Thursday, March 15, 2012

Bank of America: "It's Not Your Mother's Tampon"

This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.  - Matt Taibbi, Rolling Stone
I've written several posts in the past showing - with links to its 10Q and 10K filings - where all the fraud is embedded in Bank of America's balance sheet.  I even theorized when Bernanke and Geithner and merged Countrywide and Merrill Lynch into Bank of America that it was being done to use Bank of America as a sewage mechanism in order to cover up the trail of enormous fraud at Countrywide and Merrill (I am not alone in this belief).

Matt Taibbi has done some brilliant reporting for Rolling Stone.  In another era, his work might have been published in the Washington Post or the New York Times.  But this is not your mother's America.  Please take the time to read Taibbi's latest article:  "Bank of America:  Too Crooked To Fail"  LINK  There is no question that every assertion he makes is 100% bona fide.  It also is one more strong signal that our system as your parents knew it is collapsing.


  1. when that happened (countrywide and Merril into BofA) we knew it at that time. The next piece should be where they are going to stick Citi...because there is no way they let the appearance of a failure get out unless they had a plan to out that somewhere just like the others. My guess is they roll it into the FED or JPM. One interesting observation I've come up with is that we all know that the current Fed charter expires sometime in the next year or one seems to know when. How about they just roll everything into the FED and tank it....starting "fresh" all over again. Alot would have to happen for that to even be considered but what other choices do they have?

  2. They've already started rolling shit into the Fed by moving a lot of the toxic assets from TBTF balance sheets to the Fed. No way in hell the Fed will be able to sell that diarrhea for anything more than pennies on the dollar.

    Not sure what's in store for Citi. I know the Government seems to like to use Pandit as punching dummy, that's for sure. How JPM got a clean bill of health from the Fed and Citi didn't is beyond me.

    1. Whistleblower part#1:
      From: Z A N
      JPMorgan Chase

      Comment No: 57019
      Date: 3/14/2012

      Comment Text:

      Dear CFTC Staff,

      Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.

    2. To be honest, I think that letter is a fake.

  3. they've been doing essentially that (rolling into the FED) since 2002. Repo's and all that. That's why I say they just continue to pile it in over there and "poof" it just goes away. What that means for our currency is another question...however look what they've accomplished up to this point. I never would have guessed it was possible to get the system so effed up yet keep up the appearance of "all's well"

  4. It's everywhere...

    Role of Speculation in Financial Collapse - The Recurrency of Fraud

    "Financialization permits the transmission of the speculation to a broader audience, in the most recent collapse a global audience, and widens the scope and duration of the Ponzi scheme through its interlocking web of counter party risks.

    The most common thread in destructive bubbles is official complicity, often seen in regulatory capture, and the almost willful suspension of disbelief achieved through influence in the media and the steady application of messaging, often so intense that it borders on overt propaganda.

    Certainly it does involve the silencing of whistleblowers and critics through access denial, ridicule, and other forms of soft censorship. And if it is followed by the obstruction of justice so that the perpetrators may go forward unimpeded, they will work their cons and carny magic on something else again."

  5. You think the TBTF agenda would get sidetracked under RP?

    Is There A Conspiracy Against Ron Paul?

  6. Accounting fraud, voter fraud, everywhere fraud...every thing's a farce.

    More Documented Voting Fraud Against Ron Paul – Georgia • Must See •

    need more Taibbi's

  7. Evening Dave


    Germany’s DAX: +20%, 96% annualized
    S&P 500: +11%, 52% annualized
    S&P 500: up 67% of all sessions, just one -1% day in 51 trading sessions.
    Nasdaq 100: +19%, 91% annualized, up 73% of all sessions.
    Homebuilders Index: +23%, 110% annualized
    S&P Financials: +21%, 100% annualized
    Apple, the world’s largest company: +45%, 216% annualized

  8. Shove Your MF Global Vulture Offer, $itch!

    I decided NOT to sell my MF Global Claim to a Vulture Firm because I would like to have the moral authority to Bull-Dog this issue through. I hope that Justice will be served on Jon Corzine and JP Morgan (if applicable and proved). Moral Authority is important and we must demand our government agencies to do what they were designed to do or they need to be eliminated. We need the Department of Justice to act in regards to MF Global.. We need the Department of Energy and other agencies to help create more and to help create the conditions for success. We don't need agencies to be barriers to entry to innovation. We need to call things as they are. We need to take responsibility. PS Kilroy was Here! Who is John Galt!

