Sunday, October 09, 2011

Examples of U.S. Financial Corruption

Susan Brannon
9 October 2011
Examples of U.S. Financial Corruption

- Most gold is traded on the markets and is not backed by the actual metal itself.  When people think that they are buying gold, they are actually buying pieces of paper that say that they own gold, while being charged storage fees to store the gold.  Insiders reveal that the London Bullion Market Association has approximately a hundred times more gold deposits than actual gold bullion.

- Joe Cassano to helped bring down AIG is getting away scott free and can keep the millions in profits that he made in the process.

-  Goldman Sachs denies "betting against clients"...the Wall Street bank issues eight-page letter to shareholders justifying its conduct before, during and after the financial crisis.

The eight-page letter, signed by chief executive Lloyd Blankfein and president Gary Cohn, also contained a detailed defence of the $12.9bn (£8.5bn) payout which Goldman received from AIG after the failed insurance giant was bailed out by the US government. Goldman had helped to fuel the housing boom during the last decade by packaging hundreds of millions of dollars worth of housing loans into complicated financial products such as collateralised debt obligations (CDOs). "These CDOs were sold on to other banks and investors such as pension funds, who suffered big losses when the sub-prime housing bubble burst. Goldman, though, actually profited from the fiasco by short-selling the market before the credit crunch." (The guardian)

Goldman was the biggest beneficiary from the US government's bailout of AIG in autumn 2008. Goldman claimed at the time that its exposure to AIG was "immaterial", but in March 2009 it emerged that it actually received $12.9bn of the $44bn handed to various counterparties who had taken out insurance contracts with AIG. Goldman said that $4.8bn of the money was paid in return for securities which could otherwise have been sold for the same price, while $2.5bn covered existing debts owed because of the deteriorating market.

Another $5.8bn was handed over to settle credit default swaps, or insurance contracts, on the CDOs that had helped to create the crisis.

-  Goldman Sachs made billions of dollars from the economic collapse:
Step 1: Sell mortgage-related securities that are absolute junk to trusting clients at vastly overinflated prices.

Step 2: Bet against those same mortgage-related securities and make massive bets against the U.S. housing market so that your firm will make massive profits when the U.S. economy collapses.

Step 3: Have ex-Goldman executives in key positions of power in the U.S. government so that bailout money can be funneled to entities such as AIG that Goldman has made these bets with so that they can get paid after they win their bets.  

Step 4: Collect the profits - Goldman Sachs is having their "most successful year" and will end up reporting approximately $50 billion in revenue for 2009. 

-Data analysed by the Wall Street Journal found that 18 major banks were, on average, able to reduce debt levels used to fund securities tradesby 42pc over the last five quarters using repurchase agreements, also known as “repo” trades. Under certain circumstances, some repurchase trades can be booked as “sales” and used to reduce debt.

The assessment, based on data from the Federal Reserve Bank of New York, highlights the extent to which advanced accounting is still in use, even in the wake of the crippling financial crisis.

In Lehman’s case, the court-appointed investigator’s report into the bank’s September 2008 downfall found that the bank had used “Repo 105” – the name given to the technique within the bank – to significantly mask its borrowing, so decreasing its apparent risk profile.

According to the report, the ruse allowed Lehman to claim its liabilities were $50bn (£33bn) lower than they actually were by May 2008, just months before the bank collapsed. (The Telegraph)

- The Federal Reserve bought up a majority of U.S. government debt in 2009, likened to printing money out of thin air.  Some call it a Ponzi scheme.

-  The Federal Reserve holds credit-default swaps on the debt of Florida schools and debt owned by the states of California and Nevada.  This will turn into a huge profit if the states default on the debt.  Isn't this a conflict of interest? 

-  record bonuses during and after the financial crisis...and continues.

- We may not know much about what is going on inside some of these banks, but they sure do know a lot about us.  For example, it has been revealed that the data mining operations of the major credit card companies are becoming so sophisticated that they can actually predict how likely you are to get a divorce.  (The Daily Beast
The Movement:  Occupy Wall St.
Occupy Together
Twitter: @occupywallst

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Making Sense of the Failing Economy and U.S. Downgrade
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American Struggling Middle Class (Video)
Global Confidence in Economy Collapses 
Crime Against Humanity
Examples of US Financial Corruption
Presidential Candidates Response to Occupy Wall Street
One Example of Wall Street Corruption
Occupy Wall Street - Proposed/Unproposed List of Demands
What is Wall Street?

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