Category Archives: Banking

WSJ reports: Bank of North Dakota outperforms Wall Street

While 49 state treasuries were submerged in red ink after the 2008 financial crash, one state’s bank outperformed all others and actually launched an economy-shifting new industry. So reports the Wall Street Journal this week, discussing the Bank of North Dakota (BND) and its striking success in the midst of a national financial collapse led by the major banks. Continue reading

Why do banks want our deposits?

Hint: it’s not to make loans

Many authorities have said it: banks do not lend their deposits. They create the money they lend on their books. Continue reading

Building an ark: How to protect public revenues from the next meltdown

Concerns are growing that we are heading for another banking crisis, one that could be far worse than in 2008. But this time, there will be no government bailouts. Instead, per the Dodd-Frank Act, bankrupt banks will be confiscating (or “bailing in”) their customers’ deposits. Continue reading

Don’t be fooled: Banks still too big to fail

Analyzing a government report is like eating and digesting a meal—better to take it slowly than gobble quickly and suffer the possible consequences. Continue reading

You can’t taper a Ponzi scheme: Time to reboot

One thing to be said for the women now heading the Federal Reserve and the IMF: compared to some of their predecessors, they are refreshingly honest. Continue reading

Did the other shoe just drop?

Black Rock and PIMCO sue banks for $250 billion

For years, homeowners have been battling Wall Street in an attempt to recover some portion of their massive losses from the housing Ponzi scheme. But progress has been slow, as they have been outgunned and out-spent by the banking titans. Continue reading

Buying up the planet: Out-of-control central banks are on a corporate buying spree

When the US Federal Reserve bought an 80% stake in American International Group (AIG) in September 2008, the unprecedented $85 billion outlay was justified as necessary to bail out the world’s largest insurance company. Today, however, central banks are on a global corporate buying spree not to bail out bankrupt corporations but simply as an investment, to compensate for the loss of bond income due to record low interest rates. Indeed, central banks have become some of the world’s largest stock investors. Continue reading

Interest rate puzzle

One of the biggest puzzles in the financial markets this year has been the considerable fall in interest rates, despite the Fed’s program of tapering or cutting back the Fed’s bond purchases known as Quantitative Easing. A year ago, when Fed Chairman Bernanke announced the possibility of tapering QE on May 22, 2013, the 10-year Treasury yield was 2.03%. The yield quickly moved up close to 3% after Bernanke’s taper comments, forcing the Fed to retract or “clarify” them. Since January 2014, however, when the Fed actually began tapering, the 10-year yield has steadily declined from over 3% to it’s current yield of just over 2.5%. Continue reading

Infrastructure sticker shock: Financing costs more than building it

Funding infrastructure through bonds doubles the price or worse. Costs can be cut in half by funding through the state’s own bank. Continue reading

Robbing Main Street to prop up Wall Street

Why Jerry Brown’s rainy day fund is a bad idea

There is no need to sequester funds urgently needed by Main Street to pay for Wall Street’s malfeasance. Californians can have their cake and eat it too—with a state-owned bank. Continue reading

The global banking game is rigged and the FDIC is suing

Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. Continue reading

Banking union time bomb: Eurocrats authorize bailouts and bail-ins

On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins”—the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed. Continue reading

Warren’s post office proposal: Palast aims at the wrong target

Investigative reporter Greg Palast is usually pretty good at peering behind the rhetoric and seeing what is really going on. But in tearing into Senator Elizabeth Warren’s support of postal financial services, he has done a serious disservice to the underdogs—both the underbanked and the US Postal Service itself. Continue reading

The stone that brings down Goliath?

Richmond, Calif., and eminent domain

In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorgan Chase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands. Continue reading

Enough is enough: Fraud-ridden banks are not L.A.’s only option

“Epic in scale, unprecedented in world history.” That is how William K. Black, professor of law and economics and former bank fraud investigator, describes the frauds in which JPMorgan Chase (JPM) has now been implicated. They involve more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; failing to disclose known risks, including those in the Bernie Madoff scandal; and engaging in multiple forms of mortgage fraud. Continue reading

100 years is enough: Time to make the Fed a public utility

December 23, 2013, marked the 100th anniversary of the Federal Reserve, warranting a review of its performance. Has it achieved the purposes for which it was designed? Continue reading

Occupying the NEED Act

More than 5 years into the economic crisis created by Wall Street, recovery is a nothing but a meaningless word, mouthed by politicians. Yet just two years ago a bill was placed before the last Congress: the National Emergency Employment Defense Act (the NEED Act) Continue reading

Amend the Fed: We need a central bank that serves Main Street

December 23 marks the 100th anniversary of the Federal Reserve. Dissatisfaction with its track record has prompted calls to audit the Fed and end the Fed. At the least, Congress needs to amend the Fed, modifying the Federal Reserve Act to give the central bank the tools necessary to carry out its mandates. Continue reading

The money changers serenade: A new plot hatches

Former Treasury Secretary Timothy Geithner, a protégé of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the handful of gigantic banks, whose existence attests to the fact that the Anti-Trust Act is a dead-letter law, Geithner has been appointed president and managing director of the private equity firm, Warburg Pincus, and is on his way to his fortune. Continue reading

