TAXING WALL STREET WAS THE STRONGEST TOOL IN RECOVERING TENS OF TRILLIONS IN FRAUD---AND YET WE GOT A BLIP OF A RAISE ON INVESTMENT INCOME.
The most important lesson learned by the American people once the 2008 economic crash opened the behind-closed-doors financial activities of Wall Street-----credit default swaps create an unsustainable amount of leverage and risk and absolutely no revenue is collected from what was a massive amount of financial transaction that brought the Us economy down. It was this leverage that sparked the drive to subprime mortgage loans as it was the selling of these subprime loans internationally.
THIS IS WHAT WE KNOW WAS WRONG AND IT HAPPENED BECAUSE OF DEREGULATION AND CONSOLIDATION INTO GLOBAL MARKETS OF OUR FINANCIAL INDUSTRY DURING THE REAGAN/CLINTON YEARS.
No, the Republicans didn't make Clinton do this----he came to office embracing neo-liberalism----HE INTENDED TO DO THIS.
So, instead of using the super-majority of Democrats in Congress to reinstate Glass Steagall and install a Financial Transaction Tax on Wall Street to curb their enthusiasm and recover tens of trillions of dollars in fraud----Congress pretended to write a Financial Reform bill that was hundreds of pages long knowing none of it would be installed.
THAT IS WHAT CLINTON NEO-LIBERALS DO----THEY POSE PROGRESSIVE WHILE CONTINUING TO PROTECT WEALTH AND PROFIT.
Because nothing was done with this credit default swap dervivatives market----we are about to enter a Great Depression due to the same leverl of leverage around the world this time with the bond market and as with the subprime mortgage fraud----this bond market fraud was all planned.
Remember, that $700 trillion is not real money-----it is simply bets placed on financial transactions like a mortgage loan tied to a homeowner who, when the economy crashes from all this fraud loses their jobs and end up in foreclosure giving the banks and investment firms real assets. No government or politician is allowed to sit by and watch systemic and massive fraud just because a FED Greenspan pretends there are no problems. IT WAS ALL FRAUD AND WE HAVE YET TO GET ANY JUSTICE.
BETS WITH NO REAL MONEY WITH A GOAL OF TAKING OUR REAL ASSETS WITH PLANNED ECONOMIC CRASHES.
Derivatives Estimated to be More than $700 Trillion
Mogambo Guru April 22, 2008 Daily Reckoning Australia
Junior Mogambo Ranger (JMR)
Brad W. sent, from the Ludwig von Mises Institute, the essay “Our Financial House of Cards and How to Start Replacing It With Solid Gold”, to which I say, “Hahaha! Good luck, dude!”, because to think that banks would give up their powers to create money with which to enrich themselves, or that Congress would make banks stop creating more money with which Congress can spend on itself and its nasty little friends, makes me laugh and laugh and laugh, until my stomach hurts and I am tired of laughing, and I realize, “Hey! This isn’t funny!”
Then we read the most astonishing sentence, “Currently, untold billions more of banks’ capital now hinge on the survival of bond insurers striving to insure more than two trillion dollars of outstanding bonds on the basis of capital of their own of roughly ten billion dollars.”
In other words, every dollar of insurance on bonds issued by some deadbeat governments and corporations is leveraged 200 times! Man! Talk about leverage!
Now, I am not the biggest math whiz in town, especially word problems, and it was years later that I finally understood the apparently indecipherable equation that someone had written in my high school year book:
“2 ugly 2 be 4 given for being such a creepy little pest and ruining everything for everybody and it’s no wonder nobody likes you.” Well, 2 plus 2 two equals 4 I understand… But ugly be given? What in the hell was THAT supposed to mean?
Well, I recognized my mother’s handwriting immediately, of course, but the math thing is still a bit of an embarrassment. But even a dolt like me can see that if that aforementioned $2 trillion in bonds declines in value by one-half of one percent (0.5%) for one reason or another, all of their $10 billion in capital is gone! Wiped out!
