Category Archives: economy

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The Real Libor Scandal by Paul Craig Robert & Nomi Prins – Thoughts – Nomi Prins

(Note: I was deeply honored to have been asked to be a co-author on this piece by Paul Craig Roberts)

According to news reports, UK banks fixed the London interbank borrowing rate (Libor) with the complicity of the Bank of England (UK central bank) at a low rate in order to obtain a cheap borrowing cost. The way this scandal is playing out is that the banks benefitted from borrowing at these low rates. Whereas this is true, it also strikes us as simplistic and as a diversion from the deeper, darker scandal.

Banks are not the only beneficiaries of lower Libor rates. Debtors (and investors) whose floating or variable rate loans are pegged in some way to Libor also benefit. One could argue that by fixing the rate low, the banks were cheating themselves out of interest income, because the effect of the low Libor rate is to lower the interest rate on customer loans, such as variable rate mortgages that banks possess in their portfolios. But the banks did not fix the Libor rate with their customers in mind. Instead, the fixed Libor rate enabled them to improve their balance sheets, as well as help to perpetuate the regime of low interest rates. The last thing the banks want is a rise in interest rates that would drive down the values of their holdings and reveal large losses masked by rigged interest rates.

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via The Real Libor Scandal by Paul Craig Robert & Nomi Prins – Thoughts – Nomi Prins.

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Before the Election was Over, Wall Street won – Nomi Prins

Before the campaign contributors lavished billions of dollars on their favorite candidate; and long after they toast their winner or drink to forget their loser, Wall Street was already primed to continue its reign over the economy.

For, after three debates (well, four), when it comes to banking, finance, and the ongoing subsidization of Wall Street, both presidential candidates and their parties’ attitudes toward the banking sector is similar  – i.e. it must be preserved – as is – at all costs, rhetoric to the contrary, aside.

Obama hasn’t brought ‘sweeping reform’ upon the Establishment Banks, nor does Romney need to exude deregulatory babble, because nothing structurally substantive has been done to harness the biggest banks of the financial sector, enabled, as they are, by entities from the SEC to the Fed to the Treasury Department to the White House.

In addition, though much is made of each candidates’ tax plans, and the related math that doesn’t add up (for both presidential candidates), the bottom line is, Obama hasn’t explained exactly WHY there’s $5 trillion more in debt during his presidency, nor has Romney explained HOW to get a $5 trillion savings.

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Thoughts – Nomi Prins.

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Keiser Report: Wall St. Vomitorium (E362)

In this episode, Max Keiser and Stacy Herbert discuss how Wall Street has won big time with zero interest rate policy and that the biggest winner, JP Morgan Chase, has seen its deposits increase by 46% from 2007 (pre ZIRP) to 2012 and yet its interest expenses declined by nearly 89%. They also discuss the Vomitorium in Florida where Obama’s ‘historic’ mortgage settlement may be used to plug government deficits or political pay rises instead of helping the 11% of mortgage holders in foreclosure. In the second half, Max Keiser talks to former Goldman Sachs banker, Nomi Prins, discuss the lost lessons of the Great Depression.

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Greg Palast | Investigative Reporter No Charge for my Bestselling Book

Starting Today: No Charge for my Bestselling Book. No Joke.

Palast Fund to give away FREE copies of Bestseller

Billionaires & Ballot Bandits:
How to Steal an Election in 9 Easy Steps

via Greg Palast | Investigative Reporter.

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Keiser Report: Fraud by Day, Fraud by Night (E361) – YouTube

In this episode, Max Keiser and Stacy Herbert discuss Chinese investors pouring money into silver, while American investors pour money into bonds 33 times faster than into equities. They also look at the latest updates to the mystery of there being no Chinese gold bars in the GLD vaults and on the fly by day operations at the Federal Reserve Bank. In the second half, Max Keiser talks to John Butler, author of The Golden Revolution and chief investment officer of Amphora Capital, about German gold and a German exit from the euro.

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Capitalism Without Failure: Joseph Stiglitz: Paulson, Bernanke and Geithner Adopted the Bankers’ Rescue Plan – Which Saved the Bankers

SUNDAY, OCTOBER 28, 2012

Joseph Stiglitz: Paulson, Bernanke and Geithner Adopted the Bankers’ Rescue Plan – Which Saved the Bankers

Joseph Stiglitz, one of the most distinguished economists in the USA, is unique in his profession. He is uncompromised, principled, and vocal about the terrible policy decisions following the crisis.  A few notes:

  • There is no excuse in terms of how the rescue was handled.  Whomever designed it was either in the pocket of the banks or incompetent.
  • Even though Volcker had tamed inflation and was a very effective Fed Chairman, Reagan did not reappoint him. Reagan was looking for an ideologue. And he found one.
  • Fannie & Freddie were latecomers to the problems and were a sideshow. It was the private banks that brought it on.

Audio:

Capitalism Without Failure

21st Century Economics: 1. Rampant fraud and reckless mismanagement in the financial sector, 2. Public bailouts of the worst actors in the financial sector, 3. Private debt and liability imposed on taxpayers, 4. Monetary policy aimed at recapitalizing insolvent and recidivist banks, 5. Promotion of business leaders and policy-makers who are chronically compromised, 6. Conglomeration of Systemically Dangerous Institutions into a more empowered menace.

Capitalism Without Failure: Joseph Stiglitz: Paulson, Bernanke and Geithner Adopted the Bankers’ Rescue Plan – Which Saved the Bankers.

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GE Christenson ~ We Have Been Warned! – Part 3 | Shift Frequency

Bernanke announced on September 13, 2012 a massive “money printing” program – QE3 – that will increase the money supply, help the large banks, create more commodity price inflation, and lower the standard of living of most of the middle class in the United States. Read what other authors had to say about QE3: We Have Been Warned! – Part 2

GE Christenson ~ We Have Been Warned! – Part 3 | Shift Frequency.