Home » Posts tagged 'banks'

Tag Archives: banks

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

If you thought the Coinbase bankruptcy disclosures were bad…

Just wait ’til you see your government’s bail-in rules

One of the subplots that made for a bad week in crypto included a largely manufactured crisis around “The Coinbase bankruptcy disclosure”.  After posting an earnings miss, the next shoe to drop was the discovery in the latest version of the Coinbase Terms of Service, the addition of text that included the following:

“Custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors”

This verbiage became a big deal with every corporate media outlet dumping all over it. It trended on Twitter and quickly went viral, almost as if this was some sort of revelation.

It’s not. It’s basically the oldest adage in crypto, “not your keys, not your coins” spelled out in writing.

Do you really think if you’re holding your crypto on some exchange that suddenly becomes insolvent it’s going to make a difference if a paragraph to that effect appears in the ToS or not? Good thing Mt Gox or QuadrigaCX didn’t have that in their ToS otherwise everybody with assets in either exchange would have been really screwed, right?

You’re screwed no matter what. At least Coinbase is calling your attention to it.

Don’t hold your crypto on the exchange, any exchange, full stop. Even the largest crypto exchange CEOs will tell you that.

But if you’re one of those people for whom this is something to be up in arms about, I’ve got news for you:

…click on the above link to read the rest of the article…

Serf-Expression

Serf-Expression

Eventually the “flock of timid and industrious animals” changes their minds about how much exploitation by the few is acceptable.

You may have noticed the news flow beyond the hot war in Ukraine is largely focused on capital: financial capital (markets, liquidity, interest rates, commodities, central bank tightening, etc.) and political capital (geopolitical maneuvering, sanctions, revising energy and defense policies, etc.)

Notice who’s left out, unnoticed and invisible? The serfs, the bottom 90% who have been decapitalized in the developed world and exploited in the developing world for the past 45 years.

With capital ascendant, the vast majority of financial and political gains flowed to the top tier of speculative capital (banks and billionaires) while the purchasing power of labor (i.e. wages) has been in a 45-year descent. (See chart below)

This disemboweling of labor transferred $50 trillion from labor to capital in the U.S. alone. Financialization and globalization devalued labor and working-class assets such as savings and boosted leveraged speculative bets only available to financiers and corporations, for example, stock buybacks funded by the tsunami of free money for financiers unleashed by the Federal Reserve and other central banks. (See chart below)

Even though the corporate media gives it no notice, serf-expression will become increasingly consequential. No, serf-expression is not a typo for self-expression, the core doctrine of modernism. By serf-expression I mean the serf’s expression of what is no longer acceptable. Another term for this is cultural revolution. I address social and cultural revolutions in my new book, Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States.

Is a Cultural Revolution Brewing in America? (April 9, 2021)

When the serfs no longer believe in the divine right of banks and billionaires, then the concentration of economic and political power in the hands of the few will no longer be acceptabl…

…click on the above link to read the rest of the article…

Bank Run? Canada’s Top Banks Mysteriously Go Offline

Bank Run? Canada’s Top Banks Mysteriously Go Offline

Days after Canadian Prime Minister Justin Trudeau said he would invoke emergency orders to crack down on demonstrators by freezing their bank accounts, five major Canadian banks went offline on Wednesday night, as customers reported their funds were unavailable, according to technology website Bleeping Computer.

Royal Bank of Canada (RBC), BMO (Bank of Montreal), Scotiabank, TD Bank Canada, and the Canadian Imperial Bank of Commerce (CIBC) were all hit with unexplainable outages on Wednesday evening. Users began reporting issues with banks around 1600-1700 ET, Downdector data showed.

Canadian Twitter users reported they couldn’t access their funds at the ATMs. One user took a photo of an error message at one of RBC’s ATMs that read, “Tap transactions aren’t available for this card.”

In response, RBC tweeted, “We are currently experiencing technical issues with our online and mobile banking, as well as our phone systems.”

 “Our experts are investigating and working to get this fixed as quickly as possible, but we have no ETA to provide at this time. We appreciate your patience.”

