Friday, January 31, 2014

Enough Is Enough: Banksters Are Not Our Only Option


By  (about the author) 

JPMorgan Chase by

"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.
So why, asks Chicago Alderwoman Leslie Hairston, are we still doing business with them? She plans to introduce a city council ordinance deleting JPM from the city's list of designated municipal depositories. As quoted in the January 14th Chicago Sun-Times:
The bank has violated the city code by making admissions of dishonesty and deceit in the way they dealt with their investors in the mortgage securities and Bernie Madoff Ponzi scandals. . . . We use this code against city contractors and all the small companies, why wouldn't we use this against one of the largest banks in the world?
A similar move has been recommended for the City of Los Angeles by L.A. City Councilman Gil Cedillo. But in a January 19th editorial titled "There's No Profit in L A. Bashing JPMorgan Chase," the L.A. Times editorial board warned against pulling the city's money out of JPM and other mega-banks -- even though the city attorney is suing them for allegedly causing an epidemic of foreclosures in minority neighborhoods. "L.A. relies on these banks," says The Times, "for long-term financing to build bridges and restore lakes, and for short-term financing to pay the bills." The editorial noted that a similar proposal brought in the fall of 2011 by then-Councilman Richard Alarcon, backed by Occupy L.A., was abandoned because it would have resulted in termination fees and higher interest payments by the city.
It seems we must bow to our oppressors because we have no viable alternative -- or do we? What if there is an alternative that would not only save the city money but would be a saferplace to deposit its funds than in Wall Street banks?
The Tiny State That Broke Free
There is a place where they don't bow. Where they don't park their assets on Wall Street and play the mega-bank game, and haven't for almost 100 years. Where they escaped the 2008 banking crisis and have no government debt, the lowest foreclosure rate in the country, the lowest default rate on credit card debt, and the lowest unemployment rate. They also have the only publicly-owned bank.
The place is North Dakota, and their state-owned Bank of North Dakota (BND) is a model for Los Angeles and other cities, counties, and states.
Like the BND, a public bank of the City of Los Angeles would not be a commercial bank and would not compete with commercial banks. In fact, it would partner with them -- using its tax revenue deposits to create credit for lending programs through the magical everyday banking practice of leveraging capital.
The BND is a major money-maker for North Dakota, returning about $30 million annually in dividends to the treasury -- not bad for a state with a population that is less than one-fifth that of the City of Los Angeles. Every year since the 2008 banking crisis, the BND has reported a return on investment of 17-26%.
Like the BND, a Bank of the City of Los Angeles would provide credit for city projects -- to build bridges, restore lakes, and pay bills -- and this credit would essentially be interest-free, since the city would own the bank and get the interest back. Eliminating interest has been shown to reduce the cost of public projects by 35% or more.
Awesome Possibilities
Consider what that could mean for Los Angeles. According to the current fiscal budget, the LAX Modernization project is budgeted at $4.11 billion. That's the sticker price. But what will it cost when you add interest on revenue bonds and other funding sources? The San Francisco-Oakland Bay Bridge earthquake retrofit boondoggle was slated to cost about $6 billion. Interest and bank fees added another $6 billion. Funding through a public bank could have saved taxpayers $6 billion, or 50%.
If Los Angeles owned its own bank, it could also avoid costly "rainy day funds," which are held by various agencies as surplus taxes. If the city had a low-cost credit line with its own bank, these funds could be released into the general fund, generating massive amounts of new revenue for the city.
The potential for the City and County of Los Angeles can be seen by examining their respective Comprehensive Annual Financial Reports (CAFRs). According to the latest CAFRs (2012), the City of Los Angeles has "cash, pooled and other investments" of $11 billion beyond what is in its pension fund ( page 85 ) , and t he County of Los Angeles has $22 billion ( page 66 ) . To put these sums in perspective, the austerity crisis declared by the State of California in 2012 was the result of a declared state budget deficit of only $16 billion.
The L.A. CAFR funds are currently drawing only minimal interest. With some modest changes in regulations, they could be returned to the general fund for use in the city's budget, or deposited or invested in the city's own bank, to be leveraged into credit for local purposes.

