Tag Archives: #FusionCollusion

Dec 12 2018

Custodial Risk, a Major Problem is Looming


Armstrong Economics Blog/Economics

Re-Posted Dec 12, 2018 by Martin Armstrong

QUESTION: I have been a reader for 10+ year, Socrates subs and reg for Orlando WEC. Thank you and as a Veteran, I admire your courage and service.

Ques: Under Dodd-Franks & Bail-In & Bankruptcy Priority; and, due to the Global Debt Crisis, is there a Custodial Risk for Investors a) who are “beneficial owners” (paid for the securities but holding securities in street name) but b) who are not the “Nominee Owner” (since normally the trade Clearing House or Custodian has the direct accounts at the Depository Trust Company).
Is the risk due to the Global Debt Crisis affected by custody by the biggest banks, namely JPMorgan, Citibank, Goldman Sachs & Bank of America – in view of the FDIC record of these four biggest Wall Street Banks holding at 6/30/2018 $ 188.58 TRILLION of nominal derivatives of which $ 142.23 TRILLION are interest rate contracts? FDIC reports two, JPM and Citibank, have $ 36.8 TRILLION of custodial assets. Further, OCC.GOV reports 99.4% of the nominal derivative obligations of these four banks are held for trading, not for hedging. Worldwide, Deutsche Bank, for example, is notorious for their derivative obligations, while non-bank dealers like oil companies and others also write derivatives.
In view of the M F Global seizure by JPM-Britain of USA sourced billions under City-of-London laws, is there a concern if the Custodial Companies have unsupervised authority to transfer title to securities to numerous other nations/laws?
Finally, for Securities Lending, since the near-cash securities collateral is also in “nominee ownership” (custodian) at the Depository Trust Company and similar depositories around the world, in a Global Debt Crisis is there a risk to the (paid up) “beneficial owner” of the collateral?
ANSWER: There is certainly a Custodial Risk going forward and many people are unaware of the broker/clearer risk. The derivative obligations are always thrown around in gross. The real risk is hard to quantify because you have to really net out all these positions. The Leham and Bears collapses were overnight because of posting these mortgage-backed securities ratings by S&P at AAA & others (see the Big Short) which enabled them to enter the REPO market. The derivative obligations are entirely different. This may not cause an overnight collapse but some sort of a work-out deal.
The safer custodian would be Bank of New York if you are talking about just parking assets rather than trading. The risk of a crisis seems to be more 2020-2021. The Fed & Treasury would most likely step in when we are talking about the United States. There is a greater risk in Europe because they are all caught up in the problem of transfer payments between states. In other words, the bail-in problem in Europe is more about the refusal to bail out banks say in Italy with tax-payer fund from Germany. That issue does not exist in the USA so there is less of a risk in the USA than in Europe.
If you are holding shares and you do leave them in the custody of a broker, they will keep them in “street name” so yes they can be taken as an asset of the firm as they did in M.F. Global. If the shares are to be held and you are not using them for collateral at a broker, it is best to take possession. Another trick is you can post them as collateral at a bank separate from a broker and borrow against them and use the cash for hedging. It is more complicated, but it would be best to do that sort of thing with a different entity.
As far as an American institution sweeping accounts and sending the money to London pretending that they are the “owner” of the funds to post in the REPO market, that remains an open risk because the SEC and CFTC never prosecuted M.F. Global allowing that scheme to remain in place. These two agencies always look the other way when the big houses commit fraud. What we must understand is that the banking system model is inherently subject to booms and busts because it is fundamentally flawed and began as a fraud. Once upon a time, you paid a bank to hold your money for safekeeping. Then the banks figured they could lend your money out and make a profit keeping just 10% or less to cover withdrawals. Then when a crisis would hit, they could not get the cash back in time to meet the demand for withdrawals and the bank would close and the assets (loans they made) were then liquidated at deep discounts.

The creation of the Federal Reserve was with the power to create money in times of crisis to meet the demand for withdrawals without having to dump assets in a panic. Then World War I came and instead of the Fed stimulating the economy by buying the corporate paper to directly create jobs, politicians instructed the Fed to buy ONLY government bonds. The Fed was never returned to what it was intended to do and today it can take over any corporation if it deems they are too big to fail no longer limited to banks.

