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Last August, ExxonMobil warned that it may need to remove 20 percent of its oil and gas proved reserves from its books. While that was a shocking number from the oil major, reality proved to be even more of a shock to the company. On February 24, Exxon reported that it would actually remove over 30 percent of its proved reserves from its books — essentially wiping out the value of its Canadian tar sands holdings from its books.

According to the Securities and Exchange Commission (SEC), proved reserves are “the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.”

Proved reserves are the concept on which the whole oil business is based. It is a main factor in how oil and gas companies are valued and in determining how much money banks will loan companies. Much of oil and gas lending is known as reserved-based lending.

Exxon’s latest move is even more remarkable, however, because it has a reputation for being resistant to properly valuing reserves, often lagging behind the other oil major companies in making these downward adjustments.

In this case, the market — and the SEC— forced Exxon’s hand on the matter. SEC rules require that oil and gas companies value reserves based on the average price of oil from the previous 12 months.

In its latest SEC filing released this week, Exxon explains that this requirement essentially meant removing all of the value for its Canadian tar sands investments from its reserves.

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

Swiss National Bank’s Monetary Racket, US Stock Holdings & the Wild Ride of its Own Shares

November 14, 2019

Swiss National Bank’s Monetary Racket, US Stock Holdings & the Wild Ride of its Own Shares

We’ll also look at its garbage pile at the bottom. These folks don’t even pretend to be stock pickers. They buy and let it stick till it falls off on its own.

The Swiss National Bank, which filed its disclosure of US stock holdings today with the SEC, has figured out the best money racket of all times. It works because currency speculators are eagerly gobbling up Swiss francs. In January 2015, the SNB started to print Swiss francs ostensibly to depress the value of the CHF, a tiny currency with huge global demand. It then began selling those francs for dollars, euros, and other currencies to buy securities denominated in those currencies. This monetary racket only works as long as there is endless global demand for the tiny currency.

The SNB doesn’t disclose its holdings of securities. But in the US, it has to disclose its holdings of US-traded stocks via a quarterly 13F filing with the SEC. So we know what US-traded stocks it owns, but this is just a slice of the securities it owns globally.

In its 13F filing today, the SNB revealed that it held 2,520 US-traded stocks and American Depositary Receipts (ADRs) of foreign companies at the end of the third quarter, of about 3,500 stocks traded in the US. The value of these holdings rose 1.5% during the third quarter to a record of $94.1 billion.

Its portfolio is loaded up with the FANGMAN stocks – Facebook, Amazon, Nvidia, Microsoft, Alphabet, and Netflix – with Apple and Microsoft as its largest positions. It also holds a number of ADRs, including ADRs of Chinese companies, such was Weibo, Alibaba (16th largest holding), Baozun, ZTO Express Cayman, and Huazhu Group.

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

Ted Siedle: The Greatest Retirement Crisis In The History Of The World

April 8, 2019

Ted Siedle: The Greatest Retirement Crisis In The History Of The World

The pension crisis is even worse than we imagine.

“We are on the precipice of the greatest retirement crisis in the history of the world. And that makes perfect sense because, first of all, we have the largest elderly population in the history of the world.

Just focusing on the United States: our elderly are woefully unprepared to retire. And in the decades to come we will witness millions of elderly American’s, Baby Boomers and others, slipping into poverty. ‘Too frail to work, too poor to retire’ will become the new normal for many elderly Americans.”

So warns pension fraud whistleblower Ted Siedle.

Siedle’s firm, Benchmark Financial Services, Inc. has pioneered over $1 trillion in forensic investigations of the money management industry. He’s nationally recognized as an authority on pensions and investment management matters, having testified before the Senate Banking Committee regarding fund scandals and is an expert in various Madoff-related and other litigations.

In 2017, he secured the largest SEC whistleblower award in history of $48 million, and in 2018, the largest CFTC award in history at $30 million.