And this is only a couple of lousy trillions of dollar’s worth of bonds! The total value of the existing global gargantuan globular glut of derivatives is estimated to be more than $700 trillion! Compare this stupefying fact to the associated fact that global GDP is only about a lousy $50 trillion!
Hell, the population of the whole freaking planet is about 6 billion people, all neatly divided into categories of either “with me” or “them”, so the derivatives market alone represents $116,666.66 per each person on the whole freaking planet! Hahahaha! This is incomprehensible!
Naturally, I am drawn to the “666” motif, which has some very appalling Biblical connotations, which makes everything even SCARIER, as if the very idea of that much money being bet on derivatives wasn’t enough to fry your brain neurons at twenty feet.
But there are plenty of things that can fry your brain these days, like CaseyResearch.com reporting that “Occupying center stage yesterday was Bad Ben Bernanke, who for the first time uttered the dreaded ‘R’ word in front of Congress, saying that the possibility of recession cannot be ruled out.”
In fact, Mr. Bernanke is quoted as having said, “It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly.”
I thought Mr. Casey was going to mention the huge increases in prices, but instead reported something that seems so incongruous with rising prices, namely, “Among the day’s data were numbers from the Commerce Department on demand for U.S.-made factory goods, which dropped for the second month in a row in February, as factory shipments hit their lowest level since September 2006. Overall factory orders fell by 1.3%, after dropping by 2.3% in January. That exceeded economists’ expectations for a decline of only 0.7%.”
Lower production, higher prices. It can only mean something bad.
The Mogambo Guru
for The Daily Reckoning Australia
Below you see the point at which US media simply became a tool of propaganda for Wall Street as all journalistic integrity left after 2009. As we can see a Senate with a majority Democrats ----the financial reform bill is clearly useless with no intent to regulate the worst of banking policy. US media kept hyping that this bill had some teeth even as you see Obama and Geithner was criss-crossing Europe lobbying against any regulation of the derivatives market. The media was writing here in the US that Obama tried to regulate the derivatives market even as Obama was campaigning against it overseas.
We see in the article below this one----the German and French as with most of the European Union always intended to regulate the derivatives market. It was the UK and US who drove these frauds that refuse to address this and as I said above----
WE ARE NOW HEADING TOWARDS YET ANOTHER CRASH CAUSED BY THE SAME LEVERAGING.
This is why I shout to educate on these public policy issues---do not simply listen to what media or a politician says because the US no longer has a reliable media. This one issue is the most important in fixing our US economy. We cannot circumvent the too-big-to-fail so we need RULE OF LAW AND ANTI-TRUST/MONOPOLY ENFORCEMENT TO STOP WALL STREET'S CRIMINAL BEHAVIOR! We have known this since 2009 and yet, every election cycle since----2010, 2012, 2014-------our national labor unions and justice organizations and Democratic Committees are still pushing Clinton neo-liberals.
PLEASE ENGAGE IN POLITICS----BE THE CANDIDATE IN ALL PRIMARIES AGAINST CLINTON NEO=LIBERALS AND WE CAN REVERSE ALL THIS EASY PEASY!
Major Loophole In Senate Financial Reform Bill, Derivatives Reform May Be Illusory
Posted: 05/16/2010 12:33 pm EDT Updated: 05/25/2011 4:30 pm EDT Huffington Post
Please glance through this long article to the next one to revisit the time of the last collapse-----our next is right around the corner! Keep in mind that Johns Hopkins had Tim Geithner-----the face of the Wall Street subprime mortgage fraud and Wall Street bailout as a Commencement Speaker! It was Geithner and Bernanke that bailed out Ivy League endowment investments!
'There was no doubt that the overriding purpose of Geithner's mission was to sabotage the German moves against derivatives in particular and speculation in general'.
