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Unsealed court-settlement documents reveal banks stole $trillions’ worth of houses

Posted on August 13th, 2013 at 12:30 by John Sinteur in category: Robber Barons

[Quote]:

Back in 2012, the major US banks settled a federal mortgage-fraud lawsuit for $95,000,000. The suit was filed by Lynn Szymoniak, a white-collar fraud specialist, whose own house had been fraudulently foreclosed-upon. When the feds settled with the banks, the evidence detailing the scope of their fraud was sealed, but as of last week, those docs are unsealed, and Szymoniak is shouting them from the hills. The banks precipitated the subprime crash by “securitizing” mortgages — turning mortgages into bonds that could be sold to people looking for investment income — and the securitization process involved transferring title for homes several times over. This title-transfer has a formal legal procedure, and in the absence of that procedure, no sale had taken place. See where this is going?

The banks screwed up the title transfers. A lot. They sold bonds backed by houses they didn’t own. When it came time to foreclose on those homes, they realized that they didn’t actually own them, and so they committed felony after felony, forging the necessary documentation. They stole houses, by the neighborhood-load, and got away with it. The $1B settlement sounded like a big deal, back when the evidence was sealed. Now that Szymoniak’s gotten it into the public eye, it’s clear that $1B was a tiny slap on the wrist: the banks stole trillions of dollars’ worth of houses from you and people like you, paid less than one percent in fines, and got to keep the homes.


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Comments:

  1. Want to commit crime and get away with it? There are currently several good choices:

    1. Get elected to federal office.
    2. Become a “law enforcement” officer.
    3. Become a bank executive.
    4. Work for the TLA agencies such as the NSA/CIA/DOJ/DHS/DEA, et al.

    Me, I vote for #3 – the pay is a LOT better than the others, though if you are elected to Congress (#1), you can usually land a cushy position with #3 when you leave office…

BART’s Tax Shelters

Posted on August 5th, 2013 at 9:39 by John Sinteur in category: Robber Barons

[Quote]:

Remember when BART helped a few giant multi-national corporations establish lucrative tax shelters?

You probably don’t. It hasn’t been written about much in the press. The type of deal BART agreed to has gotten some attention, but even so, most people are unfamiliar with the scheme and how it works. BART’s tax shelter deals almost cost the transit agency $40 million in 2009 when the financial sector was melting down. One of the agreements withered and BART lost $5.5 million. Few people know this.

So what sketchy tax shelters am I talking about? They’re called lease-in, lease-out, or LILO agreements. BART calls them lease, leaseback agreements in their financial reports.

In a LILO deal a public transit agency like BART leases its trains or train operating equipment to a private corporation for some extended period of time. The corporation immediately turns around and leases the property back to BART. The terms of the lease are incredibly complicated and circuitous. I wont go into details here. It’s the kind of creative accounting and contract law that vast financial disasters are made from, and it’s mind-numbing in detail.

Why would BART ever do this you ask?

The most immediate answer is because it provided up front cash payments to BART which the agency then capitalized over a period of future years. This had the effect of easing BART’s budgetary strains, and providing BART with more borrowing capacity. It was the closest thing to free money the agency had ever been offered besides its cut of the regional sales tax, and it could be gotten without political pain, without appealing to voters for a bigger trim of retail sales. And BART wouldn’t need to confront the big real estate corporations in San Francisco and Oakland that have benefitted so much from the system. Million of dollars could be generated out of a shuffle of paperwork and a fictitious transfer of capital through a circular lease agreement.

Of course there’s no such thing as free money. The money that BART obtained from the deals was cut from the profits that BART’s private financial partners were making through the LILO agreements. These profits came not out of any productive investment activities or new efficiencies, for the LILO deal didn’t meaningfully transfer or redeploy ownership of BART’s assets, nor did it redeploy the lease payments into any other economic activity. Rather, the profits were harvested from federal tax deductions claimed by the private corporations leasing and then subleasing BART’s trains and equipment. It was, in the words of Senator Charles Grassley, “a good old fashioned tax fraud.”

Of course BART would never characterize it that way. Nor will the financial corporations that have been the instigators of these deals.


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Latvia resists US call to extradite ‘virus maker’

Posted on August 4th, 2013 at 14:02 by John Sinteur in category: Robber Barons

[Quote]:

Latvia is resisting calls to extradite a man the US alleges wrote a computer virus used to steal millions.

In January, Latvian Deniss Calovskis was named by the US as one of the creators of the Gozi virus.

Latvian courts have twice rejected US extradition requests and its foreign minister has now backed their stance.

In a statement, he said the potential jail term Mr Calovskis faced was too severe for the crimes he is alleged to have committed.

[..]