BMO customers also reported issues. One customer said, “I’m having trouble and money transfer just auto gets rejected for no reason. Not going over my limit, all info is verified correct and receiving bank says no issues on their end.”

There were countless stories of banking customers who experienced trouble accessing their funds yesterday evening. No bank explained the source of the outrage, but essential to note the outage comes, as we said above, days after Trudeau invoked the Emergencies Act.

The power gives the federal government direct access to banks to force any business conducted with Freedom Convoy protesters and affiliates to freeze their bank accounts. Trust in the banking system among depositors is crucial to prevent bank runs. Freezing accounts of people linked to the protests can incite fear.

…click on the above link to read the rest of the article…

Martial Law in Canada: It’s never been riskier to NOT own Bitcoin

Welcome to the era of civil asset forfeiture for your bank accounts. Where governments are woke, broke, and the new f-bomb is Freedom.

Christia Freeland’s edict tonight that the government can now seize bank accounts with no due process and no recourse could only have been made possible by a complicit media, shaping an utterly false narrative about the truckers convoys and even of “freedom” itself.

For about six years or so, the far left, woke progressives have been operating under the assumption of being (ironically) “on the right side of history”, that their pronunciations, accusations and neuroses were canonical truth while all other thought was heretical and offensive.

They believed themselves to be objectively correct about everything, and that they evangelized an all-encompassing worldview of purported fairness and equity. Yet, the vast majority of their rhetoric is the embodiment of flat-out hatred and othering. For self-declared anti-fascists, their prescriptions around nearly everything amount to pure unvarnished totalitarianism.

They’ve destroyed classical liberalism, they’ve hijacked everything to the left of Ronald Reagan and they’ve polarized the discourse to such as degree that anything which is not full throated cultural marxism is deemed far-right.

 

Against this backdrop of institutionalized gaslighting, on the eve of the Trudeau government’s declaration of martial law, I’m going to go out on a limb and say that..

The times, they are a changing

Whether anybody cares to admit it or not, the Truckers Revolt, having spread not only across Canada but around the world, has catalyzed a sea change. The public sentiment was already there: people were sick of COVID Tyranny and they were sick of lockdowns and even a large swath of the double vaccinated (like myself) find the vax mandates to be Orwellian and authoritarian.

…click on the above link to read the rest of the article…

Ellen Brown: The Real Antidote to Inflation

Ellen Brown: The Real Antidote to Inflation

The Fed has options for countering the record inflation the U.S. is facing that are far more productive and less risky than raising interest rates.
[Images Money / CC BY 2.0]

The Federal Reserve is caught between a rock and a hard place. Inflation grew by 6.8% in November, the fastest in 40 years, a trend the Fed has now acknowledged is not “transitory.” The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply. Its conventional tools for this purpose are to reduce asset purchases and raise interest rates. But corporate debt has risen by $1.3 trillion just since early 2020; so if the Fed raises rates, a massive wave of defaults is likely to result. According to financial advisor Graham Summers in an article titled “The Fed Is About to Start Playing with Matches Next to a $30 Trillion Debt Bomb,” the stock market could collapse by as much as 50%.

Even more at risk are the small and medium-sized enterprises (SMEs) that are the backbone of the productive economy, companies that need bank credit to survive. In 2020, 200,000 more U.S. businesses closed than in normal pre-pandemic years. SMEs targeted as “nonessential” were restricted in their ability to conduct business, while the large international corporations remained open. Raising interest rates on the surviving SMEs could be the final blow.

Cut Demand or Increase Supply?

The argument for raising interest rates is that it will reduce the demand for bank credit, which is now acknowledged to be the source of most of the new money in the money supply…

…click on the above link to read the rest of the article…

The Fed’s Inflation Is behind the Supply Chain Mess

The Fed’s Inflation Is behind the Supply Chain Mess

fed

It seems supporters of the Biden administration finally settled on a narrative they like for explaining away supply chain shortages.

