Interesting, unfortunately I have long passed the point of being surprised by any chicanery when banks are involved.

 

And on Friday I leave one of them and start at another... Honestly I'm a nice guy (and freelance so it's not as bad)

 

A long time retired banker friend once told me that even in his day they had the "gambling department"
Sure @Tiny Iota you are a great guy as are 99.99% of your colleagues, just a pity your industry seems to keep popping up with one scandal after another

 

I'm another of the 99.99%, a career banker and just an all-around nice guy too.

There's Wall Street banking and then there's community banking. The 99.99% great guys are to be found in the local community where you live.

 

Not everyone on Wall Street is a crook - most of us are honest and hard working, and are just trying to do our best to provide for our families. Yes, there are some idiots, as in every other profession. I understand the stick we get as a profession, but please don't fall into such simplistic arguments as this..
'
I'm another of the 99.99%, a career banker and just an all-around nice guy too.

There's Wall Street banking and then there's community banking. The 99.99% great guys are to be found in the local community where you live.'

One of the '99.9% of good guys' I know in a branch was actually selling his customers' identities to organised criminals - but I don't let that stereotype every bank teller I come across...

 

To be honest I can't really be called a banker either. I'm a freelance software developer. The financial industry in London just pays more so that's who my clients are, and why I can indulge in frivolities like Omegas. Plus, the last system I built was a tool to help hold traders to account and make sure they're doing their job properly. I've only ever met a few in the industry who want to be Gordon Gekko and even fewer who think they actually are.

 

The gold market has been manipulated on and off for decades, and the history is well known to those who seek it out.

For those interested, here is a good overview from Chris Powell, co-founder of GATA:

http://www.gata.org/node/14840

Here is a very good and useful article that provides further important background. The author, Koos Jansen, is one of the very best observers and researchers of current gold markets.

https://www.bullionstar.com/blog/koos-jansen/gold-meeting-nixon-pompidou-1971-azores/

Here are a few trenchant, related quotes:

“The modern mind dislikes gold because it blurts out unpleasant truths.”

– Joseph Schumpeter

"Until government administrators can so identify the interests of government with those of the people and refrain from defrauding the masses through the device of currency depreciation for the sake of remaining in office, the wiser ones will prefer to keep as much of their wealth in the most stable and marketable forms possible - forms which only the precious metals provide."

– Elgin Groseclose

"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."

– Hans F. Sennholz

The world's economic problems cannot be resolved by creating credit/money out of thin air, as the world's central banks are doing in record amounts. The system is broken, and most countries in the world (including the U.S.) are insolvent. Gold acts as a barometer of the health of fiat currencies, as in stark contrast, it cannot be created with a stroke of a keyboard. Governments and central banks are terrified at the possibility that the masses will wake up and recognize the true value of the paper promises which are commonly mistaken as "money". When – not if – that happens, there will be a stampede toward hard assets and so-called "good" collateral, among which gold stands at the very top. In other words, when the current system collapses – and it isn't far off – the value of gold will increase dramatically, and manipulation of the paper (i.e. futures) markets will cease to be effective.

 

I'm not #humblebrag(ing) but if I don't tell you my background, you'll figure I might be talking out of my ass more than I normally do.

Long story boring: I was the CCO of a 15bn USD money complex (IA, Broker Dealer and Hedge Funds/ Partnerships) in my past life.

The corporate culture of any large sized money center is generally corrupt or crooked (in the vernacular). The further up the food chain, the more dirty. More specifically, front office is more corrupt than back office. I'm not blowing any whistles but suffice to say (write?) the most common question asked of me each day was some some incarnation of "Can I get away with this" or, "Is this legal"?

Now some may argue that the reason why I was asked this question dozens of times a day might be the overbearing regulatory nature of the business.

My retort to that argument would be something approximating that there are lots of highly regulated businesses. For example: Commercial Aviation and say, Civil Engineering. I can't for the life of me imagine a scenario where airline pilots or air traffic controllers constantly contact their legal / compliance department to ask one of the above referenced questions. Or worse, a bridge engineer asking "can I get away with that?". Maybe I'm just ignorant but I hope that I'm right lol.

last digression: my old firm was as white shoe as it gets...


/end rant

I'm, going back to looking at pictures of pretty watches.

 

I still love the rants. My take is that these are human systems. Traders can bankrupt a major company in seconds, because controls are lax and will remain so. In my life, I've seen the silver market cornered, several banks brought down by errant traders and the king of them all --- packaging bad high leverage mortgages. And the banks are back to the latter. Political willpower is in the hands of special interests. Peace out. Bill

 

I have a different take on banks and bad high leverage mortgages. Banks were compelled to do so by big government. There was the big hammer of CRA back in the 90s. I was there. I saw it. The American dream. We'll make you extend it to everyone. Oh, and we'll encourage endless 106% mortgages, special impaired credit mortgage products, and stated income mortgages through our agencies' guarantees because we're the government and we can.

My bank is not back to the latter. My bank's regulatory agencies aren't in the humor to allow that.

 

Fair enough. The gov apparently forced you guys to do things you didn't want to do. Although, a lot of money was made in the packaging and bailing out. I wonder if your bank is state or federal. Either way it is starting up again. The Ameracan dream of of owning a house is a construct. Bill

 

http://www.forbes.com/2009/02/13/ho...ibutors_0216_peter_wallison_edward_pinto.html

 

in all of this brouhaha surrounding mirror mirror on the wall it won't be a bad idea to get one's barings right ...er...... bearings right
i would like to ask for nick leeson's testimony

 

That's an interesting article. My view, tempered by my misspent adulthood as a lawyer and VC is that nothing is that simple. I'm not a fan of conspiracy theories. I will just say that the gov miscreants, assuming the article is true, bailed out thir industrial cohorts. In any event we pay for it. Just like Hillary who left the WH broke, I know the investment bankers are having a tough time making the Mercedes payments. Sad. I feel their pain.