They ran a “modern-day bank robbery ring, that required neither a gun or a mask”, said US attorney Preet Bharara in January.

[..]

Mr Rinkevics said the US sought a jail term for Mr Calovskis that exceeded 60 years.
Continue reading the main story
“Start Quote

In my view, such a penalty is disproportionate to the amount, and so far no-one has been able to conclusively dispel my fears that it might be otherwise”

Latvian minister Edgars Rinkevics

While he could not take a view on whether Mr Calovskis broke the law or not, the jail term amounted to an effective life sentence, he wrote.

“In my view, such a penalty is disproportionate to the amount, and so far no-one has been able to conclusively dispel my fears that it might be otherwise,” he said.

I know some other folks worthy of jail sentence who are still running a “modern-day bank robbery ring, that required neither a gun or a mask”…


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Comments:

  1. Yeah. Maybe if we gave our bank executives similar sentences for the frauds and robbery they have perpetrated on the world they might reconsider… That and $5 will get you a nice cuppa coffee at Starbucks. :rolleyes:

US regulators ‘find evidence’ of banks fixing derivative rates

Posted on August 4th, 2013 at 9:53 by John Sinteur in category: Robber Barons

[Quote]:

The Commodity Futures Trading Commission (CFTC) is probing 15 banks over allegations that they instructed brokers to carry out trades that would move ISDAfix, the leading benchmark rate for interest rate swaps.

Pension funds and companies who invest in interest rate derivatives often deal with banks to insure against big movements in the ISDAfix rate or to speculate on changes to interest rate swaps

ISDAfix is published each morning after banks submit bids for swaps via Icap, the inter-dealer broker, in a number of currencies. The CFTC has been investigating suggestions that the banks deliberately moved the rate in order to profit on these deals.

Given the hundreds of trillions of dollars worth of interest rate derivatives trades that occur annually, even the slightest manipulation can have a substantial effect. The CFTC, which started to investigate ISDAfix after last summer’s Libor scandal has now been handed emails and phone call recordings that show the rate was deliberately moved, according to Bloomberg.

Barclays has reportedly handed the CFTC information, while employees at Icap and Citigroup have also been questioned. In its interim results statement yesterday, Royal Bank of Scotland also said it was co-operating with authorities regarding the investigation.

Man, we are going to slap their wrists so hard.


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  1. Settlement….

How complex are corporate structures?

Posted on August 3rd, 2013 at 9:10 by John Sinteur in category: Robber Barons

[Quote]:

Visualisations of corporate ownership for six banks: Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JP Morgan and Wells Fargo.


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Ex-Goldman Sachs trader Fabrice Tourre liable in $1bn fraud

Posted on August 2nd, 2013 at 10:21 by John Sinteur in category: Robber Barons

[Quote]:

A New York jury has found former Goldman Sachs trader Fabrice Tourre liable for fraud in a complex mortgage deal that cost investors $1bn (£661m).

Jurors concluded that the trader, who nicknamed himself “Fabulous Fab”, had misled investors in the run up to the global financial crisis in 2008.

Complex mortgage investments played a significant role in the crisis.

Mr Tourre was found liable in six of the seven fraud claims brought by US financial regulators.

He was accused by the Securities and Exchange Commission (SEC) of misleading investors about investments linked to subprime mortgages that he knew would fail.

Because the case is civil rather than criminal, he faces possible fines and a ban from the financial services industry.


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Family mistakenly locked out of home even though mortgage payments current

Posted on July 25th, 2013 at 16:40 by John Sinteur in category: Robber Barons

[Quote]:

Michael, who is father of three and husband, asked RTV6 not publish his last name.

His family has lived at 11889 Esty Way for 10 years until April, when they decided to move to a bigger home and rent out their townhouse.

Michael found a tenant, but he was forced to refund the money when their townhouse was locked and the utilities were turned off.

“Our lender changed the locks on us,” Michael said.

A notice was left on the Esty Way townhouse from Safeguard Properties , a company that works with mortgage lenders in securing homes being returned to the banks.

Safeguard’s posting alerted the family that, “all persons entering this property (must) provide an explanation of their visit, sign and date the form.”

Michael was locked out, even though his bank statements show he is current with his mortgage and his loan doesn’t mature until 2033.

[..]

“The woman told me — this is something that I will never forget, honestly — she told me that they were the mortgage company, and if they wanted to change your locks, they could,” Davis said.


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Comments:

  1. And if you have money deposited in that bank, you can change their locks too.

Art as Alternative Investment Creates Storage Business Tax Haven

Posted on July 25th, 2013 at 9:32 by John Sinteur in category: Robber Barons

[Quote]:

Anyone hoping to get into the walk-in lock boxes of this very special Swiss tax haven must first surmount a number of hurdles. At the first door, an employee has to type the right combination of numbers into a small screen. The next hurdle is a large steel barrier that has to be rotated counter-clockwise until it snaps into place, followed by a heavy steel door that resembles a submarine bulkhead. Behind it is a drab corridor with doors on both sides. Only the renters have keys to these doors.

