Central banks are designed to be “independent,” and they shroud themselves in secrecy. But they have formidable and, when it comes to money, “unlimited” powers that they harness for the benefit of their clientele, banks. And hiding behind their veil of secrecy are shenanigans that rarely seep to the surface, but when they do, they just get worse and worse. The latest is a sordid bribery and kickback scandal at the Reserve Bank of Australia that appeared to be neatly contained to two subsidiaries, until now.
Federal Reserve
All Heck Breaks Loose on CNBC, TARP Gets Sanctified, Bank Bailouts Get Whitewashed, And The Fed Escapes Scot-Free
by Wolf Richter • • 4 Comments
It must have been a nightmare for Neil Barofsky, former Inspector General overseeing TARP during the financial crisis. He was on CNBC this morning to hawk his new book, when all heck broke loose. An argument about TARP, the most despised law in the US … how it prevented the collapse of Wall Street or something. But they failed to mention that by the time TARP was handing out money, it had already become irrelevant. A much greater power had taken control.
Ron Paul’s Legacy: A Complete Audit Of The Secretive Banking Cartel?
by Wolf Richter • • Comments Off on Ron Paul’s Legacy: A Complete Audit Of The Secretive Banking Cartel?
They only bubble up rarely, these scandals at the Federal Reserve System, but when they do, they’re doozies, involving huge amounts of money, massive conflicts of interest, all-out manipulation, collusion, favoritism, dizzying cronyism…. Over the 100 years the Fed has existed, it has done an excellent job in one of its other functions, maintaining the dollar, which has lost only 96% of its value—instead of 100%. Yet, it just doesn’t want to be audited.
The Con Game Of Writing Up Assets: It’s Not Just The “London Whale”
by Wolf Richter • • 3 Comments
Normally we see the gory details only after a firm collapses, like Enron or Lehman, when vultures tear open its guts to fight over shriveled assets that had appeared fat and healthy on paper, and some of them had been written up repeatedly to create—which our accounting system encourages us to do—paper income. Other outfits get bailed out. JPMorgan among them. Yet, they still hollow out their balance sheets. And JPMorgan’s soon-to-be $7 billion trading loss shows how.
Is The Inexplicable American Consumer Rebelling?
by Wolf Richter • • Comments Off on Is The Inexplicable American Consumer Rebelling?
The strongest and toughest creatures out there that no one has been able to subdue yet, the inexplicable American consumers, are digging in their heels though the entire power structure has been pushing them relentlessly to buy more and more with money they don’t have, and borrow against future income they might never make, just so that GDP can edge up for another desperate quarter. But it’s been tough.
Libor Perp Walks, but No Perp Walks for Rate Manipulation by Central Banks
by Wolf Richter • • 2 Comments
I’m shocked and appalled that the Libor fiasco could even occur in our modern, highly ethical, and transparent financial sector. Banks misreporting anything…. unheard of. Nevertheless, it occurred. Not just once, but from get-go. And everyone and his dog, even Treasury Secretary Timothy Geithner, back in 2008 when he was still President of the New York Fed, knew about it.
Two Down-Under Comedians Explain QE
by Wolf Richter • • Comments Off on Two Down-Under Comedians Explain QE
The Fine Wine Bubble Blows Up
by Wolf Richter • • Comments Off on The Fine Wine Bubble Blows Up
I love wine, but I’m leaning towards Californian wines; they’re awesome and grow in my extended neighborhood. More precisely, I love drinking wine, not keeping it locked up in a refrigerated vault, and certainly not investing in it. Hence, I have little sympathy for those who were buying high-dollar French wines for the purpose of investing in them, instead of drinking them, and I certainly don’t feel sorry for them in their plight. But a plight it is.
Piling Up: The Detritus of Failed Stimulus Policies
by Wolf Richter • • Comments Off on Piling Up: The Detritus of Failed Stimulus Policies
“Ugly” doesn’t even describe it. I’m not talking about today’s ISM index of US Manufacturing, which was quite ugly, dropping to the worst level since 2009; and whose all-important New Orders index was beyond ugly. And I’m not talking about today’s Global Manufacturing PMI, which was truly ugly, seeing its lowest level since June 2009. These are volatile indices that might turn around on a dime, though that appears to be wishful thinking.
The Worldwide QE Quagmire
by Wolf Richter • • Comments Off on The Worldwide QE Quagmire
Certain central bankers are coming out of the closet admitting that their favorite shenanigans—ultralow interest rates and printing money with utter abandon—can’t solve the very problems they were designed to solve, which has been obvious for a long time. What they’re not yet admitting massively, though some are starting to hand out hints, is just how much havoc these policies are wreaking.