Gold Daily and Silver Weekly Charts - When the Operation of the Machine Becomes So Odious

"This is the contempt in which they hold the majority of American people and the political process: the common people are easily led fools, and everyone else who is smart enough to know better has their price. And they would beggar every middle class voter in the US before they will voluntarily give up one dime of their ill-gotten gains."

Simon Johnson

Congress is crafting a bipartisan deal to allow retiree benefits to be cut. 

"A measure that would for the first time allow the benefits of current retirees to be severely cut is set to be attached to a massive spending bill, part of an effort to save some of the nation’s most distressed pension plans.

The rule would alter 40 years of federal law and could affect millions of workers, many of them part of a shrinking corps of middle-income employees in businesses such as trucking, construction and supermarkets."

As you may recall, Congress responded to business lobbying by allowing their pension plans to make outrageously optimistic assumptions about future returns, so the corporations could divert more of their money from pension contributions to short term profits.  

 

Now that corporate profits are at record levels, someone has to take up the slack and that must be the elderly.  Let's just rewrite the contracts after the fact, and take the money from them.  

In a conversation today some were tut-tutting this decision.  But after all, someone has to tighten their belts in hard times.  It certainly can't be the privileged class, so it may as well be the pensioners.

I hope people are so sanguine when the Banks come to seize their assets to make up their derivatives losses, which emboldened they will almost certainly do.  First they come for the pensions, and then they come for the savings deposits and IRAs.  It is a sign of the times.

Speaking of a sign of the times, the Manhattan based 2nd US District Court of Appeals knocked my socks off today, with a ruling that basically overturns 80 years of securities principles, and probably does more to erode the 14th amendment than Citizens United.

2nd US District Court of Appeals Issues the Equivalent of the Dred Scott Decision for US Securities Markets

Here is the money shot in the decision that overturned the insider trading convictions of the infamous ring involving SAC and what looked like an organized conspiracy to violate securities laws. 

"Although the government might like the law to be different, nothing in the law requires a symmetry of information in the nation's securities markets."

Barrington Parker, 2nd U.S. Circuit of Appeals Judge

And I will wager that if you have not seen this here and a few other places in the blogosphere, you would not even understand what the heck was going on.   The mainstream news stories made it seem like the conviction was overturned on insufficient evidence.

 

Well technically it was.  Especially if you maintain the perspective of a servile tool of the corporate media.   To paraphrase Mario Savio, would you ever imagine a manager in a firm making a statement that is in contradiction to his board of directors?

In its attempt to give a get out of jail card to some of the particularly well-connected, the appeals court has set a precedent that is noxious and repugnant to the Constitution, particularly the 14th amendment.  Its willingness to torture the law should make us wary of what other things that the crony capitalists have in mind with regard to overturning bank reform and confiscating assets.

If this stands, there is no excuse for any foreign investor to complain when they are robbed blind by the US markets.  At least those in the US can make the case that getting all their money away from the US banks is an onerous task.   The character of this government is being writ large for all to see.

Other than this, I just don't have the words. The stench coming out of New York and Washington is getting so bad I can't breathe, whether it is from being water-boarded, or slammed to the ground and choked to death for a cigarette, or being robbed blind by white collar criminals who have friends in high places.  Don't bother to do anything.  Sit back and relax.  They will come for you and yours too, sooner or later.

To paraphrase Martin Luther King, never forget, everything they do will be 'legal.'

Have a pleasant evening.

With Regard to the Cyprus Bank Deposit Confiscations: Is Nothing Sacred?

Customer funds were long considered 'sacred' at brokerage firms, and were segregated from the proprietary operations of the company. And they were stolen at MF Global, and no one has been punished.

Bank deposits, protected by insurance and the guarantees of the government, were long considered 'sacred' at financial institutions. And they are being stolen in Cyprus as a matter of convenience to the crony capitalists in Europe, who are loathe to force the banks to take their losses.  And so they impose them on the people.

And this is what was done, and is still being done, in the US and the UK as well.  It is merely being done in a different form.

The Parliament of Cyprus will vote on this plan on Monday.

There are always various ways, and people, who will be willing to justify such theft. The banks were taking dirty Russian money, the people are lazy spendthrifts. This is always how it goes when the oligarchs steal to finance their gambling losses.  And in their insular arrogance they always go too far, provoke a reaction, and then act surprised.

As I wrote a few weeks ago:

Politicians from both sides of the aisle will swear pious oaths to protect and foster the well being of the middle class. They will say that their policies and proposals are all designed for its betterment. And yet the state of the middle class continues to dwindle into despair and disrepair. Why is this?

It is not because of the predominance of a right or left ideology, of taxation and deficits and austerity. It is not because of the re-emergence of a perversion of the gospel, in the predestination of prosperity. We have seen all this before. It is not because in our comfort we have lost the sense of the imperative of common cause.