Here’s the administration’s talking point: the US economy is rolling along so well that Americans are demanding huge amounts of goods. That’s overwhelming the supply chain and causing the backups roiling America’s ports and logistic infrastructure.

For example, transportation secretary Buttigieg this month declared “Demand is up … because income is up, because the president has successfully guided this economy out of the teeth of a terrifying recession.”

Similarly, White House spokeswoman Jen Psaki told reporters supply chain problems are occurring because “people have more money … their wages are up … we’ve seen an economic recovery that is underway.”

This position has been mocked by a number of conservative politicians—including Senator Ted Cruz—and commentators, who find this to be an absurd assumption. Indeed, Cruz and other critics could point to a variety of factors ranging from the weight of government regulations to the problem of covid lockdowns limiting the productivity of supply-chain workers.

Yet the administrator’s defenders are right about consumer demand and spending—even if for the wrong reasons. As Mihai Macovei showed earlier this month, the global volume of trade and shipping volume in 2021 have actually exceeded prepandemic numbers. For example, in the port of Los Angeles, “loaded imports” and “total imports” for the 2020–21 fiscal year (ending June 30, 2021) were both up when compared to the same period of the 2018–19 fiscal year.

In other words, it’s not as if little is moving through these ports. In fact, more is moving through them than ever before. That suggests demand is indeed higher.

But why is it higher? It some ways, it’s true that, as Psaki says, “people have more money.” That, however, is where the veracity and usefulness of Biden’s defenders end in explaining the problem.

…click on the above link to read the rest of the article…

Weekly Commentary: Controllable

Weekly Commentary: Controllable

Now that was wild. Let’s start with the Chinese developers. Indicative of the more troubled companies, Kaisa Group bond yields surged to almost 51% in Wednesday trading, up from 36% to begin the week (20% to start the month). Yields closed the week at 44.7%. After beginning the week at 23.3% (October at 16.6%), Yuzhou Group bond yields surged to almost 38% in Thursday trading, before reversing sharply lower to end Friday’s session at 27.7%. China Aoyuan yields began the week at 16.6%, jumped to almost 20% on Thursday, but were back down to 17% by week’s end. Evergrande yields ended the week at 75%. Acute instability for bonds of a sector that, according to Nomura analysts, has accumulated a frightening $5 TN of debt.

An index of Chinese dollar developer bonds began the week with yields of 17.5%, up from 14.4% to begin the month and 10% back in July. Yields closed Thursday trading at a record 20%, before ending the week at 19.3%.

Ample volatility as well in the cost of insuring against default for the major Chinese banks. China Development Bank CDS surged 10 Monday to 77 bps, up from 43 bps points at the beginning of September to the highest level since the pandemic crisis. China Development Bank CDS then reversed sharply lower, ending the week down at 62 bps. Industrial and Commercial Bank of China CDS traded to 78 bps (high since April ’20), up from 48 on September 17, before closing out the week at 76 bps. China Construction Bank traded to a post-pandemic high 75 bps (ended week at 74), after beginning the year at 36 bps.

It’s been a wild ride for China’s sovereign CDS. After beginning October at 47, China CDS closed last week (10/8) at 52.5 bps.

…click on the above link to read the rest of the article…

Banks Disclose Tidbits of Hidden Stock Market Leverage of “Securities-Based Lending,” as Known Stock Market Leverage Surges

Banks Disclose Tidbits of Hidden Stock Market Leverage of “Securities-Based Lending,” as Known Stock Market Leverage Surges

No one knows total stock market leverage, but it’s huge and ballooning, as we see from the tidbits we’re allowed to see.

No one knows how much total leverage there is in the stock market. Only fragments are reported. Margin loans are reported monthly, and they provide a general idea of the trend in stock market leverage. Some types of leverage are not disclosed at all until something implodes spectacularly, such as Archegos. Other types of leverage are reported in bits and pieces, if at all, by a few banks and broker-dealers in their quarterly financial statements, if they so choose. This includes “securities-based lending.”

Some banks & brokers report securities-based lending, others don’t.