Minimizing Risk
Beyond being a money-maker, a city-owned bank can minimize the risks of interest rate manipulation, excessive fees, and dishonest dealings.
Another risk that must now be added to the list is that of confiscation in the event of a "bail in." Public funds are secured with collateral, but they take a back seat in bankruptcy to the "super priority" of Wall Street's own derivative claims. A major derivatives fiasco of the sort seen in 2008 could wipe out even a mega-bank's available collateral, leaving the city with empty coffers.
The city itself could be propelled into bankruptcy by speculative derivatives dealings with Wall Street banks. The dire results can be seen in Detroit, where the emergency manager, operating on behalf of the city's creditors, put it into bankruptcy to force payment on its debts. First in line were UBS and Bank of America, claiming speculative winnings on their interest-rate swaps, which the emergency manager paid immediately before filing for bankruptcy. Critics say the swaps were improperly entered into and were what propelled the city into bankruptcy. Their propriety is now being investigated by the bankruptcy judge.
Not Too Big to Abandon
Mega-banks might be too big to fail. According to U.S. Attorney General Eric Holder, they might even be too big to prosecute. But they are not too big to abandon as depositories for government funds.
There may indeed be no profit in bashing JPMorgan Chase, but there would be profit in pulling deposits out and putting them in Los Angeles' own public bank. Other major cities currentlyexploring that possibility include San Francisco and Philadelphia.
If North Dakota can bypass Wall Street with its own bank and declare its financial independence, so can the City of Los Angeles. And so can the County. And so can the State of California.

Thursday, January 30, 2014

Random thoughts of a free Black mind, v. 199


 Filed under COMMENTARIES 

00-charlescherry2Beyonce & Jay-Z and the Grammy Awards – I don’t know a real husband who would let the world know the grimy details of sex with his wife, brag about what a freak she is on a song in wide release, then let her grind on him half-nekkid on stage for the family and the world to see…”Bad concept, baby! Come up with something else.” That’s what a real man would have said…
Bro. Prez – As we approach year six of eight of the Obama administration, I’m completely over ‘the First Black President’ for reasons I have highlighted here previously. Here are a few.
He refused to enforce existing federal procurement laws assisting Black businesses.
He refused to lock up Wall Street banksters during the 2008 crash, and left money on the table via incompetent administration of federal foreclosure relief programs (similar to how he botched the Obamacare rollout) when Black homeowners were disproportionately foreclosed. He refused to protect small businesspeople against Big Business by enforcing antitrust laws. He helped kill Black-owned radio and TV by not enforcing FCC rules. He’s not supporting Black entrepreneurs in Africa who are in pitched economic battles against the Chinese while America sits and watches.
You don’t need an act of Congress to enforce existing laws designed to give Black business people a fighting chance, OR to get competent people to run programs Congress approved. NO heads have rolled in this incompetent administration other than Van Jones’s and Shirley Sherrod’s – allegedly for embarrassing the president.
Truth be told, I was done in 2009 when in response to a question about 50 percent Black male unemployment in New York City, Obama said, “A rising tide will lift all boats.” In other words, “Y’all Negroes gotta wait.”
If things were this bad for Black America under Dubya, the NAACP, NAN, PUSH, Urban League, et. al would be frothing at the mouth. Their silence tells you all you need to know.
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Wednesday, January 29, 2014

