Friday, May 3, 2013

Central Bankers as part of Financial Realm Elites version of Al Qaeda .... Bernanke = Bin Laden , Draghi = Ayman al-Zawahiri ? Jamie and Blythe - Operatives in the Field ( About to take a hit for the " Financial Al Qaeda " team ? ) ....

http://www.zerohedge.com/news/2013-05-03/elliotts-singer-bernanke-destroying-value-money-and-uprooting-basic-stability-societ



Elliott's Singer On Bernanke Destroying "The Value Of Money" And "Uprooting The Basic Stability Of Society"

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Submitted by Tyler Durden on 05/03/2013 19:26 -0400



Previously, it was Seth Klarman, one of the most respected value investors of all time warning against the hubris of economists, the complacency of investors and the stupidity of politicians. Now, it is the turn of that other, just as legendary hedge fund manager, Paul "Commodore" Singer, to take what is an increasingly contrarian position in a field of "experts" filled with momentum-chasers, Fed apologists, and those who are convinced the world owes them a free lunch, and once again tell the full truth about the Federal Reserve and its utterly clueless, real world reject, chairman.
The Fed, Lost In The Wilderness
[T]he financial system (including the institutions themselves, products traded, and risks taken) has “gotten away from” the Fed’s ability to comprehend. The Fed is primarily responsible for that state of affairs, and it is out of its depth. Former Chairman Greenspan created – and reveled in – a cult of personality centered on himself, and in the process created a tremendous and growing moral hazard. By successive bailouts and purporting to understand (to a higher and higher level of expressed confidence) a quickly changing financial system of growing complexity and leverage, he cultivated an ever-increasing (but unjustified) faith in the Fed’s apparent ability to fine-tune the American (and, by extension, the world’s) economy. Ironically, this development was occurring at the very time that financial innovations and leverage were making the system more brittle and less safe. He extolled the virtues of derivatives and minimized the danger of leverage and risky securities and dot-com stocks, all while he should have been putting on the brakes. It was not just the disappearance of vast swaths of the American financial system into unregulated subsidiaries of financial institutions, nor was it just government policies that encouraged the creation and syndication of “no-documentation” mortgages to people who could not afford them. It was also the low interest rates from 2002 to 2005, the failure to see the expanding real estate bubble caused by an unprecedented increase in leverage and risk, and the general failure to understand the financial conditions of the world’s major institutions. Under Chairman Bernanke, the combination of ZIRP and QE completed the passage of the Fed from sober protector of a fiat currency to ineffective collection of frantically-flailing, over-educated, posturing bureaucrats engaged in ever more-astounding experiments in monetary extremism.
If you look at the history of Fed policy from Greenspan to Bernanke, you see two broad and destructive paths quite clearly. One path is the cult of central banking, in which the central bank gradually acquired the mantle of all-knowing guru and maestro, capable of  fine-tuning the global economy and financial system, despite their infinite complexity. On this path traveled arrogance, carelessness and a rigid and narrow orthodoxy substituting for an open-minded quest to understand exactly what the modern financial system actually is and how it really works. The second path is one of lower and lower discipline, less and less conservative stewardship of the precious confidence that is all that stands between fiat currency and monetary ruin. Monetary debasement in its chronic form erodes people’s savings. In its acute and later stages, it can destroy the social cohesion of a society as wealth is stolen and/or created not by ideas, effort and leadership, but rather by the wild swings of asset prices engendered by the loss of any anchor to enduring value. In that phase, wealth and credit assets (debt) are confiscated or devalued by various means, including inflation and taxation, or by changes to laws relating to the rights of asset holders. Speculators win, savers are destroyed, and the ties that bind either fray or rip. We see no signs that our leaders possess the understanding, courage or discipline to avoid this.
It is true that the CEOs of the world’s major financial institutions lost their bearings and were mostly oblivious to their own risks in the years leading up to the crash. However, as the 2007 minutes make clear, the Fed was clueless about how vulnerable, interconnected and subject to contagion the system was. It is not the case that the Fed completely ignored risk; indeed, several Fed folks made “fig leaf” statements about the risks of the mortgage securitization markets, as well as other indications that they appreciated the possibility of multiple outcomes. But nobody at the Fed understood the big picture or had the courage to shift into emergency mode and make hard decisions. In the run-up to the crisis the Fed was a group of highly educated folks who lacked an understanding of modern finance. After convincing the nation for decades of their exquisite grasp of complexities and their wise stewardship of the financial system, they didn’t understand what was actually going on when it really counted.
