Why the Financial Industry is so Corrupt

[JimBowie1958]

Not saying it is all due to this one incident, but this illustrates the nepotistic corruption and conflict of interest that riddles Wall Street which is little more than agreat big Ponzi these days run by HFT algos and Treasury credit bearing Big Bankers.

Revealed: JPMorgan Paid $190,000 Annually to Spouse of Bank's Top Regulator | | AlterNet

On May 10 of this year, Jamie Dimon, Chairman and CEO of JPMorgan, announced that billions of insured deposits at his bank had been invested in high risk derivatives and had sustained at least a $2 billion loss. The Department of Justice and FBI have commenced investigations. Dimon is expected to announce the current extent of those losses this Friday in an earnings conference call.

Following the May 10 announcement, there were numerous calls for Dimon to step down from the Board of Directors of the Federal Reserve Bank of New York. That organization is the primary regulator of the firm. There was widespread public outrage that the CEO of a bank had no business serving on the governing body of his regulator. (The New York Fed has a long history of such conflicts.)

Now it has emerged that not only was Dimon conflicted in his role on the New York Fed but the President and CEO of the New York Fed had an equally dubious conflict of interest.

William C. Dudley has been employed by the New York Fed since January 1, 2007, first heading up the powerful Markets Group. That Group manages the supply of bank reserves in the banking system according to the mandate of the Federal Open Market Committee (FOMC). On January 27, 2009, Dudley was elevated to President and CEO of the New York Fed. Financial disclosure forms for 2008 through 2010 show that Dudley’s wife, Ann Darby, was a former Vice President of JPMorgan and had holdings of more than $1,500,000 in deferred income accounts at the firm as well as between $250,000 to $500,000 in a 401(K) plan there.

 

[georgephillip]

Much of the systemic corruption in the Financial industry can be summed up in five letters: L-I-B-O-R.

This recent example of systemic fraud reveals how corrupt insiders have been able to manipulate the basic measurement--the interest rate--on $800 trillion per day of credit related transactions. Barclays, the British financial giant, has admitted to manipulating the rate from 2005 to at least 2009.

Some of the largest US banks are currently under investigation for similar fixing.

Elizabeth Warren:

"It is also clear that many of those who didn’t have a fixer — including consumers, community banks and credit unions — lost money. Barclays padded its bottom line by taking money from everyone else. It won when it shouldn’t have won — and others lost when they shouldn’t have lost..."

"In most markets, consumers could simply take their business elsewhere once they learned that the scales were rigged. But interest rates are different.

"Everyone who borrows money on a mortgage, credit card, student loan, car loan or small-business loan — basically, everyone — is affected by a crooked market on Libor.

"According to the Federal Reserve Bank of Cleveland, in 2008 more than half of all adjustable-rate mortgages were linked to Libor. Even those who didn’t borrow but saved for retirement or their children’s future got hit with interest rates that had been faked."

Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post

 

[Misaki]

Confessions Of A Wall St. Nihilist: Forget About Goldman Sachs, Our Entire Economy Is Built On Fraud | The Smirking Chimp

[ame=http://www.amazon.com/Where-are-Customers-Yachts-Marketplace/dp/0471119792]Amazon.com: Where Are the Customers' Yachts? Or, A Good Hard Look at Wall Street[/ame]


The Inflation Scam

How to fix Wall Street by creating jobs without government spending, which allows the deficit to go to zero and inflation to go to zero as well: http://wh.gov/cVNr

 

[expat_panama]

...Our Entire Economy Is Built On Fraud ...

... systemic corruption in the Financial industry...

...the nepotistic corruption and conflict of interest that riddles Wall Street which is little more than agreat big Ponzi ...

So what is it, you have something better--

--or we're just talking hatred of of everyone and everything and leaving it at that?

 

[georgephillip]

Naomi Wolf agrees:

"Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the 1%ers' fear of the rank and file exposing massive fraud if they ever managed get their hands on the books.

"At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters' list of demands.

"But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture.

"The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this week's headlines make such a conclusion, sadly, inevitable."

This Global Financial Fraud and Its Gatekeepers | Common Dreams

 

[georgephillip]

...Our Entire Economy Is Built On Fraud ...

... systemic corruption in the Financial industry...

