Harper hides fraudulent banking
http://www.thenation.com/doc/20100201/kaufmann
"FDIC Chairman Sheila Bair testified that the credit-default swaps (CDS) market still poses a systemic threat and that even she can't access CDS information to accurately assess financial institutions' exposure."
http://www.rbcroyalbank.com/products/gic/index.html
"Global Market-Linked GICs...Participate in the growth potential of major international equity markets with 100% principal protection."
In the US, the Federal Deposit Insurance Corporation Chair testifies that she cannot access the credit-default swaps market information to accurately assess financial institutions' exposure.
Major US financial institutions including branches in Canada, and Canadian banks continuing to do business with US finance include CDS and other financial and insurance markets.
Canadian banks are currently encouraging Canadians to put their money into products trading in international equity financial markets. They do clarify that only the principle is guaranteed by the Canada Deposit Insurance Corporation.
Aside from the fact that the term 'GIC' for these products is misleading, where is Harper's condemnation of the gaping hole in banking accountability? Where is our media's coverage of the gaping hole in responsible governance of banking?
Harper tries to pass himself off as concerned about Canadians' individual and collective finances, but he hides the fact that no one in his government knows what banks are doing nor where our money is going.
Harper is a fraud, regarding international law and war crimes, regarding democratic governance, regarding climate change, and regarding the economy.
He has lost the confidence of the people of the land.
it is a big house of cards, all reliant on each other to hold them all up.... i don't believe gic's are being used to invest in cds but i could be mistaken... the derivatives market overshadows so much and yet much of it is unregulated....of course aig was involved in cds and it was the reason for the cascade in the market during 2008 and early 2009... it continues to amaze me how such a central dynamic - money - and its manipulation - is such a topic that evokes a sense of boredom and no interest in so many...
a description of credit default swaps, or cds... http://en.wikipedia.org/wiki/Credit_default_swap
perhaps this would be better served in a different category here at rabble, instead of introductions... it is national or international in nature as it involves banking issues central to all of us....
Rather tenuous link to Harper. The fact that the Canadian banking system is fairly safe and well regulated is no testimony to the certainty that Canadian banks give to their customers.
The whole shell game rests on convincing Canadians to invest in financial products that return the best margin to the bank and that is done by offering the best commission for the riskiest products.
Go into ANY bank branch and ask to purchase a GIC. The immediate response is a suggesting that mutual funds offer a much better return and, historically, are as safe as GICs. If the customer demands a guarantee that they will not lose principal or income from said mutual funds, the story changes with a different sales pitch.
This CDS 'GIS' sounds like such an alternate sales pitch where it is alluded that the customers' funds are protected while the reality is that only the principal is.
Caveat emptor. Ask the right questions: Are both my principal AND earnings GUARANTEED safe by CDIC? If the answer is another purposely confusing sales pitch, complete with fanciful earnings projections, run, don't walk.
requested it be moved...
Moved....you're welcome
Thank you Old Goat, your nimbleness on many levels is a tribute to the fact the age means little, when it comes to goats. ;)
When you put your money in an international equity market, you don't know exactly where it goes. The financial transactions which your dollars undergo in their journey through the trades of the entities in which you have invested are not subject to audit.
Neither the federal guaranteeing bodies in the US nor Canada know how much is translated into risky products at any given time, and thus cannot guarantee the safety of the system as a whole. All they can do is guarantee, up to a point, the principle.
A similar situation holds for the tax-free savings accounts.
Now, if the bankers are never fully audited and reined in, and balloons crash again, the FDIC and CDIC will be on the hook for lots of lost money. Money which was taken from residents and put into the financial markets. We won't know where all that money went either. But taxpayers will be obligated to cough up to meet the guarantees of principle.
Successive governments like Harper's line the people up for repeated slashes and blood-letting.
How much longer it can continue is a question.
*
It is fraudulent to say Canada's financiers are fine when there is no public audit of financiers' transactions.
It is fraudulent to imply the problem rests with government funding of critical public services.
Harper defrauds investors and taxpayers when he encourages further sinking of money into an unaudited pit, while requiring residents to pick up the bill for losses.
Harper defrauds and insults us when his policies eliminate good full-time reliable jobs (needed to pay for above) while cutting funds for basic services like health care and education which sustain the population and recycle public dollars back to the population.