Siedel rings a loud warning bell regarding the solvency of today’s public pension system. Specifically, his investigations show that most of them:

Are much too under-funded to meet their future payout obligations (e.g., Kentucky’s state pension plan is only 12% funded)
Are experiencing annual returns far below the required 7% average the plans assume in their forecasts
Have oversight boards making portfolio allocation decisions that are staffed by individuals with zero experience managing financial securities (e.g., policemen, kindergarten teachers)
Have little transparency. Many are rarely audited. And many have moved their capital off-shore without accounting for where it’s been moved to.

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

Pension / Retirement Crisis Is Becoming An Underfunded ‘Tsunami’ According to The SEC

October 21, 2018

Pension / Retirement Crisis Is Becoming An Underfunded ‘Tsunami’ According to The SEC

We have detailed this problem over the past 3-4 years warning people about how bad the pensions around the nation have become nothing more than another ponzi scheme. Most, if not all, state, local and federal pension programs are underfunded by 40% or more.

What we stated a mere two months ago, in September 2018!

The steam that is building began in earnest in 2012 and has been picking up speed ever since. Look no further than some of the recent events we have documented time and again – Detroit, CALPers, Jeremy Stein, Teamsters and Dallas Pension Fund. All of these events have taken place in less than five years. What will the next four-plus years bring? How much longer should one sit on their hands and watch as thousands upon thousands of people either have retirement stolen or placed on lock-down as is the case with the Dallas Police Pension fund?

****

We have studied, researched and written about this for well over four years. Harry Markopolous, in 2011, tried to warn us about the ongoing theft, within the pension funds, on a daily basis by the banking cabal – link. CALPers pension program is north of 50% underfunded and losing a little more each and every quarter. – link. These are merely two of the articles that paint a picture of a tsunami of pension bankruptcies in the near future.

That’s a lot of people around the country that are directly impacted by unfunded, underfunded or otherwise completely insolvent pension funds.

It appears either the Forbes writer Elizabeth Bauer or SEC Commissioner Kara Stein read the article we published in September as they are now using the exact same language we used in September – ‘tsunami’ of pension failures.

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

Heroes & Whores

September 20, 2018

HEROES & WHORES

“Certainly one of the most important things I learned is that numbers can be deceiving. There is a logic to mathematics, but there is also the underlying human element that must be considered. Numbers can’t lie, but the people who create those numbers can and do. As so many people have learned, forgetting to include human nature in an equation can be devastating.” ― Harry Markopolos, No One Would Listen

Image result for harry markopolos

The quote I used from Harry Markopolos’ No One Would Listen book about the Bernie Madoff ponzi scheme in my last article triggered a bittersweet recollection. For me, the experience captured the true nature of our warped financial markets, a culture glorifying wealthy arrogant criminal assholes, while ignoring or ridiculing honest, hard working, highly intelligent truth tellers.

The picture of Markopolos above shows an average looking middle aged guy, with a five o’clock shadow, bad haircut, and wearing a modestly priced suit and tie. Since reading about his fruitless effort to expose Madoff’s Ponzi Scheme and his fifteen minutes of fame in 2009, I have felt an affinity towards him. We both have a brother and sister. We were both brought up in Catholic households and went to Catholic schools. We both have degrees in finance. We have both had financial careers. We are both married with three sons. And we both believe facts and an accurate assessment of the numbers always reveals the truth.

Through his job as a portfolio manager with a small investment firm Bernie Madoff’s investing record was brought to his attention. As a numbers guy, he immediately began assessing the returns. Markopolos said he knew within five minutes Madoff’s numbers didn’t add up. It took him another four hours to mathematically prove that they could have only been obtained by fraud.

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

Why It Matters If Fracking Companies Are Overestimating Their ‘Proved’ Oil and Gas Reserves

June 17, 2018

Why It Matters If Fracking Companies Are Overestimating Their ‘Proved’ Oil and Gas Reserves

Back in 2011, The New York Times first raised concerns about the reliability of America’s proved shale gas reserves. Proved reserves are the estimates of supplies of oil and gas that drillers tell investors they will be able to tap. The Times suggested that a recent Securities and Exchange Commission (SEC) rule change allowed drillers to potentially overbook their “proved” reserves of natural gas from shale formations, which horizontal drilling and hydraulic fracturing (“fracking”) were rapidly opening up.

