The bell has rung. Round 1 begins.
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Guest post from Wil Martindale, who blogs at:
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First Blood for Elizabeth Warren
There’s been quite a stir regarding Elizabeth Warren, her background, her appointment and her role in the consumer protection agency she now oversees.
- Will she put an end to this practice? -- Complex derivatives being sold to retirees and other retail investors (Bloomberg)
Monetary illusionists have argued for years that ”institutional investors should be fully aware of the risks involved in derivative instruments” to obscure the criminality of their scams with ”sophisticated” slight of hand. And as Tavakoli has pointed out, time and again, this favorite “get out of jail pass” frequently played by Goldman and JPM, fails the sniff test of any regulator not on the Wall Street Casino’s current or future payroll.
Perhaps the best sysnopsis of how I feel about these criminals and their bailout apologists like Charlie “Fear” Munger is found here.
Now we have even more undisputable evidence of the widespread wealth confiscation of the derivative swindle, as it applies to 84 year-old retired beauticians -- a group well known for its mastery of structured bond notes, second only perhaps to their mastery of the ”ballerina bun” for prom-bound teenies of the Kennedy era.
Simply put:
- Individual investors are incapable of valuing structured notes and their underlying derivatives, said Kevin Kelly, manager of Tontine Capital.
So what has the Dodd-Frank bill done to arrest such predatory practices, or at least address them? What will Warren do?
This national disgrace is pretty obvious to all by now. We have a private corporation, the Federal Reserve, dictating 0% interest policy, virtually ELIMINATING risk aversion by making the activity of traditional savings FUTILE, thereby not only ENCOURAGING riskier forms of investment, but providing liquidity to investment firms preying upon retirees with derivative schemes to rob their pensions.
They fund them because there is no capital in traditional savings accounts to serve as fractional reserves.
And all we can talk about are the capital requirements of Basel III? If Americans could earn even 5% in risk-free savings accounts, the banks might have some capital, but currencies have one and only one utility for the global banking oligarchy: betting chips in their rigged game.
And the house always wins, because the dealers (TBTFs) literally own the house (FED) and the house (FED) is showing them your cards (FUTURE RATE MOVEMENTS). Or does anybody actually think they’d bet 25 times the gross domestic product of the U.S. against the house?
When the other 49 States finally wise up and begin restructuring their sovereign economies along the lines of North Dakota, then you’ll start seeing the fruits of success in ethical banking and sound fiscal management, and you'll see reasonable rates which encourage both saving and lending.
What you won’t see is dirty-dealing derivatives, siphoning off the retirement wealth of taxpayers to fund similar international scams. Until then, we have what we have.
So now we’ll see whether Elizabeth Warren will serve as Geithner’s water boy, or a Brooksley Born with teeth, or just the next frustrated appointee to jump ship when the water gets rough.
The bell has rung – round one begins.
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