Ultimately, of course, as the system was collapsing and on the verge of freezing up completely, the Fed shifted into the (more comfortable and much less difficult) role of emergency provider of liquidity and guarantees.
All this background presents an interesting framework in which to think about what the Fed is doing now. QE is a very high-risk policy, seemingly devoid of immediate negative consequences but ripe with real chances of causing severe inflation, sharp drops in stock and bond prices, the collapse of financial institutions and/or abrupt changes in currency rates and economic conditions at some point in the unpredictable future. However, the lack of large increases in consumer price inflation so far, plus the demonstrable “benefits” of rising stock and bond markets, have reinforced the merits of money-printing, which is now in full swing across the world. In the absence of meaningful reforms to tax, labor, regulatory, trade, educational and other policies that could generate sustainable growth, “money-printing growth” is unsound. We believe that the global central bankers, led by the Fed as “thought leader,” have no idea how much pain the world’s economy may endure when they begin the still-undetermined and never-before attempted process of ending this gigantic experimental policy. If they follow the paths of the worst central banks in history, they will adopt the “tiger by the tail” approach (keep printing even as inflation accelerates) and ultimately destroy the value of money and savings while uprooting the basic stability of their societies. Read the 2007 Fed minutes and you will understand how disquieting is the possibility of such outcomes and how prosaic and limited are the people in whom we have all put our trust regarding the management of the financial system and the plumbing of the world’s economy.
Printing money by the trillions of dollars has had the predictable effect of raising the prices of stocks and bonds and thus reducing the cost of servicing government debt. It also has produced second-order effects, such as inflating the prices of commodities, art and other high-end assets purchased by financiers and investors. But it is like an addictive drug, and we have a hard time imagining the slowing or stopping of QE without large adverse impacts on the prices of stocks and bonds and the performance of the economy. If the economy does not shift into sustainable high-growth mode as a result of QE, then the exit from QE is somewhere on the continuum between problematic and impossible.
Central banks facing high inflation and/or sluggish growth after sustained money-printing frequently are paralyzed by the enormity of their mistake, or they are deranged by the thought that the difficult and complicated conditions in a more advanced stage of a period of monetary debasement are due to just not printing enough. At some stage, central banks inevitably realize, regardless of whether they admit the catastrophic nature of their own failings, that the cessation of money-printing will cause an instant depression. Even though at that point the cessation of money-printing may be the only action capable of saving society, that becomes a secondary consideration compared to the desire to avoid immediate pain and blame. The world’s central banks are in very deep with QE at present, and the risks continue to build with every new purchase of stocks and bonds with newly-printed money.
* * *
And, as an added bonus, Singer's thoughts on gold:
There are many current theories as to why the price of gold had been drifting down and then collapsed in mid-April. We are trying to sort out various possible explanations, but we urge investors to be cautious in their thinking about what circumstances would likely cause gold to rise or fall sharply. The correlations with other assets in various scenarios (risk on or off, economic normalization, inflation, the rise and fall of interest rates, euro collapse) may shift abruptly as the macro picture evolves. Many people think that if stock markets continue rising, and/or if the U.S. and Europe restore normal levels of growth and employment, then the rationale for owning gold is weakened or destroyed. This perception may be correct, and it is certainly a topic that is currently much discussed, but ultimately another set of considerations is likely to dominate.
The world is on a seemingly one-way trip to monetary debasement as the catchall economic policy, and there is only one store of value and medium of exchange that has stood the test of time as “real money”: gold. We expect this dynamic to assert itself in a large way at some point. In the meantime, it is quite frustrating to watch the price of gold fall as the conditions that should cause it to appreciate seem more and more prevalent. Gold may not exactly be a “safe haven” in the sense of an asset whose value is precisely known and stable. But it surely is an asset that, in a particular set of circumstances, becomes a unique and irreplaceable “must-have.” In those circumstances (loss of confidence in governments and paper money), there are no substitutes, and the price of gold may reflect that characteristic at some point.