“Welcome back to Alice in Wonderland,” energy analyst John E. Olson told The Times, commenting on the reliability of these reserves after the rule change. Olson, a former Merril Lynch analyst, is best known for seeing the coming Enron scandal 10 years before the infamous energy company imploded in 2000.

Today, those same rules have allowed shale drillers to boost their reserves of oil, as well as natural gas. As a result, these “proved” reserves, which investors and pipeline companies are banking on, could potentially be much less proven than they appear.

And the unprecented degree to which this is happening in the shale industry casts a shadow of doubt on the purportedly bright future of America’s booming oil and gas industry.

Rising ‘Proved Undeveloped’ Reserves

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

Brad Birkenfeld: Lucifer’s Banker

April 18, 2017

Brad Birkenfeld: Lucifer’s Banker

A whistle-blower’s account of exposing massive fraud at UBS

Just how bad is the ongoing fraud in the banking system? Get ready for a mind-bowing expose by a former insider at UBS.

Brad Birkenfield, author of Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy, recounts the efforts he uncovered by his employer to help its clients cheat the US government out of tens of $billions in taxes.

But despite his working with the government closely to expose the gigantic conspiracy between US-based tax cheats and the giant Swiss bank, UBS, the so-called Justice Department went after Mr. Birkenfeld for abetting tax evasion by one of his clients. After spending thirty months in Federal prison, he was released and three weeks later, received a whistle-blower check for $104 million, the largest such check ever from the IRS Whistle-blower Office.

Once again, 300,000,000 Americans-plus got screwed by the corrupt Department of Justice. They’re not about justice, they’re about protecting themselves, trying to take credit, and making everyone else listen to what they say the story is.

We remember the financial crisis of 2008. It was devastating and so many people lost their jobs, lost their homes and so forth. In the entire financial crisis, there was not one banker to go to jail. The only banker to go to jail was the UBS whistleblower who exposed the largest and longest running tax fraud in the world.

Here’s the problem with the system. When you fine UBS you must realize UBS is a Swiss bank, so that means they write off the fine on their taxes. So then, that means the Swiss taxpayers carry the burden. That’s the first thing.

The second thing is go look at the millions and millions of dollars in legal fees spent to defend their conduct. The UBS shareholders pick up that tab.

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

One Way to Unrig Stock Trading

December 25, 2015

One Way to Unrig Stock Trading

AMERICA’S equity markets are broken. Individuals and institutions make transactions in rigged markets favoring short-term players. The root cause of the problem is that stocks trade on numerous venues, including 11 traditional exchanges and dozens of so-called dark pools that allow buyers and sellers to work out of the public eye. This market fragmentation allows high-frequency traders and exchanges to profit at the expense of long-term investors.

Individual investors, trading through brokers like Charles Schwab, E-Trade and TD Ameritrade, suffer first as the brokers profit by hundreds of millions of dollars from selling their retail orders to high-frequency traders and again as those traders take advantage of the orders they bought.

Market depth, critically important to investors who trade large blocks of securities, also suffers in the world of high-frequency traders. Startling evidence for the lack of robustness in today’s market comes from a 2013 Securities and Exchange Commission report that found order cancellation rates as high as 95 to 97 percent, a result of high-frequency traders’ playing their cat and mouse game. Market depth is an illusion that fades in the face of real buying and selling.

Brad Katsuyama, founder of IEX, testified about the state of U.S. stock markets last year on Capitol Hill.CreditDoug Mills/The New York Times

Securities markets work best as a central clearinghouse where all buyers and sellers of stocks come together. Not so long ago, when the New York Stock Exchange and the Nasdaq operated as virtual monopolies, American equity markets were the envy of the world. Until 2000, Nasdaq was wholly owned by a nonprofit corporation; the New York Stock Exchange was nonprofit until 2006. To ensure that they would operate in the public interest, they were treated much like public utilities.