The employee of Geneva Free Ports & Warehouses Ltd. remains discreetly in the background while the owners of the locked-up treasures count their gold bars or examine their collection of paintings being stored in the warehouse.

The Nahmad dynasty of art dealers reportedly has 300 Picassos in storage in Geneva. Countless Degas, Monets and Rothkos are also stored on the inhospitable premises. The estimated value of the works is in the billions. Hardly any museum can boast such a valuable collection.

Those who use the warehouse are genuinely wealthy. According to the Capgemini World Wealth Report, there were 12 million millionaires in the world last year, with combined assets of $46.2 trillion (€35 trillion), or 10 percent more than in the previous year.


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Athens County Woman Wants Possessions Back After Bank Tried To Repossess Wrong House

Posted on July 24th, 2013 at 14:34 by John Sinteur in category: Robber Barons

[Quote]:

An Athens County woman is looking to get her belongings back after a bank incorrectly broke into her house and took them.

Katie Barnett says that the First National Bank in Wellston foreclosed on her house, even though it was not her bank.

“They repossessed my house on accident, thinking it was the house across the street,” Barnett said.

Barnett, who had been away from the house for about two weeks, said she had to crawl through the window of her own house in order to get in after she used her own key that did not work.

Some of the items in her house had been hauled away, others were sold, given away and trashed.

It turns out the bank sent someone to repossess the house located across the street from Barnett’s house, but by mistake broke into hers instead.

“They told me that the GPS led them to my house,” Barnett said. “My grass hadn’t been mowed and they just assumed.”

She called the McArthur Police about the incident, but weeks later, the chief announced the case was closed.

Barnett said that according to the bank president, this was the first time something like this has happened.

She presented him with an $18,000 estimate to replace the losses, but the president refused to pay.

Nice to have to police to help you when your stuff is nicked…. “Someone stole your home and all your shit? Sorry call back when you have a real crime to report, like someone smoking a joint.”


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Comments:

  1. I not only think she should sue the bank but also sue the police department for failure to act on a crime.

  2. I think they’re too big to sue now too. It would probably take her 5 years to get her money.

  3. Perhaps the only good thing about the legal system in the U.S. is that there are lots of hungry lawyers to help such people – for a price.

Lac-Megantic taking legal action against rail company

Posted on July 23rd, 2013 at 22:09 by Sueyourdeveloper in category: News, Robber Barons

Quote

The town of Lac-Megantic is taking legal action against the rail company at the heart of this month’s fatal train derailment in the community. Mayor Colette Roy-Laroche says Montreal, Maine & Atlantic has not yet paid any of the workers it hired to clean up the crude oil that leaked from dozens of tanker cars.

She told a news conference today that Lac-Megantic has paid the workers $4 million so far after some threatened to walk off the job. Roy-Laroche says lawyers have been told to inform MMA that it must pay up right away. She described the situation as completely unacceptable.

Forty-two bodies have been found since the blaze and explosions on July 6, with another five people missing and presumed dead.

Good luck on collecting from that bunch.


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A Shuffle of Aluminum, but to Banks, Pure Gold

Posted on July 21st, 2013 at 13:35 by John Sinteur in category: Robber Barons

[Quote]:

Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.


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Comments:

  1. Break em up, Re-impose Glass Steagall, off with the robber barons heads, and while I am dreaming, organize mass protests against the supreme court until the Citizens United is repealed. After that, enact strict anti lobbying laws.

  2. Crikey, Mykolas! What would we have left to complain about after that? :-)

Interview: HSBC Swiss Bank Whistleblower Herve Falciani on Tax Evasion

Posted on July 16th, 2013 at 22:53 by John Sinteur in category: Robber Barons

[Quote]:

SPIEGEL: Still, authorities in Spain and France have convicted a number of prominent tax evaders based on the data you gave them.

Falciani: That’s true, but so far not even 1 percent of the information I supplied has been analyzed, because the authorities are only interested in client names. But this information can also be used to expose the system banks have installed to make tax evasion and money laundering possible. For me, it has always been about calling attention to the banks’ behavior, after I failed to change it from inside.

SPIEGEL: The bank denies you ever pointed out problems from inside.

Falciani: I did, but to no avail. Most Swiss banks do have a whistleblower program, but they use it to punish those who avail themselves of it.

SPIEGEL: Did you also offer your information to German authorities?

Falciani: Three years ago, I offered my help and made direct contact through my lawyer.

