Juggling Dynamite

Today bank stocks are bid as JP Morgan reported its much gamed Q1 earnings ‘beat’ of lowered profit growth expectations.  We will know we have come through this crazy lawless time, when the masses and policy makers speak of today’s law-breaking, fine-paying, ‘TBTF’ executives as people of ill repute rather than admired business leaders worthy of extravagant compensation and privilege. This news clip from April 12, 1938 gives a flavor of what that looks like.  See the video here:  Sing Sing Gates close on Richard Whitney (former head of the New York Stock Exchange)

Meanwhile the complex Dodd Frank reforms have been largely ineffective because they lacked the critical piece– breaking up the investment bank conglomerates and their destructive, queering influence over policy, politicians, financial advice and free markets.  In the present arrangement depositors and thus taxpayers remain still fully exposed to the next wave of investment bank insolvency.  And it is coming.  Will the executives get to keep all the profits and accolades while taking taxpayer funds to bail them out again?

Five out of eight of the biggest U.S. banks do not have credible plans for winding down operations during a crisis without the help of public money, federal regulators said on Wednesday, saying the institutions could face stricter oversight if they do not fix their plans.

The “living wills” that the Federal Reserve and Federal Deposit Insurance Corporation jointly agreed were not credible came from Bank of America, Bank of New York Mellon, JPMorgan Chase, State Street, Wells Fargo.

Here is a direct video link.

Also see:  Goldman Sachs just got a $1 billion break on its financial crisis settlement. Are its political contributions the ultimate investment strategy?

Yes. works beautifully for them.

The plot thickens.  Interesting…

Birkenfeld, an American citizen, was a banker working at UBS in Switzerland when he approached the U.S. government with information on massive amounts of tax evasion by Americans with secret accounts in Switzerland. By the end of his whistleblowing career, Birkenfeld had served more than two years in a U.S. federal prison, been awarded $104 million by the IRS for his information and shattered the foundations of more than a century of Swiss banking secrecy.

Now he suspects the CIA is behind the Panama Papers leak and explains why.

Here is a direct video link.

Over the past 20 years, as ‘financialization’ swept the world and credit securitization and derivatives became all the rage, originators and sellers extracted trillions by swapping out cash and leaving ‘iou’s’ (debt) in the drawers of most institutions, companies, governments and programs. For a long time the masses did not appreciate the difference between debt and net equity or income, so most were not paying attention as financial strength was steadily transferred from the 99.9 to .1% of the world’s population.

Tax havens and luxury products thrived during this era, as wealthy corporations and individuals fueled a booming industry fixated on absorbing and hiding their mounting spoils. But now that incomes have stagnated, revenues are plunging and budget deficits are gaping for as far as the eye can see, the emaciated masses are increasingly being asked to pay more. The ultra rich have had a hell of a run here, but in a closed system like planet earth nothing can go all in one group’s favor forever. This is especially true since the concentrated wealth of the few, was largely made possible by the widespread extraction of savings and investment from the economy and society of everyone else. Now it’s pay back time and the pitch forks are coming for tax havens, evaders and avoiders all around the world.

In light of the Panama Papers leak, Jeppe Kofod, MEP and head of delegation for Danish Social Democrats, says we have to have more efficient regulation and transparency towards taxes. Here is a direct video link.