Without Election Reforms We’re Going Nowhere Fast


Without Election Reforms We’re Going Nowhere Fast

By RA Monaco
After last night’s State of the Union festivities, I needed a good night’s sleep to step back from the warm and fuzzy feelings I get when I hear our Commander in Chief speak to the nation.
It is an undeniable fact, that President Obama is a talented individual—a statesman.  In fact, he is so talented, he can say all the things I know will mean nothing, with his hand in my pocket and fingers on what little cash I have and I still want to like him—I still to want believe.
I still want to believe that as a once constitutional law professor, the president values the civil liberties which are the tenets of our founding as a nation.  That he hasn’t given-in to the security lobbyists and egregiously disregarded our civil liberties just to funnel tax dollars in exchange for campaign cash from private firms who now capture every keystroke of our existence.
I still want to believe he hasn’t ignored the tenets of international law and Due Process to kill Americans and unwitting civilians with drones in some far off land.  That he doesn’t allow drones to be used for surveillance here in the States, I still want believe that too.
I still want to believe that he didn’t seriously intend a military option in Syria or that he’s not being played by Iran lifting sanctions and pursuing diplomacy just to piss Putin off.
I want to believe that the accountability of Banksters who now are bigger, more profitable and no more stringently regulated than before we bailed them out, wasn’t a broken promise for campaign cash.
I still want to believe that the Affordable Care Act wasn’t another capitulation for campaign cash from the insurance industry or another broken campaign promise that tossed out the single payer option on healthcare for all.
I still want believe that Guantanamo will be closed and our own troops will never be used on domestic soil to suppress public dissent.   That he doesn’t have his fingers in the prosecution of the #NATO 3 to justify the expense and unwarranted militarized police presence in Chicago during the 2012 NATO Summit just to chill public dissent.
Yes, I want to believe that immigration reform will be practical, companionate and humane.
I want to believe that Obama understands that the secrecy--even from our own legislature--surrounding the Trans Pacific Partnership and the idea of “fast tracking” legislation undermines our confidence in all his ideas.  That he realizes a free market doesn’t mean “free” and that the cost of access to the American marketplace demands social and environmental responsibility.
Mostly, I want to believe that American prosperity and the words “liberty” and “freedom” are not just empty words of deception—a language device.  Yes, the President’s extending an olive branch across the aisles and the challenge to “go it alone” left me warm and fuzzy.  Because I realize that the Republican Party has been infected with obstructionists and selfish partisanship.
I also realize that Republican’s have had five years to clean up their own backyard, yet they continue to obstruct every bill that in any way has the support and endorsement of this president.
Also, I realize that Republican’s have used more—Green Eggs and Ham—filibusters in the last five years than in the combined history of the Senate to undermine this president’s agenda with irresponsible disregard for the economy and well being of an already suffering nation.
I realize that Republican’s shut down the government and have repeatedly created economic crises at the expense of the entire nation.  That they’ve continue to bootstrap every bit of government business to destroy the Affordable Care Act without ever having attempted to improve the law or make it better.
So, who is abusing what I ask?
To guide the American people there is a powerful philosophical statement within our Declaration of Independence:
“…Governments are instituted among Men, deriving their just powers from consent of the governed, that whenever any Form of Government becomes destructive to these ends, it is the Right of the People to alter or abolish it, and to institute a new Government.”
I checked and it says nothing about corporations.  So, we must think deeply about those words now because as a nation we’re going nowhere fast.
We are living within a narrow, highly vetted framework of information, options, choices and solutions.  Far too often, legacy media is failing in their intended constitutional purposes and more interested in entertainment, mouse-clicks and profit than real journalism and public accountability.
We are on the heels of a presidential election when 46 million people are living below the poverty line and yet not a word from either candidate—where was the press?
Today, independent journalism is the equivalent of Tom Paine’s Common Sense the most popular pamphlet in the American colonies.  In 1776, it made the bold argument for independence with words people understood:  “Society in every state is a blessing, but Government even its best state is but a necessary evil…”
So, criticisms are of no real practical value unless accompanied by a proposed solution or some guidance, here’s mine.  America is in desperate need of election and campaign finance reforms that can restore a representative government that allows “people” to engage in self governance.  Publically funded elections are the first step toward eliminating the influence of campaign cash.  The details in this idea need to come from you and the grassroots organizations that can put wheels to the changes we need.
We can no longer look to our political class for this change, they’d never put themselves out of a job and they’ve never made concessions to the middle class or the poor that damaged their own wealth or power—Political Science 101.
So, maybe it’s time we take a page from the Grover Norquist’s “no new tax” playbook.  Let’s tell every politician—regardless of political affiliation—that in exchange for our vote they must sign the pledge that upon being elected to office their first order of business must be publically funded elections and campaign finance reforms.
Let’s make sure that each and every politician seeking office—State or Federal—knows that if they don’t make the pledge and follow through that “we the people” will finance and support the candidate who makes the pledge.
Today, members of congress spend 70% of their day raising campaign cash to get reelected—would your boss allow you to work at another job while he pays you?   If not, why then should we?
Americans, we are not helpless.  We need to accept that the partisan distraction is just that, a distraction.  We have to stop wanting to believe in empty words—even if we want—and fix the problem.