http://www.zerohedge.com/news/2013-05-03/monarchs-money

The Monarchs Of Money

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Submitted by Tyler Durden on 05/03/2013 20:38 -0400



The world's central banks have printed unimaginable amounts of money in recent years - "these guys are really more powerful than the government." Neil Macdonald explores what this means for the global economy and for your financial well-being - "can you imagine if the American public knew there was this 'club' that met secretly in Switzerland and made decisions that dramatically affected their lives, but we're not going to tell you about it because it's too complicated." This brief documentary should open a few eyes to the reality behind the world's most powerful (and real) cabal.




http://www.zerohedge.com/news/2013-05-03/seth-klarman-if-economy-so-fragile-government-cant-allow-failure-then-we-are-indeed-


Seth Klarman: "If The Economy Is So Fragile That Government Can't Allow Failure Then We Are Indeed Close To Collapse"

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Submitted by Tyler Durden on 05/03/2013 15:43 -0400



Following today's flashback to the most euphoric and irrationally exuberant days of market peaks (and bubbles) gone by, driven entirely by the now constant central-planner dilution of current and future wealth, these selected excerpts from Seth Klarman's latest letter to investors is just the cold water of common sense everyone needs:
From Seth Klarman of Baupost:
Is it possible that the average citizen understands our country's fiscal situation better than many of our politicians or prominent economists?
Most people seem to viscerally recognize that the absence of an immediate crisis does not mean we will not eventually face one.They are wary of believing promises by those who failed to predict previous crises in housing and in highly leveraged financial institutions.
They regard with skepticism those who don't accept that we have a debt problem, or insist that inflation will remain under control. (Indeed,they know inflation is not well under control, for they know how far the purchasing power of a dollar has dropped when they go to the supermarket or service station.)
They are pretty sure they are not getting reasonable value from the taxes they pay.
When an economist tells them that growing the nation's debt over the past 12 years from $6 trillion to $16 trillion is not a problem, and that doubling it again will still not be a problem, this simply does not compute. They know the trajectory we are on.
When politicians claim that this tax increase or that spending cut will generate trillions over the next decade, they are properly skeptical over whether anyone can truly know what will happen next year, let alone a decade or more from now.
They are wary of grand bargains that kick in years down the road, knowing that the failure to make hard decisions is how we got into today's mess. They remember that one of the basic principles of economics is scarcity, which is a powerful force in their own lives.
They know that a society's wealth is not unlimited, and that if the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse.For if you must rescue everything, then ultimately you will be able to rescue nothing.
They also know that the only reason paper money, backed not by anything tangible but only a promise, has any value at all is because it is scarce. With all the printing, the credibility of our entire trust-based monetary system will be increasingly called into question.
And when you tell the populace that we can all enjoy a free lunch of extremely low interest rates, massive Fed purchases of mounting treasury issuance, trillions of dollars of expansion in the Fed's balance sheet, and huge deficits far into the future, they are highly skeptical not because they know precisely what will happen but because they are sure that no one else--even, or perhaps especially, the  policymakers—does either.


Does Jamie and Blythe get "  Seal Team Sixed "  ? 


http://www.zerohedge.com/news/2013-05-03/will-jpmorgans-enron-be-end-blythe-masters


Will JPMorgan's "Enron" Be The End Of Blythe Masters?

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Submitted by Tyler Durden on 05/03/2013 01:38 -0400




One year after the infamous Jamie Dimon "tempest in a teapot" fiasco, which promptly turned out to be the biggest TBTF prop-trading desk debacle in history, things were going well for JPMorgan.
On one hand, the chairman of the TBAC (and thus US Treasury advisor and policy administrator), and former LTCM trader, Matt Zames, was just recently promoted to the sole second in command post at the biggest US bank (and 2nd biggest in the world) by assets, and first in line to take over from Jamie Dimon. On the other hand, one of Mary Jo White's former co-workers, and a JPM defense attorney from Debevoise just became head of the SEC's enforcement division, in theory guaranteeing that the US government would never do more than slap the wrist of JPM in perpetuity.
And then, when everything seemed like smooth sailing ahead, the Federal Energy Regulatory Commission (FERC) showed up on March 13, the day before Carl Levin's committee released its latest report on JPM's prop trading blunder, and according to the NYT, alleged that JPM in the past several years, quietly became nothing short than the next Enron.
Government investigators have found that JPMorgan Chasedevised “manipulative schemes”that transformed “money-losing power plants into powerful profit centers,” and that one of its most senior executives gave “false and misleading statements” under oath. The findings appear in a confidential government document, reviewed by The New York Times, that was sent to the bank in March,warning of a potential crackdown by the regulator of the nation’s energy markets.
Another "tempest in a teapot"... Or is JPM reprising the role of the most hated company from the early 2000s, Enron, now that absolutely everyone's attention is focused on its purportedly criminal activity, potentially a problematic development? It very well might be.
The JPMorgan case arose, according to the document, after the bank’s 2008 takeover of Bear Stearns gave the bank the rights to sell electricity from power plants in California and Michigan. It was a losing business that relied on “inefficient” and outdated technology, or as JPMorgan called it, “an unprofitable asset.”
Funny: another "case" that has arisen, so far at mostly in the tinfoil hat periphery of the blogosphere is that JPM also inherited some massive precious metal shorts when it was handed over Bears Stearns on a Fed-subsidized silver platter, and it is the legacy of these short positions that has encouraged various JPM employees, such as Blythe Masters for example, to not only do everything in their power to push the price of gold and silver lower, but to align directly with the Fed, which wants nothing more than to destroy every single last believer in real, not paper-based, "quality-collateral."
For now, however, let's get back to what was previously conspiracy theory, and is now fact:
Under “pressure to generate large profits,” the agency’s investigators said, traders in Houston devised a workaround. Adopting eight different “schemes” between September 2010 and June 2011, the traders offered the energy at prices “calculated to falsely appear attractive” to state energy authorities. The effort prompted authorities in California and Michigan to dole out about $83 million in “excessive” payments to JPMorgan, the investigators said. The behavior had “harmful effects” on the markets, according to the document.
Uh-oh. Sounds suspiciously close to what a certain Houston firm, once upon a time called Enron (advised by none other than one Paul Krugman) was doing to the California electricity market. And where the FERC and legacy ENRON instances arise, sparks are sure to fly.
But what is worst for JPM, and its brilliant (abovementioned) employee, often times credited with creating the Credit Default Swap product and market (simply an instrument to trade credit with negligible upfront collateral and thus allow equity option-like speculation in the credit realm), is that FERC may be seeking to throw the book at none other than Blythe Masters.
In the energy market investigation, the enforcement staff of the Federal Energy Regulatory Commission, or FERC, intends to recommend that the agency pursue an action against JPMorgan over its trading in California and Michigan electric markets. 

