11 Examples Of How Insanely Corrupt The U.S. Financial System Has Become

[Octafish]

Rock. Paper. Scissors. They don't matter when the game's rigged:

11 Examples Of How Insanely Corrupt The U.S. Financial System Has Become

Michael Snyder
Apr. 14, 2010, 9:16 AM
(This is a guest post from endoftheamericandream.com.)

If you ask most Americans, they will agree that the financial system is corrupt. It is generally assumed that just like most politicians, most big bankers are corrupt by nature.

But the truth is that the vast majority of Americans have no idea just how corrupt the U.S. financial system has become.

The reality is that the American Dream is literally being stolen from millions of Americans right out from under their noses and they don't even realize it. The corruption on Wall Street has become so deep and so vast that it is hard to even find the words to describe it. The level of greed being displayed by many Wall Street firms would make Gordon Gecko blush. It seems that the major financial players will try just about anything these days - as long as they think they can get away with it. But in the process they are contributing to the destruction of the greatest economic machine that the planet has ever seen.

Here's 11 Examples Of The Insane Corruption On Wall Street

CONTINUED...

http://www.businessinsider.com/11-examples-of-recent-corruption-on-wall-street-2010-4#

Everyone's NOT a winner.

[arcane1]

1. This one jumped out at me:

It turns out that the Federal Reserve holds credit-default swaps on the debt of Florida schools, and on debt owed by the states of California and Nevada. So the Federal Reserve would profit if one of those states defaulted on its debt. Talk about a conflict of interest.

[FBaggins]

7. It isn't a conflict if they also own those bonds.

Hedging instruments are entirely approprite IF they are actually used to hedge a risk that you currently have. It's only a bet that the state will default if the swaps are "naked"

[patrice]

2. K & R

[leftstreet]

3. K&R - Very nice recap of the whole clusterf**k

Number 5 is especially important because NO ONE talks about it:

#5 Predatory deals against American cities


It is being alleged that the biggest banks in the United States are ripping off American cities with the same predatory deals that brought down the financial system of Greece.  Of course the big banks will rip off just about anyone these days if they think they can get away with it.

Very significant given that the Feds are F**KING BETTING that states will fail!
Credit default swaps on the budgets of entire states !! Yippee!!




:banghead:

K&R
Thanks for posting

[gratuitous]

6. "If they think they can get away with it"

The definition for that used to be whether the miscreant was caught. Now the measure is, "Will I steal enough to cover the anticipated fine? If so, it's a go!"

[Raksha]

9. Unfortunately, that's not an exaggeration.

[gratuitous]

10. Yeah, I used to spend many a sleepless night

Tossing and turning, wondering if I had gotten too cynical. Now, I sleep like the dead.

[Confusious]

18. Never worry about it

If I think I am, the Repugs and wall street top my cynicism the next day, or within the next week.

[Lydia Leftcoast]

33. I think it was Lily Tomlin who said, "The trouble with cynicism is

that you just can't keep up."

[Demeter]

35. I've Concluded It's not Possible to Get Too Cynical

since I haven't the capacity to become drunk, it will have to suffice.

[sarcasmo]

4. The data mining is so that they banks/credit companies can predict if we will get a divorce

Orwell does another roll in his grave.

[felix_numinous]

5. Part of the con game

is convincing people in the fairy tale that they have our interests at stake, while they are actually profiting off of our misfortune. But they do this because they have created a dependency on the system.

The question is, can this system be changed from within, or can it be somehow marginalized by the rest of the population? There has to be a power paradigm shift where people reclaim our own lives, through cooperation reach critical mass to a state of self empowerment. I think this has to be experienced in order to be learned. We have to declare independence from these thieves.

[KansDem]

8. "...convincing people in the fairy tale that they have our interests at stake"

This is what always struck me as odd with Reagan's famous nine words--what made us think if government is the problem, that these capitalist con artists were a better choice? What made us think that government of, for, by the people would not work for the people, but private enterprise would?

For 30 years we've been fed this horseshit, and now we're paying the price...

[RC]

11. "...government is not the solution to our problem; government is the problem."

Most people do not understand who the speaker was representing. It sure wasn't us.

[Enthusiast]

36. We are part of the possibly only 2%

that recognize it as horseshit. This is because the entire media is part of the horseshit feeding mechanism.

[Wilms]

12. Up

[earth mom]

13. Huge K & R!

:argh:

:grr:

:mad:

[HCE SuiGeneris]

14. K & R

[charlie]

15. Lookit that. Gold is oversold

The "ultimate" repository of stored value has been turned into just another financial will o' the wisp. When the music stops, goldbugs are as fucked as the rest of us.