After PhiBro took over Solomon Brothers, Goldman Sachs took over J. Aaron. Suddenly, the trading of commodities mentality became the mainstay of bankers on Wall Street. Then Robert Rubin of Goldman Sachs/US Treasury Secretary pushed to overrule Glass–Steagall. That opened the door for these banks to then be officially trading with other people’s money. The end was now in sight. Today, the trading banks are typically also primary dealers and when they blow up because they are liable for deposits on a demand basis yet invest long-term, they then turn to the government for bailouts threatening them that if they do not cover their losses, the government cannot sell its debt.

GlennIt was Martin Glenn who was the judge in New York on M.F. Global bankruptcy. He was the first one to engage in FORCED LOANS by abandoning the rule of law to help the bankers by protecting them from losses taking client accounts to cover M.F. Global’s losses. That is no different from what we saw in Cyprus. He simply allowed the confiscation of client funds when in fact the rule of law should have been that the bankers were responsible and M.F. Global’s losses should have been reversed. Never should the client’s funds be taken for M.F. Global’s losses to the NY Bankers. It was Judge Martin Glen who placed the entire financial; system at risk by trying to protect the bankers. He pampered these bankers making then the new UNTOUCHABLES. We have to be concerned that there really is no rule of law that will protect you in a crisis.

Categories: Economics, Rule of Law
Dec 12 2018

Michael Avenatti is Ordered to Pay almost $300,000 in Fees to Trump as Case is Dismissed


Armstrong Economics Blog/Politics

Re-Posted Dec 12, 2018 by Martin Armstrong

 

A California federal judge has awarded attorneys for President Donald Trump nearly $300,000 in fees for Michael Avenatti and his failed defamation claim brought by porn star Stormy Daniels for which he raised $600,000. U.S. District Judge S. James Otero held that when Stormy Daniels said in a TV interview that a man had confronted her in 2011 after alleging an affair with Trump in an attempt to silence her, Trump tweeted that the person who made the threats was a “non-existent man” and that her allegation was a “total con job.”

Otero had earlier indicated that the tweet was protected as free speech since it related to a matter of public concern and involved public figures. Daniels was “in the process of making her story known to the world,” Otero said. He said the president’s tweets appeared should be protected under the First Amendment. Such speech “lies at the heart of the First Amendment” and to try to restrict it would have a “chilling effect on candidates running for office.”

It looks like Michael Avenatti’s bid to become president in 2020 has gone down in flames. His claims that Trump is a Liar have not found any legal foundation. It seems to be allegedly just a ploy to make him famous

Dec 11 2018

How Gov’t Violates Human Rights using Conspiracy Theory


Armstrong Economics Blog/Rule of Law

Re-Posted Dec 11, 2018 by Martin Armstrong

Ireland is now claiming it needs to pass the Magnitsky Act to defend human rights. The greatest human rights violations take place in the legal system. It was Adolf Hitler’s notorious court that everyone said violated human right because it had a 90% conviction rate against people accused of being Jewish. Well Ireland, like the United States, has surpassed Adolf Hitler. Sexual offenses have the lowest conviction rates in Ireland’s circuit courts because it requires proof. The 89% conviction rate for sexual offenses in Ireland’s circuit courts compares with 100% for fatal offenses, 98% for offenses against property such as burglary and theft, and 93% for road traffic offenses. If we are really going to deal with human rights, the place to start is legal reform.

The crime of conspiracy was used by the Roman Emperor Maximinus I (235-238AD) which There must be an agreement between two or more persons. The mens rea of conspiracy is a separate issue from the mens rea required of the substantive crime. Conspiracy is the law of tyrants, for it allows the conviction of someone for a crime they did not commit, nor even attempted to commit but you claim they “intended” purely as a mental state to commit in the future. Maximinus engaged in legal persecution. He charged a noted Senator by the name of Magnus, with conspiracy against the emperor, found him guilty, executed him, and then arrested 4,000 others claiming they all conspired with him to intend to depose him. He then used the criminal law to claim they committed a crime of conspiracy, and that, of course, justified confiscating all their property as well.