The 70-page document also took aim at a top bank executive, Blythe Masters.
Blythe did a bad, bad thing. So bad she lied about it under oath.  
The regulatory document cites her supposed “knowledge and approval of schemes” carried out by a group of energy traders in Houston. The agency’s investigators claimed that Ms. Masters had “falsely” denied under oath her awareness of the problems and said that JPMorgan had made “scores of false and misleading statements and material omissions” to authorities, the document shows.
Oops. And it's only downhill from here, because what follows, are the two scariest words a banker can hear in the context of a potential enforcement decision: "individually liable"
For now, according to the document, the enforcement officials plan to recommend that the commission hold the traders and Ms. Masters “individually liable.” While Ms. Masters was “less involved in the day-to-day decisions,” investigators nonetheless noted that she received PowerPoint presentations and e-mails outlining the energy trading strategies.
And some more scary words: "systematic cover-up"
The bank, investigators said, then “planned and executed a systematic cover-up” of documents that exposed the strategy, including profit and loss statements.

In the March document, the government investigators also complained about what they said was obstruction by Ms. Masters. After the state authorities began to object to the strategy, Ms. Masters “personally participated in JPMorgan’s efforts to block” the state authorities “from understanding the reasons behind JPMorgan’s bidding schemes,” the document said.

The investigators also referenced an April 2011 e-mail in which Ms. Masters ordered a “rewrite” of an internal document that raised questions about whether the bank had run afoul of the law. The new wording stated that “JPMorgan does not believe that it violated FERC’s policies.”
Looks like the FERC disagreed. But how could it? It was only a year ago that Blythe was on CNBCpromising that not only she, but JPMorgan would and could never do anything wrong in the commodities, or any other, arena. Who can possibly forget her unforgettable platitude:"What is commonly out there is that JPMorgan is manipulating the metals market. It's not part of our business model. it would be wrong and we don't do it."
But... if she fabricated data, blocked regulatory investigations, and lied under oath could she possibly also have... lied to CNBC? No... that is unpossible.
So what happens next?
Well, JPM can hope that its guy at the SEC, Andrew Ceresney, who happens to be in charge of the porn-addicted agency's "enforcement" division, has just enough clout to make that other regulator, the FERC forget all about its inquiry, and its factually-justified allegations.
Or, failing that, and should justice finally prevail in this banana republic for one of the TBTF banks, what may just happen is that Blythe may end up in prison. Minimum security, of course, and for a very brief period of time, with all of her (allegedly) ill-gotten and accumulated wealth waiting for her upon reentry into society. And that's fine.
But what we hope for is that there is at least a brief period of time when Blythe's finger is not be on the gold "sell" button. Not because we want to be deprived of the opportunity to buy physical gold and silver at far cheaper than fair value prices (which, by the way, are meaningless when expressed in dying fiat), but because we are simply curious how high gold may go should JPM's commodity queen finally be put away temporarily... or permanently.
Even for a total banana republic, this does not seem like such a far-fetched request.

 and....