...the nepotistic corruption and conflict of interest that riddles Wall Street which is little more than agreat big Ponzi ...

So what is it, you have something better--

--or we're just talking hatred of of everyone and everything and leaving it at that?

Why don't we start with Geithner and see where it leads?

"The New York Times business section on 12 July shows multiple exposes of systemic fraud throughout banks: banks colluding with other banks in manipulation of interest rates, regulators aware of systemic fraud, and key government officials (at least one banker who became the most key government official) aware of it and colluding as well."

This Global Financial Fraud and Its Gatekeepers | Common Dreams

 

[EdwardBaiamonte]

...Our Entire Economy Is Built On Fraud ...

... systemic corruption in the Financial industry...

...the nepotistic corruption and conflict of interest that riddles Wall Street which is little more than agreat big Ponzi ...

So what is it, you have something better--

--or we're just talking hatred of of everyone and everything and leaving it at that?

of course if entire economy was built on fraud we should demand more of it since we have the highest standard of living in human history!!

That said, we would be far far better off still if we had more capitalism and good transparent accounting so for example you could compare banks and financial companies easily and get a simple but accurate understanding of their profitability, size and risk.

 

[Moonglow]

Just goes to show how money corrupts.

 

[EdwardBaiamonte]

Just goes to show how money corrupts.

perfect liberal thought!!!! We'll have the only society in history without money then.... because, after all, money corrupts!!

 

[iamwhatiseem]

Just goes to show how money corrupts.

perfect liberal thought!!!! We'll have the only society in history without money then.... because, after all, money corrupts!!

Power corrupts...money is the spoils

 

[georgephillip]

...Our Entire Economy Is Built On Fraud ...

...the nepotistic corruption and conflict of interest that riddles Wall Street which is little more than agreat big Ponzi ...

So what is it, you have something better--

--or we're just talking hatred of of everyone and everything and leaving it at that?

of course if entire economy was built on fraud we should demand more of it since we have the highest standard of living in human history!!

That said, we would be far far better off still if we had more capitalism and good transparent accounting so for example you could compare banks and financial companies easily and get a simple but accurate understanding of their profitability, size and risk.

Proving yet again that if it wasn't for lies, capitalists would have little to say:

"On comprehensive measures such as the UN Human Development Index the United States is always in the top twenty, currently ranking 4th.

"On the Human Poverty Index the United States ranked 17th, one rank below the United Kingdom and one rank above Ireland.[4]

"On the Economist's quality-of-life index the United States ranked 13th, in between Finland and Canada, scoring 7.6 out of a possible 10.

"The highest given score of 8.3 was applied to Ireland. This particular index takes into account a variety of socio-economic variables including GDP per capita, life expectancy, political stability, family life, community life, gender equality, and job security."

Standard of living in the United States - Wikipedia, the free encyclopedia

 

[uscitizen]

The industry was making all the money they could honestly and fairly and had to increase their income soooo....

 

[JimBowie1958]

Just goes to show how money corrupts.

perfect liberal thought!!!! We'll have the only society in history without money then.... because, after all, money corrupts!!

It is true that money corrupts, but that does not mean that money does not have a vital roll in a modern economy.

The way we make money can and will be improved but it seems a crisis will be necesary for the Fed to open up and do what is right for everyone and shift to the USD being based on a basket ofcommodities that are redeemable in the amounts available by the issuer of the note.

Say the note is based on a basket of precious metals (rhodium, platinum, gold, iridium, silver, palladium, osmium, ruthenium, copper, rhenium, indium) and you want to cash in your money. You go to a local precious metal outlet and trade in your money for what they find convenient to them in terms of what is available and cheaper in the long run due to expected increase in that metals value. Speculators cant corner that market as the issuer of the note will have too much flexibility and to corner that currency you would have to corner ELEVEN different metals available in almost every global market.

Something like that I think will replace the fiat system we have now, though it will take away theoretical leverage enjoyed by the central banks.

 

[Politico]

The problems can all be traced back to an event in 1999. As soon as it occured I knew exactly what was going to happen. Can anyone remamber what that was?

 

[JimBowie1958]

The problems can all be traced back to an event in 1999. As sson as it happened I knew exactly what was going to happen. Can anyone remamber what that was?

