Jesse's Café Américain

10 February 2015

US Seeks Felony Pleas From JPM, Barclays, RBS, and Citi For Criminally Rigging Currency Markets

Too bad a felony conviction will not remove the privilege of voting from criminal organizations, since despite their 'personhood' and many rights as granted by the Bill of Rights, as bizarrely distorted by the Supreme Court, corporations do not yet have the right to vote. Not even the Banks.

But they will still possess the right to use huge quantities of publicly subsidized funds to maintain large stables of servile politicians on retainer, which is a much more direct and efficient way of obtaining your political and regulatory will than by merely casting a vote, in the conventional human manner.

Will they be banned from any markets? Will they be subjected to more intense regulation? I don't know.

But they will carry a 'symbolic stigma.' This is quite the burden for our pampered princes. The horror!

I wonder why Eric Holder is unafraid now to pursue actual criminal charges this time, as opposed to the scores of other cases where banks, such as HSBC for example, have brazenly flouted the law, again and again and again, with deferred prosecution and wristslap fines?

Why now? What has changed? What line could they have possibly crossed, after so many other brazen and repeated offenses? What does the government see coming that they need to do this? No more bailouts for felons?

And what happens when they do it again? And again.

Do they get to keep the Presidential cuff links?

Dealbook

U.S. Is Seeking Felony Pleas by Big Banks in Foreign Currency Inquiry

By Ben Protess and Jessica Silver-Greenberg

February 9, 2015

The Justice Department is pushing some of the biggest banks on Wall Street — including, for the first time in decades, American institutions — to plead guilty to criminal charges that they manipulated the prices of foreign currencies.

In the final stages of a long-running investigation into corruption in the world’s largest financial market, federal prosecutors have recently informed Barclays, JPMorgan Chase, the Royal Bank of Scotland and Citigroup that they must enter guilty pleas to settle the cases, according to lawyers briefed on the matter.

The pleas would be likely to carry a symbolic stigma, if limited actual fallout, in handing felony convictions to some of the world’s biggest banks...

Read the entire article here.

09 February 2015

Central Banking Chronicles Continued - Multimedia Q&A

Q. What is it like to pursue a career as a central banker?

“A cross between a foreign legion boot-camp and a secret-society initiation ritual, the ordeals were grounded in pain. One thing was obvious: the agenda, which was dedicated to grave discomfort, had been drawn up by a passionate sadist... quite as unpleasant as wearing a pair of briefs which have been trailed through a Calcutta courtyard...

The pursuit of illusion is not about studying for prizes, or for study's sake. There's no right or wrong, no pass or fail...

Nothing is what it seems."

Tahir Shah, Sorcerer's Apprentice

Q. What is it exactly that Central Bankers do? How do they preside over the real economy?

An imperial central banker explains to a simple, honourable man.

Q. Does the Central Bank ever audit their custodial gold bullion vaults in response to another Central Bank's request?

Q. The Central Bank has a broad array of monetary policy tools to use in managing the growth of the real economy. Can you give us one example?

Q. Do Central Banks ever engage in task sharing, or employ consultants or specialists?

The IMF is sometimes used for their expertise in negotiating the terms of sovereign bailout packages.

Gold Daily and Silver Weekly Charts - Auguries of Innocence

"The whore and gambler, by the state

Licensed, build that nation’s fate.

The harlot’s cry from street to street

Shall weave old England’s winding-sheet.

The winner’s shout, the loser’s curse,

Dance before dead England’s hearse.

Every night and every morn

Some to misery are born,

Every morn and every night

Some are born to sweet delight.

Some are born to sweet delight,

Some are born to endless night.

We are led to believe a lie

When we see not through the eye,

Which was born in a night to perish in a night,

When the soul slept in beams of light.

God appears, and God is light,

To those poor souls who dwell in night;

But does a human form display

To those who dwell in realms of day."

William Blake

Gold and silver bounced back a bit today after that pre-meditated smashing that they took last Friday coincident with the Non-Farm Payrolls report.

I cannot stress this enough. China, Russia, England and the US are playing a game of strategy, a global 'game of thrones' if you will.

England and the US especially are playing the short game, the smash and grab. Russia and especially China are playing a longer game, if you will.

Riddle me this. If you were planning on a future with an international currency system that is based on a type of money that is difficult for a single entity to manipulate for their own ends, would you rather be a debtor or a creditor?

And further, if you were in a situation in which you saw no other interest but your own, and you were threatened with a loss of the control your personal pleasure and power as you will, what might you be willing to do to retain it?

But in many cases, there are no differences among them, the elite. They are merely faced with different problems and assumptions. And their styles may differ, greatly.

Some of the differences are due to a cultural bias. Whereas Chinese and Russian thinkers are likely to play chess and 圍棋 or 'go' their Western equivalents are more focused on games involving direct assault and concentration relying less on strategy and more on power.

Surprisingly, the West is somewhat lacking in empathy. Not kindness, although there is precious little of that these days. Rather, we tend to consider 'the others' as spoiled or insufficient replicas of ourselves, as our inferiors. So we tend to greatly underestimate them.

And unfortunately the cult of power has persuaded many 'leaders' that obedience is a loyalty to which they are entitled. So they too often tend to underestimate the willingness of their own people to endure their excesses.

I am sure the West has just as many capable and intellectually proficient strategic thinkers as does the East. The difference is that here they are on the political sidelines, working finance, or otherwise ignored.

This is setting up to be a much more interesting event than I had ever imagined it would be.

As an aside, you may do well to limit your exposure to the Euro as well as most equities for the short term here. We are entering a rather fluid situation in Europe, with repercussions that are difficult to discern for all the Western nations.

There is a movement to pre-emptively disband the Euro from several sources, and those who wish to continue to hold it together are rapidly losing ground. Will such a change be unequivocally good for the Dollar? I believe some think so. I am not so sure.

The global financial system is very interconnected, and still rather fragile in the States despite the enormous effort that the Fed and the government have placed on reforming leverage and excessive speculation out of the financial system. (NOT! LOL)

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Once More Into the Breach

"You never know what is enough unless you know what is more than enough."

William Blake

Stocks were unable to take out the overhead resistance on the SP 500 continuous contract futures which is fairly well established around 2055-2060.

This was the third or fourth try, depending on how you wish to account a two phased attempt in mid-January.

I think the bulls have one more serious shot at taking it up and over, or we are likely to go down and test a firmer support level, say around 2025 or so.

I suspect that geopolitical developments are weighing on the US domestic game of liar's poker that is the equity market. Despite the usual self-sufficient exceptionalism bravado.

Have a pleasant evening.

NAV Premiums of Precious Metals Trusts and Funds - Pleasant Cycles of Financialisation

"By the middle of the stage of financial capitalism, however, the organization of financial capitalism had evolved to a highly sophisticated level of security (paper asset) promotion and speculation which did not require any productive investment as a basis.

Corporations were built upon corporations in the form of holding companies, so that securities were issued in huge quantities, bringing profitable fees and commissions to financial capitalists without any increase in economic production whatever.

Indeed, these financial capitalists discovered that they could not only make killings out of the issuing of such securities, they could also make killings out of the bankruptcy of such corporations, through the fees and commissions of reorganization.

A very pleasant cycle of flotation, bankruptcy, flotation, bankruptcy began to be practiced by these financial capitalists. The more excessive the flotation, the greater the profits, and the more imminent the bankruptcy."

Carroll Quigley, Tragedy and Hope