Geithner Rushes To Sabotage
German Derivatives Ban
Schäuble Prepares New Moves Against Speculators
By Webster G. Tarpley
The German government is now fully committed to escalating its ongoing counterattack against international financial speculation. These moves represent an historical watershed as Germany becomes the first major economic power to roll back the tide of financial globalization, under which crackdowns on hedge funds, derivatives, and the world gambling casino were branded as taboo for national governments. German Finance Minister Wolfgang Schäuble has announced that the Merkel government is sending a draft bill to the German parliament (the Bundestag) targeting "turbulence" and "volatility" through further regulation of "certain transactions [which] amplify the crisis." The bill reaffirms the most fundamental German measure enacted so far, the May 18 blanket ban on all naked credit default swaps issued against the treasury bonds of the eurozone nations. This ban represents the most aggressive move anywhere in the OECD against these most toxic derivatives, which have figured prominently in the AIG bankruptcy and the recent Goldman Sachs Abacus scandal. They are also the derivatives being widely used by hedge fund hyenas and zombie banks to attack such nations as Greece , Spain , and the rest of the Southern tier of the euro. The naked CDS ban protects euroland government bonds, To that would now be added a ban on the naked shorting of those Euro zone government bonds themselves. This means that a speculator wishing to sell a Euro zone government bond short must own that bond in advance. This makes speculation more complex and expensive, and is all to the good. Schäuble's new measures also expand protection for certain stocks and for the euro itself. The draft bill would outlaw naked shorts of all German stocks, meaning stocks whose primary listing is at a German exchange. The original May 18 package had banned naked shorts against a list of 10 large German banks, insurance companies, and reinsurance firms. The obvious next step is to ban naked shorting of stocks altogether. From now on, speculators who wish to short German stocks must own those stocks before they sell, making it more difficult and costly for said speculators to operate. The new draft bill would also outlaw the naked shorting of the euro itself in the foreign exchange markets. The Bundestag needs to approve this bill on the fast track, and then do more. Tiny Tim Geithner's US Treasury is attempting, but not succeeding, to conceal its apoplectic hysteria over the German ban. Geithner announced that he was flying from China to Europe in order to confer with George Osborne, the new Bilderberger Chancellor of the Exchequer, and Bank of England boss Mervyn King in London, followed by consultations with European Central Bank chief Trichet and Bundesbank leader Axel Weber in Frankfurt, followed then by a meeting with Schäuble in Berlin. There was no doubt that the overriding purpose of Geithner's mission was to sabotage the German moves against derivatives in particular and speculation in general. An unnamed US Treasury official speaking off the record on condition of anonymity told Dow Jones that the German ban on naked credit default swaps was "damaging to the market and counterproductive." The band was "one-sided," he added, making clear that Geithner & Co. did not expect the German ban to be adopted on a large scale. Geithner was evidently deeply concerned that the German ban might be imitated by some of Germany 's closest economic partners, including the Netherlands , Belgium , and Sweden , as well as by other nations much farther afield. Who was the anonymous official? It might have been Tiny Tim himself, or it might have been Mark Patterson of Goldman Sachs, Geithner's chief of staff and chief lobbyist for carbon offset boondoggles. Spain is an example of a country which would have been very well advised to join in the German measures when they were first proposed. Observers have noted with some astonishment that the self-styled "socialist" Zapatero of Madrid is unable or unwilling to embrace the measures against the casino economy which the center-right Christian Democratic/Liberal government in Berlin is actively pursuing. The explanation is obviously that the Socialist International as a whole (with figures like Papandreou of Greece and Socrates of Portugal, as well as Zapatero) is acting as an abject puppet of the financiers. Spain is now paying the price for its inaction through an incipient banking panic emerging on the weekend after the German ban was announced. The Caja Sur, a savings bank representing about 1% of the Spanish banking system, became insolvent, quickly followed by eight banks over the next three days. This meant that the hedge funds had succeeded in spreading the Greek contagion, thus raising questions about the short-term survivability of such overextended speculative operations as Banco Santander and Banco de Bilbao. The Spanish parliament approved a draconian austerity program by a single vote, offering the lunatic spectacle of a country already mired deeply in economic depression, with an official unemployment rate of 20%, embracing its own self-cannibalization with a deflationary austerity program in the vain effort to regain the confidence of international financial markets and investors. Spain needs to understand that there are no "markets" today, but only oligopolies and cartels. They need to understand that they are dealing with ruthless speculators, and not with investors. They might as well try to regain the confidence of Bonnie and Clyde , Dillinger, and Ma Barker. Another country that urgently needs to join the anti-derivatives front is Italy , where a large-scale debate on