Rant

by Larry Levin

There is very little new news to write about this evening, other than poor earnings from EBAY and QCOM. Both are down over 8% as I write this. However, I do have something to share with you that again comes from Denninger's blog. It is a long rant and the following is only a partial post. The whole thing can be read here:

http://market-ticker.denninger.net/archives/2224-A-Sober-Warning-To-The-GOP-And-The-Democrats.html

So precisely what are the Republicans trying to argue for here? That the sort of misconduct that is alleged to have occurred here beyond the boundaries of the law, and that which does not rise to a criminal standard of conduct but which is exploitive of Americans, should be permitted to slide - either "because it's in the past" or for more sinister reasons - like permitting the same looting to continue and be expanded in the future?

Don't feed me this crap about "expanding credit for Americans" - we've done that and it was a freaking DISASTER! Liar loans, 0 down, totally irresponsible HELOC and other lending policies, people tying small businesses to their houses and personal fortunes all so the bankers could skim off a huge piece of everything - and it all blew up.

Now "they're back" and making billions in bonuses - but what are they doing to earn that money? Banking and finance generally is a parasitic function. It's a necessary function, but only to a point. Yes, we need to match those with capital with those who want to borrow capital, and that's what banks do - but we don't need to feed an insatiable monster that "demands" products that are unsound, unsafe, and crooked at their inception, nor do we have to permit these same bankers to continue to lie about their asset valuations.

Yet we are.

Let me be clear: The system will not hold together on the path we are on now. It can't. It is demanding to be fed with ever-greater interest payments and ever-larger slices of the economy siphoned off, and the real economy can't withstand that sort of attack.

Look at consumer confidence - it came in at -50 today, just off record lows, .vs. projections of "improvement." Improvement? Where? The real economy is choking to death under 29.9% interest rates as the bankster monster sits on it and plays vampire, sucking the blood from the economy.

And Mayor Bloomberg has the chutzpa to tell the NYC Congressional delegation that they have to "fight" for NY. Fight? For what? For the ability to steal even more?

Jefferson County Alabama funded NY's fat-cat bankers and taxes - with a bribery scheme that sent several officials to prison. WHERE ARE THE INDICTMENTS OF THE BANKERS INVOLVED? The banks involved included in the swap deals that were both overpriced and may have been entered into in exchange for bribes include JP Morgan, Bear Stearns, Bank of America and Lehman Brothers. Two of the four are now dead, of course, but the other two are not.

Oh, Mr. Langford? He got 15 years. How many years have the bankers gotten?

NOT ONE DAMN DAY.

Oh, Bill Blount (who did the bribing) went to prison too - he pled guilty.

The bankers - and the banks themselves - that profited from this crooked set of deals? Not one penny has come back to the citizens of Birmingham, Alabama, nor has one bank executive been indicted. Never mind that Matt Taibbi has alleged that Goldman was effectively bribed to the tune of $3 million to stay out of the deals - by JP Morgan!

Oh, and before anyone tries to hide behind a claim that "they didn't know", you might want to read this:

Here you can see a trail that leads directly from a billion-dollar predatory swap deal cooked up at the highest levels of America's biggest banks, across a vast fruited plain of bribes and felonies "” "the price of doing business," as one JP Morgan banker says on tape "” all the way down to Lisa Pack's sewer bill and the mass layoffs in Birmingham.

Didn't know eh? That dog won't hunt...

The people are done with being robbed, looted, bent over the table and violated repeatedly, while our nation's corporations - banks included - are fined with wrist-slaps instead of hard time or worse, their actions are IGNORED and they're even bailed out! Witness Pfizer, who I've written about - in 2009 the firm pled guilty to a criminal felony and paid $2.3 billion as a fine. What did the various agencies say at the time?...

Perhaps you can explain why the people should sit still while our government, which is supposed to enforce laws, allows not just one offense but corporate recidivism - with an offense that includes aggresisvely peddling drugs for unapproved uses. Out here in the real world we call that "drug dealing" and when the drug is heroin or PCP, and we catch them, we lock people involved up for life.

But when you run a big pharmaceutical company and in essence commit the same offense you get your hand slapped, get promoted for the first offense and then when you do it again you get elected to the board of the institution that executes monetary policy for the entire United States!

I keep brining up the Pfizer case - and the Jefferson County one - because they are outrageous in their impact on ordinary people and the brazen nature of what occurred. There's also no doubt that criminal acts were involved, since in both cases the parties (or corporations) either were found or pled guilty.

That is, these felony aren't allegations, they're facts.

But in each case the prime actors go free. Nobody does hard time and nobody even loses a business license. Pfizer wasn't shut down nor did it lose the ability to do business with the government. The banks involved in the Jefferson County Alabama swap deals were not prosecuted, they didn't lose their banking licenses, they didn't have to return any of the money they "made", and the people of the county still got screwed. Then those very same banks jacked up half the nation's credit card interest rates to 29.9% - while The Fed lent them our money at zero.

The latter is important, by the way. If I steal a car and then sell it to you, when you're caught with the stolen car you don't get to keep it. It doesn't matter if you're out lots of money as a consequence - you never had a right to the car in the first place, as it was the fruit of a poison tree. Why haven't these banks been forced to disgorge every penny that Jefferson County paid them, since the funds they got were likewise the fruit of a felonious series of events?

(And what about every dollar fraudulently made from the housing/mortgage scam? Will that be disgorged? In a word: no.)

We desperately need politicians who will cut the crap and put a stop to all of this, right here and now. No more flim-flamming, no more off-balance-sheet crap, no more hidden fees, no more bribery and no more extortion. Do any of the above, go to prison - period.

If you need someone with experience in the matter, call Bill Black.

Will this "constrain credit"? Not among those who are truly qualified to borrow. Note that our local community banks didn't pull any of this garbage - bribing people, holding a trillion in so-called "assets" off balance sheet and running complex derivative books intended to make price discovery and fair dealing impossible.

Force the big banks to stop all of it right here and now. If they can't survive with everything they hold consolidated on their balance sheet, that's too bad. We have thousands of community banks that would be happy to have the business, and that will make sound loans.

Demand that The Fed cut the "below zero" real interest rates. Get rid of the Clinton-era machinations in the CPI, and mandate that the short end of the rate curve be held above the true rate of inflation. Why? Because it must always cost something to borrow in real terms or you get monstrous malinvestment, bubbles and crashes. If Bernanke won't put a stop to this garbage right here and now then The Fed's charter must be revoked.



Previous Day's Trading Room Results:

Trade Date: 4/21/10

E-Mini S&P Trades*
(before fees and commissions):

1) FT sell @ 10:58am at 1202.00 = +.25 & +.25 (2 lots)

2) VA sell @ 11:36am at 1203.75 = -1.00 (1 lot)

3) Algorithm positions (11)

4) "Reading the Tape" positions (4) ...combined Secret's, Algo, & "Reading the Tape" total...-5.75



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