Glass-Steagall Act, signed into law as the U.S.A. Banking Act of 1933, the legislation had been crucial to safeguarding the financial industry in the wake of the Great Depression. But with its repeal in 1999, the barriers separating commercial and investment banking collapsed, creating the preconditions for an economic crisis from whose shadow we have yet to emerge. Carmen Segarra, a Wall Street whistleblower in her book “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street” described the deep corruption in our banking and financial system and how the powerful rewards bad behaviours.Read More
In what appears to be the latest in a string of financial crimes and scandals that have generated some $18 billion in fines since the financial crisis, prosecutors are investigating whether two employees in the bank’s wealth management division helped clients set up accounts in offshore tax havens, including the British Virgin Islands, and possibly allowed criminals to move money through these shelters, some of which may have flowed through accounts at the bank (other employees may also have been involved, prosecutors said).
According to the Financial Times the illicit transactions that two DB wealth management employees neglected to flag in 2016 alone stood at €311 million ($353 million), but people familiar with the case is almost certainly much larger, given that the suspicious activity continued for five years.
From the LIBOR-rigging scandal to the offshore secrets of the Panama Papersand ‘dark money’ in the Brexit vote, it is everywhere. In my recent work with anti-corruption group Global Witness, I saw first-hand how ordinary people in some of the world’s poorest countries suffer the consequences of corruption and financial crime. We exposed suspicious mining and oil deals in Central Africa, in which over a billion dollars of desperately-needed public finances were lost offshore. The story is about the West as much as Africa. The deals were routed through a dizzying web of offshore shell companies in the British Virgin Islands, often linked to listed companies in London, Toronto and elsewhere.
For Strange, money laundering, tax evasion and public embezzlement were a result of the collapse in the 1970s of the post-war financial order.
Google, Amazon, Apple, Facebook and Microsoft have bought more than 500 companies in the past decade. These giants are looking for the younger fast growers.
Today firms find it is more profitable to restrict production than to invest in growing. Think of airlines that don’t want more capacity, beer companies that don’t expand plants, and cable companies that don’t upgrade infrastructure.
Instead, firms take their high profits and plow them into share buybacks. The money goes to wealthy shareholders who spend less relative to their income than poor people. And so low investment and low consumption are tied together.
“The Wealth of Nations” and the Declaration of Independence were bold statements against the abuses of monopoly power. Americans wanted entrepreneurial freedom to build businesses in a free market.
Today, we need a new revolution to cast off monopolies and restore free trade.
Many indigenous Papuans ask “Why are we so poor when our country is so rich?”
BP is profiting from a giant gas field in West Papua while the indigenous population face ‘slow motion genocide’ under Indonesian military occupation, an undercover investigation by New Matilda can reveal. The oil giant is collaborating with the army and police who are implicated in the killing and torturing of pro-independence activists as part of an escalating militarisation to secure West Papua’s gas reserves.
After fifteen years in West Papua, BP is endangering human rights and failing to deliver ‘a material improvement in fundamental living conditions’ of some of the world’s poorest people.
“BP are siphoning off West Papuan resources to Indonesia blind to the brutal repression going on around them, The Indonesian Government are desperate to hide what is happening from the rest of the world”, said Lord Harries.
We are going to see whether Goldman Sachs, the world’s most politically-connected investment bank – the former employer of dozens of senior civil servants, from US treasury secretaries to the governors of the Bank of England and the European Central Bank can evade this financial fraud allegation once again.
The answer will tell whether there has been reform in the banking and financial industry since a decade of financial crash, which I doubt very much. Meanwhile its stock is plunging, drastically underperforming compared to the market.
We are risking another bubble and if 70 years of historical relationships are anything to go by, the S&P 500’s annual return over the next 10 years may be about zero. “In hindsight, the fix was simple: abandon the belief in any limit to the stupidity of Wall Street.”
“Over the completion of the current market cycle, I fully expect the S&P 500 to lose close to two-thirds of its value from the recent peak.”