[toastbutter]

16. buy what people hate

My grandfather taught me that. ALthough it's very buffett/graham. I started buying gold in 1998. Nobody talked about gold. It was in the 200's. That's when you want to accumulate an asset class. I certainly wouldn't be accumulating it now. But that's me. Contrarian at heart.

[caseymoz]

26. Actually, if people had invested in lead in 2004

Their investments would be worth 400 percent now. Gold is the biggest economic myth in history, held most sacred by even those purportedly rational Ayn Randite objectivists, most prominent of those being Alan Greenspan.

The only reason why it ever became valuable in the first place is that it was pretty and was purported to have magical properties.

[Art_from_Ark]

41. What nonsense

The reason why gold became a universal monetary medium was because not only was it "pretty", but it was scarce but not excessively rare, it did not corrode, it was easily shaped into coins, it was readily accepted as money by people around the world, and it could represent substantial value in small amounts.

[Art_from_Ark]

43. You realize that the price of lead fluctuated in 2004, right?

Its lowest monthly average in 2004 was $743/metric ton in April. Its current price of about $2400/metric ton. So even if you had bought at the lowest monthly average, the price would only be 323% higher now.

http://www.indexmundi.com/commodities/?commodity=lead&months=120

The problem with investing in lead is that there are lots of problems.
First of all, it is a highly toxic heavy metal, and recently there been a scramble to find lead substitutes. Lead has already been removed from paint, crystalware, gasoline, and many kinds of batteries, among other things, due to its toxicity.

Secondly, lead is not a rare metal by any stretch, and there are lead mines all over the globe producing millions of tons of the stuff annually.

Thirdly, the market for lead is not as liquid as the precious metals markets. Physical possession for most people is out of the question, not only because of the tremendous amount needed just to represent, say, $1400 worth (approximately 1300 pounds versus 32 grams for gold), but also the special care required to handle and store it. If you have small amounts, practically the only market is with scrap dealers, who pay a fraction of the market price. And if you buy "paper lead", you have to pay "storage costs" and maybe other maintenance costs, which would eat into the profits. And you have to rely on the integrity of the party who is holding your lead, if they are, indeed, actually holding it for you.

[Art_from_Ark]

17. You seem to be confusing two different things

"Paper gold" and "Physical gold".

"Paper gold" is what is oversold. I would never own "paper gold" because it is, indeed, a will-o-the-wisp. However, physical gold is a completely different animal. If sellers of "paper gold" ever have to scramble to buy the physical stuff to cover their rear-ends, it's not going to hurt the price of physical gold.

[JDPriestly]

25. Good point, Art

The question is whether the paper gold is backed by what its sellers claim.

[Art_from_Ark]

40. Yes, that is the question

and that is why I wouldn't touch paper gold with a 10-foot pole.

[caseymoz]

27. The problem is, it's impractical to back everything by one product.

Especially gold, which is damn heavy and hard and expensive to transport, especially when you have an "emergency" shortage. Of course, in lieu of it, you always have paper instruments, which are inevitably a symbol of a promise that can't be kept.

[sendero]

42. Paper gold..

... is paper. You'd have to be crazy to buy it. There have already been instances of banks selling gold they don't actually have. Actually having it is a detail that many investment companies don't think is important.

Get the physical stuff and hide it. The paper has a huge potential to be worthless.

[Art_from_Ark]

44. Even Uncle Sam has defaulted on paper gold (and paper silver)

First in 1933, when Gold Certificates were demonetized (they have since been remonetized to their face value but are no longer redeemable for gold), and again in 1968 when the government said that it would no longer be redeeming Silver Certificates. I remember a news clip in '68 showing people lining up at the Federal Reserve Bank in New York to redeem their Silver Certificates for the last time (toward the end, they could only be redeemed at the 12 Federal Reserve banks). And for all that effort, they only received crappy silver granules that had to be assayed!

[Art_from_Ark]

45. Paper precious metals have been around a while

In 1973, I bought some silver from an outfit called Stagecoach that had advertised in one of the coin publications I was reading at the time (probably Coins Magazine). It was a whopping $25 worth, or a little more than 5 ounces at the going price at the time. The company said it would hold my silver for me, and issued a receipt for my payment. Then a few weeks later, I read an article in another coin publication advising collectors to take physical delivery of precious metals purchases, since there was too much room for unscrupulous practices. So I sent my receipt back to Stagecoach and requested physical delivery of my silver. To their credit, they did send the silver-- in the form of silver granules that were undoubtedly the product of redeemed Silver Certificates. I tried to sell the damn things during the silver boom of 1979, but was told the silver granules would have to be assayed. So I held on to them for another 7 years, until I found a coin dealer who wanted silver granules to create framed displays of "The Silver Story" for sale to collectors.