 

It's misleading to blithely talk about the history of debt without putting the current "experiment" into perspective. I never suggested that manageable debt was a problem, but if you look at the history of public debt to GDP in the U.S., you'll see that the current bubble greatly exceeds even that of WWII (source: Heritage Foundation). And after WWII, as the U.S. emerged victorious, it went on a tremendous ride, fueled in large part by the victor's spoils, huge manufacturing output, and the development of the world's reserve currency. Also, the dollar was backed by gold until '71.

Now, as the U.S. is no longer a manufacturing base, there is no hope of paying down the crushing debt load, especially when factoring in unfunded liabilities. The dollar is also rapidly losing its once peerless status (though it will do well in the short-term as the perceived "cleanest dirty shirt"), and will go the way of all reserve currencies.

The second chart illustrates the epidemic of insolvencies around the world, and there is no way out. We are in absolutely unprecedented times, and while I do not think that a Mad Max scenario is likely, I see no possibility whatsoever that the current economic system can be maintained without crashing for more than a few years, let alone generations. In fact, I'd wager that it will arrive before the end of 2016.

 

So, not very long ago, Brazil, which is currently the worlds 7th largest economy, faced crushing debt and run away inflation. Like most cancers or parasites, Brazil ate itself alive fairly quickly. In 1986, there were battle tanks on the streets of Brasilia and other cities. Basically, Brasil did everything wrong in trying to solve a political, social and most importantly: an economic catastrophe.

This isn't a white paper, and I'm not setting up footnotes or an index so, I'll keep this brief and casual…

The severest action which Brasil took was to kill their currency; not once but (5) five separate times between 1986 and 1993. FIVE !

Some economists will argue that the perpetual "nation of the future" was still a 3rd world country during this period (by definition, it was) and these sorts of shenanigans are part and parcel for the third world. But, Brasil was always a little (or, a lot) different than the rest. Brazil was and is a resource rich, industrialized country with well formed capital markets and international trade. In many ways, Brazil mirrors the United States. At the very least, Brazil more resembles the USA than it does, say, Argentina or Venezuela , two nation which seem to revel in dysfunction (100 short years ago, both Argentina and Venezuela had economies which were arguably more dynamic and at least as large as the USA.

If I can infer your conclusions, you seem to be of the opinion that USA is heading for the direction Brazil circa 1986. "King Dollar" will be replaced with new dollars or something a long that line. Is it fair of me conclude that you believe this where we're heading and there's really nothing to stop it?

Can I assuage your concerns, just a little? My old job, which I mentioned earlier, required me to spend a lot of time in private meetings with one of the richest people on the planet. He was my boss and it was my job to keep him off the front page of the NY Times. This was during Elliot Spitzer's reign of terror. There's no reason for me to write his name, especially without his approval; you'll just have to take my word for it that he is loaded. And, not new money, but dynasty money. His wife is a Loeb (yeah, those Loebs lol) and the Seagram's were the poorer members of his extended family lulzzz!

Anyway, I figure since I read all the time that this family is one of a few who literally control the world (personally, I don't buy into that conspiracy-Bilderburg-cabal nonsense), I hoped that he might be able to give me some sage advice about the state of the America and the rest of world, in a true meta, long view.

He always spoke of "post WW2 America": after the war, the US State Dept @ Bretton Woods decided that the industrialized world, led by the United States, would "drain" the middle east (the extent of Venezuela's oil reserves were not yet known at this time more nor was the extent of the North Sea basin) of their very easy to get to oil before fully exploring and producing our own oil. Middle East crude is very dirty but it's ridiculously easy to drill. Basically, you stick a straw in the ground in most parts of the arabian peninsula and out pours oil. In exchange for their oil, we offered military security agreements to these newly formed nation states. At the time. most scientists agreed that nuclear, fission and fusion were the future and oil would become less needed.

There have been some obvious bumps along the way (1973, some pretty serious conflicts) but for the most part, this has been the status quo ante for some 70 years running.

OK, so most of "our" oil (and a lot precious metals minerals) are on and beneath federal lands and territories (including the sea). The good news is that we have a sh*t ton of oil and natural gas. Estimates for the total amount of oil for just the Bakken formation are over 500 billion barrels. That means the future value of of just one formation (it's not technically a field) is…an obscenely large amount of money. For example: @ 200 bucks p/bbl, you're talking about 100 trillion dollars which happens to be the exact amount of the future unfunded liabilities of the United States of America. This is just one formation!

Respected geologists estimate that the aggregate amount of oil held the US federal government (our citizens) could be as high as 4.5 trillion barrels. This isn't the type of oil where using my earlier example, you just stick a straw in the ground and out she comes…gusher! This oil may cost upwards of 40 or 50 dollars per barrel just to extract (Present Value = PV). When you start throwing these numbers around, it becomes absurd. The future value (FV) of that oil could be as high as one thousand trillion USD's ( I think they call that a "gazillion" ). Suddenly, owing China a trillion dollars doesn't seem like such a big deal, right?

The point being, the US Government has lots of collateral to back up our debt and isn't just some abstraction like full faith and credit or future taxes. The United States is very literally, very valuable and we have historical giants like Monroe and Seward who were true leaders and visionaries to thank.

Of course having all these resources is pretty useless if somebody plans on coming along and conquering it. The most important part of having all these resources is having a military force which can protect our assets. I don' want to go off on another tangent so I'll stop here