SPIEGEL: And?

Falciani: Nothing happened.

SPIEGEL: Why was that?

Falciani: I ask myself the same question. We’re talking about a total of 127,000 clients and over 300,000 accounts.


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The Ruling That Could Change Everything For Disabled People With Million-Dollar Trusts

Posted on July 15th, 2013 at 19:16 by John Sinteur in category: Robber Barons

[Quote]:

When Judge Kristen Booth Glen walked into her Manhattan Surrogate’s courtroom one day in 2007, she had no idea she was about to challenge the nation’s top banks on behalf of tens of thousands of disabled people.

Before her stood lawyer Harvey J. Platt, who was petitioning to become the legal guardian of Mark Christopher Holman, a severely autistic teen who lived in an institution upstate.

Holman had been left an orphan nearly three years earlier after the eccentric millionaire who adopted him passed away. According to doctors, he had the communication skills of a toddler, unable to bathe, dress, or eat by himself.

But before Judge Glen would grant this seemingly perfunctory petition, she had a few questions for Platt.

“How often have you visited Mark Holman?” she asked the lawyer.

“Since his mother died, I have not visited him,” said Platt.

“And when you say you haven’t visited him since then, how often had you visited him prior to that?”

“I haven’t seen him since he was eight or nine,” responded the lawyer. “His mother used to bring him to our office with his brother, just to show him my face and so forth and so on, so I haven’t seen him probably since 1995 or 1996.”

It was around that time that Platt helped Mark’s mother, Marie Holman, draft her will and create trusts for him and his older brother. A decade later, when she was dying, Platt promised Marie he’d apply to become Mark’s guardian.

“And have you visited the institution which he currently resides in?” Glen asked.

“No, I intend to, but I have not as yet,” Platt said, sounding weary. “I don’t think even a visit has much significance anyway. He’s totally nonverbal—he’s never spoken a word. He’s potentially aggressive.”

This didn’t sit well with Judge Glen. When it came to signing away the rights of disabled people to guardians, she was perhaps the most cautious judge in New York. But what came next would floor her.

Platt informed her that Mark’s trust had reached nearly $3 million. But while his trustees—Platt and JP Morgan Chase—had collected thousands of dollars in commissions, they hadn’t spent a penny on Mark. Medicaid covered his basic care at the institution upstate, but neither the lawyer nor the bank had considered how his mammoth trust might further aid his quality of life.


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Comments:

  1. This posting seems to be missing an end tag or something. It’s breaking the page!

  2. fixed, thx!

If You Put $250 in a Chase “Savings Account,” You’ll Get 12.5 Cents in Yearly Interest — And Maybe Charged $4 a Month

Posted on July 13th, 2013 at 14:25 by John Sinteur in category: Robber Barons

[Quote]:

If you are a working stiff and can squirrel away $250 to put in a Chase “savings account,” Chase will pay you 12.5 cents a year (.05% APY at a “standard rate”). Furthermore, if you don’t make any transactions, they will charge you $4 a month, meaning that you will be left with $202 at the end of a year, plus your 2.5 cents.


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Can we tame the banks?

Posted on July 10th, 2013 at 21:19 by John Sinteur in category: Robber Barons

[Quote]:

As Andrew Haldane, director of stability at the Bank of England, put it in a historical overview a few years ago, ‘there is one key difference between the situation today and that in the Middle Ages. Then, the biggest risk to the banks was from the sovereign. Today, perhaps the biggest risk to the sovereign comes from the banks. Causality has reversed.’ Yes, it has: and the sovereign at risk is us. The reason for that is that in the UK bank assets are 492 per cent of GDP. In plain English, our banks are five times bigger than our entire economy. (When the Icelandic and Cypriot banking systems collapsed the respective figures were 880 and 700 per cent.) We know from the events of 2008 and subsequently that the financial sector, indeed the whole world economy, is in an inherently unstable condition. Put the size together with the instability, and we are facing a danger that is no less real for not being on the front page this exact second. This has to be fixed, and it has to be fixed soon, and nothing about fixing it is easy.

[..]

In the UK, the government has spent magic money on QE to the tune of £375 billion, 23.8 per cent of our GDP. An amount equal to a quarter of our entire annual economic activity has therefore been willed into being in an attempt to stimulate the economy. If they’d just given the money directly to the public, perhaps in the form of time-limited, UK-only spending vouchers, it would have amounted to just under £6,000 for everyone, man, woman or child, in the country. Can anyone doubt that the stimulus effect of that would have been much bigger?

But you can’t trust little people with all that money, can you? Giving banks money is the only way out of our mess, right? The trouble with just giving people money is that they’ll go out and buy things with it, effectively wasting it on foolish nonsense like food, and housing.