economic populism broke out on the weekend after the German ban. The financiers Franco Debenedetti and Paolo Savona, camouflaged amidst a group of free-market quackademics, are desperately campaigning to convince Prime Minister Berlusconi to maintain the sanctity of hedge funds and derivatives. My answer to these market fetishists appears below. Berlusconi is moving in the wrong direction on draconian austerity with the ¤30 billion package of cuts which he has presented to the parliament. If this is all Berlusconi has to offer, the Italian economy is in danger of entering a death spiral in which tax increases and cuts to spending and public services inevitably cause rising unemployment, falling real production, and constantly lower government revenue receipts. Berlusconi should concentrate on suppressing speculation and on launching a recovery program, not on austerity. Reactionary commentators around the world continue to parrot the line that the great crisis is a crisis of the welfare state," and spells the doom of any and all government measures designed to defend and secure the health, education, and welfare of their respective populations. The Greeks, we are told, are "profligate." This legend of the profligate Greeks conveniently ignores the fact that Greece is the second poorest nation of pre-1990 Europe only Portugal is poorer. The Greeks have 18% official unemployment, with 20% of the population living below the official poverty line. The average Greek office worker earns about $1500 per month, or barely 40% of the wage level of their German counterparts. And the average pension for Greek government worker is about $750 per month. This is hardly a king's ransom. Greece is also an example of one of the peripheral countries where the depression first began to hit. Greece is heavily dependent on tourist revenue, which began to decline sharply in 2007 and 2008 as the world derivatives panic began to lash Germany and northern Europe , spelling fewer foreign visitors on the Acropolis and on Mykonos and the Dodecanese . The pro-financier ideologue Robert Mundell, speaking in Warsaw , has voiced his evaluation that a restructuring of Greek government debt is now inevitable. The Greeks and many others would be well advised to act on this advice immediately. For many of these countries, it is already obvious that their current debts cannot be repaid in the physical universe as presently constituted. For them, default is simply an inevitable necessity, not a choice. Their only choice is now when they will default, and with what strategy. In this regard, their choices are essentially two. On the one hand, they can destroy their national economies, dilapidate their capital stock, and destroy the living standard of productive working families through criminally stupid austerity programs and budget cuts of the vandalistic type dictated by the monetarist crackpots at the International Monetary Fund, European Commission, World Bank, Bank for International Settlements, and similar institutions. At the end of all this unspeakable torture of austerity, they will find their political institutions destroyed, their internal governability and stability deeply compromise or totally wrecked, and their ability to pay lower than when they started. At the end of all this, they will default anyway, and drift like derelict wrecks on the world ocean. Many of them will fall under dictatorships, or even fascist regimes. The alternative to this nightmare scenario is to use the time-tested weapon of the unilateral financial debt moratorium as a means of national survival and national sovereignty. (If Republican US President Herbert Hoover could successfully propose an international financial debt moratorium among Germany, France, and Great Britain, and the United States in June 1931 to fight that depression, this approach cannot be regarded as wild radicalism.) This freeze on all payments of interest and principal on international financial debt must be conducted in an orderly, legal fashion, fully explained to the population and presented as an integral part of a strategy for national economic recovery. Plans should be made in advance for suppressing financial speculation, while mobilizing domestic economic resources for the most ambitious projects of national public infrastructure as a means to radically reduce unemployment and poverty. Raw materials must be secured in advance through barter deals and other ad hoc arrangements with the relevant countries, and these transactions must necessarily occur outside of the straitjacket of IMF and World Trade Organization rules. Countries using the weapon of debt moratorium should normally be able to reduce their foreign debt exposure by about one half. If they play their cards correctly, they can do even better for their people. Every country needs to identify at least one area in which it can produce the most advanced high technology capital goods for export, and strive to become the world leader in that department. This production must be capital-intensive, energy intensive, and high value added, and it must target the world export market. The goal is to produce something which the world will find simply indispensable, independent of whatever protectionist measures may or may not be enacted elsewhere. This effort can be used as a science driver along with other science drivers to restart scientific discovery and technological research and development throughout the entire national economy. This is the kind of strategy which the leaders of the southern tier nations of the euro should currently be elaborating. And they need to act fast. By September, the tide of financial panic which is now engulfing Greece and Iberia will be in the suburbs of Paris and London . Watch....
