March 23, 2013

Thieves, Cheaters and Liars, or as Shah might say: Bankers!

By SHAH GILAN
www.moneymorning.com


Lett's talk about the Cyprus bailout, the International Monetary Fund, and the European Central Bank.
Let's call what the IMF and ECB are doing what it really is. After all, it is the ultimate institutional goal. It's thieving.
So let's start with the thieves...
The IMF, on behalf of the big global banks it serves, and the ECB, on behalf of the big European banks it serves, is stealing, without any authority whatsoever (other than under cover of the European Commission, which they jointly own) depositors' money in all the banks in Cyprus.
Because all the banks that lent to the Cypriot banks to keep them in business are now about to get shafted.
Why?
There's a few missing seats in their musical chairs merry-go-round, so they are enforcing their right to get bailed out.
How will the banks do it?
They'll deputize the European Commission to go in, with the international backing of the IMF (the ultimate tool of global bankers) and the local backing of the ECB, to steal enough money to give back to themselves.
This is so they can then use what they stole that as "reserves" to make themselves look better.
That in turn makes the ECB and IMF look healthier, so the IMF and ECB can lend more money to the same banks in Cyprus, whose depositors they just stole from, to bail them out.
I am not kidding.
If you can't make money the old fashioned way, by earning it through diligent, methodical work, the easy way to make it is to just steal it.
That's what banks do. They used to (though I can't remember that far back, if ever) earn their money slowly and incrementally, which is why bankers used to have two-martini lunches and play golf on Wednesdays with their doctors and corporate clients. They had time back then. Not everybody and their brothers were in the game.
That's all changed.
Now banking is about gigantic economies of scale. Blankets of schemes covering industrial sectors, nations, and the globe are woven from soiled cloth for massive earnings to pay fantastic bonuses that make doctors and most corporate executives seem like paupers.
How does it all work without them blowing themselves up and going to jail?
How can an amalgamation of small and large cartels - all in the same game, all shaking down the same sheep - be part of a grand cartel and not really have a worry in the world?
That's because the banks themselves created central banks and the IMF. They created their saviors to look like they were subject to them, in terms of rules, regulations, the safety of the system, and the public. But that's just what they wanted the world to think.
The IMF and the ECB are the thieves' bosses in Cyprus. Actually, they are their sycophant underlings masquerading as hall monitors in an elementary school where the bankers themselves are the principals.
The lenders of last resort are about to resort to the unthinkable. Instead of just printing money to give to their banker constituents (purchasing power stolen through inflation) they are about reach into depositors' accounts, look them in the eye and say, "We're sorry, but it's our money anyway."
This changes everything.
For the first time in modern history the light of day is being cast on the great vampire squids from depths of Mordor. Maybe (but I doubt it) the world can begin to see the noose that banks have around our necks.
And that we will hang ourselves if we don't break up all the big banks and the central banks that use government power to back the true usurpers of humankind.
Then there are the cheats.
SAC Capital Advisors just paid over $600 million dollars to settle civil insider trading charges. But of course they're not guilty. They didn't admit to anything - other than some stuff happened that they promise to not let happen again.
Are they cheats at SAC? No, they just like paying big fines and distancing themselves from former employees who were convicted of insider trading. What a coincidence.
Then there are the liars.
Yes, all of them, but I'm specifically talking about JPMorgan Chase.
Make that allegedly, as in allegedly liars. After all, I don't want to get sued by a bunch of trillionaire bullies for calling them what they are... allegedly.
But if I were to call you all liars...
You, Jamie Dimon...
You, Douglas Braunstein...
You, Ina Drew...
You, Michael Cavanaugh...
Would you be willing to take lie detector tests tomorrow - without prep time - to prove I'm a worthless, muckraking tool?
Would you be willing to test your mettle - not against the patsies in Congress who you all just lied to - but to a machine that's as cold as you all are? Would you like to tell us what you really hid from the regulators about the London Whale's losses?
Come on. Here's a chance to clear your names. I'll ask the questions...
For background, I'd tell you that I know how trading desks work. I've been a trader on some very interesting desks.
I was at a former Primary Dealer that had to be bailed out because one of our government traders sank the firm. He hid his trading loses (in his locked desk drawer... this was the old days) so the winning side of his bets could net him a million dollar bonus (which he received). In those days, that was the equivalent of what about $10 million is today.
I was at one of the world's biggest banks, brought in to hedge their government bond desk, the currency desk, and the derivatives desk, and long after I left I saw that bank get bailed out. What I saw there I can't talk about, I'd get sued. But I saw what I saw.
I've run hedge funds, too. So, you might say I'm fairly well-versed on how traders interact with their desks, with their immediate supervisors, with senior management, with risk managers, and how what they do gets reported up the line to the CIO, the CFO, and the CEO.
Now let me ask each of you a few questions, and remember you're hooked up to that machine.
Wait, where are you going, Come back, you're flying out of here with all those wires attached to you.
Oh, well. They're gone.
Maybe they were telling the truth.
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