  9. In 'highly unusual' move, Marines asked to disarm before Leon Panetta speech

    doubts...wonder why?

  10. America’s public morality crisis
    Santorum has it backwards. The real ethical breakdown is in Wall Street boardrooms, not private bedrooms

    Republicans have morality upside down. Santorum, Gingrich and even Romney are barnstorming across the land condemning gay marriage, abortion, out-of-wedlock births, access to contraception and the wall separating church and state.

    But America’s problem isn’t a breakdown in private morality. It’s a breakdown in public morality. What Americans do in their bedrooms is their own business. What corporate executives and Wall Street financiers do in boardrooms and executive suites affects all of us.

    There is moral rot in America but it’s not found in the private behavior of ordinary people. It’s located in the public behavior of people who control our economy and are turning our democracy into a financial slush pump. It’s found in Wall Street fraud, exorbitant pay of top executives, financial conflicts of interest, insider trading and the outright bribery of public officials through unlimited campaign “donations.”

    Since 2009, the Securities and Exchange Commission has filed 25 cases against mortgage originators and securities firms. A few are still being litigated but most have been settled. They’ve generated almost $2 billion in penalties and other forms of monetary relief, according to the Commission. But almost none of this money has come out of the pockets of CEOs or other company officials; it has come out of the companies — or, more accurately, their shareholders. Federal prosecutors are now signaling they won’t even bring charges in the brazen case of MF Global, which lost billions of dollars that were supposed to be kept safe.

    Nor have any of the lawyers, accountants, auditors, or top executives of credit-rating agencies who aided and abetted Wall Street financiers been charged with doing anything wrong.

    But abuses of public trust such as we’ve witnessed for years on the Street and in the executive suites of our largest corporations are not matters of private morality. They’re violations of public morality. They undermine the integrity of our economy and democracy. They’ve led millions of Americans to conclude the game is rigged.

    ...are the democrats any better?...

  11. Cosa Stanley?

    One Half of Italy's New Sales Tax Receipts Go Directly to Morgan Stanley in New York

    Complex derivatives deal from the 1990s backfires on Italy.

    Bankers win. The people pay.

    No wonder the American derivatives dealers are leaving Europe. They are probably just a few steps ahead of the pitchforks and torches.

    The bad news is that they are coming home.

    ...what a screwing they gave the boot.

  12. Now the dollar has broken 80 again - and what happens to gold and silver - nada. And for the miners have made it double worse. What else does Gold need to go - together with negative watch for UK and the US rating said not be raised again for a while.

    WHAT ELSE???

    And for another - everyone was always going on about miners and governments raising resource taxes etc etc. Then I said that it will not stop here - physical will also be targeted. Here we come India is the start of it like Australia was the start for the resource tax.

    Do you honestly believe that governments will allow 10 000 Gold. Everyone must be crazy.

    1. I didn't know it was a choice in a free market economy???

      Intervention will be reduced to 'a blip on a chart,' von Greyerz says
      “What is happening is the law of diminishing returns has firmly taken over with regards to money printing. But it’s not just diminishing returns, it’s collapsing returns. We have to print trillions and trillions, not just in the US but worldwide, in order to receive a nominal increase in real GDP.

      If you look at the debt that has been created worldwide, in just the last ten years, it’s gone up from $80 trillion to $200 trillion. So we have seen an increase of $120 trillion or 140% over the last ten years. You can imagine the effects this will have on the world.

      First of all, we know the debt levels are too high today and gold is starting to reflect that. But because less than 1% of world financial assets are in gold, we have yet to really see the gold market react to all of this massive money printing. Once the gold market starts reacting to all of this, that’s when gold is going to go exponential.

      It doesn’t matter whether investors are buying gold at $1,600 or $1,800, it’s irrelevant in the long-run. What’s important is they are invested in physical gold in order to preserve their wealth.

    2. Man alive - what bullshit. Anyone who has said sit tight and be right needs their head examined. If you look at most gold stock - they haven't gone anywhere from at least 2006 and most even longer. Their is a handfull that have given some returns but nothing to speak of. Its like choosing your lottery numbers. Look how easy it is - there are just no bulls at all. We are at crisis levels in the gold miners and the real crisis is yet to come with the rest of the market - then the miners will really go to the woodshead.