We see again where Obama and now Pelosi are supporting this widely demanded bank transaction tax while never having any intention of installing it. Obama spent his entire two terms in office helping corporations write and push Trans Pacific Trade Pact and it has been known since 2010 that the TPP was written with financial policy that would prohibit any regulation----dismantling for too-big-to-fail -----EVERYTHING THEY PRETENDED TO WRITE IN THE FINANCIAL REFORM BILL WOULD BE VOIDED WITH TPP.
Meanwhile, all of our labor and justice organizations were shouting for this tax while silent on the fact that Clinton neo-liberals and Obama were working against it. It was not until TPP hit Congress in 2014-2015 that our labor and justice leaders started to mention TPP. We went through 2012 and 214 elections with our labor and justice organizations still supporting Clinton neo-liberals
EVERY TIME WE ALLOW CLINTON NEO-LIBERALS POSE PROGRESSIVE WITHOUT EDUCATING ABOUT THE LYING, DEMOCRATIC VOTERS ARE GETTING DISILLUSIONED-----WHICH IS THE GOAL. I WAS ABLE TO SHOUT IN 2010 THAT OBAMA AND CONGRESSIONAL INCUMBENTS HAD NO INTENTION OF REFORMING WALL STREET OR INSTALLING THIS TAX.
The Transaction Tax! WHAT THE HELL IS THIS??
President Obama's finance team and Nancy Pelosi are recommending a 1% transaction tax on all financial transactions.
It is true. The bill is HR-4646 introduced by US Rep Peter deFazio D-Oregon and US Senator Tom Harkin D-Iowa.
Their plan is to sneak it in after the November election to keep it under the radar.
See what Nancy has to say about this wonderful idea!
How the Trans-Pacific Partnership Would Roll Back the Financial Regulations Needed to Avoid Another Crisis EXPOSE TPP
The TPP would provide big banks with a backdoor means of rolling back efforts to re-regulate Wall Street in the wake of the global economic crisis.
The deal would require domestic law to conform to the now-rejected model of extreme deregulation that caused the crisis. The TPP would forbid countries from banning particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG.
The TPP would threaten the use of "firewalls" - policies that are employed to stop the spread of risk between different types of financial institutions and products. While many in the United States have called for a reinstatement of the Glass-Steagall Act, that helped eliminate banking crises for four decades by prohibiting deposit-holding commercial banks from dealing in risky investments, the TPP would bar such reform. The TPP would ban capital controls, an essential policy tool to counter destabilizing flows of speculative money. Even the International Monetary Fund has recently endorsed capital controls as legitimate for mitigating or preventing financial crises.
The TPP would prohibit taxes on Wall Street speculation. That means that there would be no hope of passing proposals like the Robin Hood Tax, which would impose a tiny tax on Wall Street transactions to tamp down speculation-fueled volatility while generating hundreds of billions of dollars' worth of revenue for social, health, or environmental causes.
The TPP would empower financial firms to directly attack these government policies in foreign tribunals, and demand taxpayer compensation for policies they claim undermine their expected future profits.