Gramm

 

[georgephillip]

The industry was making all the money they could honestly and fairly and had to increase their income soooo....

...they never have enough.

When the FIRE sector crashes the global economy loudly enough to focus American attention spans the same way 911 did, they will blame the immigrants and make even more profit from the "creative destruction" that follows.

Monopoly-Finance Capitalism at its finest just as Marx predicted.

Monopoly-Finance Capital and the Paradox of Accumulation :: Monthly Review

 

[JimBowie1958]

The industry was making all the money they could honestly and fairly and had to increase their income soooo....

...they never have enough.

When the FIRE sector crashes the global economy loudly enough to focus American attention spans the same way 911 did, they will blame the immigrants and make even more profit from the "creative destruction" that follows.

Monopoly-Finance Capitalism at its finest just as Marx predicted.

Monopoly-Finance Capital and the Paradox of Accumulation :: Monthly Review

There is nothing wrong with well regulated capitalism. It is crony capitalism and Laissez-faire capitalism that are problematic.

 

[Widdekind]

Those on the receiving end of the economic surplus (surplus value) generated in production are constantly seeking to enlarge their profits and wealth through new investment and further augmentation of their capital (society’s productive capacity). But this inevitably runs up against the relative deprivation of the underlying population, which is the inverse of this growing surplus.

can i "call", and cry foul?

Yes, business accumulate profits; and then seek to re-invest those savings, on more profitable investments. The recirculation, of savings into investments (S --> I), is the "heart" of the economy.

But, businesses re-investing, in their own society's economy, generates jobs today for workers building the capital (machines, factories) that they purchase today; and keeps on generating jobs tomorrow for other workers employing that capital (working with the machines, at the factories) in perpetual pursuit of profits. Which are then, themselves, re-invested into society, improving the economy.

Businesses investing billions and trillions of dollars, in their own societies & economies, is not "bad"; is "good"; or, at least, "better than nothing", i.e. recession. Thus, the lack, want, and dirth of business (re-)investment, into the US economy today, is the cause, of the current recession. Constant "harassment" of markets & businesses, by government "meddling", is not helping; is hindering; economic recovery.

Businesses re-investing in society and the economy is not "bad" for workers, hired to build machines, factories; and then hired again to work on those machines, at those factories, building "widgets" for sale. Workers are not "deprived" by businesses investing billions & trillions of dollars, in those workers' society & economy.

If disputing the Decrees of mainstream media is possible, then i want to dispute, that businesses (re-)investing billions & trillions of dollars per year into a society & economy, is "bad" for that society & economy.

 

[Widdekind]

the root problem is confusion. Behind the camouflaging "smoke" of confusion, corruption can advance, in formation, against economies, and societies. If humans were not "stupid suckers born every minute"; then they would demand simplicity, in everything related to money. For example, tax codes would not be "Byzantine & Labyrinthine". Instead, tax codes would be "one line long -- X% flat-rate tax, for the sale, of all goods & services, parts & labor". Something "simple, right down to earth, in language that everybody here on earth, can actually comprehend".

 

[georgephillip]

The industry was making all the money they could honestly and fairly and had to increase their income soooo....

...they never have enough.

When the FIRE sector crashes the global economy loudly enough to focus American attention spans the same way 911 did, they will blame the immigrants and make even more profit from the "creative destruction" that follows.

Monopoly-Finance Capitalism at its finest just as Marx predicted.

Monopoly-Finance Capital and the Paradox of Accumulation :: Monthly Review

There is nothing wrong with well regulated capitalism. It is crony capitalism and Laissez-faire capitalism that are problematic.

Can you think of a time when capitalism was well-regulated or immune from the influence of Adam Smith's "vile maxim of the masters of mankind: all for ourselves and nothing for other people"?

Smith was a pre-capitalist figure of the enlightenment living in what was the most democratic society of his day, and it was obvious to him how the principal architects of state policy, the merchants and manufactures, made certain that their interests are "most peculiarly attended to" no matter the effect on the victims of those crony policies.

Smith was referring not only to the experiments the British were inflicting on India at that time, but also the majority of the people of England who also suffered from the early abuses of division of labor practices.

Education is Ignorance, by Noam Chomsky (Excerpted from Class Warfare)