FRIDAY, MAY 3, 2013

Mirabile Dictu! JP Morgan Finally on Regulatory Hot Seat for Widespread Control Failures and Alleged Lying by Blythe Masters Under Oath

It’s been far too long in coming, but Jamie Dimon may finally be getting his comeuppance. A New York Times report reveals the Morgan bank is in the crosshairs of multiple regulators for poor controls and dishonest dealings with the authorities:
Government investigators have found that JPMorgan Chase devised “manipulative schemes” that transformed “money-losing power plants into powerful profit centers,” and that one of its most senior executives gave “false and misleading statements” under oath…
In a meeting last month at the bank’s Park Avenue headquarters, the comptroller’s office delivered an unusually stark message to Jamie Dimon, the chief executive and chairman: the nation’s biggest bank was quickly losing credibility in Washington. The bank’s top lawyers, including Stephen M. Cutler, the general counsel, have also cautioned executives about the bank’s regulatory problems, employees say.
The Times reports that the bank faces actions across eight regulators including: FERC, for a series of “schemes” to dupe state authorities to overpay for power and includes allegations that JP Morgan executive Blythe Masters lied under oath; using false documents when collecting credit card debt; and a failure to report suspicious trading activities by Bernie Madoff.
The fact that JP Morgan is in hot water isn’t news. Josh Rosner revealed in an extensive report released in early March that the bank had paid out over $8.5 billion in fines since 2009, nearly 12% of its net income, for violations across virtually all of its operations. This account showed the carefully cultivated picture of JP Morgan as a well-managed operation was an artful fabrication. As Dave Dayen wrote here in his overview:
….as you read the report, it’s hard to see the bank as anything but a criminal racket just days away from imploding, were it not propped up by implicit bailout guarantees and light-touch regulators. Rosner paints a picture of a corporation saddled with pervasive internal control problems, which end up costing shareholders, and which “could materially impact profitability in the future.” ….It’s hard to summarize all of the documented instances in this report of JPM has been breaking the law, but here’s my best shot….
Bank Secrecy Act violations;
Money laundering for drug cartels;
Violations of sanction orders against Cuba, Iran, Sudan, and former Liberian strongman Charles Taylor;
Violations related to the Vatican Bank scandal (get on this, Pope Francis!);
Violations of the Commodities Exchange Act;
Failure to segregate customer funds (including one CFTC case where the bank failed to segregate $725 million of its own money from a $9.6 billion account) in the US and UK;
Knowingly executing fictitious trades where the customer, with full knowledge of the bank, was on both sides of the deal;
Various SEC enforcement actions for misrepresentations of CDOs and mortgage-backed securities;
The AG settlement on foreclosure fraud;
The OCC settlement on foreclosure fraud;
Violations of the Servicemembers Civil Relief Act;
Illegal flood insurance commissions;
Fraudulent sale of unregistered securities;
Auto-finance ripoffs;
Illegal increases of overdraft penalties;
Violations of federal ERISA laws as well as those of the state of New York;
Municipal bond market manipulations and acts of bid-rigging, including violations of the Sherman Anti-Trust Act;
Filing of unverified affidavits for credit card debt collections (“as a result of internal control failures that sound eerily similar to the industry’s mortgage servicing failures and foreclosure abuses”);
Energy market manipulation that triggered FERC lawsuits;
“Artificial market making” at Japanese affiliates;
Shifting trading losses on a currency trade to a customer account;
Fraudulent sales of derivatives to the city of Milan, Italy;
Obstruction of justice (including refusing the release of documents in the Bernie Madoff case as well as the case of Peregrine Financial).
In other words, the New York Times account is a pale rendition of the rap sheet against the bank.
In reality, there’s been evidence for years that the image of JP Morgan as a well-run bank with its oft-touted “fortress balance sheet” was more hype than reality. The bank got more credit than it deserved for having lower exposure to subprime loans than other “too big to fail” institutions, which made it the rescuer of choice during the financial crisis. That status resulted at least in part from the banks have suffered large losses in a business it had helped pioneer, that of corporate credit default swaps, when Delphi went bankrupt in 2005 and got gun-shy in taking on more CDS related risk (and recall it was also CDS that turned what would otherwise have been a “contained” subprime meltdown into a global financial crisis by creating economic exposures that were considerably greater than the value of the underlying loans). Mortgage securitization industry participants also say another reason JP Morgan was an also-ran in the mortgage business in the runup to the crisis was that the bank blew hot and cold about hiring people with the needed experience and contacts. In other words, the fact that JP Morgan escaped the worst of the crisis looks to be due to luck rather than great foresight.
Recall that banking expert Chris Whalen has been saying for years that JP Morgan’s balance sheet quality was also mythologized. While the traditional bank looks solid, the risks it is taking in its $75 trillion derivatives clearing operation dwarf that. And the bank hasn’t been the most astute player there either. For instance, it was snookered for months by Lehman into taking collateral that employees of the failing investment bank called “goat poo.” And when the bank realized the risk it was taking, it struck the fatal blow by seizing over $7 billion Lehman cash and collateral that it held. The bank also looks to have played fast and loose in the failure of MF Global. Recall that it suspected that the broker was using client funds, asked for written assurances from assistant treasurer Edith O’Brien that it wasn’t, and didn’t press the matter when she ignored the requests.