      The tinfoil hats have no strength - they are reliant on other more powerful people - hedge funds etc - to make them realise their dreams.

      WTF with Embry - never again. Its only a trade not an investment. Lovely religious experience you guys are getting, just wonderful. All will realize to late that miners aren't worth the trouble.

      And you guys are still holding Hecla - even worse buying - you must have your heads read.

    3. You're such an idiot. Stop blowing bullshit. HUI index was at 64 in Sept 2001, about the time I started doing this sector. It's at 476 today. Do you know what a CAGR is? Compounded Average Annual Growth Rate. The HUI CAGR over that time period is 20%. There's not another asset class out there that comes even close to that. And THAT's after a brutal correction in the HUI from it's cyclical peak in early 2011.

      The secular move in this sector has at least 10 more years. The only thing that will derail it is a global war and extreme totalitarianism everywhere. I wouldn't discount that possibility.

      Next time please back up your commentary with facts, like I'm required to do.

    4. There's a lot of money sitting idle---who's to say where it goes?

      The truth is that the banks are desperate to start offloading their
      risk exposure to retail investors, and instead of selling, are
      furiously trying to send the market ever higher just to get that ever elusive "investor" back: just look at how much the market rose by last week, CNBC will say: do you really want to be out of this huge rally?
      Alas, the damage has been done: between the Great Financial Crisis,
      the Flash Crash, a massively corrupt regulator, rehypothecating assets that tend to vaporize with no consequences, and a central bank which effectively has admitted to running a Russell 2000 targeting ponzi scheme, the investor is gone. But what if? What if the retail herd does, despite everything, come back into stocks? After all the money
      is in bonds, or so the conventional wisdom states. What harm could
      happen if the 10 Year yield goes back from 2% to 3%, if the offset is another 100 S&P points. After all it is good for the velocity of money and all that - so says classical economic theory. Well, this may be one of those "be careful what you wish for." Because while investors
      have indeed park hundreds of billions out of stocks and into bonds,
      the real story is elsewhere. And the real story is the real elephant nobody wants to talk about. Presenting: America's combined cash hoard, which between total demand deposits, checkable deposits, savings deposits, and time deposits (source H.6), is at an all time high of $8.1 trillion.

      got gold?


    The person who wrote this article is already known to be a consummate nave and unapologetic Bankster tool. He insists that no actionable crimes were committed by Wall Street in the Subprime meltdown. Word brothers and sisters.

    Now he posits the question: why is our 'savior' Ben Bernanke so hated?

    Look at the discerning pious grin on this central planning fool.

    You want to know why he is universally loathed by those of us who know better?

    He is the one most responsible for institutionalizing the towering babel of financial moral hazard that has poisoned the global economy.

    Wondering why Lloyd Blankfein and Jamie Dimon are chronically recurring raw nerves afflicting the popular psyche.

    Because this man shields them from being held justly accountable. Accountable for leading their storied institutions in a perpetually sequenced crime spree of economic rape, pillage and fiduciary sodomy. Reset...

    Interesting commentary...

    Ben Davies: Financial Repression and Technocratic Governments

  14. I think the guy is onto something...

    Death penalty idea for corruption draws criticism: China

    If corruption of over 500,000 (S$99,426) yuan is punishable by death, no official will dare to do that anymore, said Zhao Runtian, a deputy to the National People's Congress, on Monday. His speech draws heated comments online.

    The light punishment against corruption may be encouraging graft, added Zhao, who is also secretary of the Heze Municipal Committee of the CPC in Shandong province.

    Zhou Yuhua, another deputy to the NPC and chief justice of Shandong Higher People's Court, said corrupt officials don't consider how many years of jail time they will get, because they believe that they won't get caught.

    1. If you want to deter crime, you have to put in place the right disincentives. If they wanted to put in place an unappealable death sentence in the event of undisputed evidence of a crime like that, I'm all for it.

    2. People will still commit crimes like that, but at least they'll know that risks of getting caught and sentenced can't be challenged in court.