[sendero]

46. I prefer rounds and bars.

... so that is what I got :)

[Art_from_Ark]

49. Rounds and bars are certainly among the most liquid

types of bullion investments There are also a lot of beautiful designs. My favorite round is a one ounce Currier and Ives Christmas round I bought 15 years ago for less than $6 :)

However, I am especially partial to numismatic stuff that is being sold at prices that are close to the melt value-- it provides a bit of "insurance", as it were. For example, a lot of proof silver coins from the '60s are selling for little more than regular "junk" silver.

[sendero]

50. Interesting...

.. care to name names? :)

[Art_from_Ark]

52. There are a couple of dealers I know here in Japan

who sell US gold coins for essentially the "melt" price. As for the proof silver coins, I have seen ads in Coin World where they are going for just a slight premium over melt. And a lot of the modern commemorative proof silver dollars have become little more than bullion to most US dealers. If you are not a subscriber to Coin World or other coin publications already, I would highly recommend getting a subscription. :)

[TheUnspeakable]

19. k&r-so corrupt and so insane n/t

[Cowpunk]

20. The Banking System Should Be Treated As An International Crime Cartel

Theft, extortion, fraud, racketeering. Are these not the hallmarks of organized crime?

[fascisthunter]

21. sociopathy

and the sociopaths on top

[caseymoz]

28. A sociopathocracy.

Just like Stalin's, Mao's, and Hitler's.

[fascisthunter]

31. yup... the one consistent component

[me b zola]

22. K&R

[KillCapitalism]

23. Criminality on a massive scale.

These bankers make hardened criminals in state & federal prisons look like fine upstanding citizens.

[mackerel]

24. K&R

Merryfeckingchristmas!

[Overseas]

29. Yikes. K&R. //nt

[mrdmk]

30. Remember that high-level Federal Government Official that no longer flew commercial due to

unforeseen threats to the average American Citizen? (no I am not going to hijack a thread here!)

From a sub-link within the OP link

But all of this success has not come without controversy. In fact, Goldman executives are very much aware of the growing backlash against the firm.

Senior officials at Goldman Sachs have reportedly loaded up on firearms and are now equipped to defend themselves if there is a "populist uprising" against the bank.

In addition, Goldman Sachs employees are now not allowed to gather in groups of 12 or more outside the office. The firm very much discouraged "holiday parties" as they most definitely did not want to be seen as celebrating the downfall of the U.S. economy.

link: http://theeconomiccollapseblog.com/archives/how-goldman-sachs-made-tens-of-billions-of-dollars-from-the-economic-collapse-of-america-in-four-easy-steps


Actions of a person or a group of people are very telling. Yet, we told that the economy is making a slow, but fore-sure recovery...

[Hubert Flottz]

32. We are being deregulated out of our country.

The "golden age" of Grant x 1000!

[MinM]

34. The Orwellian named "Tea Party" demonstrates how many Americans...

fail to comprehend the extent of the corruption and it's roots.

:dem: & R

[Enthusiast]

37. Exactly.

The Tea Party mindset is a clear demonstration of how easily manipulated a population can be. We have seen this time and again throughout history. Through the media, and the ignorance it fosters, TPTB have great plans. They might even put a great world conflict into motion, one that will rival WWII. One thing for sure, it will come to no good end.

[bobthedrummer]

38. K&R#97-it's nuts alright...

:crazy:

[snappyturtle]

39. Kick! nt

[Jeffersons Ghost]

47. so many worthwhile projects need better funding and all the DC politicians can think of is padding..

their own pockets. It's only about the money with too many people.

[Name removed]

48. Deleted message

Message removed by moderator. 
[link:www.democraticunderground.com/forums/rules.html|Click
here] to review the message board rules.

[Initech]

51. Guess that goes to show you who the real criminals in this country are.

[Liberal_in_LA]

53. kick

[Quantess]

54. What happpens when the parasite kills its host?

[jmowreader]

55. The Fed holds the munis referred to in the CDS item, right?

I don't like it any more than you do, but if the Fed holds any munis right now and they do NOT also hold CDS protection against those assets, they are guilty of malpractice.

OTOH, if these are naked CDS the Fed is gambling using our money.