A conspiracy law was created and used at the Nuremberg Trials for members of the Nazi leadership because they could not actually prove involvement in some cases which was NOT a crime before the trial. This violated every principle of law in any civilized country known as the Ex Post Facto Clause. In other words, you cannot violate a law before it becomes a law. You are supposed to have Due Process which requires the notice of what is a crime to knowingly violate such law. But the pressure to convict the Nazi leadership resulted in violating that Due Process right which is the fundamental guidance from the Bible. The story of Cain and Abel is the source. Cain kills his brother Abel and God knows what he has done. Nevertheless, he summons him and allows him to defend himself even though he knows what he had done. That is the Due Process right that we are all supposed to have. They abandoned that at Nuremberg because the leaders merely gave orders and did not personally execute anyone. So they needed to create a crime of Conspiracy to prosecute them. They charged Conspiracy for participating in a “conspiracy or common plan” to commit international crimes. This was controversial because the conspiracy was not a part of the European civil law tradition. Nonetheless, the crime of conspiracy continued in international criminal justice and was incorporated into the international criminal laws against genocide.

However, they use conspiracy for everything. In this manner, they do not have to prove anyone actually committed any act. This is what Mueller is doing. He charges everyone around Trump in order to compel them to testify against Trump and thus they are given a script that will state that Trump “agreed” to whatever crime they committed and that will prove CONSPIRACY.

Human rights will not begin until CONSPIRACY is eliminated from all crimes. In the case of Nuremberg, they simply need to enact a law that covers the issue of an order in a military context. Any other crime of conspiracy needs to be eliminated in every other context. In the USA, the 1948 Conspiracy Statute was where the punishment provision was completely rewritten to increase the penalty from 2 years to 5 years except where the object of the conspiracy is a misdemeanor. In addition, conspiracies allow for derivative liability where conspirators can also be punished for the illegal acts carried out by other members, even if they were not directly involved.  Thus, where one or more members of the conspiracy committed illegal acts to further the conspiracy’s goals, all members of the conspiracy may be held accountable for those acts. So if one person killed someone and others did not even know that would take place, they too are charged with murder. Where no one has actually committed a criminal act, the punishment varies.  Some conspiracy statutes assign the same punishment for conspiracy as for the target offense. That is where human rights are violated. You can be charged with conspiracy and sentenced to the same punishment as if you actually committed the act. That is why the prisons are full to the brim because prosecutor just charges conspiracy and do not have to prove you committed any act and just claim you agreed with someone else.

The irony is that people who make up conspiracy theories about government actors are called conspiracy nutjobs, yet this in 99% of how the government prosecutes its citizens.

 

Dec 11 2018

The Rule of Law


Abuse of Prosecutorial Discretion

PhilaColonialCourtHouseUS Colonial Courthouse Philadelphia

 

 

Justice

United States Case Law

Dec 11 2018

Jared Kushner Discusses Ongoing White House Agenda Items…


Re-Posted from The Conservative Tree House on December 11, 2018 by

A relatively rare interview with a key senior advisor and emissary for President Trump, Jared Kushner. Topics include: the upcoming chief of staff position; federal prison reform and the first-step act; and the ongoing dialogue in the middle east.

Dec 11 2018

DOJ Wants Details of Mysterious FBI Raid on Protected IG Whistleblower Kept Secret – Target of Raid Says “Police State”…


Re-Posted from The Conservative Tree House on December 10, 2018 by

An interesting legal development (full pdf below) in the aftermath of the mysterious FBI raid on protected FBI whistleblower Nate Cain. [Backstory]  The DOJ wants the details behind the search warrant to remain under seal, and the whistleblower target of that warrant -who was not arrested- is accusing the DOJ-FBI of being a police state:

[Tweet Link – – Daily Caller Story Link]

Something about this entire story is just not adding up.  The whistleblower came forward to the IG with information about how the FBI covered-up for the Clintons during investigations about the Clinton Foundation.  The IG gave the whistleblower protection, confirmed anonymity, and passed on his documentary evidence to the Senate Intelligence Committee (SSCI).   Then the whistleblower gets raided.

From the outset the DOJ and IG claims don’t match the DOJ and FBI conduct.   Even Senator Chuck Grassley has questions.