The London Whale fiasco alone demonstrated beyond doubt that JP Morgan was, as Rosner put it, out of control. Even before the Senate investigation, media reports provided compelling evidence of astonishing risk management failures, such as having risk management reporting to the CIO, rather than being independent. Sarbanes Oxley expert Michael Crimmins saw the risk management and control failures to be so severe as to firing Dimon. As he wrote last July:
The first stunner, that JP Morgan was restating the first quarter financials, should have caused a deafening ringing of alarm bells. For a company of JP Morgan’s stature to be compelled to restate prior period financials is a very clear signal of bigger problems with their overall financial reporting. In isolation we would normally expect to see a massive selloff with an event of that seriousness. Analysts and reporters may have missed the significance since it was dropped into a footnote and overshadowed by the other disclosures. …
But the real cause for alarm is the reason for the restatement. JPM was forced to disclose that it relied on its traders to provide honest and accurate valuations for its financial statement disclosures. That’s like putting the foxes in charge of not just the henhouse, but the entire farm. Much to its chagrin that was a costly choice. Note that was not a mistake, but a conscious choice….
t appears that JPM is attempting to make the case that rogue traders, with criminal intent, mismarked the books. That may be so and relevant criminal charges against those traders should be pursued. But that strategy does not protect management. If there was mismarking, especially to the extent that occurred here, it is the responsibility of management to know or have procedures in place to alert them to the potential for fraud. Step one in that control process: Don’t let your traders mark their own books. If you do you have no excuse. Your controls are worthless and as CEO, you are responsible for ignoring that fundamental control gap. Full stop.
Which leads to the second underreported stunner.
It is a very big deal when a firm is compelled to disclose a material weakness in internal controls. That’s the worst level of internal control failure a going conern can report. In JP Morgan’s case its more damning since Dimon, as recently as May 10, 2012, certified that all was well with internal controls as of the end of 1Q2012.
That assessment means that it is impossible for the firm’s external auditor to sign off on the financial statements until and unless the control breakdowns are remediated sufficiently for the auditor to provide assurance. The description of the control weaknesses at JP Morgan appear to be design flaws, so it’s likely the weaknesses existed in periods earlier than the first quarter of 2012, when it was ‘discovered’. The fact that the unit with the weaknesses by all accounts was under the direct control of the CEO throws doubt on the validity of his prior certifications about the quality of the internal controls. The external auditors will be under extreme pressure to either support or refute the earlier certifications. Falsifying the certification is the worst Sarbanes Oxley violation there is, so Dimon is going to have to come up with an airtight rebuttal.
But the lapdog financial media refused to take these stunning lapses seriously, apparently more taken by the Dimon mythology, as reflected in Warren Buffett recommending Dimon for Treasury chairman last November.
And the Senate hearings revealed Dimon’s and the CIO’s conduct to be markedly worse that the previous press reports had unearthed, including:
Management hid the existence and role of the unit within the JP Morgan Chief Investment office that entered into the “whale” trades, the Synthetic Credit Portfolio, from its inception, even as its exposures ballooned, from the OCC
The bank made repeated, knowing misrepresentations about the size of the losses, the severity of the control failures, and the degree of management knowledge to regulators and investors
The contempt for regulators and for the need for timely and adequate disclosure is symptomatic of an out of control environment. Between the beginning of the year and end of April 2012, the SPG breached risk limits 330 times, sometimes even violating bank-wide limits. Yet staff and management regarded them as an inconvenience rather than treating them as shrieking alarms that warranted swift action
JP Morgan managers and risk control officers were aware of and complicit in the mismarking of positions (this is a very big deal in a financial institution)
And despite this impressive history of bad conduct, JP Morgan was getting special treatment from regulators as recently as January of this year. Marcy Wheeler noted the OCC failed to clean up “previously identified systemic weaknesses” in its anti-money laundering compliance. Eighteen months of intransigence and all the OCC did was scold a bit. It issued no fine.
Even though regulators are finally waking up to the fact that JP Morgan is a dangerous institution that thinks it can act as a law unto itself, the bank does not appear ready to change its ways. The New York Times reports that FERC recommended pursuing Masters and traders over its energy market violations:
For now, according to the document, the enforcement officials plan to recommend that the commission hold the traders and Ms. Masters “individually liable.” While Ms. Masters was “less involved in the day-to-day decisions,” investigators nonetheless noted that she received PowerPoint presentations and e-mails outlining the energy trading strategies.
Masters has apparently lied under oath in offering the usual “I was in charge and I knew nothing” defense. The normal behavior is to cut miscreants loose and at least make a good show of wanting to operate lawfully. But the bank is taking the high-handed route:
“We intend to vigorously defend the firm and the employees in this matter,” said Kristin Lemkau, a spokeswoman for the bank. “We strongly dispute that Blythe Masters or any employee lied or acted inappropriately in this matter.”
Fish rot from the head, and JP Morgan looks to be no exception. Dimon repeatedly made statements to the media and in Congressional testimony about the London Whale trades that were flagrantly false. He wasn’t sworn in and apparently thinks he’s not obligated to be honest with investors, lawmakers, or the public. That sort of arrogance is mirrored in the bank’s pervasive rulebreaking. The upside of JP Morgan’s continued defiance of the law in the interest of its profits is that this latest round of scandals might finally engulf the perp-in-chief.