With all the hoopla around this transaction tax the fact that it will only bring a few hundred billion which we lose every year to financial fraud does not make this the fix the American people need in recovering fraud. We don't even have tax collection agencies working to collect corporate tax for goodness sake.
We need to get Wall Street out of our state economies----replacing them with community banks will lead to the pressure to reform. More important, we need to rebuild Rule of Law and recover this because WHEN A GOVERNMENT SUSPENDS RULE OF LAW IT SUSPENDS STATUTES OF LIMITATION!
WASHINGTON -- A minuscule tax on financial transactions proposed by congressional Democrats would raise more than $350 billion over the next nine years, according to an analysis by the Joint Tax Committee, a nonpartisan congressional scorekeeping panel.
Tony Blair and Bill Clinton were tag team in taking the people's parties to Wall Street. Blair took the UK Labour Party and Clinton the US Democratic Party. It was UK and US that pushed Europe into this race of fraudulent banking and the UK brought DeutscheBank into the goal of breaking social democracies in Europe with these frauds as was done in the US. Today, Europeans are better positioned for this coming crash as the US spent four election cycles re-electing Clinton neo-liberals to do the same thing all over.
As you see here-----the TROIKA used high property taxes as a way to generate revenue for the national debts-------we are going to see our property tax soar as credit bond debt is tied to property tax for just this reason. So, what happened in Europe is coming to the US.......
'A key obstacle to the payment was removed on Tuesday when the Greek parliament passed a controversial new property tax bill that aims to boost revenues'.
European Commission financial tax opposed by UK
- 28 September 2011 BBC
Bank shares have fallen in London after the UK said it would "resist" a financial transaction tax on EU members proposed by the European Commission.
The tax would raise about 57bn euros ($78bn; £50bn) a year and would come into effect at the start of 2014.
At close, Royal Bank of Scotland was behind by 3.64%, Lloyds Banking Group by 2.4%, and Barclays by 1.22%.
London would be hardest hit by the tax as the majority of banking transactions in Europe come through the city.
'Tax on London?'City of London officials have said that about 80% of the revenues of any Europe-wide financial tax would come from London.
Stuart Fraser of the City of London said the question that had to be asked was whether the proposal was "a tax on London".
The banking sector played a role in causing the economic crisis, the commission said Mr Fraser also warned that such a tax could mean a lot of banking transaction being lost to outside of the EU, and that the cost of setting up the scheme could outstrip whatever monies it raised.
Under the proposals, the financial tax would be levied at a rate of 0.1% on all transactions between institutions when at least one party is based in the EU. Derivative contracts would be taxed at a rate of 0.01%.
The BBC's business editor Robert Peston said that while dealers and investors in financial products such as derivatives and bonds were not happy about the proposal, share dealers were more relaxed as the tax would cost less than the existing stamp duty, which the tax would replace.
Meanwhile, in Germany and France bank shares also fell at close, and the European Banking Federation called the tax a "nonsense".
Among the market losers were Deutsche Bank and Commerzbank in Germany, and Societe Generale and BNP Paribas in France.
'Contribution'Despite the opposition Algirdas Semeta, EC commissioner for taxation, customs, anti-fraud and audit, said: "Our project is sound and workable. I have no doubt this tax can deliver what EU citizens expect - a fair contribution from the financial sector."
The EU executive also points out that financial services are "in the majority of cases exempt from paying VAT (due to difficulties in measuring the taxable base)".
Germany and France have been among countries pressing the European Commission to propose the tax on all financial investment systems, as they seek to show their citizens they are serious about recouping some of the costs of the banking crisis.
Austria, Belgium, Norway and Spain also support such a tax.
Earlier, Commission president Jose Manuel Barroso had said banks must "make a contribution" as Europe faced its "greatest challenge".
A transaction tax would need the approval of the UK in order to be implemented across the EU.
The commission said that if the UK vetoed the tax, it would look to implement it in the eurozone.
Referring to "the constraints of unanimity", Mr Barroso said "further changes to the Treaty of Lisbon" may be required in order to push through measures to stabilise Europe's economy.