Here’s the DOJ motion today to keep everything under seal:

https://www.scribd.com/embeds/395382132/content?start_page=1&view_mode=&access_key=key-MVD83hbNwuwvb8XTnfjh

.

This is the letter from Senator Grassley to Inspector General Horowitz.  Notably Grassley wasn’t asking FBI Director Chris Wray for the answers:

(Link to Grassley Letter)

Something sketchy is going on in the background of this story, it just doesn’t make sense.  Why raid the confirmed and IG protected whistleblower?

A possible explanation is that corrupt FBI and DOJ officials, the ones at risk from the evidence provided by the whistleblower, wanted to know what evidence Nate Cain had against them; what was their exposure; and the raid was an effort to protect their interests. That’s the alarming possibility.

However, if that cover-up or target motive is true  – the brazen nature of the operation is stunning; and the corrupt officials must really believe they are so above the law they can act without any concern. Obviously Nate Cain appears to be pointing in that direction.

Yikes.

Dec 11 2018

MAGAnomic Report: Job Openings Still Growing 7+ Million Jobs Available…


Re-Posted from The Conservative Tree House on December 10, 2018 by

The Bureau of Labor Statistics (BLS) has updated the data for the number of jobs that are available in the U.S. economy.  More than 7 million jobs are available for an estimated unemployed labor force (job seekers) of approximately 6 million.

Additionally, what is interesting to note is the sectors where the rate of available jobs is increasing the most. [See Table A – as below]  What you can clearly see is the rate of highest job openings is within the Main Street economy (blue and white collar).

To consider the state of the economy; and contrast the punditry opinion of the economic strength therein; it is important to look at what types of jobs are growing.

Ex. as we can see the “manufacturing” sector available jobs continues to grow at a rate higher than the companies within the industry can hire workers to fill them.

Additionally, and importantly, another sector with expanded job openings is “retail”.  This is a key indicator of downstream consequences from economic growth. People have money to spend, and retailers need workers to support the shopping demand.

When considering the current health and future expansion of the U.S. economy it is an excellent sign that durable goods makers are continuing to add jobs.  More and more manufacturing capacity is coming on-line each month and that means more jobs.

The bottom line is the U.S. Main Street economy is very healthy; wage rates are increasing as a natural outcome of supply/demand within the labor market; and there’s no indication that dynamic is going to change anytime soon.

MAGAnomics makes a balanced economy.

The Trump economic policy simply works.

Jobs, jobs, jobs.

7,000,079 jobs currently available!

Dec 11 2018

Huawei Executive Requests Bail in Canada, Pending Extradition to U.S…


Re-Posted from The Conservative Tree House on December 10, 2018 by

The issues appear multifaceted. In a Canadian court lawyers for Chinese company Huawei CFO, Meng Wanzhou, are arguing for bail while she awaits extradition to the United States for violations on Iran sanctions.

There’s an element to this entire story that appears suspicious. President Trump was intentionally kept out of the loop; and that reality could infer that U.S. (deep state) actors were/are leveraging the Huawei matter as a poison pill against Trump’s trade reset with China.

Years ago such a possibility might be dismissed as conspiracy theory. However, today, knowing how far the administrative state has gone to disrupt the Trump presidency, such a concerted deep state scheme with Canada seems entirely plausible.

VANCOUVER (Reuters) – A Canadian provincial court on Monday weighed whether to grant bail to a top executive of one of the world’s biggest telecommunications companies, Huawei Technologies, while she awaits a ruling on extradition to the United States.

U.S. prosecutors want Chief Financial Officer Meng Wanzhou to be extradited to face accusations she misled multinational banks about Huawei’s control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions which would incur severe penalties, court documents said.

[…] Meng’s lawyers argue that while she awaits the extradition ruling, she should be allowed to live in one of her two multi-million-dollar Vancouver homes and travel through the area as long as she is accompanied at all times by drivers and minders from a security firm. She would also wear a global positioning system (GPS) bracelet at all times, her lawyers said.

[…] At one point the judge asked why Meng had avoided travel to the United States since 2017 if not to avoid arrest. Her lawyer David Martin cited a “hostile” climate toward Huawei in the United States.

