Juggling Dynamite

Nigel Farage MEP, Leader of the UK Independence Party (UKIP), Co-President of the ‘Europe of Freedom and Democracy’ (EFD) Group speaks in the EU Parliament yesterday. Here is a direct video link.

Former Federal Deposit Insurance Corp. Chairman Sheila Bair talks about efforts by some U.S. banks to limit the reach of the Volcker Rule and market regulations. Bair, is now a senior adviser at Pew Charitable Trusts. Here is a direct video link.

The issue is very simple: investment banks who do not like observing the rules and controls that serve and protect the public purse, should step away from tax-payer backing and live and die by their own risk management.

It is the insidious underwriting of financial firm profits with public funds that has been a fatal flaw undermining democracy and free market forces the past 20 years. This cord must be cut.

Student loans are one of several socially significant areas where government subsidized guarantees on for-profit-loans from banks are enabling debilitating impacts on young people, household formation, the birth rate and the stability of our economy as a whole. See why here: Fed Student loan focus shows recognition of growth risks

This just in, now here’s a real shocker…(yes sarcasm, sorry):

Wall Street traders may be manipulating a key derivatives market and front running Fannie Mae and Freddie Mac, hurting the US-owned mortgage giants in the process, according to an FBI intelligence bulletin reviewed by Reuters.

Using what Federal Bureau of Investigation agents described as “unsophisticated tradecraft,” such as hand signals and special telephone ring tones, some traders are conspiring to rig rates on large orders submitted by Fannie Mae and Freddie Mac, or front running them in the interest rate swaps market, the document says.

The FBI said in the bulletin that the information came from a former high-level employee at a U.S. bank and an employee at a Canadian Bank, plus interviews with other bank workers conducted in 2012 and 2013. The former high-level employee at the U.S. bank estimated the front running had resulted in profits of $50 million to $100 million for the bank, the FBI said. See: FBI suspects front running of Fannie and Freddie in SWAPS market