    3. how about a first step along these lines:

      make the bankster boards and managements liable for any losses ie go back to the partnership model such that the board and managments' personal assets are subject to capital calls.

      that'll wipe the smile of Dimon's pie hole

    4. Totally agree with that. Let's start with Joe Nacchio - he should be forced to disgorge all the money he made on fluffed up numbers

  15. BankThink
    Banks with Inside Track Take Advantage of MF Global Mystery
    By Francine McKenna
    March 16, 2012

    ...All parties have practiced misdirection. The trustees, the regulators, and the investigators from the FBI and U.S. Attorney's office dole out anonymous updates to reporters with the goal, I suppose, of attracting more information, buying time, or preparing customers for the worst.

    There is one thing we know for sure. Some banks must know where the missing customer funds are.

    Otherwise why would they be so sure that customer claims will be paid in full and paid soon that they're bidding as much as 90% of face value for the claims?

    "These banks are so confident that they’re buying the claims for their own account, not resale," says Barry Slotnick, a white-collar defense lawyer and a partner at Buchanan Ingersoll & Rooney PC who's not involved in the case.

  16. Why doesn't the (all knowing) market see through this farce?

    The Fed's Stress Test Was Merely The Latest "Lipstick On A Pig" Farce

    Last week we learned two things: that Jamie Dimon specifically telegraphed he is now more powerful than the Fed, and that the US economy is back down to the same March 2009 optical exercises in financial strength gimmickry to stimulate rallies. Recall that on FOMC day, the market barely budged on Bernanke's ambivalent statement and in fact was in danger of backing off as the readthrough was that of no more QE... until JPM announced a major stock buyback and dividend boost. The catalyst: a successful passing of the latest and greatest Stress Test, which according to experts was "much more credible" than all those before it. Wrong. The test was merely yet another complete farce and a total joke. But as expected, the test had its intended effect: financial shares soared across the board, and banks promptly took advantage of investors and robot gullibility to sell equity into transitory strength. Bloomberg's Jonathan Weil explains.

    How stressful were the Fed’s tests? One anecdote stands apart: Regions Financial Corp. (RF), which still hasn’t paid back its bailout money from the Troubled Asset Relief Program, passed.

    The footnotes to the company’s latest financial statements tell the story. There, the Birmingham, Alabama-based lender disclosed that the loans on its books were worth $8.1 billion less than what its balance sheet said, as of Dec. 31. By comparison, the company’s tangible common equity, a bare-bones measure of net worth, was $7.6 billion.

    So if it weren’t for the inflated loan values, Regions’ tangible common equity would have been less than zero, with liabilities exceeding hard assets. In short, the test was a joke, although it had its intended effect.

  17. today sounds like...?????????

    How America Avoided A Fascist Coup in 1933

    BBC Documenary on 'The Business Plot' of 1933 in which a powerful group of wealthy Americans attempted to set up an organization patterned on the French fascists and German Storm Troopers and overturn democracy and the Constitution.

  18. good history and some good comments

    Heroes and Villains – A Paean to the Money Printer-in-Chief

    During the Great Depression, there was a five year long inflationary echo boom after FDR ascended to the presidency. At the time, the economy certainly appeared to be on the mend. The 'data' proved it after all. And yet, it turned out to be nothing but another illusion in the end. The very moment monetary and fiscal stimulus were withdrawn, the echo boom collapsed back into a heap. This proves ipso facto that it was not a sustainable economic expansion. You have one guess as to what will happen to the current echo boom once fiscal and monetary stimulus are ended.

    Ben Bernanke may be a decent man and a faithful civil servant doing what he believes to be his duty. However, there is nothing new under the sun. Inflationist 'cures' of economic ills have been attempted over and over again throughout history. The idea that a credit contraction and economic bust can be 'fixed' by heaping more debt upon the already smoldering pile has occurred to people since medieval times.

    Today it is easier than ever to actually implement these hoary inflationist doctrines. One need not even go to the trouble of clipping coins or printing additional bank notes. One need merely credit a few accounts with impressive looking numbers in the electronic aether. And yet, no way has been found as of yet to actually create one iota of new wealth in this manner. All that is happening is that yet another financial and economic Potemkin village is erected.

    It will prove just as durable as its predecessor and when it falls apart, it will once again turn out that untold damage has been wrought by policies meant to achieve the exact opposite.

  19. nice posting.. thanks for sharing.