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Tougher capital rules proposed for 8 largest U.S. banks

Posted on July 10th, 2013 at 19:30 by John Sinteur in category: Robber Barons

[Quote]:

The nation’s eight largest banks would have to meet tougher financial ratios than required under international standards as part of proposed rules designed to protect taxpayers from another financial crisis.

Under the plan, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and four other U.S. bank holding companies designated as “systemically important financial institutions” would each have to hold capital equal to at least 5% of total assets.

In addition, their federally insured bank subsidiaries, such as Citibank and Chase bank, would have to hold capital equal to at least 6% of assets, according to the proposed rules.

Other U.S. banks and bank holding companies have to meet only a 3% leverage ratio under rules adopted by regulators as part of an international agreement known as Basel 3.

Michael Milken (of junk-bond infamy) once said:

[Quote]:

“When I was on Wall Street, we rarely had more than 1:1 leverage, and the highest I recall in my career was 4:1. The idea of leveraging 30:1 or more, as many financial institutions did recently, is not a business.”

When the guy responsible for a market meltdown based largely on not being able to cover losses tells you your leverage is off, it might be a good idea to listen.


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Daily CEO Pay Now Exceeds the Average Worker’s Annual Salary

Posted on July 6th, 2013 at 21:08 by John Sinteur in category: Robber Barons

[Quote]:

In 1965, the average CEO made 20 times the average worker. Now the ratio is 273 to 1, meaning the average CEO makes in a day what their workers make in a year.


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Jeff Olson Found ‘Not Guilty’ Of Vandalism For Anti-Bank Chalk Messages

Posted on July 2nd, 2013 at 20:41 by Paul Jay in category: Robber Barons

[Quote]:

Jeff Olson was found not guilty of vandalism today after writing anti-bank messages about Bank of America on public sidewalks in water-soluble chalk last year.

Olson was charged with 13 counts of vandalism and faced 15 years in jail, plus $13,000 in fines.

Olson had written the anti-bank messages in front of three Bank of America buildings in San Diego, California.

Darrell Freeman, Vice President of Bank of America’s Global Corporate Security, pushed San Diego authorities to prosecute Olson for writing messages such as: “No thanks, big banks” and “Shame on Bank of America.”

San Diego Deputy City Attorney Paige Hazard was in communication with Bank of America, assuring the multinational corporation that Olson would be charged.

As reported by the San Diego Reader, Judge Howard Shore banned Olson’s lawyer from mentioning the “First Amendment.”

Despite that highly-questionable ruling, the jury still voted “not guilty” in Olson’s case, notesNBC San Diego.

San Diego Mayor Bob Filner had called the prosecution of Olson by San Diego City Attorney Jan Goldsmith “a stupid case,” reported the Los Angeles Times.


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Comments:

  1. I guess the US will have to revoke their free trade agreement.

  2. Stupid indeed. A bank employee with a watering can could have saved all this trouble.

  3. Sue, you do know tort reform was only for the 99%.

  4. That’s OK, the Streisand Effect is for the rest…

  5. So the bank, angry that someone said that they weren’t nice, had the State Attorney prosecute the guy for telling the world that they weren’t nice?

    It would seem that banks are fully capable of informing the public that (without any help from others) they are money-grubbing, untrustworthy trolls with the warmth & compassion of an anal cyst. And no-one else is allowed to elbow in on spreading that message, the banks can do it all by themselves…

EU charges 13 banks, ISDA, Markit with breaching EU antitrust rules

Posted on July 2nd, 2013 at 15:07 by John Sinteur in category: Robber Barons

[Quote]:

Financial data company Markit, the International Swaps and Derivatives Association (ISDA) and 13 banks were charged with blocking two exchanges from entering the credit derivatives market in the last decade in breach of European Union (EU) antitrust rules.

The European Commission said the group, which included Goldman Sachs and UBS, shut out Deutsche Boerse and the Chicago Mercantile Exchange from the Credit default swaps (CDS) business between 2006 and 2009.

CDS are over-the-counter contracts that allow an investor to bet on whether a company or country will default on its bonds within a fixed period of time. Lack of transparency on such derivatives is a key target of regulators following the 2007-2009 crisis.

The case is one of several opened by the EU antitrust regulator into the financial services since the crisis. Banks and other companies involved could be fined up to 10% of their global turnover if found guilty of infringing EU rules.


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Setback for Hollande’s transparency drive

Posted on June 27th, 2013 at 15:17 by Sueyourdeveloper in category: News, Robber Barons

Quote

French politicians have diluted President Francois Hollande’s plans to make politicians declare their wealth in a transparency drive. They have also backed harsh penalties for journalists who publish the information.

