Legal chicanery and pitch darkness are the banker's stoutest allies.

Its show time again on Capital Hill, but this second round of show and tell won’t cut the muster! It will end as it always has, back to business as usual. Wall Street has gained to large a footprint in congress to be chastised in any meaningful manner. And there is no Ferdinand Pecora to take on the banks.

The hearings, like their counter part in the UK were and are for appearances, to placate rather than prosecute.

This show lacks the credibility of its famous counter part Ferdinand Pecora, and “sadly” there appears to be no real intent to prosecute anyone for anything, and there are a lot of good reasons to bring criminal charges.

What we are witnessing on Capital Hill is a fusillade to give the uneducated observer the appearance that something is going to be done about the banks and their reprehensible behavior. But don’t be misled! It will be back to business as usual as it has since the founding of the banking system. Banks tend to be corrupt, it is in their nature.

This is not the first time the Banks have produced chaos within our economy, and it will no doubt not be the last!

The bankers are involved in every aspect of their business even the agencies that oversee and control them, and from political office and its revolving door. Its always been the fox guarding the chickens, and over seeing other foxes. One has only to look back to the last fiasco the banks engineered to see where we are today.

Pecora launched a real investigation and interviewed such high-profile luminaries as Wall Street personalities Richard Whitney, president of the New York Stock Exchange, his brother, George Whitney (a partner in J.P. Morgan & Co.) and investment bankers Thomas W. Lamont, Otto H. Kahn, Albert H. Wiggin of Chase National Bank, and Charles E. Mitchell of National City Bank (now Citibank).

Even then Congress was on the payroll of the Morgan interests. But public outrage brought congress to its knees and meaningful regulation was passed. Glass Steagall held the banks in check until Greenspan watered it down on behalf of his real bosses, JP Morgan, and Morgan Guaranty Trust Co. another JP Morgan Company.

In his role at the FED, his primary function was to water down and rescind the Glass Steagall act, which he successfully accomplished.

Pecora's investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, (sound familiar?) including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States) participated in stock offerings at steeply discounted rates.

Pecora also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, (as Goldman Sachs now stands accused) that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had helped themselves to $2.4 million in interest-free loans from the bank’s coffers.

Pecora's investigations highlighted the contrast between the lives of millions of Americans living in abject poverty and the high-rolling lives of such financiers as J.P. Morgan, Jr.

Under Pecora's insistent questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932;

And there were bombshells! New York Mayor Fiorello La Guardia’s revelations that a corporate publicist had over a ten-year period stuffed nearly $300,000 in the pocket of various journalists to ensure flattering coverage of certain companies. Today it’s members of Congress that accept money from the powerful Banking contingent.

Ferdinand Pecora, meticulously exposed Wall Street’s role in the crash. His famous inquisition of J.P. ‘Jack’ Morgan Jr., son of the financial titan, revealed the House of Morgan’s control over other financial institutions. There is no difference today, just different faces but the same mindset, and the same exertion of control by the same players. It will never end, until the American people stand up in numbers and say STOP.

Wall Street’s culture of Deception (Part 2)

Bank Stock Value Manipulation:

We are now aware of Lehman Bros SCAM, where they would hide billions of dollars of bad debts by selling them prior to a required reporting period and buy them back directly after the report was filed. This is known now as end-of-quarter balance sheet manipulation, the purpose was to trick investors into thinking the Bank or investment house was less leveraged than it was.

This was a form of stock value manipulation, which is illegal! It also constitutes FRAUD on the investors, who would have sold their stock had they known the truth. It is concealing the true nature and value of the company and of its stock value.

Now as it turns out, almost of all of Wall Street is based on this same phony perception, having been caught using this same Ploy, Bank of America now claims there is nothing wrong with concealing in this manner its bad assets. We respectfully disagree!

Comparing Bank of America's "average quarterly assets" and "end of quarter assets" found that, in each quarter, billions of dollars of assets conveniently disappeared briefly at the end of the quarter, only to return again at the start of the next one.

Like Lehman, Bank of America found some legal loophole in some country somewhere that allowed them to momentarily hide tens of billions of dollars of assets somewhere where Wall Street wouldn't see them. And, naturally, Bank of America thinks it's perfectly acceptable: We believe this has been a common practice on Wall Street for sometime

For those that don’t know Repo 105, Lehman Bros asset disappearance program, it was a sale and repurchase agreement by which Lehman parked about 50 billion in assets (presumably assets they did not want to discuss) overnight via a repo transaction so they would not appear on the balance sheet. Who the counter party was has still not been disclosed.

But unfortunately the Lehman executives do have one point. Repo 105 type balance sheet faking was “an old trick” and well known to anyone who cared to read balance sheets (very) carefully.