Monday, January 27, 2014

America's Biggest Bank Wants In (On This Truly Free Currency)


By Founding EditorReal Asset Returns  ·   January 27, 2014

As we know, most fiscal history has been dominated by a web of central banks.

The central banks are in a race to debase, a trend that's rapidly accelerated over the past decade.

There's a lot of money to be made by issuing money.

After a century of massively inflated fiat currencies worldwide, it's little wonder people have flocked to a totally independent form of new money.

Bitcoin's appearance and meteoric rise have galvanized the market for truly free money.

To quote Sir Richard Branson on CNBC last week, "Whoever was behind Bitcoin was brilliant..."

But the race for control of virtual currencies is heating up...

Understanding the Road to Virtual Currency

The precursor to virtual currencies is PayPal, established already 15 years ago.

It has come to dominate the electronic payments space, particularly after it was acquired by eBay in 2002.

The company essentially allows payments and money transfers through the Internet. Consumers and vendors link their bank accounts and/or credit cards to their PayPal accounts in order to send or receive payments.

Fees are charged for processing payments and receiving money, depending on the currency, payment option, countries involved, amounts, and account types.

But PayPal is a payment facilitator rather than a currency, as it uses the Internet to accomplish what's otherwise done through checks, money orders, and wire transfers.

Widespread acceptance of PayPal has moved the service from the edge of the "payment frontier" to the "go-to" source for web-based financial transactions.

The appearance of Bitcoin, however, has meant a quantum leap forward, from facilitator to currency.

Bitcoin Arrives

Bitcoin is not issued by any government. It's a peer-to-peer payment system and digital currency that was introduced in 2009 as open source software.

Bitcoin is virtual money, as no actual physical "coins" exist.

They can be purchased using money, but they can also be produced. Users can mine them by employing their own computers to solve complex mathematical algorithms.

When a user pays with Bitcoin, a public transaction log called a blockchain is updated. It's a master list of all transactions worldwide that's chronologically ordered, and its validity is verified through a decentralized system using the Bitcoin protocol.

The beauty of this currency system is that a maximum of just 21 million Bitcoins will ever be produced, and it dramatically reduces the costs of financial transactions.

Without the need for banks, financial services companies or wire agencies, transaction costs can be substantially reduced, freeing up tremendous amounts of capital for far more productive purposes.

Historically Bitcoin has swung widely in value but has settled into something of a trading range recently. At the beginning of 2013, it traded around $15. By late November, it was at about $1,200. Most recently it's traded in the $900's.

As Bitcoin matures and its acceptance grows, it's likely to become a valid form of money.

And that's certainly helped to draw a lot of attention.

On Nov. 18, 2013, the Department of Justice (DOJ) said Bitcoin can be a "legal means of exchange." Bernanke himself even stated in a letter to the Senate panel that Bitcoin "may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system."

François R. Velde, senior economist of the Federal Reserve in Chicago, labeled it as "an elegant solution to the problem of creating a digital currency."

Acceptance of the virtual currency for payments is still in its infancy, but it is growing.

Businesses such as Reddit, Virgin Galactic, and now accept Bitcoin, with Zynga now in the testing phase. Even Congressman Steve Stockman, R-Texas, is glad to take Bitcoins as 2014 campaign contributions.

On the other hand, Bitcoin still faces some challenges to its wider acceptance. The U.S. Treasury's anti-money-laundering unit, the Financial Crimes Enforcement Network (FinCEN), sent "industry outreach" letters to several firms. They outlined the potential compliance measures related to Bitcoin businesses.

China's central bank recently banned financial institutions from dealing in Bitcoin, and even BTCChina, the world's largest Bitcoin exchange, has been blocked from accepting yuan renminbi, China's currency.

China knows a thing or two about manipulating currency, so the simple fact that it's reacted like this to Bitcoin gives the virtual currency further credibility. Perhaps the Bank of China sees it as a competitor?