Comparing Al Qaeda to Financial Elites Al Qaeda - is it that far fetched ? 



Al Qaeda Ideology ...... 



Ideology

See also: Qutbism
Part of the Politics series
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The radical Islamist movement in general and al-Qaeda in particular developed during the Islamic revival and Islamist movement of the last three decades of the 20th century, along with less extreme movements.
Some have argued that "without the writings" of Islamic author and thinker Sayyid Qutb, "al-Qaeda would not have existed."[73] Qutb preached that because of the lack of sharia law, the Muslim world was no longer Muslim, having reverted to pre-Islamic ignorance known as jahiliyyah.
To restore Islam, he said a vanguard movement of righteous Muslims was needed to establish "true Islamic states", implementsharia, and rid the Muslim world of any non-Muslim influences, such as concepts like socialism and nationalism. Enemies of Islam in Qutb's view included "treacherous Orientalists"[74] and "world Jewry", who plotted "conspiracies" and "wicked[ly]" opposed Islam.
In the words of Mohammed Jamal Khalifa, a close college friend of bin Laden:
Islam is different from any other religion; it's a way of life. We [Khalifa and bin Laden] were trying to understand what Islam has to say about how we eat, who we marry, how we talk. We read Sayyid Qutb. He was the one who most affected our generation.[75]
Qutb had an even greater influence on bin Laden's mentor and another leading member of al-Qaeda,[76] Ayman al-Zawahiri. Zawahiri's uncle and maternal family patriarch, Mafouz Azzam, was Qutb's student, then protégé, then personal lawyer, and finally executor of his estate—one of the last people to see Qutb before his execution. "Young Ayman al-Zawahiri heard again and again from his beloved uncle Mahfouz about the purity of Qutb's character and the torment he had endured in prison."[77] Zawahiri paid homage to Qutb in his work Knights under the Prophet's Banner.[78]
One of the most powerful of Qutb's ideas was that many who said they were Muslims were not. Rather, they were apostates. That not only gave jihadists "a legal loophole around the prohibition of killing another Muslim," but made "it a religious obligation to execute" these self-professed Muslims. These alleged apostates included leaders of Muslim countries, since they failed to enforce sharia law.[79]

Al Qaeda strategy.........
On March 11, 2005, Al-Quds Al-Arabi published extracts from Saif al-Adel's document "Al Quaeda's Strategy to the Year 2020".[65][66] Abdel Bari Atwan summarizes this strategy as comprising five stages to rid the Ummah from all forms of oppression:
  1. Provoke the United States and the West into invading a Muslim country by staging a massive attack or string of attacks on U.S. soil that results in massive civilian casualties.
  2. Incite local resistance to occupying forces.
  3. Expand the conflict to neighboring countries, and engage the U.S. and its allies in a long war of attrition.
  4. Convert al-Qaeda into an ideology and set of operating principles that can be loosely franchised in other countries without requiring direct command and control, and via these franchises incite attacks against the U.S. and countries allied with the U.S. until they withdraw from the conflict, as happened with the 2004 Madrid train bombings, but which did not have the same effect with the July 7, 2005 London bombings.
  5. The U.S. economy will finally collapse by the year 2020 under the strain of multiple engagements in numerous places, making the worldwide economic system which is dependent on the U.S. also collapse leading to global political instability, which in turn leads to a global jihad led by al-Qaeda and a Wahhabi Caliphate will then be installed across the world following the collapse of the U.S. and the rest of the Western world countries.
Atwan also noted, regarding the collapse of the U.S., "If this sounds far-fetched, it is sobering to consider that this virtually describes the downfall of the Soviet Union."[65]







NWO Ideology  and QE Strategy  of Financial Al Qaeda.........