After the resignation of a budget minister over a secret Swiss bank account, Hollande’s government drafted a bill in April to force politicians to declare their assets and income to an independent authority.

However, members of the National Assembly, the lower house of France’s parliament, who worried about their privacy, including Hollande’s own Socialist Party, voted on Tuesday in favour of an amended version of the bill.

The new version would only provide the information to people who specifically requested it.

Besides, it would ban publication of the details: any reporter who publishes the information would be subject to a jail sentence of one year and could pay a fine of 45,000 euros ($58,000).

They are so worried about their privacy poor lambs. Off with their heads!


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Wall Street is winning the long war against post-crash regulation

Posted on June 17th, 2013 at 9:47 by John Sinteur in category: Robber Barons

[Quote]:

US banks needed bailouts. The German banks needed bailouts. European banks needed bailouts. Lawsuits funneled through the courts on two continents. We’re still living the consequences. 

All of which is to say, the financial system is global. There are no such things as borders in the world of finance; it’s an integrated whole. A fellow sitting in an office in Hamburg or London is as likely to change our financial world as the guy sitting in a trading room on Wall Street.

That’s why it’s so baffling that the House of Representatives came down, this week, on the side of ignoring abuses of US-made derivatives – known as swaps – as soon as they’re wired overseas. These swaps were at the heart of the London Whale trading debacle, which lost $6bn for JP Morgan Chase. The bank was otherwise sound, and survived the stupid move easily. But not every bank is JP Morgan, and the next stupid swap deal could come at a cost to taxpayers if another bank needs a bailout or government support.

The House voted overwhelmingly to let the measure – labeled the London Whale Loophole Act by critics – pass. It’s one of several measures that the House has taken to weaken oversight of derivatives; the other two will come up for debate soon.

It will surprise no cynic that there is a financial connection between the members of Congress who approve these measures and the industry they are supposed to regulate.


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Comments:

  1. There are many things that can go wrong as a consequence of large scale financial disruption. Stronger regulation would rein in the horses; the danger is that we’ll end up in such bad circumstances that we’ll then agree to shoot the horses.

Big banks lose 2.4m customers in protest against scandals

Posted on June 15th, 2013 at 13:19 by John Sinteur in category: Robber Barons

[Quote]:

An estimated 2.4 million customers quit the UK’s five biggest banks in 2012 as people “voted with their feet” in response to a string of scandals, according to latest figures.

The Move Your Money UK campaign and website, which issued the figures, said they showed a “mass movement” away from the big banking groups: Lloyds, Royal Bank of Scotland/NatWest, Barclays, HSBC and Santander.

Laura Willoughby, Move Your Money chief executive, said: “The constant slew of scandals last year has opened the floodgates, and people are beginning to realise they don’t have to put up with the arrogance of the big banks.”


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Woman sues McDonald’s franchisee for payroll debit

Posted on June 15th, 2013 at 12:50 by John Sinteur in category: Robber Barons

[Quote]:

She spent her days serving up Happy Meals, but when it came time to get paid, Natalie Gunshannon says a local McDonald’s franchisee gave her an unhappy deal.

The Shavertown McDonald’s forces workers to be paid only one way: with a payroll debit card that burdens workers with hefty fees to obtain their hard-earned cash, according to a lawsuit filed Thursday on behalf of Ms. Gunshannon and other McDonald’s workers.

[..]

The J.P. Morgan Chase payroll card carries fees for nearly every type of transaction, according to the lawsuit, including a $1.50 charge for ATM withdrawals, $5 for over-the-counter cash withdrawals, $1 to check the balance, 75 cents per online bill payment and $10 per month if the card is left inactive for more than three months.


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Comments:

  1. Just when I thought that I’d heard every kind of exploitation of low-pay workers, some bright spark comes up with a wheeze like this…I wonder what kick-back is given by JPMC to the McD franchise to do this? Corrupt practices corporatized…

  2. This has been going on for at least 10 years. I know because I used to work for a company that started offering this option. At the time I wondered who would be so stupid as to choose this option. Well now I know. The people that choose this option, choose it because they have no other option. Since the banksters own the US Congress, this will have to be fought at the state and local level. Companies should be forced to either pay the fees to extract the workers pay or offer them a paycheck (or direct deposit.) But good luck Amerika, your government is under control of corporations who have more money to spend on the politicians than do you as individuals.

Bank’s Lobbyists Help in Drafting Financial Bills

Posted on May 24th, 2013 at 15:20 by John Sinteur in category: Robber Barons

[Quote]:

Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.

One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.

[..]

The bank chief also delivered something of a pep talk.

“America has the widest, deepest and most transparent capital markets in the world,” he said. “Washington has been dealt a good hand.”

And the public has been dealt a good hand job.