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

Groups Hand 360,000 Signatures to Justice Department Calling for “Exxon Knew” Probe

November 21, 2015

Groups Hand 360,000 Signatures to Justice Department Calling for “Exxon Knew” Probe

Exxon social license revoked

With the hottest October in world history recorded recently, a slew of advocacy groups have delivered 360,000 petition signatures to the U.S. Department of Justice, calling for a probe of petrochemical industry giant ExxonMobil’s history of funding climate change denial despite what the company knew about climate science.

The groups ranging from 350.org, Food and Watch Watch, Climate Parents, Moms Clean Air Force, The Nation, Sierra Club and others have asked DOJ to investigate what ExxonMobil knew about climate change and when the company knew it, juxtaposing that insider knowledge, exposed by both InsideClimate News and The Los Angeles Times, with the climate change denial campaign it funded both in the past and through to the present.

“That’s right: decades before climate change became a hotly debated political issue, the biggest oil company in the world was doing cutting-edge research into just what was causing it and how dangerous it might be,” reads the petition, pointing back to the research the company did on climate change dating back to the 1970’s and 1980’s.

“But Exxon chose to protect their profits over the planet, and proceeded to cover up their findings for nearly forty years.,” it continues. “They hid the work of their own scientists, while financing an elaborate network of climate-denial think tanks, organizations, and politicians.”

“Might Get Away With It”

The petition also says that while it’s unsurprising ExxonMobil committed such a deed, what’s scary is that in the legal sphere “they just might get away with it.”

That concern by the groups does not arise out of a vacuum.

Case in point: coal giant Peabody Energy recently got off the hook in the aftermath of a New York State Attorney General Office investigation by merely amending some line-items in its corporate securities filings with the U.S.Securities and Exchange Commission (SEC).

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

Systemic Corruption Has Destroyed America

June 3, 2015

Systemic Corruption Has Destroyed America

Preface: It’s been less than a month since we last posted on this topic … but, sadly, we’ve got many more examples.

The Cop Is On the Take

Government corruption has become rampant:

Senior SEC employees spent up to 8 hours a day surfing porn sites instead of cracking down on financial crimes

Nuclear Regulatory Commission workers watch porn instead of cracking down on unsafe conditions at nuclear plants

An EPA employee who downloaded 7,000 porn files, then spent 2-6 hours each workdaywatching porn. He’s been doing it for years … but the EPA never fired him. Another EPA employee harassed 16 women co-workers … and then was promoted to a higher-paying jobwith more responsibility, where he harassed more women

NSA spies pass around homemade sexual videos and pictures they’ve collected from spying on the American people

NSA employees have also been caught using their mass surveillance powers to spy on love interests, such as girlfriends, obsessions or former wives … and to eavesdrop on American soldiers’ intimate conversations with their wives back home. And see this (“routinely shared salacious or tantalizing phone calls that had been intercepted” … “‘Hey, check this out … there’s good phone sex’”)

An employee of the Transportation Security Administration admitted that TSA agents share – and laugh at – nude scans of passengers. Another TSA employee says that screeners make excuses so they can grope and fondle travelers that they’re attracted to (maybe that’s why the TSA failed to find mock explosives or banned weapons going through checkpoints in 95% of trials)

Investigators from the Treasury’s Office of the Inspector General found that some of the regulator’s employees surfed erotic websites, hired prostitutes and accepted gifts from bank executives … instead of actually working to help the economy

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

How HFT Destroys Markets: 50 Pages Of Evidence

March 21, 2015

How HFT Destroys Markets: 50 Pages Of Evidence

Back in 2009, when aside from a few insiders, nobody had heard of HFT, Zero Hedge launched its crusade to expose the algorithmic scourge that has since then caused an equity, treasury and now US Dollar flash crash, and has been the subject of a Michael Lewis bestseller and resulted in countless market halts and failures.