Yet Bitcoin's biggest challenger could well be a new rival... originating from within the banking system itself.

The Banksters Challenge Back

Last November, JPMorgan submitted a patent for their own form of digital currency called "Web-Cash."

With $2.46 trillion in assets, America's largest bank has decided to compete head-on with Bitcoin.

Based on its description, Web-Cash is similar to Bitcoin. It's a system to process Internet payments and conduct financial transactions over a payment network. Even its proposed directory sounds comparable to Bitcoin's blockchain.

The biggest difference, of course, is who's behind it. As America's largest bank, JPMorgan naturally has a major stake in preserving the current system of the Federal Reserve. After all, how else would it have gotten so big?

Money permeates our lives, and central banks control its issuance.

That's a power too valuable for the banksters to give up without a fight. So understandably, the Bitcoin phenomenon hasn't gone unnoticed.

The way I see it, though Web-Cash will do its best to compete with Bitcoin, it would bring us no closer to free-market money.

Yet that's where I think the world is ultimately headed.

Who Has the Upper Hand?

As I mentioned earlier, the past decade has seen a race to debase currencies by the world's central banks.

The U.S. Dollar is the de facto reserve currency, but it's lost over 95% of its purchasing power since the Federal Reserve was established 100 years ago.

Despite the Fed's recent move to "taper," it's still soaking up bonds worth $900 billion annually at its current pace.

Last April, Japan announced a $1.4 trillion quantitative easing program to double the nation's money supply, in a bid to jumpstart its economy and rid itself of deflation.

Central banks across the globe are suppressing interest rates, buying up mammoth quantities of bonds, or both. Meanwhile, their debts are swelling at a dizzying pace.

Increasingly, average citizens are cluing in on these government shenanigans.

They know that massive debt is what led to the 2008 financial crisis and that piling on even more debt will only worsen the problem.

The next crisis promises to be much worse.

That's why they're actively seeking out alternative currencies that simplify transactions, boast a limited supply, and aren't government-issued. Bitcoin wins on all three points.

Not surprisingly, JPMorgan's Jamie Dimon disagrees, while Sir Richard Branson is clearly of another opinion.

Bitcoin may not be perfect, but then no currency is, and my bet, along with many others, is on it.

Editor's Note: The White House has certainly taken notice of the rise of Bitcoin. In October, President Obama summoned Google chief Eric Schmidt to the Oval Office and asked him point-blank if Bitcoin was "something he has to worry about." The answer is yes. And what's coming could have major implications for global economies, the international monetary system, and your wealth. Click here to continue reading this story.

About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles onMoney Morning. Peter is headquartered in resource-rich Canada, but, as editor ofReal Asset Returns, he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.
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Friday, January 24, 2014

Bank Boss Gets $20 Million After $20 Billion In Fines

from huffpost

Billions Of Dollars In Fines Later, Jamie Dimon Gets A Raise

Reuters  |  Posted:   |  Updated: 01/24/2014 12:59 pm EST
NEW YORK, Jan 24 (Reuters) - Jamie Dimon, chairman and CEO of JPMorgan Chase & Co, will be paid $20 million for his work in 2013, restoring most of the $11.5 million cut directors imposed a year earlier following the company's embarrassing derivatives loss.
The 2013 pay includes a base salary of $1.5 million, plus $18.5 million of restricted stock, the company said in a public filing on Friday.
Dimon was paid $11.5 million for 2012, half the $23 million compensation in each of the prior two years, according to company filings.
The raise, decided by the board of directors, comes after JPMorgan annual profits fell 16 percent in 2013 as the company agreed to pay out some $20 billion to settle legal claims from government agencies and private investors.
Directors cut Dimon's 2012 pay after the company lost $6.25 billion on the so-called "London Whale" derivatives trade that he had initially brushed off as a "tempest in a teapot."
Directors then cited that pay cut as evidence that the board is sufficiently independent from Dimon despite the fact that he is chairman of the panel. The independence of the board became an issue at the company's annual meeting when some shareholders tried, but failed, to pass a referendum to separate the roles of board chairman and CEO. Dimon holds both posts.
JPMorgan Chase Lawsuits And Regulatory Probes
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