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Comments:

  1. Anyone who thinks that the U.S. is a democracy is either mentally incompetent or simply delusional

  2. I’m getting OFPS (Onion-false-positive syndrome).

  3. No, a good hand job is enjoyable. Bankers put on sandpaper gloves when they “help a buddy out.”

  4. From the linked article: ““I won’t dispute for one second the problems of a system that demands immense amount of fund-raisers by its legislators,” said Representative Jim Himes, a third-term Democrat of Connecticut, who supported the recent industry-backed bills and leads the party’s fund-raising effort in the House. A member of the Financial Services Committee and a former banker at Goldman Sachs, he is one of the top recipients of Wall Street donations. “It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption. It’s unfortunately the world we live in.””

The slow-going process of compensating victims of housing violations

Posted on May 20th, 2013 at 16:02 by John Sinteur in category: Robber Barons

[Quote]:

Banks have paid less than half the $5.7 billion in cash owed to troubled homeowners under nearly 30 settlements brokered by the government since 2008, delaying help to the millions of victims of discrimination and shoddy lending that epitomized the housing crisis, according to a Washington Post analysis of government data.

[..]

But in order to determine how much each borrower was owed, the banks planned to review each foreclosure one by one. After 12 months, no homeowners had received a dime. But the eight consultants managing the process on behalf of the banks were paid nearly $2 billion.


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12-year old girl explains world debt

Posted on May 12th, 2013 at 18:09 by John Sinteur in category: Robber Barons


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Comments:

  1. Yes, the emperor has no clothes!

  2. And this kid should be then next Treasury Minister of Canada – she obviously has a better appreciation of the issues than those currently in charge!

  3. @Spaceman: Quite a number of “those currently in charge” are Goldman Sachs alumni and such. I don’t think they misunderstand…

  4. Their pay depends on them misunderstanding, so you can be pretty sure they misunderstand very well!

  5. And at the end a 6 year old raised her hand and asked why in the 12 year old’s scheme the government has to bother to pay interest to the Bank of Canada as its just taken from taxes. Just print the money and be done with it!

  6. @Desiato — In other words, why not take a page from the Ben Bernanke play book.

The Rich Have Gained $5.6 Trillion in the ‘Recovery,’ While the Rest of Us Have Lost $669 Billion

Posted on May 5th, 2013 at 1:02 by John Sinteur in category: Robber Barons

[Quote]:

Oh, are we getting ripped off. And now we’ve got the data to prove it. From 2009 to 2011, the richest 8 million families (the top 7%) on average saw their wealth rise from $1.7 million to $2.5 million each. Meanwhile the rest of us –  the bottom 93% (that’s 111 million families) — suffered on average a decline of $6,000 each.

Do the math and you’ll discover that the top 7% gained a whopping $5.6 trillion in net worth (assets minus liabilities) while the rest of lost $669 billion. Their wealth went up by 28% while ours went down by 4 percent.

It’s as if the entire economic recovery is going into the pockets of the rich. And that’s no accident.


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Comments:

  1. The middle are getting squeezed, the poor are being crushed…and the rich have a private jet.

  2. Off with their heads!

When a million isn’t enough

Posted on May 3rd, 2013 at 16:33 by John Sinteur in category: Boo hoo poor you, Robber Barons

[Quote]:

In theory, a seven figure annual pay packet should be more than enough to live on. In the UK, only the top 1% of income taxpayers earn anything more than £150k according to figures from the Office of National Statistics. In the US, the top 1% of people earn more than $370k according to the Internal Revenue Service. And yet, some bankers in the top bracket are having money troubles.

“It’s really not that unusual to find Wall Street bankers who are close to declaring themselves bankrupt,” said Gary Goldstein, co-founder of U.S. search firm Whitney Partners. “Some people are really struggling.”

Claims that bankers are having problems making ends meet won’t do much to ingratiate them to the public. At last week’s Barclays Annual General Meeting, Joan Woolard, a pensioner from the north of England berated Barclays for overpaying its bankers. Anyone who wanted more than £1m ($1.5m) a year was simply a “greedy b*stard,” said Woolard.

For some people working in financial services, however, £1m is simply what’s needed to cover the cost of living.

“You get a lot of people who have a very expensive lifestyle,” said Louise Cooper, a former Goldman Sachs salesperson and financial analyst at Cooper City. “They will always have a nanny, private schools for the children and they will have a very big expensive house. All of this has to be paid for out of taxable income,” she points out. “With a top tax rate of 45%, this means that you need to be earning nearly double what you’re spending.”