“I ask the court to ask itself, what motive could she possibly have to flee?” Martin said, arguing the evidence against her was not overwhelming. “If she were to flee, or breach order in any way … it doesn’t overstate things to say she would embarrass China itself.” (Read More)

We cannot discount any motives here, because remember: there are trillions at stake.

If there is validity to a Machievellian DC scheme to block President Trump’s global trade reset with China, via antagonism through Meng Wanzhou, we would be naive not to notice such an action holds almost identical fingerprints to the Turkish Kashoggi matter and the effort to disrupt President Trump’s agreements with Saudi’s MbS.

At the 30,000 foot level – in both issues of conflict (Wanzhou and Kashoggi) Iran is the principle benefactor.  In the realm of geopolitical influence and power struggles – – Who supported the Iran deal and who opposed it?

Additionally, and structurally beyond refute, Wall Street and the multinational global alliance (World Bank and IMF) have an interest in blocking President Trump from restructuring global economic systems through his trade agreements.

Could it be the Kashoggi matter and the Wanzhou matter are similarly framed?

We should at least entertain the plausibility.

Dec 11 2018

Mark Meadows Leading Contender for President Trump Chief-of-Staff?…


Re-Posted from The Conservative Tree House on December 10, 2018 by

Lots of speculation around the DC circuit about who will replace President Trump’s outgoing chief of staff John Kelly.  However, one name seems to be gaining considerable consensus, congressman Mark Meadows (R-NC).

According to a statement from Mr. Meadows office:

“Serving as Chief of Staff would be an incredible honor. The President has a long list of qualified candidates and I know he’ll make the best selection for his administration and for the country.”

Dec 11 2018

U.S. Chamber of Commerce Threatens Trump USMCA Deal – Eliminate Steel/Aluminum Tariffs or No Support…


Re-Posted from The Conservative Tree House on December 10, 2018 by

CTH has never hidden our disgust for the corrupt lobbying enterprise known as the U.S. Chamber of Commerce, and their President Tom Donohue.  No internal organization in modern history has done more to harm American workers and American industry than the U.S. Chamber of Commerce.  Their fraudulent and corrupt enterprise is a toxic threat to our economy.

Today the U.S. Chamber of Commerce issues a statement denouncing the trade strategy of the Trump administration and announcing their lobbying support for the USMCA trade agreement is contingent upon the removal of Steel and Aluminum tariffs.

As the Washington Times writes: “The Chamber had previously complained that the deal’s language limiting protections for investors and stiffening of the “rules of origin” for when autos can be duty-free were problematic.”  Put another way: Wall Street is angry their multinational constructs are not supported, and protecting U.S. workers from the predatory nature of global outsourcing is bad for their controlled market schemes.

Ultimately, Donohue’s biggest complaint -revealed by historic review- is that his organization didn’t get to write the USMCA trade agreement and were stopped from selling their special interest carve-outs to their corporate clients.

President Trump is the first modern U.S. president to stop the CoC from writing the trade agreement thereby stopping Donohue from selling his influence to the highest bidder.

In the heavily globalist TPP agreement (thankfully Trump abandoned), President Obama allowed the U.S. CoC full and autonomous control over the terms.  In exchange for control over content the U.S. CoC gave generous donations to Obama’s political allies.  Dubya Bush, Bill Clinton and H.W. Bush did the same thing; that’s also how the original NAFTA was written, and the reason for the global exploitation loophole.

It is actually refreshing to see a U.S. President and and economic policy team that are entirely independent from Wall Street influence.  If you peel all the skin from the corrupt DC onion, the inability of Donohue and his crony CoC to influence economic policy is exactly why our economy is growing independent of the global markets.

President Donald Trump, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Ambassador Robert Lighthizer will go down in history as the greatest assembly of economic warriors/strategists ever.

What the people of France, Brazil, Poland, Hungary, Italy and perhaps even Mexico, are expecting and demanding is exactly the economic nationalism that President Trump and team are delivering for the U.S.A.

Few people actually comprehend the scale of President Trump and how his America First MAGAnomic program is destroying the tentacles of influence from a multinational global financial network.

The ongoing U.S. trade reset is the biggest, most consequential and most significant national security initiative in our lifetime. Nothing else is even close….