On Thursday and today, some Wall Street banks and broker filed their Q3 earnings reports and supplemental information with the SEC, and a few of them included in their supplemental filings some tidbits about their securities-based lending (SBL).

Securities-based lending is hot; people who want to cash out some of the gains in their portfolios – thank you halleluiah, Fed – but didn’t want to sell, can use their portfolios as collateral for loans by the broker, the proceeds of which can be used for anything – buy more securities, buy a house or a new vehicle, or pay for a divorce settlement.

When asset prices fall enough, the borrowers get a margin call and either have to either come up with some cash and put it into the account, or they have to sell securities and pay down their SBL balances, thereby turning into forced sellers.

Goldman Sachs didn’t disclose anything about its SBL; they’re lumped into a larger loan category.

…click on the above link to read the rest of the article…

Banks Around World Are Suffering Big Outages, Leaving Millions of Customers in Lurch At Worst Possible Time

Banks Around World Are Suffering Big Outages, Leaving Millions of Customers in Lurch At Worst Possible Time

Twenty banks (some suffering repeated outages), six countries (one in lockdown), five continents, tens of millions of unhappy customers.

There’s never a good time for your bank’s IT system to go down. But few can be worse than in the middle of a lockdown. It’s difficult to leave home, your local branch may not be open, and as a result you are more reliant than ever on digital banking services. In New Zealand, now in its seventh week of nationwide lockdown, one of the country’s largest lenders, Kiwibank, went down on Tuesday, leaving many of its customers in the lurch. It is one of a string of IT outages the bank has suffered over the past three weeks, after a DDoS attack on New Zealand’s third largest Internet provider caused IT crashes at a number of lenders, including Commonwealth Bank and Anz Bank.

In a DDoS attack hackers overwhelm a site by getting huge numbers of bots to connect to it all at once, rendering it inaccessible. Servers are not breached, data is not stolen but it can still cause plenty of disruption.

24 Million Unhappy Customers

New Zealand is not the only country to have suffered major outages within its banking system in recent weeks. Other countries include the UK, Japan, South Africa, Venezuela and Mexico, though there are no doubt more (if you know of any, It would be great if you could provide details in the comments section).

On September 12, operating failures at Mexico’s largest bank, BBVA Mexico, left 24 million account holders unable to use the bank’s 13,000 ATMs, its mobile app or in-store payments for almost 20 hours. It being a Sunday, customers could not even avail of the lender’s in-branch cash services.

…click on the above link to read the rest of the article…

Why the Global Economy Is Unraveling

Why the Global Economy Is Unraveling

Global supply chain logjams and global credit/financial crises aren’t bugs, they’re intrinsic features of Neoliberalism’s fully financialized global economy.

To understand why the global economy is unraveling, we have to look past the headlines to the primary dynamic of globalization: Neoliberalism, the ideological orthodoxy which holds that introducing market dynamics to sectors that were closed to global markets generates prosperity for all.

This is known as Neoliberalism, as liberalizing markets means opening up sectors that had previously been restricted. Neoliberalism holds that global market forces introduce efficiencies and opportunities that then pave the way for growth. Global market forces include not just new buyers and sellers of goods and services but the introduction of vast new markets for credit and risk that far exceed what was available in local marketplaces.

So far so good: opening markets creates efficiencies and prosperity, blah blah blah. But the real dynamic behind this happy-story shuck-and-jive is unprecedented prosperity for those with access to low-cost credit generated out of thin air by central banks.

In other words, introducing market forces leads to the dominance of those who control those forces –banks and corporations. Once a local economy is exposed to global capital, those with the most expansive access to the lowest-cost credit can outbid local buyers, snapping up the most productive assets and dominating the local economy to their own benefit.

Since the core mechanism of Neoliberalism is access to low-cost credit, Neoliberalism concentrates financial power and risk in a handful of financial nodes which every market participant unknowingly becomes dependent on. When a developing-nation village was largely self-sustaining and not exposed to global markets, it was largely unaffected by global financial crises.