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Comments:

  1. I think Ms. Woolard is going to make a fine tricoteuse. And I’ve got some nice wool. Might knit some of those Firefly hats or something…

  2. I thought you were supposed to budget your expenses to meet your income, not demand an income to justify your costs. I could definitely get used to having a modestly sized mansion, a nanny, a maid, private schools for the children I don’t have yet… I wonder if my boss will give me a raise if I start spending more.

Robert Reich (A Story for May Day: The Fed, Apple, and Trickle-Down Economics)

Posted on May 3rd, 2013 at 14:10 by John Sinteur in category: Apple, Robber Barons

[Quote]:

It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion.

The reason big companies aren’t creating more jobs is consumers aren’t buying enough to justify the expansion. And government is cutting back on spending.

Big corporations are borrowing simply in order to push stock prices up and reward their investors.

It’s a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns.

Get it? Easy money from the Fed can’t get the economy out of first gear when the rest of government is in reverse.

Trickle-down economics is the first cousin of austerity economics. Austerity is nuts when so many millions are out of work. And as we’ve learned before, trickle-down is a fraud. Nothing ever trickles down.


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Check Out Who’s Hiding $32 Trillion in Offshore Accounts

Posted on May 1st, 2013 at 22:32 by John Sinteur in category: Robber Barons

[Quote]:

More than two million emails that shed light on the biggest tax dodge in history – trillions of dollars hidden in offshore accounts – have been uncovered by the British newspaper The Guardian and the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ).

Some $32 trillion has been hidden in small island banking hubs which host a bevy of trust funds, shell corporations and other tax havens, the Tax Justice Network estimates.

[..]

Let that sink in for a moment. The implications are stupefying. The real effects of this are far more subtle, and pernicious, but this makes for a fun thought exercise – even setting aside the fact that only some percentage of this huge sum would fairly be taken as tax revenue.

The “CIA World Factbook” estimates the nominal Gross World Product is $71.83 trillion as of 2012. If you shine a light on that $32 trillion, and put it back on the books, the entire planet’s total product jumps by more than 44%. Every country on Earth would get a $163.2 billion windfall. High-speed rail and space programs for everyone!

If all $32 trillion was added to government coffers, that would be enough to give every man, woman and child alive on Earth today a roughly $4,600 “stimulus” check.

Maybe we could all enjoy a two-week vacation in the British Virgin Islands. After all, it seems to be the destination of choice for monied types…


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  1. Hey John, just curious… when record labels make it unattractive to buy music by putting high prices and DRM on it, you say that it’s OK to download music until they change their business model and make it more attractive to buy music. So when countries make it painful to do your taxes and the tax rates are high, it’s OK to move your money somewhere else, right, until the tax regime becomes more attractive?

  2. Also, the idea that when you “shine a light” on that $32 trillion, you can suddenly confiscate it all seems a bit bizarre. How so? The assumption is that it was illegitimately obtained? (I’m sure a lot of it was, but where’s the due process?) Guilty until proven innocent? Isn’t that like convicting “hackers” merely for having hacking tools on their machine, etc.?

  3. you say that it’s OK to download music

    I don’t think I ever said that. I usually say I stop being their customer and won’t buy their product. Funny how people automatically assume I therefore download, although I understand where that comes from.

    And about moving to tax havens: For example, the Netherlands has a 25% tax on interest you earn savings you have (above a certain amount of money – a fairly large amount, actually) – and the tax authority assumes that interest rate you earn to be 4%. Effectively you have to pay 1% of everything over a certain amount. If you stuff your money overseas and keep it hidden, you’re doing something illegal. If, on the other hand, you move yourself as well, and start living in a better tax regime, that’s legal.

    In a way that situation is unfair – companies can easily construct legal loopholes to park their money elsewhere, individuals usually cannot – but that’s problem for another post. Using trust funds and such can help, but in the end the individual owning the money will want to use it at some point in time, so there’s often still a very clear link to an individual.

    So, if the tax collector in the Netherlands finds out somebody living in the Netherlands has parked a few million in an overseas bank account, he has two questions for that person: did you pay the ‘vermogensrendementheffing’ I mentioned above in ‘box 3′ of your tax form? And by the way, where did the money come from? Did you declare it as income in the past? Usually the burden of proof in these cases lie heavily on the person who parked their money in a foreign account, perhaps again something for another post, but “shining a light” on the money can help tax collectors quite a lot. But the practical upshot is that money owned by individuals living in the Netherlands under Dutch tax rules, and kept hidden from those rules, is at risk.

    As for the question if it’s OK to move your money somewhere else until the tax regime becomes more attractive: sure, go ahead, but make sure you follow the rules. Usually that means you find better tax rules to live in, and emigrate. Not emigrating usually indicates you want to be part of a society with all it’s facilities (roads, hospitals, etc) but unwilling to pay your share of the upkeep of that society.


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