With BoA they did the very same thing, the end period assets were always lower than the average assets. Moreover it was not obvious unless you really looked because the quarterly earnings releases did not include average assets (but you could work it out because they stated return on average assets.

Bank of America was parking its assets off balance sheet at the end of every quarter for some time and had been obscuring the fact.

There must be a Counterparty

If Bank of America wanted to shove the assets off balance sheet someone (credit worthy) needed to be found to house the assets overnight. There are not that many parties credit worthy for $50 billion or more of overnight repos.

Well BoA found such a willing participant the counterparty was MUFJ. If you look you can see – the same way that MUFJ had end period assets higher than average assets and that the differences and timing roughly match. Someone had to assist BofA in its financial manipulation and that was MUFJ. MUFJ stands for (Mitsubishi UFJ Financial Group)

About MUFJ

Mitsubishi UFJ Financial Group, Inc. (MUFJ), incorporated on April 2, 2001, they are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Co., Ltd. (MUS), Mitsubishi UFJ NICOS Co., Ltd. (Mitsubishi UFJ NICOS), and other subsidiaries.

Through its subsidiaries and affiliated companies, MUFG engages in a range of financial operations, including commercial banking, investment banking, trust banking and asset management services, securities businesses, and credit card businesses, and provides related services to individual and corporate customers. In July 2008, BTMU acquired 49.375% interest in JALCARD, Inc., a wholly owned subsidiary of Japan Airlines International Co., Ltd. In November 2008, BTMU completed the acquisition of all the interest in UnionBanCal Corporation (UNBC), and as a result, UNBC became a wholly owned indirect subsidiary of MUFG.

The Company manages the underwriting of debt and equity instruments for large corporations. It also provides arrangement services relating to private placements primarily for medium-sized enterprise issuers and institutional investors. The Company advises on financing methods to meet various financing needs, including loans with derivatives, corporate bonds, commercial paper, asset-backed securities, securitization programs and syndicated loans. It also offers a range of products to meet fund management needs, such as deposits with derivatives, government bonds, debenture notes and investment funds. It also offers swaps, options and other risk-hedge programs to customers.

Well this is just the second Scam uncovered in the series, stay tuned.

Obama and the Titanic

The current administration has hit an ice berg and placed Middle Class America in the steerage section of the Titanic

For most of America it feels like April 15, 1912, that’s the date the Titanic hit an ice berg in the Atlantic and within hours went down taking 1,517 people with it. But this time an entire nation could go down and when America sinks it will take practically the entire world with it. The question is no longer if, but when.

Regardless of the lucidity of the administration’s propaganda, we as a nation have been struck by an ice berg and we are sinking, audibly drowning in an abyss of debt.

While the Obama administration helped the large banks step into the life boats, our citizens were relegated to the lower lever steerage where lifeboats were not available.

Yes the banks have rebounded, and yes they will continue financing their cluster of relationships, rewarding those who have allowed the impenitent greed that surrounds Wall Street to go on, even while Middle Class America struggles to hold onto the remnants of a broken ship’s bowl.

We are told that everything is rosy and America is moving ahead, yet the unemployment figures (11 million unemployed) don’t reflect those sentiments. Neither does the current bankruptcy filings (6,000 a day).

The current US Debt is a staggering 12 .6 trillion and growing, at the rate of $4.02 billion per day

Inflation and depreciation of our currency is an inevitable as the looming debt crisis, even as the stock market is overvalued and an adjustment is also eminent.

It’s time to put on the life jacket!

Obama says it’s time to say Good-by and Move on

The foreclosure crisis has been a challenge for this president, who has invested more than $787bn in Wall Street in hopes they would help keep Americans in their homes, now this administration has thrown in the towel, the new direction, help the banks to liquidate American homeowners. Obama’s new approach paying homeowners to leave quietly.

Taking effect on April 5, the new program hopes to encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program, (which simply hasn’t worked), to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

However, this program like all the others is dependent on co-operation from the Banks and servicers of the loans, who so far have refused to participate in these types of government programs unless there is money in it for them. Short sales have been unsuccessfully tried for the past two years and very few have actually been accepted by the banks without the borrower agreeing to repay the short part of the mortgage, this plan is not expected to fare any better.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance."

However the servicer earns much more than $1000, by maintaining the borrower in a default status, and through the foreclosure.

This program is more like a slap in the face of the defaulting borrower! $1,500.00 won’t pay even a portion of the moving costs.

We are a disposable people and a disposable workforce!