More importantly, there is now roughly 50 pages of just bibliography citing the evidence-based, academic research that has shown just how pervasively, maliciously and premeditatedly HFTs manipulate, destabilize, impair and otherwise destroy every single market in which they participate, and what’s worse: result in incremental costs to investors, debunking the biggest lie HFTs spread about themselves – that they, being the gregarious humanist vacuum tubes they are, make trading cheaper and more accessible for the small investor.

And the biggest paradox: despite all this proof – which we urge every readers to sent to their favorite SEC regulator – America’s corrupt enforcers of securities laws continue to turn a blind eye to all the crime that takes place every single day. Why? Because they collect a portion of the proceeds, of course, and because they need a scapegoat to blame once the market crashes.

We are grateful to “R. T. Leuchtkafer” who put it all together.

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

Former SEC Director Admits The Truth: The Market Is Rigged

March 10, 2015

Former SEC Director Admits The Truth: The Market Is Rigged

For more than a decade, John Ramsay kept his mouth shut about how rigged the US equity market was.

As SEC Director of Trading & Markets, Ramsay tells Bloomberg her “had red tape over his mouth,” but now he is “uncorked.”

“I’ve been able to find my voice on these issues in a way I couldn’t have done when I was in the government, because you’re always limited by internal politics and not wanting to get too far out in front of the agency,” he said. “I feel like I’ve been a little bit uncorked.”

Having joined Brad Katayama’s IEX Group (infamous for the Flash Boys’ exposure), Ramsay is calling out the “convoluted” and “illogical” pricing rules of major stock exchanges and compared the $25 trillion U.S. stock market’s structure to the Death Star of “Star Wars.”

It will be hard for current regulators to shrug off Ramsay’s comments,

“He’s a guy who accomplished a lot and doesn’t have anything to prove,” said James Burns, who worked with Ramsay at the SEC and is now a partner at the law firm Willkie Farr & Gallagher LLP.

Ramsay helped the SEC hammer out the post-crisis Volcker Rule, which bans government-insured banks from gambling with depositors’ money. The rule has an exemption — it allows banks to continue “making markets,” or standing ready to buy or sell stocks and bonds from customers. Financial regulators initially clashed over that exemption, with banking agencies fretting that the language would open loopholes for Wall Street to exploit.

Ramsay helped ease the tension with clear language and humor, bank regulators said. Ramsay was the voice at the table “making us understand how market making is done, and what kind of parameters are around it,” said Scott Alvarez, the Federal Reserve’s general counsel.

And so when he uncorks a nasty reality check on the market, perhaps it is time to listen…

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

The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare | Rolling Stone

November 7, 2014

The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare | Rolling Stone.

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'”

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She’s had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.

Read more: http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106#ixzz3IOGK5Bxj

Read more: http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106#ixzz3IOGFE1sU
Follow us: @rollingstone on Twitter | RollingStone on Facebook

US Taxpayers Pay For SEC to Arrange Early Release of Data to High Speed Trading Firms

October 29, 2014

US Taxpayers Pay For SEC to Arrange Early Release of Data to High Speed Trading Firms.

The SEC reportedly does not like trading on information that is not yet public. Just ask SAC Capital, or if you prefer, watch the plethora of insider trading SEC news conferences in general.

Why, even this morning there is a WSJ story about the SEC’s investigation into the early leak and release of Medicare cancer related funding data , which is an investigation into a different government agency!

And remember last year, when the SEC began investigating Thompson Reuter’s early release of ISM data to certain high speed subscribers. While the SEC brought no charges against Thompson Reuters, the data firm did subsequently suspend its “tiered release” practice:

On Monday, Thomson Reuters announced that it was suspending a so-called “tiered release” of market moving data to elite clients. The data and news service had been selling the University of Michigan’s consumer sentiment numbers to paying clients at 9:54:58 on release days—two seconds before the information went to a broader set of clients at 9:55 am. That created an opportunity for high speed trading firms to rake in profits before the rest of the market knew which direction the impending news would propel trading.

– See more at: http://blog.themistrading.com/us-taxpayers-pay-for-sec-to-arrange-early-release-of-data-to-high-speed-trading-firms/#sthash.Q5Ovnhx5.dpuf

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