Public banking in Costa Rica: A remarkable little known model

In Costa Rica, publicly-owned banks have been available for so long and work so well that people take for granted that any country that knows how to run an economy has a public banking option. Costa Ricans are amazed to hear there is only one public depository bank in the United States (the Bank of North Dakota), and few people have private access to it. Continue reading

Ireland: Ground zero for the austerity-driven asset grab

The Irish have a long history of being tyrannized, exploited, and oppressed—from the forced conversion to Christianity in the Dark Ages, to slave trading of the natives in the 15th and 16th centuries, to the mid-nineteenth century “potato famine” that was really a holocaust. The British got Ireland’s food exports, while at least one million Irish died from starvation and related diseases, and another million or more emigrated. Continue reading

The lies that will kill America

Here in Manhattan the other day, you couldn’t miss it—the big bold headline across the front page of the tabloid New York Post, screaming one of those sick, slick lies that are a trademark of Rupert Murdoch’s right wing media empire. There was Uncle Sam, brandishing a revolver and wearing a burglar’s mask. “UNCLE SCAM,” the headline shouted. “U.S. robs bank of $13 billion.” Continue reading

JP Morgan Chase’s $13 billion settlement and a possible whale-sized tax deduction

At JPMorgan Chase, you want record earnings and deals, not record settlement payments. But the nation’s biggest bank with $2.4 trillion in assets could be days away from the biggest and most painful settlement ever. As big as the $13 billion number is, it may not preclude criminal prosecution. What’s more, it could involve an express admission of wrongdoing, something that could curtail tax deductions and fuel shareholder suits. Continue reading

How much of JPMorgan’s $13 billion fine will taxpayers pay?

Experts speculate settlement will allow bank to write off chunk of penalty as business expense

JPMorgan—whose fraudulent mortgage claims helped take down the economy in 2008—will likely be able to write off its much-touted $13 billion fine as a business expense, experts speculate, meaning U.S. taxpayers would help foot the bill. Continue reading

Is Homeland Security preparing for the next Wall Street collapse?

Reports are that the Department of Homeland Security (DHS) is engaged in a massive, covert military buildup. An article in the Associated Press in February confirmed an open purchase order by DHS for 1.6 billion rounds of ammunition. According to an op-ed in Forbes, that’s enough to sustain an Iraq-sized war for over twenty years. DHS has also acquired heavily armored tanks, which have been seen roaming the streets. Evidently somebody in government is expecting some serious civil unrest. The question is, why? Continue reading

America needs the NEED Act

Today, our politicians squabble over healthcare legislation passed years ago and in a few more days their fight will be over the federal debt ceiling. Continue reading

What we could do with a postal savings bank: Infrastructure that doesn’t cost taxpayers a dime

The U.S. Postal Service (USPS) is the nation’s second largest civilian employer after Walmart. Although successfully self-funded throughout its long history, it is currently struggling to stay afloat. This is not, as sometimes asserted, because it has been made obsolete by the Internet. In fact the post office has gotten more business from Internet orders than it has lost to electronic email. What has pushed the USPS into insolvency is an oppressive 2006 congressional mandate that it prefund healthcare for its workers 75 years into the future. No other entity, public or private, has the burden of funding multiple generations of employees who have not yet even been born. Continue reading

The Armageddon looting machine: The looming mass destruction from derivatives

Increased regulation and low interest rates are driving lending from the regulated commercial banking system into the unregulated shadow banking system. The shadow banks, although free of government regulation, are propped up by a hidden government guarantee in the form of safe harbor status under the 2005 Bankruptcy Reform Act pushed through by Wall Street. The result is to create perverse incentives for the financial system to self-destruct. Continue reading

Making the world safe for banksters: Syria in the crosshairs

Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why? Here is one overlooked scenario . . . Continue reading

The leveraged buyout of America: Big banks are using your deposits as collateral for borrowing in the repo markets

Another reason why we need public banks

Giant bank holding companies now own airports, toll roads, and ports; control power plants; and store and hoard vast quantities of commodities of all sorts. They are systematically buying up or gaining control of the essential lifelines of the economy. How have they pulled this off, and where have they gotten the money? Continue reading

Not too big to jail: Why Eliot Spitzer is Wall Street’s worst nightmare

Before Eliot Spitzer’s infamous resignation as governor of New York in March 2008, he was one of our fiercest champions against Wall Street corruption, in a state that had some of the toughest legislation for controlling the banks. It may not be a coincidence that the revelation of his indiscretions with a high-priced call girl came less than a month after he published a bold editorial in the Washington Post titled “Predatory Lenders’ Partner in Crime: How the Bush Administration Stopped the States from Stepping in to Help Consumers.” Continue reading

Wells Fargo, it ain’t your great-grandpa’s stagecoach anymore

Wells Fargo is your neighborhood mega-money laundering, drug war profiteering, prison-industry enlarging bank, one big elite networking operation that’s not afraid to get its hands covered in blood money. Yes siree, they’re a whole new coach of pain on wheels, coming right at you. Continue reading