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Derivatives - The Unregulated Global Casino for Banks

Derivatives - The Unregulated Global Casino for Banks
Note the little man standing in front of white house. The little worm next to lastfootball field is a truck with $2 billion dollars. There is no government in the world that has this kind of money. This is roughly 3 times the entire world economy. The unregulated market presents a massive financial risk. If you don't want to bank with these banks, but want to have access to free ATM's anywhere-- most Credit Unions in USA are in the CO-OP ATM network, where all ATM's are free to any COOP CU member and most support depositing checks. Keep an eye out in the news for "derivative crisis", as the crisis is inevitable with current falling value of most real assets. Related:  Economy

JPMorgan: If This Is a Financial Fortress, Run For the Bunkers | Education June 6, 2012 | Like this article? Join our email list: Stay up to date with the latest headlines via email. The U.S. Senate Banking Committee spent over two hours on Wednesday proving to the American people that any shred of confidence they might still have in our financial markets is misplaced. Thomas Curry, head of the Office of the Comptroller of the Currency (OCC) since April 9 of this year, did confirm one important detail during the hearing: the reckless derivative trading at JPMorgan’s London office occurred in a unit of the national bank (not the broker-dealer), using insured deposits of bank customers, while 65 of the OCC’s examiners sat in offices of JPMorgan in New York, where they are permanently stationed. The OCC oversees all national banks, including those deemed systemically important. The U.S. Elizabeth Friedrich, a member of Occupy the SEC, offered the following insight into these dangerous conflicts of interest:

US Debt Ceiling Visualized: Stacked in $100 dollar bills @ $16.394 Trillion Dollars $122,100,000,000,000. - US unfunded liabilities by Dec 31, 2012. Abovet you can see the pillar of cold hard $100 bills that dwarfs the WTC & Empire State Building - both at one point world's tallest buildings. If you look carefully you can see the Statue of Liberty. The 122.1 Trillion dollar super-skyscraper wall is the amount of money the U.S. Government knows it does not have to fully fund the Medicare, Medicare Prescription Drug Program, Social Security, Military and civil servant pensions. The unfunded liability is calculated on current tax and funding inputs, and future demographic shifts in US Population. Note: On the above 122.1T image the size of the bases of the money stacks are $10 billion, and 400 stories @ $4 trillion "It is incumbent on every generation to pay its own debts as it goes. "This is when you need to remember that when a nation's economy collapses, the wealth of the nation doesn't disappear, it only changes hands." Everyone needs to see this.

JPMorgan made some $5bn on Friday using accounting magic called DVA With all the talk about JPMorgan's losses out of the CIO's office, nobody is discussing the money the firm made on Friday due to the accounting magic called DVA. After all, CIO's positions were (at least in principle) meant to act as an offset to this earnings volatility. As an example the chart below shows the price action for JPM's newly minted bond (issued just last month). With roughly $12bn of this bond outstanding, JPMorgan will record a gain of some $350MM based on Friday's price move just for this bond. SoberLook.com

Revealed – the capitalist network that runs the world By Debora Mackenzie and Andy Coghlan AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. The Zurich team can. The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). 1. (Data: PLoS One) economics

Regression to the Mean, JPMorgan Edition By James Kwak I haven’t been writing about the JPMorgan debacle because, well, everyone else is writing about it. One theme that has stuck out for me, however, has been everyone’s reflexive surprise that this could happen at JPMorgan, supposedly the best and most competent of the big banks. “Highly intelligent women tend to marry men who are less intelligent than they are.” No. The performance of anyone doing anything will exhibit regression to the mean. The more disturbing thing isn’t that commentators fell for this statistical red herring. “I wouldn’t call it ‘more aggressive,’ I would call it ‘better,’” Dimon told analysts yesterday. People don’t suddenly go from being good to bad overnight. “Inside JPMorgan, leadership is stunned by the situation, according to two senior executives,” also as reported by Bloomberg. It’s another thing if the bank didn’t realize it was taking on risks of this magnitude.

On The Trail Of Dubai's Stolen Gold: A Robbed Client Breaks The Silence, And A Fascinating Detail Emerges On Christmas Day, 2015, we told our readers the fascinating tale about the Turkish-Iranian gold smuggling ring - perhaps the biggest and most brazen in history, one which lasted for years, which saw billions in gold transported out of Turkey and into Iran to allow Tehran to circumvent the western financial sanctions using gold as a medium for bater, and which was all made possible thanks to the tiny Emirate of Dubai. What made this particular instance of gold smuggling especially memorable is that it reached to the very political top in both Turkey, and Iran, and Dubai. Here, for those who missed it the first time, is the letter that Gold.A.E.'s stunned clients received in late December: Dear Client A group of minority shareholders of GOLD HOLDING suspected that there were questionable financial transactions being undertaken in Gold AE DMCC ("the Company"). But was Gold Holding involved in the smuggling of billions in gold out of Turkey and into Iran?

Who Wants Big Banks By James Kwak Thirty years ago, Merton Miller, one of the giants of modern finance, was at a banking conference when a banker said he couldn’t raise more capital by selling stock because that would be too expensive: his stock was selling for only 50 percent of book value. Merton responded, “Book values have nothing to do with the cost of equity capital. That’s just the market’s way of saying: We gave those guys a dollar, and they managed to turn it into 50 cents. Now that’s what a growing number of sophisticated investors are saying about today’s banking behemoths, especially JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley. A brief aside: Book value refers to the amount that shareholders have historically invested in a firm, plus profits that have not been paid out to them as dividends. But now people who matter (that is, people with real money) are also saying the banks should be broken up—because then they would be worth more to their shareholders.