We built a great nation only to watch it collapse under the weight of corporate greed:

There was a joke that was told many years ago about the Lone Ranger and his sidekick Tonto, Tonto was an Indian, or now more correctly stated “a Native American” the story went like this: Both the Lone Ranger and Tonto were surrounded by hundreds of Indians and as the Lone Ranger ran out of ammunition he turned to Tonto and said, ” looks like we’re done Tonto”, Tonto turned back to the Lone Ranger and replied “what do you mean “we” white man”

And so it goes with Wall Street

Yes there is a recovery going on, but it’s not for middle class America, it’s for the big boys whom the government favors. Like our big global companies, Wall Street, and high-income Americans who hold their savings in financial instruments and in bonds and stocks, they are clearly doing better.

But take a drive down main street or look at any commercial center in any of the 50 states and we see empty stores that once contained mom and pop businesses, even franchises are folding. If there is as the government says a recovery, then why are businesses still closing?

Because Americans are not spending as the government claims, in fact Americans generally don’t have the money to spend. Indeed they don’t have the means to even pay their current debts. In fact since the first business day of January 2010, Americans are filing bankruptcies at the rate of 6,000 per day. That’s an annual filing rate of just over 1.5 million

The reason the Government puts out exaggerated figures is their belief the economy runs on optimism and that if the average consumer believes the economy is getting better, they'll spend more readily and- the economy will get better.

Only a pseudo intellect in today’s sad state of affairs could muster this reasoning

The government fails to understand that regardless of how people feel, they won't spend if they don't have the money, and Main Street doesn’t have the money! The 9 million unemployed along with 30 million underemployed and the growing number of College Graduates entering the workforce has crippled the economy and it is felt most by small business, the neighborhood business. Each unemployed and underemployed individual affects 5 others in the economy. This 39 million people who are earning less are spending less and they are affecting nearly 200,000,000 people. It is axiomatic that the economy will not improve for the average American until we begin to employ our own, and to regenerate and reinvigorate American Small business.

The government tells us that the US economy grew at a 5.9 percent annual rate in the fourth quarter of 2009. That sounds good at first blush, until you realize GDP figures are badly distorted by structural changes in the economy. For example, part of the increase is due to rising health care costs, when WellPoint ratchets up premiums it enlarges the GDP. A separate part of the perceived growth in GDP is due to rising government expenditures, and the costs or gas at the pump.

Who is really doing better in America?

The people and private-sector institutions at the top!

Many of America's biggest companies are sitting on huge amounts of cash, but that says nothing about the health of the U.S. economy. Companies in the Standard & Poor 500 stock index had sales of $2.18 trillion in the fourth quarter, up from $2.02 trillion last year, and their earnings tripled. Why? Because they're global and selling into fast-growing markets in places like India, China, and Brazil!

America's biggest companies are also showing fat profits and productivity gains because they continue to slash payrolls and cut expenditures. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. Sounds terrific until you realize how it did it. By cutting 28,000 jobs - 32 percent of its workforce - and slashed capital expenditures 43 percent. Who suffered, middle class America, while those who owned Alcoa Stock benefited and so did Alcoa’s executives.

We have become a use then throw away work force!

Yes firms in S&P 500 are holding $932 billion in cash and short-term investments. And they can borrow money cheaply, corporate bond sales, that is buying into Corporate debt, so far in 2010, has topped $195.2 billion, excluding government-guaranteed bonds.

Does this spell a recovery? No, why? Because they're doing two things that don't help at all!

First, they're buying other companies. Walgreen last month spent $618 million for New York drugstore chain Duane Reade; Bank of New York Mellon, $2.3 billion for PNC Financial Services; Monster, $225 million for jobs.com; Diamond Foods, $615 million for Kettle Foods.

This buying doesn't create new jobs. In fact it creates a net loss of duplicate ones. One of the first things companies do when they buy other companies is fire people who are considered "redundant."

The second thing large companies are doing with all their cash is buying back their own stock, in order to boost their share prices. There were 62 such share buy-backs in February, valued at $40.1 billion. We're witnessing the biggest share buyback spree since Sept 2008. The major beneficiaries are current shareholders, including top executives, whose pay is linked to share prices. The buy-backs do absolutely nothing for most Americans.

The picture on Main Street is quite different. Small businesses aren't selling much because they have to rely on American consumers - rather than foreign consumers. And Americans still aren't buying much because they don’t have the financial resources.

Small businesses are also finding it difficult to get credit. Most of the 8000 American banks don’t have money to loan because of the large number of bad debts on their books. And some 700 banks are set to fail this year. Since small businesses are where the jobs are created in any recovery and we are losing small businesses, this recession will continue for a decade or longer. We won’t see a recovery until we have an administration with the foresight to care about us rather than Wall Street.

The traditional mom and pop business is closing at the rate of 40% (2 out of 5) during this recession if this continues we may lose most of our 28,000,000 small businesses that we had in 2007 during its peak.

Don’t believe the Government reports

The Federal Reserve recently reported that American consumers are shedding their debts. Total US household debt, the FED claims, “including mortgages and credit card balances, fell 1.7 percent last year”. Supposedly this was the first drop since the government began recording consumer debt in 1945.

What is the truth?

Much of the debt-shedding has been through default - consumers are simply not repaying their debts and walking away from homes and big-ticket purchases, cars and credit card balances.

End of story!

Rupert Murdoch’s Wall Street Journal has its own take on the defaults: "the defaults are leaving many people with more cash to spend and save, jump-starting the financial rehabilitation of the economy”

Let’s get real: American consumers account for 70 percent of the total demand for goods and services if they don’t have the financial resources or the jobs, or are concerned about their retirement, who if not them will sustain the economy?

Let’s face the facts: This American economy was in trouble since the end of 2000, it took the real estate balloon (developing Bubble) to stimulate the economy, but there were NO real job growth even then, consumers were borrowing the equity from their homes merely to make the payments. The Banks knew it, the FED knew it, and they knew the bubble had to burst! That was one of the reasons the Credit Default Swaps were created, guaranteeing Mortgage loans that the Banks knew were worthless!

The daunting question must be considered? The US Economy has been imperiled through incompetent administrations, who have favored outsourcing American jobs, and it started with Ronald Reagan and George HW Bush. Now how will Main Street come back? How will we create jobs? Certainly not from big businesses that are outsourcing! Certainly not from Wall Street who considers itself above main street and has no concerned for what they consider a disposable work force. And certainly not from government who is so tied to the apron strings of Wall Street they appear to be tied at the hip!

Until there's an answer, an economic "recovery" for anyone other than big corporations, Wall Street, and the wealthy is an illusion, and more Americans will yet find themselves falling into dismay

The Wall Street Bankers: Aaron Burr, and Alexander Hamilton

Very few know its history: Chase traces its roots back to the founding of The Manhattan Company by Aaron Burr on September 1, 1799, in a house at 40 Wall Street.

After an epidemic of yellow fever in 1798, in which coffins had been sold by itinerant vendors on street corners, Aaron Burr established the Manhattan Company, with the ostensible aim of bringing clean water to the city from the Bronx River but in fact designed as a front for the creation of New York's second bank, rivaling Alexander Hamilton’s, Bank of New York.

In addition to being fierce political and personal rivals, Aaron Burr and Alexander Hamilton competed in business, with Burr's Bank of the Manhattan Company competing against Hamilton's Bank of New York. In 1804, their rivalry erupted into a duel, leading to the death of Alexander Hamilton. The dueling pistols are owned by the successor company of Chase Manhattan. They are currently on display on the executive conference floor of the JP Morgan Chase building at 277 Park Avenue in New York City.

Chase National Bank

Chase National Bank was formed in 1877 by John Thompson. It was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase, although Chase did not have a connection with the bank.

The Chase National Bank acquired a number of smaller banks in the 1920s, through its Chase Securities Corporation. In 1926, for instance, it acquired Mechanics and Metals National Bank.

It’s most significant acquisition though was the Equitable Trust Company of New York in 1930, the largest stockholder of which was John D. Rockefeller, Jr. This made it the largest bank in America and indeed the world.

Chase was primarily a wholesale bank, dealing with other prominent financial institutions and major corporate clients, such as General Electric, which had, through its RCA affiliate, leased prominent space and become a crucial first tenant of Rockefeller Center, rescuing that major project in 1930. The bank also is closely associated with and has financed the oil industry, having longstanding connections with its board of directors to the successor companies of Standard Oil, especially Exxon Mobil, which are also Rockefeller holdings.

Merger as Chase Manhattan

Bank In 1955, Chase National Bank and The Manhattan Company merged to create Chase Manhattan Bank. As Chase was a much larger bank, it was first intended that Chase acquire the "Bank of Manhattan", as it was nicknamed, but it transpired that Burr's original charter for the Manhattan Company had not only included the clause allowing it to start a bank with surplus funds, but another requiring unanimous consent of shareholders for the bank to be taken over. The deal was therefore structured as an acquisition by the Bank of the Manhattan Company of Chase National, with John J. McCloy becoming chairman of the merged entity. This avoided the requirement of unanimous consent by shareholders.

Under McCloy's successor, George Champion, the antiquated 1799 state charter was relinquished for a modern one. In 1969, under the leadership of David Rockefeller, the bank became part of a bank holding company, the Chase Manhattan Corporation.

Two famous American families the Burr’s and the Hamilton’s were Wall Street Bankers.