Canadians are led into financial chaos, forced into it through Harper's refusal to use the Bank of Canada for social programs and infrastructure, his lack of a full employment policy, and his refusal to audit financier transactions. The public gets diminishing collective support, fewer good jobs, and unreliable investment options. Yet when a crash results from the irresponsibility of Harper and the finance sector, the public is expected to pick up the tab (with what !?) and get their public services slashed more.
The people are being defrauded in all aspects of their lives. another rant saved for Harper's defrauding of our natural environment...
The funds backing market-linked GIC's are not invested in credit-default swaps (assuming that the banks and their Canadian regulator, OSFI, are doing their jobs properly). The funds would typically be invested in bonds and call options, and the bank guarantees the principal. So it might be a little early to panic.
thanks, i don't believe this is the fault of harper, but more a reflection on how deep seated servitude to an increasingly rogue banking system has always been a part of gov'ts for the most part....it would be nice if banks served gov't, but it seems it works the other way around only... i think with the start of derivatives and unregulated markets connected to them, the global banking system has been gunning for increased profits which includes increased risk.. there is not a lot of questioning on the instruments that are being used - cds being a good example... their are counter parties that take the risk, but basically the country(not the banks) are on the hook when everything goes to shit.. this is what happened with the usa in the last year... freddie mac or fannie mae always had the implied backing of the us gov't, so these creations were used to gun the system... we don't have the same here in canada but i was noting on a different thread some changes in chmc here in canada which shares some similarities...
it seems one very basic agenda of the banking system is to get sovereign countries, like canada to take on increased debt while having to spend much of the revenue to service the debt... the money could be directed in all sorts of productive areas, but instead it goes into the hands of this same corrupt banking system... if we lived in a different and more cooperative society money could be the responsibility of us where the interest payments were not given away to private banking interests... why should a bank be given the responsibility of lending money to the canadian gov't when the gov't could have control over this? the answer has to do with making profit off the interest which at present amounts to huge profit... it could be very different where we weren't being leeched on with the usury...
The corporations which a financial institution invests in do their own investing. Many global corporations these days are huge conglomerates which do everything from infrastructure, energy, tech, management, to finance. These entities in turn do business with other global corporations, similarly structured, and with private equity.
None of these transactions are tracked.
i think they are from the us when they involve iran! i do agree though by and large... here is a link doug left on another thread( capitalism and communism) which i think addresses this topic we are discussing quite well
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7061058/...
Corporations around the world, banks, insurers, everyone had been dealing in unknown leveraged debt which is why the collapse of '08 was global and systemic.
I'm wondering if the credit default swaps are similar in process to the carbon market- swapping carbon debt for carbon credit.
It could be that the carbon market swaps (value of polluting permits for offset credits) are a level upon which credit default swaps would operate.
The clearinghouse for credit default swaps would function over the carbon market clearinghouse, pertaining to companies which could potentially default in the carbon market.
Given that the credit default swaps and postulated clearinghouse are entirely private and unaudited, with no one knowing who is dealing with what, and that the principle players have been exempted from the Securities Exchange Commission process, the entire scenario is, frankly, completely out of control.
Harper's smug looming grin in the banner ad as i write seems to say, 'we just want to play in the sandbox with your money'. No auditing, no accountability. make that the tarsands box..
it's nice to see that Stiglitz in that telegraph article is clear on the situation now as worse than before the '08 crash- that those who crashed the system are being given less oversight, not more.
Harper hasn't been clear about finance, and neither have the other politicians in Canada. Neither have civil society groups. How on earth are we going to develop a better system, or even get rid of Harper, when everyone avoids talking about his most glaring inconsistency and failure in reining in the financiers who caused the crash ?? HE'S MADE THE ECONOMY WORSE .
When are politicians and civil society leaders going to stop worrying about their own skins and just say what needs to be said?
Glad Stiglitz did in any case. thanks for that.
http://www.bloggingstocks.com/2009/03/18/chicago-mercantile-exchange-to-clear-credit-default-swaps/
This doesn't sound out-of-control to me: perhaps I'm reading it wrong.
The Clearinghouse and participants are all private, doing their own collating.
It's a separate universe.
Public auditing and reporting is not part of the process. Yet it is our public dollars, individually and collectively. which are the basis for any of these players to operate, including JPMorgan who was handed big bailout money directly and indirectly.
So this paragraph (excerpted from the above link) does not mean what it says?