16 things germans do better: • Football • Beer… Michael Crimmins: Why Hasn’t Jamie Dimon Been Fired by His Board Yet? By Michael Crimmins, who has worked on risk management and Sarbanes Oxley compliance for major banks JP Morgan’s jawdropping revelations in its Friday earnings call don’t seem to be attracting the attention they deserve. The market may have shrugged off the size of the losses and the corporate governance modifications plans, but the announcement opens the door wide for the next phase of this scandal. The first stunner, that JP Morgan was restating the first quarter financials, should have caused a deafening ringing of alarm bells. Add in the magnitude of the restatement which increased the CIO losses by a massive 90% over the previously reported losses and you’d expect to see further panic. But the real cause for alarm is the reason for the restatement. That Stone Age policy has been extinct for a generation at every financial institution that signs a SOX internal controls certification. Which leads to the second underreported stunner. Which leads us to the clawback issue.

Brazil, like Russia, under attack by Hybrid War — RT Op-Edge Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Color revolutions would never be enough; Exceptionalistan is always on the lookout for major strategic upgrades capable of ensuring perpetual Empire of Chaos hegemony. The ideological matrix and the modus operandi of color revolutions by now are a matter of public domain. UW was spelled out by the 2010 Special Forces Unconventional Warfare manual. “Hostile” powers are meant not only in a military sense; any state that dares to defy any significant plank of the Washington-centric world “order” – from Sudan to Argentina – may be branded “hostile”. Read more We need our own Saddam

Occupy the SEC Urges the SEC to Investigate JP Morgan Over Likely (As in Bloomin’ Obvious) Sarbanes Oxley Violations #OWS We’ve written at length how the Obama Administration claim that it couldn’t prosecute bank CEOs and senior executives because they didn’t do anything illegal is utter hogwash. Sarbanes Oxley, passed in the wake of Enron, was designed to prevent CEOs and other top executives from escaping liability by claiming they were clueless face men. And it provides for a clear path to criminal prosecutions. But the way Sarbanes Oxley was defanged is by making it an exercise in form over substance. Public firms engage in compliance theater while the SEC sits on its hands as far as enforcement is concerned (Note that the SEC did fail on its lone effort to use Sarbox against a CEO in the case of Richard Schrusy and Healthsouth. But that case was tried before a jury in Birmingham, Alabama, and I will spare readers the long form account as to why you can’t generalize from these results). I hope you’ll read their succinct and forceful letter.

"A Total Game Changer" - From Over-Population To De-Population Submitted by Chris Hamilton via Hambone's Stuff blog, Strangely, the world is suffering from two seemingly opposite trends...overpopulation and depopulation in concert. The overpopulation is due to the increased longevity of elderly lifespans vs. depopulation of young populations due to collapsing birthrates. The depopulation is among most under 25yr old populations (except Africa) and among many under 45yr old populations. So, the old are living decades longer than a generation ago but their adult children are having far fewer children. The economics of this is a complete game changer and is unlike any time previously in the history of mankind. In a short yet economically valid manner, every person is a unit of consumption. The chart below is total annual population growth broken down by OECD nations (33 wealthiest nations...representing 1.3 billion people, OECD members), BRIICS (Brazil, Russia, India, Indonesia, China, S.

How Wall Street Scams Counties Into Bankruptcy Lord knows we’ve had more than enough scandals ginned up by Wall Street over the years, and the message that banking executives proclaim after each is: “Don’t worry, we’ve learned that lesson, and it will never happen again.” Which is how we got to the recent spectacle of Jamie Dimon, the chief executive officer of JPMorgan Chase & Co., testifying twice before Congress that although the bank’s chief investment office was taking huge proprietary risks with some $350 billion of its depositors' money -- and lost $3 billion (and counting) by making a bunch of risky bets on an obscure, thinly traded derivatives contract -- everything is now fine and dandy because the unjustifiable gambling has been stopped dead in its tracks. We are told repeatedly that when Wall Street’s deeply flawed incentive system leads to one bad outcome after another, year after year, it will never happen again. Yet it does. Minor Penalties Over time, the how and why of the firm’s success revealed itself. Fraud Charges

Mutation of Medieval Feudalism Into Modern Corporate Capitalism: The Rise of Neofeudalism in Corporate Governance... Feudalism is still alive and well in today’s modern corporate world, in spirit and intent… Question: What is the most enduring and stable system of economic and social order the world has ever known? It’s not capitalism, or socialism, or dictatorship: It’s feudalism… Feudalism was primary political system of the Middle Ages (9th to 15th Centuries). The system came about, for the most part, because the reigning king had two major woes; he couldn’t keep the people from rebelling and he couldn’t take care of all his land. In the article Modern Feudal State? by Aglaya writes: Feudalism is the system whereby political and economic power is held by a relatively small group of capital owners who permit their capital to be worked or used by the large majority of landless people for their subsistence. The basic contract in the feudal state is the majority of the population will be content to remain relatively uneducated, unsophisticated, and unambitious. In the article Feudalism in America?

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