It is because of the overwhelming corruption of power, and of the cynical amorality of thoroughly modern political managers who worship power and personal wealth as ends unto themselves. They distract the people with artificially divisive social issues and crises, while robbing them blind.

It is driven by the allure of the cartels, monopolies, and monied interests, and their corrupt political bargains. It is a child of the subornation of perjury on a massive scale. It is the unscrupulous servility to power of those who have sworn to uphold and protect the law. What is truth? Whatever suits us, whatever we say it is, by whoever has the power and the craft to define 'we.' It is not the triumph of evil so much as the absence of any sense of the good, of honor, honesty, and of simple common decency.

And it is marked by the daily subverting of the law as a matter of convenience and comfort to the insatiable few, and the cravenness of their enablers, driven by personal ambition, ignorance, and fear. It is the will to power, the elevation of the ascendant self and the system that supports it, above all else. Greed is good. Whatever works. And the enemy is all that is not the self, but that which is the other.

And where there is nothing sacred, the people perish.

Protect yourselves.  And do not look only to your wealth, but also to what is lasting.

"For what does it profit a man to gain the whole world, and lose his soul?"

Investors Who Lost In Madoff and Stanford Schemes Want Government to "Make Them Whole"

These are, by and large, relatively well-to-do people who were considered 'qualified investors,' or ought to have been. They were able to place large sums of money in obviously risky investments seeking abnormally high rates of return, which they did receive for many years.

The notion that the government should retroactively cover their losses, even indirectly, by taxing the public is obviously repugnant.

What about the many who have lost, on a percentage basis, equally if not more devastating amounts of their retirement savings in the tech, housing and credit bubbles? Their only fault is that they lack the political connections and high powered lawyers to make the case for them to the Congress, and the influence to get their way from pliable Congressmen.

I feel mightily sorry for anyone who has lost money in these fraudulent markets. I spend quite a bit of my personal time trying to warn people about the snares and pitfalls that are allowed to continue in the US financial markets even today. And there are many of them. Consumer Protection is not a priority in Washington.

A better case might be made to sue the Wall Street exchanges, the private self-regulators, and the auditors and ratings agencies for gross negligence in allowing these frauds to continue for so many years. Prosecutions for fraud and corruption across a much wider circle of enablers is generally what is done. It was done in the 1930's and it was done after the Savings and Loan Scandal.

But that will not happen. The financial sector is contributing far too much to the politicians in Washington, and too many powerful politicians are beholden to them, despite what smooth words that might pass their lips in public.

To take the losses of wealthier investors from hedge funds and other high risk investments having no productive benefit or socially redeeming value, and socialize them to the many is almost unbelievable.

And the backing of Senators Richard Shelby and Bob Corker for this is just another sign of the disgraceful corruption and patronage to a select few that infests the Finance Committee in the Senate. These are the Senators on the Finance Committe, among others, who are blocking and weakening financial reform. What hypocrites!

"These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel." Abraham Lincoln, speech to Illinois legislature, Jan. 1837

BusinessWeek
Madoff Victims Join Stanford Investors to Lobby for Payback
By Robert Schmidt and Jesse Westbrook
March 10, 2010, 12:16 AM EST

March 10 (Bloomberg) -- Victims of Bernard Madoff and accused Ponzi schemer R. Allen Stanford are banding together to lobby Congress for a law that could require Wall Street firms to pay billions of dollars to cover some of the losses they suffered.

As the groups’ leaders walked the Capitol halls separately over the past several months, they learned how to find the Senate’s Dirksen Office Building and to call their proposal “revenue neutral,” meaning no cost to taxpayers.

They also gleaned another lesson: The broader the geographic base of support, the better the chance of legislative success. The result is a coalition of the Democratic-backed, East Coast, and mostly Jewish investors defrauded by Madoff, with the Republican-backed, largely Christian, Sunbelt residents victimized by Stanford. The disparate groups now find themselves bound by a common notion: They’ve been cheated, and they want the government to make them whole....

The lobbying initiative “gives new meaning to the word chutzpah,” said James Cox, a professor at Duke University School of Law. “This is just a tax increase. It’s levied on banks but customers end up paying.” Until recently, the two groups were going at it alone, and not winning much support except from lawmakers in their regions.

Shaw’s Stanford group had backing from Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee, and other panel Republicans like Bob Corker of Tennessee, David Vitter of Louisiana and Kay Bailey Hutchison of Texas, said Shaw, who also works part-time as a spokeswoman at the Federal Reserve Bank of Dallas.

“These are very Christian” people, Shaw said, referring to the Stanford victims. A lot of members were marketed the Stanford securities “at church...”