So in essence, what the CME will do is keep track of who's who and provide transparency, which means that there will be a record of all the trades. The Clearinghouse, CME, also monitors the accounts of all the players to be sure that they maintain enough money in the account to cover their trades at all times. If there is a chance of default, the Clearinghouse will immediately determine if the parties have the money to cover all losses.
And by the way, the accounts of all publicly-traded companies in the U.S. (and Canada) are audited. Auditors are not all-knowing but they are a first line of defence.
auditors and rating agencies were no defense in many past examples including the recent 2008/2009 excursion... as a matter of fact it seems the fox guarding the chicken house has always been the case when it comes to financial regulation and oversight...
from the wiki article on credit default swaps:
History
[edit] Conception
Forms of Credit Default Swaps had been in existence from at least the early 1990s, but the modern Credit Default Swaps were invented in 1997 by a team working for JPMorgan Chase.[9][10][11] They were designed to shift the risk of default to a third party, and were therefore less punitive in terms of regulatory capital.[12] The first CDS involved JPMorgan selling the credit risk of Exxon to the European Bank of Reconstruction and Development.[13]
Credit Default Swaps became largely exempt from regulation by the U.S. Securities and Exchange Commission (SEC) with the Commodity Futures Modernization Act of 2000, which was also responsible for the Enron loophole....
Government approvals relating to Intercontinental and its competitor CME
The SEC's approval for ICE's request to be exempted from rules that would prevent it clearing CDSs was the third government action granted to Intercontinental in one week. On March 3, its proposed acquisition of Clearing Corp., a Chicago clearinghouse owned by eight of the largest dealers in the credit-default swap market, was approved by the Federal Trade Commission and the Justice Department. On March 5, the Federal Reserve Board, which oversees the clearinghouse, granted a request for ICE to begin clearing.
Clearing Corp. shareholders including JPMorgan Chase & Co., Goldman Sachs Group Inc. and UBS AG, received $39 million in cash from Intercontinental in the acquisition, as well as the Clearing Corp.’s cash on hand and a 50-50 profit-sharing agreement with Intercontinental on the revenue generated from processing the swaps.
“
For several months the SEC and our fellow regulators have worked closely with all of the firms wishing to establish central counterparties.... We believe that CME should be in a position soon to provide us with the information necessary to allow the commission to take action on its exemptive requests." "
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The wiki article goes on to describe quite usefully the kinds of sandbox games, making of mud castles, air-guitar playing, snaking lines-in-the-sand equations, and fanciful new words for their 'products'. It would be cute if the sandbox wasn't the earth itself, each grain each life.
It's a situation, as Stiglitz and others have said, in which the bankers who crashed the system are given exemptions from rules limiting their powers, and instead are allowed to run the clearinghouses themselves, while further expanding the cds market along with any new bundling, leveraging, bubbling and naming of additional products created out of thin air. Quite literally out of thin air, actually, as a new base for their bubbling is the air pollution market.
The banks and investment houses must be broken up, and an up-to-date version of Glass-Steagall introduced, along with other firewalls and restrictions on credit default swaps and other derivatives/ 'innovations'.
Further, caps on carbon emissions are necessary, not trade in green offsets for capture at the bankers' table of consumption and elimination.
As for auditing, there is a big difference between a public auditor and a private auditor. Same goes for the rating agencies. And Obama's 'reforms' gave the Federal Reserve more oversight power, the Federal Reserve system boards made up of same private bankers. Recently there was a proposal to publicly audit the Federal Reserve. Where did that go after the predictable whining banker sulk? It looks like Obama's recent attempt last week to talk big and walk backwards was similarly useless.
The sandbox players can trade their clothes around or get their buddies to give them a five star rubber stamp, and it's all so much hogwash.
The entire planet is drowning in the bankers' s - - -, including that of spineless politicians.
Like Harper.
thanks, this is how i see some of our present system working... the banking industry works to elect officals that are more conservative in nature specifically those who will hold the line over what has been happening for the past however many years.... in this regard harper is little different from the liberal leader and both parties are guilty of wanting to perpetuate a system that favours the banking industry over the ordinary citizen... this has little to do with harper and much to do with the way our system of democracy works where money has undue influence over the direction of elections thru the use of advertising and propaganda in the media... wealthy vested interested own the media and are the same ones working to massage the minds of millions this way or that... we have a plutocracy, not a democracy and the banking industry continues to feed this system of plutocracy with little interest in democracy... this is how i see it anyway...