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Crooked Banks and Captured Regulators

If officials at the Securities and Exchange Commission (SEC) are bothered by allegations of incompetence and capture by Wall Street’s bankers, it is hard to tell. The Commission recently hired Brett Redfearn to serve as Director of the Division of Trading and Markets. Redfearn left a 13 year stint at JP Morgan to assume a key role in regulating banks, investors and traders. The SEC, and other regulators such as the CFTC and the Federal Reserve, aren’t worried about appearances. Redfearn looks like yet another fox being sent to guard the henhouse. His appointment undermines confidence even if he intends […]

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Is Ripple The Next Hot Cryptocurrency? Some Are Calling It ‘The Bitcoin That Banks Like’

After Bitcoin, can you name the second largest cryptocurrency?  Until recently it was Ethereum, but now it is Ripple.  At the start of last year, Ripple was trading for less than a penny, and even just a few months ago you could still get Ripple for about 20 cents.  But now the price of Ripple has absolutely exploded, and as I write this article it is sitting at $ 3.15.  At this point Ripple has a market cap of more than 120 billion dollars, and those that got in when Ripple was under a penny have seen their investments go […]

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All the Banks Deserve Are Crocodile Tears

It’s official. Lending institutions are having a tough time making loans. Don’t get me wrong, they still make money the old fashioned way: by borrowing from us through deposits on which they pay almost no interest, and then lending it long term to anyone that qualifies. But they’ve had to jack up their other fees because the traditional business plan just isn’t cutting it. You and I are still keeping tidy sums at the bank, even though they pay us about half the rate of inflation, guaranteeing a loss of purchasing power. But few people, and even fewer businesses, want […]

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Central banks’ credibility problem

In a speech in London the other day, Peter Praet discussed the ECB’s unconventional policy measures. I was there, and I have to say that he deviated considerably – and rather entertainingly – from the version of the speech on the ECB website. But his core message was still the same: “Rates are expected to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. So, no interest rate hikes for a long time to come. But that’s not what his final chart says: Market expectations are that interest […]

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U.S. Banks Precious Metals Derivative Exposure Surged

According to the most recent report on the U.S. Financial Institutions Derivatives trading activity, the U.S. banks held a record amount of precious metals contracts in the first quarter of 2017. Not only did the U.S. banks report a record amount of precious metals contracts, but they also held an unprecedented quantity in notional value of commodity and equity derivative contracts. There just seems to be a lot of paper floating around in our highly inflated stock, bond, and Forex markets. And… there needs to be. Without an ever increasing amount of leverage via their derivative bets and hedging, these […]

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Central Banks Now Own Stocks And Bonds Worth Trillions – And They Could Crash The Markets By Selling Them

Have you ever wondered why stocks just seem to keep going up no matter what happens?  For years, financial markets have been behaving in ways that seem to defy any rational explanation, but once you understand the role that central banks have been playing everything begins to make sense.  In the aftermath of the great financial crisis of 2008, global central banks began to buy stocks, bonds and other financial assets in very large quantities and they haven’t stopped since.  In fact, as you will see below, global central banks are on pace to buy 3.6 trillion dollars worth of […]

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Financial Weapons Of Mass Destruction: The Top 25 U.S. Banks Have 222 Trillion Dollars Of Exposure To Derivatives

The recklessness of the “too big to fail” banks almost doomed them the last time around, but apparently they still haven’t learned from their past mistakes.  Today, the top 25 U.S. banks have 222 trillion dollars of exposure to derivatives.  In other words, the exposure that these banks have to derivatives contracts is approximately equivalent to the gross domestic product of the United States times twelve.  As long as stock prices continue to rise and the U.S. economy stays fairly stable, these extremely risky financial weapons of mass destruction will probably not take down our entire financial system.  But someday […]

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Russian Roulette, Central Banks, and Gold

Grab your ultra-reliable 357 magnum revolver and load the cylinder with six, not one, rounds of ammunition. Point the gun at your head if you are a member of the struggling middle-class. Imagine pulling the trigger and hoping … Do you feel lucky? The Six Loads of Ammunition for your 357 revolver are: #1: Central banks and commercial banks exert a huge influence over all aspects of our financial lives. Paper currencies issued by central banks, digital currency units, credit card debt, pension funds, retirement accounts, checking accounts, Quantitative Easing, bond monetization, congress, regulators, Presidents, and the list goes on. […]

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Major Problems Announced At One Of The Largest Too Big To Fail Banks In The United States

Do you remember when our politicians promised to do something about the “too big to fail” banks?  Well, they didn’t, and now the chickens are coming home to roost.  On Thursday, it was announced that one of those “too big to fail” banks, Wells Fargo, has been slapped with 185 million dollars in penalties.  It turns out that for years their employees had been opening millions of bank and credit card accounts for customers without even telling them.  The goal was to meet sales goals, and customers were hit by surprise fees that they never intended to pay.  Some employees […]

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Global Banks are Dead in the Water

Anyone who doesn’t recognize that we’re facing a serious debt and financial bubble has either been living under a rock, or has retreated into their own fantasy la-la-land to cope with just how bad central bankers and governments have let things get. News flash: they’ve gotten pretty damn terrible! Banks have taken on too much bad debt that keeps turning into more non-performing loans, and we’re especially seeing that now in countries like Greece and Italy. But instead of restructuring those loans to let their stock and bondholders cover the losses, banks are resorting to what I call financial magic […]

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