Amazon’s HQ2 spectacle, featuring civic leaders across the country happily debasing themselves—personally, politically, and economically— in a futile quest to attract the beneficence of Jeff Bezos, is just the most extreme example of a corporate con job that goes on all the time. Big companies can force cities and states to compete in a zero-sum game of offering them tax breaks and other incentives in order to locate or relocate facilities.
All of this is nothing but a transfer of wealth from public to private coffers. To companies, this is just free money. Billions of dollars from heaven.
By banning this insulting robbery of the public till outright, business will continue building, and investing, and locating, and relocating. They do all those things in order to make more money. Companies create jobs because they need work done in order to make money. They are not charitable activities. They do not need a bribe. They are playing on the desperation of desperate places in order to rip us all off. That should not be legal.
In Indonesia, the rulers are covering-up the true horrors of the Indonesian reality. Why?
Because they don’t give a damn about the poor. They couldn’t care less about the great majority that actually lives in destitution. They don’t need ‘help’, because the people do not matter. What matters is the profits of the few who are form the ‘elites’, as well as servitude and prostitution to the Western rulers. After all, it was the West that triggered the 1965 coup in which between 1-3 million intellectuals, ‘atheists’, Communists and unionists lost their lives. And so, the Indonesian treasonous business ‘heads’, the military generals, religious leaders as well as the servile scholars and media ‘stars’ are merrily prostituting themselves, eternally grateful to Washington, London and Riyadh, for saving them from the just and egalitarian society, which the great father of the nation Soekarno and the Communist Party of Indonesia (PKI) were aiming at.
The Elites get away with everything. No one dares to challenge them. And they get rewarded by the West – as long as they rob the country and its people of everything, and deliver huge part of the loot to the gates of Washington, Canberra, Paris and London.
Of course, the decline of the dollar could be a good thing…for the rest of the world. According to former World Bank Chief Economist Justin Yifu “the dominance of the greenback is the root cause of global financial and economic crises.”
Yifu’s solution was to replace the dollar and all other national currencies with one global currency. But already, Putin and Chinese President Xi Jinping are working on a different solution of their own.
We had a stock market crash in the year 2000, and then in 2008, we had a crash in stocks and real estate. The next crash is going to be in stocks, real estate and bonds — including a lot of sovereign debt, corporate bonds and a whole lot of other bonds that will be crashing at the same time. So, it will be all of the standard financial asset classes, including the traditional ‘safe haven’ of bonds that are going to be crashing at the same time that the world monetary system is falling apart.Read More
“Such is the world of user acquisition in tech today: as growth becomes increasingly expensive, somebody must be footing the bill for all of this wasteful spending. But who?”
“The first, as you might guess, are early stage funds’ limited partners, particularly the future limited partners that invest into the next fund. Their money, after all, is what pays the VC’s newly trumped up management fee: marking up Fund IV in order to raise money for more management fees out of Fund V, and so on, is so effective because fundraising can happen much faster than the long and difficult job of actually building a business and creating real enterprise value. It might take seven to ten years to build a company, but raising the next fund happens in two or three years.”
“The antidote is two-fold. First, we need to return to the roots of venture investing. The real expense in a startup shouldn’t be their bill from Big Tech but, rather, the cost of real innovation and R&D. The second is to break away from the multilevel marketing scheme that the VC-LP-user growth game has become.”
Cutting Caracas out of the international market has already triggered a widespread humanitarian catastrophe causing ordinary Venezuelans to suffer the consequences.Read More
French, German and Spanish banks are now far too exposed to Italian debt for their respective governments to even entertain the idea of pushing Italy to the edge. “Brussels would love to see our defeat,” said Claudio Borghi, the Lega economics chief and budget chairman in the Italian parliament. “They think that we’ll surrender if they cause a crisis for our banks.
Lorenzo Bini-Smaghi, a former member of the ECB board, disagrees. He believes that events are following a similar script to the onset of the Eurozone debt crisis in 2011. “The economy risks tipping into recession in the fourth quarter. The Italian government has not understood this. The crash is going to be violent.”