on Greek state obligations. When this investment turned sour, the German government had to bail out the financial institution into which Deutsche Bank AG dumped these toxic assets.

While the large private banks were betting on the casinos of the financial markets, lending to businesses and the "real" economy was left to the public Sparkassen, which were more efficient in serving average citizens and local business because they were not stock companies that had to satisfy shareholders' hunger for ever-larger dividends. Today, the market share of private banks in Germany is only 28.4 percent, and Deutsche Bank AG dominates the segment. But with its 7 percent market share, it is still well behind the public banks owned by municipalities and communities.

Neimeyer says the private banks wanted to break up the market dominance of the public banks to get a bigger piece of the pie themselves, and they used the European Commission to do it. The Commission had been lobbied since the early 1990s by German private banks and by Deutsche Bank AG in particular to attack the German government over the country's "inflexible" public banking sector.

The International Monetary Fund, too, had long demanded that any competing public monopolies in the German banking market be broken up, citing their "inefficiencies." When the German public Sparkassen and Landesbanken were reluctant to turn to investment banking with its skyrocketing profits, they were branded as bureaucratic and "unsexy." When they were pressured to increase their returns for their government owners, the German Landesbanken did get sucked to some extent into derivatives and collateralized debt obligations (fraudulently rated triple A). But while they "lost billions in the Goldman Sachs, Deutsche Bank and Lehman Brothers Ponzi scheme," Niemeyer says the extent to which they became involved in highly speculative transactions was "laughable in comparison with the damage done by private banks, for whom taxpayers are now providing guarantees."



It was the public banks and Sparkassen that supplied the real economy with liquidity, and that stepped in for the private banks when they withdrew to bet in the financial casino; but it was on the failings of the Landesbanken and Sparkassen that the media focused their attention. The real motive, says Niemeyer, was that the large private banks wanted the public banks' market share themselves:

In order to win back this important market share, it has become a prerogative to destroy public banking in Germany completely. This unpopular move could never come from the German government itself, so that's why the [European] Commission is being employed for this dirty job.

The Price of Success

The German public banks were brought down by knocking their public legs out from under them. Previously, they had enjoyed state guarantees that allowed them to acquire and lend funds at substantially better rates than private banks were able to do. But in 2001, the European Commission ruled to strip the Landesbanks of their explicit state credit guarantees, forcing them to compete on the same terms as private banks. And today, the European Banking Authority is refusing to count the banks' implicit state guarantees in their "stress tests" for banking solvency.

The upshot is that the German public banks are being stripped of what has made them stable, secure and able to lend at low interest rates: they have had the full faith and credit of the government and the public behind them. By eliminating the profit motive, focusing on the public interest and relying on government guarantees, the German public banks were able to turn bank credit into the sort of public utility described by Professor Hudson.



The example of Germany shows that even success is no guarantee in the face of a relentless onslaught of propaganda by large privately owned banks interested only in making money for their CEOs, wealthiest clients and shareholders. But peering behind the propaganda, the public banking model that helped underwrite Germany's economic success might be the fast track to a US banking system that serves Main Street rather than Wall Street.



[cowboyangel note] Cowboyangel is a friend to Ellen Brown and organized her lecture at the Board of Supervisors Chambers in Marin County last December. Ask your town or city to do the same thing and let's get public banking off the ground...republicans in North Dakota have shown the way. BND yeah!
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Thu Oct 13, 2011 5:50 pm

Well, deja vu all over again. The private banks have ALWAYS attacked the public banks in Germany. That was Hitler's major crime. He and Feder fought endlessly to end usury. The bankers did an end-run around Feder. http://www.veteranstoday.com/2011/09/13 ... servitude/
When he created internal sovereign credit, the country flourished. The bankers attacked;
http://www.wintersonnenwende.com/script ... ecwar.html
He was a VERY bad example to the rest of the world
This was 1933, long before there were any restrictions on them.
This is nothing new. The attacks in Tunis and Cairo managed to end Sharia-compliant banking that was flourishing there.
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Re: Screw the Banks and Investment Firms

Post by cowboyangel » Fri Oct 14, 2011 7:33 am

The Feder dollar may have been the only good thing out of Adolph......
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Fri Oct 14, 2011 8:33 pm

More stuff on the Euro and Germany,,, mostly in German;
http://www.dr-hankel.de/
http://www.philippbagus.com/
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Re: Screw the Banks and Investment Firms

Post by can't sit still » Sat Oct 15, 2011 8:10 am

"Research and you will find: Greeks owe Man, Woman & Child €35K, Americans owe on same basis $84K per head. Total Euro Zone problem debt is (c) 2 €Trillion and USA $25 Trillion. California State is hiding a debt which might come out shortly that will make Greek debt look like pocket change. Only One USA major bank is technically solvent being BNY Mellon the rest are like JP Morgan with (c) $5B in tangibles and $87Bn to pay in the next 2 months. Would you lend money to a politician?"
Here is a vid of a trader talking about how to make money on a crash. It follows that if one person makes money, someone else has to lose money.

This is part 3 of an article talking about making a "killing" in the market. Once again, if one person makes a killing, someone else has to take a loss;
http://charleshughsmith.blogspot.com/20 ... gle+Reader
The first 2 parts are linked. The article is quite good. One has to have serious questions about a society which allows a non-producing sector to destroy the productive sector. One has to question the mindset of people [investors, politicians] who would aid and abet the destruction of the sector that actually keeps the economy alive.
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