Ideology....




Illuminati

The Order of the Illuminati was an Enlightenment-age secret society founded by university professor Adam Weishaupt on 1 May 1776, in Upper Bavaria, Germany. The movement consisted of advocates of freethought, secularism, liberalism, republicanism and gender equality, recruited in the German Masonic Lodges, who sought to teachrationalism through mystery schools. In 1785, the order was infiltrated, broken up and suppressed by the government agents of Charles Theodore, Elector of Bavaria, in his preemptive campaign to neutralize the threat of secret societies ever becoming hotbeds of conspiracies to overthrow the Bavarian monarchy and its state religion, Roman Catholicism.[36]
In the late 18th century, reactionary conspiracy theorists, such as Scottish physicist John Robison and French Jesuit priest Augustin Barruel, began speculating that the Illuminati survived their suppression and became the masterminds behind the French Revolution and the Reign of Terror. The Illuminati were accused of being subversives who were attempting to secretly orchestrate a revolutionary wave in Europe and the rest of the world in order to spread the most radical ideas and movements of the Enlightenment —anti-clericalism, anti-monarchism, and anti-patriarchalism — and create a world noocracy and cult of reason. During the 19th century, fear of an Illuminati conspiracy was a real concern of European ruling classes, and their oppressive reactions to this unfounded fear provoked in 1848 the very revolutions they sought to prevent.[37]
During the interwar period of the 20th century, fascist propagandists, such as British revisionist historian Nesta Helen Webster and American socialite Edith Starr Miller, not only popularized the myth of an Illuminati conspiracy but claimed that it was a subversive secret society which serves the Jewish elites that supposedly propped up both finance capitalism and Soviet communism in order to divide and rule the world. American evangelist Gerald Burton Winrod and other conspiracy theorists within the fundamentalist Christian movement in the United States — which emerged in the 1910s as a backlash against the principles of Enlightenment secular humanism, modernism, and liberalism — became the main channel of dissemination of Illuminati conspiracy theories in the U.S. Right-wing populists, such as members of the John Birch Society, subsequently began speculating that some collegiate fraternities (Skull and Bones), gentlemen's clubs (Bohemian Club) and think tanks (Council on Foreign Relations, Trilateral Commission) of theAmerican upper class are front organizations of the Illuminati, which they accuse of plotting to create a New World Order through a one-world government.[5]

and Bilderbergers - Bernanke and Draghi......


  • Ben Bernanke (2008,[110] 2009),[84] Chairman of the Board of Governors of the United States Federal Reserve
Mario Draghi is the current President of the Bank of Italy, as well as a board member of the Bank for International Settlements – the BIS (the central bank to the world’s central banks). In an interview posted on the website of the BIS in March of 2010, Mario Draghi stated that in response to the Greek crisis, “In the euro area we need a stronger economic governance providing for more coordinated structural reforms and more discipline.”[43] Mario Draghi also attended the 2009 conference of the Bilderberg Group.[44] Perhaps unsurprisingly, Mario Draghi has been backed by the euro-area finance ministers to be the successor to Jean-Claude Trichet at the European Central Bank, who is due to step down in October of 2011.[45]


Strategy......




Quantitative easing

From Wikipedia, the free encyclopedia
Part of a series on Government
Public finance
Government-Vedder-Highsmith-detail-1.jpeg
Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when standard monetary policy has become ineffective.[1][2] A central bank implements quantitative easing by buying financial assets fromcommercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to change money supply, in order to keep market interest rates at a specified target value.[3][4][5][6]
Expansionary monetary policy typically involves the central bank buying short-term government bonds in order to lower short-term market interest rates.[7][8][9][10] However, when short-term interest rates are either at, or close to, zero, normal monetary policy can no longer lower interest rates. Quantitative easing may then be used by the monetary authorities to further stimulate the economy by purchasing assets of longer maturity than only short-term government bonds, and thereby lowering longer-term interest rates further out on the yield curve.[11][12] Quantitative easing raises the prices of the financial assets bought, which lowers their yield.[13]
Quantitative easing can be used to help ensure that inflation does not fall below target.[6] Risks include the policy being more effective than intended in acting against deflation – leading to higher inflation,[14] or of not being effective enough if banks do not lendout the additional reserves.[15] According to the IMF and various other economists, quantitative easing undertaken since the global financial crisis has mitigated the adverse effects of the crisis.[16][17][18]

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