…click on the above link to read the rest of the article…

Yellen Urges Development Banks To Stop Fossil Fuel Funding

Yellen Urges Development Banks To Stop Fossil Fuel Funding

U.S. Treasury Secretary Janet Yellen is prepared to gather together the heads of development banks to persuade them to stop fossil fuel project funding, according to Bloomberg.

The Treasury Secretary intends to “articulate our expectations that the MDBs align their portfolios with the Paris Agreement and net-zero goals as urgently as possible,” according to a written speech she is set to deliver at a climate conference in Italy.

The speech, soon to be delivered, follows just days behind a similar message that the financial community received at the G20, where financial leaders for the first time every acknowledged that carbon pricing was at least a potential tool in addressing climate change.

While Bloomberg notes that while development banks have never been responsible for the big bucks behind most fossil fuel projects, those funds are largely seen as a stepping stone for the projects to secure hefty commercial funding.

Since the pandemic began, development banks have thrown just $3 billion into oil and nat gas, with $0 going towards coal projects for the first time ever.

Meanwhile, development banks have funded $12 billion in clean energy projects.

But it is precisely these natural gas projects that will allow many countries to quickly and efficiently transition away from coal.

Prior to her appointment as Treasury Secretary, Yellen was criticized for her fossil fuel stock holdings. The Secretary vowed to divest her holdings in all fossil fuel companies as well as any companies that support fossil fuels.

Nevertheless, even before her time as Treasury Secretary and the chairman of the Financial Stability Oversight Council (FSOC), Yellen has been a staunch supporter of the environment and highly critical of the role fossil fuels have played in greenhouse gas emissions.

…click on the above link to read the rest of the article…

When Expedient “Saves” Become Permanent, Ruin Is Assured

When Expedient “Saves” Become Permanent, Ruin Is Assured

The Fed’s “choice” is as illusory as the “wealth” the Fed has created with its perfection of moral hazard.

The belief that the Federal Reserve possesses god-like powers and wisdom would be comical if it wasn’t so deeply tragic, for the Fed doesn’t even have a plan, much less wisdom. All the Fed has is an incoherent jumble of expedient, panic-driven “saves” it cobbled together in the 2008-2009 Global Financial Meltdown that it had made inevitable.

The irony is the only thing that will still be rich when the whole rotten, corrupt, fragile financial system of illusory stability collapses in a heap of runaway instability. The irony is that the Fed’s leaky grab-bag of expedient “saves” was not designed to ensure systemic stability, though that was the PR cover story.

The Fed’s leaky grab-bag of expedient “saves” had only one purpose: save the fat-cats, skimmers, scammers, fraudsters and embezzlers who had gotten rich off the Fed’s cloaked transfer of wealth: the purpose of all the 2008-2009 extremes was not to impose the discipline required to truly stabilize the financial system; the purpose was to elevate moral hazard— the separation of risk from the consequences of risk–to unprecedented heights, backstopping every skimmer, scammer, fraudster and embezzler from well-deserved losses as the entire pyramid of fraud collapsed under its own enormous weight of risky bets gone bad.

To save its cronies from the catastrophic losses that should have been taken by those making the bets, the Fed instituted one expedient “save” after another: backstopped global banks with $16 trillion, dropped interest rates to zero, eliminated truthful reporting by ending mark-to-market pricing of risk, flooded the financial system with free money for financiers, all designed to signal that the Fed will never let its cronies suffer the consequences of their risky bets, i.e. the perfection of moral hazard.

…click on the above link to read the rest of the article…

The long history of money

We are approaching a critical turning point in the history of financial systems.

Since the Great Financial Crisis, central banks have exerted control over the financial markets through their QE-programs and plan to extend their influence over the monetary system through the introduction of national digital currencies.  Opposing forces include, as usual, those of financial innovation, which include independent cryptocurrencies.

In the June issue of our Q-Review series, we will delve deep into the world of digital currencies and the future of monetary systems. To accompany our report, we intend to publish a series of blogs which examine the long history of monetary and financial systems.

Today we will start with a brief summary of the history of money.

The early days

Current archaeological research has established that the measurement of economic interactions, i.e. accounting, predates writing. The clay tablets discovered at the birthplace of Mesopotamia, the Temple of Uruk, were used as an accounting tool for commodities and even for human labor as early as 3100 B.C.

The foundations of banking practices were developed in Ancient Greece, in the harbor city of Piraeus, where the local bankers, or trapezitai, took deposits and provided loans. While borrowing and lending in commodities follows the principles of banking practices then in use in Mesopotamia, the establishment of the concept of a unified monetary value for all economic units, such as commodities, assets, services, human labor, etc. was created in Ancient Greece. This also made the eventual emergence of modern banking practices possible later.

Still, the first banks known that truly resembled modern banks operated in Imperial Rome. It has been said that Rome’s financial system was so sophisticated that it was matched only by the banking sector created during the Industrial Revolution over a millennium later.

Birth of fractional reserve banking

…click on the above link to read the rest of the article…

People against Politicians Who Always Want War

QUESTION: Are you saying that the people left alone do not hate each other, it is the politicians?

FK

ANSWER: Yes. They do not teach hatred in school in Israel or the Arab world directly. They will teach biased history but that is in all countries. There are families who have lost people and that is why the old adage was you kill your enemy and his family for the son will only grow up to avenge their father’s death. The hostility is fostered at the political level.

Today, we have a very serious problem. As Matt Taibbi has reported, journalists once challenged the Spy State. Now, They’re Agents of It. If we look at the polls on Russia, the media in pushing Hillary’s agenda have turned Russia into an evil empire. The press in the United States REFUSED to ever investigate the fact that the bankers were blackmailing Yeltsin in 2000 which is why he withdrew in 2000 and handed it to Putin. That is why Hillary blamed the Russians because she was behind trying to take over Russia for the bankers. The media has ensured there will be World War III because they have promoted the propaganda and never investigated anything.

The people are not the problem. If the politicians were removed, things would be different. Take the famous Treaty of Versailles of 1919 when Germany surrendered at World War I. The French politicians insisted that is where it would take place because the previous Treaty of Versailles of 1871 is where the French surrendered and the German Empire was born. Politicians have long memories. When I had meetings in Yugoslavia, I heard about the justification for genocide against Muslims because of their Jihad against the Serbs during the 14th century when the Ottoman Empire was expanding…

…click on the above link to read the rest of the article…

Canadian Banks Have an Outsized Impact on Global Fossil Fuel Financing

Canadian Banks Have an Outsized Impact on Global Fossil Fuel Financing

We pledged to reduce emissions by 30 per cent by 2030, but will financial institutions undermine this goal?

When 18-year-old climate activist Naisha Khan wants to start a conversation about how banking fuels climate change, she asks someone how they think their bank makes money to pay them interest each month.

If that person banks with any of Canada’s five largest banks, that money likely comes partly from fossil fuels. But Canadian banks don’t just make money from fossil fuels — they’re also financing the industry, big time.

Canada has pledged to cut its greenhouse gas emissions by at least 40 per cent below 2005 levels by 2030, but since the 2015 Paris Agreement the country’s five largest banks have poured $726 billion into fossil fuels, according to environmental advocacy organization Stand.earth.

That’s based on numbers from the Rainforest Action Network’s latest annual analysis of the world’s largest 60 banks.

Ranked by the amount of financing they’ve provided to fossil fuel companies since 2016, the Royal Bank of Canada comes in fifth in the world with US$160 billion. TD Bank is ninth at US$129 billion, Scotiabank is 11th at US$114 billion, the Bank of Montreal is 16th at US$97 billion and CIBC is 22nd at US$67 billion.

Stand.earth adds up this financing and converts it to Canadian dollars using the average exchange rate for the five-year period of C$1.28 to US$1.

When asked by the CBC why it continues to fund fossil fuel projects, RBC “reaffirmed its commitment to net zero emissions, including a promise of $500 billion in sustainable finance by 2025,” the broadcaster reported. “It said it was also the first bank to commit not to lend to resource projects in Alaska’s Arctic National Wildlife Refuge.”

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress