Tuesday, January 07, 2014

Interest Rates Are Manipulated | The Big Picture

Interest Rates Are Manipulated | The Big Picture:

Nice collection of the Manipulations in the blog ...

Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.
"To put the Libor interest rate scandal in perspective:
  • Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is stillbeing manipulated.  No wonder … the fines are pocket change – the cost of doing business – for the big banks
Why? Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”.  As Nobel prize winning economist Joseph Stiglitz noted years ago:
“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.
The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”
Experts also say that we have to prosecute fraud or else the economy won’t ever really stabilize.
But the government is doing the exact opposite.  Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguablyone of the main causes of the double dip in housing.)
Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements.
Because of this failure to prosecute, it’s not just interest rates. As shown below, big banks have manipulatedvirtually every market – both in the financial sector and the real economy – and broken virtually every law on the books.
And they will keep on doing so until the Department of Justice grows a pair.

Currency Markets Are Rigged

Currency markets are massively rigged. And see this and this.

Derivatives Are Manipulated

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed: through gamed self-reporting.

Oil Prices Are Manipulated

Oil prices are manipulated as well.

Gold and Silver Are Manipulated

Gold and silver prices are “fixed” in the same way as interest rates and derivatives – in daily conference calls by the powers-that-be.
Bloomberg reports:
It is the participating banks themselves that administer the gold and silver benchmarks.

So are prices being manipulated? Let’s take a look at the evidence. In his book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012.

For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets.

Energy Markets Are Manipulated

The Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.

Commodities Are Manipulated

The big banks and government agencies have been conspiring to manipulate commodities prices for decades.
The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.
And they are using these physical assets to massively manipulate commodities prices … scalping consumers ofmany billions of dollars each year.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocksbonds, options, currencies and commodities. And seethis.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:
  • Engaging in mafia-style big-rigging fraud against local governments. See thisthis and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details herehereherehereherehereherehere,hereherehere and here
  • Pledging the same mortgage multiple times to different buyers. See thisthisthisthis and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See thisthisthisthis and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See thisthis and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments
The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until Wall Street executives are finally thrown in jail."

This is your brain on religion: Uncovering the science of belief - Salon.com

This is your brain on religion: Uncovering the science of belief - Salon.com:

Nice excerpt from the book "We Are Our Brains"

"There are around 10,000 different religions, each of which is convinced that there’s only one Truth and that they alone possess it. Hating people with a different faith seems to be part of belief. Around the year 1500, the church reformer Martin Luther described Jews as a “brood of vipers.” Over the centuries the Christian hatred of the Jews led to pogroms and ultimately made the Holocaust possible. In 1947, over a million people were slaughtered when British India was partitioned into India for the Hindus and Pakistan for the Muslims. Nor has interfaith hatred diminished since then. Since the year 2000, 43 percent of civil wars have been of a religious nature."
"In 1996 a poll of American scientists revealed that only 39 percent were believers, a much smaller percentage than the national average. Only 7 percent of the country’s top scientists (defined for this poll as the members of the National Academy of Sciences) professed a belief in God, while almost no Nobel laureates are religious. A mere 3 percent of the eminent scientists who are members of Britain’s Royal Society are religious. Moreover, meta-analysis has shown a correlation among atheism, education, and IQ. So there are striking differences within populations, and it’s clear that degree of atheism is linked to intelligence, education, academic achievement, and a positive interest in natural science. Scientists also differ per discipline: Biologists are less prone to believe in God and the hereafter than physicists. So it isn’t surprising that the vast majority (78 percent) of eminent evolutionary biologists polled called themselves materialists (meaning that they believe physical matter to be the only reality). Almost three quarters (72 percent) of them regarded religion as a social phenomenon that had evolved along with Homo sapiens. They saw it as part of evolution, rather than conflicting with it."
"The religious programming of a child’s brain starts after birth. The British evolutionary biologist Richard Dawkins is rightly incensed when reference is made to “Christian, Muslim, or Jewish children,” because young children don’t have any kind of faith of their own; faith is imprinted in them at a very impressionable stage by their Christian, Muslim, or Jewish parents. Dawkins rightly points out that society wouldn’t tolerate the notion of atheist, humanist, or agnostic four-year-olds and that you shouldn’t teach children what to think but how to think. Dawkins sees programmed belief as a byproduct of evolution. Children accept warnings and instructions issued by their parents and other authorities instantly and without argument, which protects them from danger. As a result, young children are credulous and therefore easy to indoctrinate. This might explain the universal tendency to retain the parental faith. Copying, the foundation of social learning, is an extremely efficient mechanism. We even have a separate system of mirror neurons for it. In this way, religious ideas like the belief that there’s life after death, that if you die as a martyr you go to paradise and are given 72 virgins as a reward, that unbelievers should be persecuted, and that nothing is more important than belief in God are also passed on from generation to generation and imprinted in our brain circuitry. We all know from those around us how hard it is to shed ideas that have been instilled in early development."

"The Evolutionary Advantage of Religion
(1) First, religion binds groups. Religions use various mechanisms to keep the group together: 
One is the message that it’s sinful to marry an unbeliever.. This principle is common to all religions, with attendant punishments and warnings. Segregating education according to faith makes it easier to reject others, because ignorance breeds contempt. 
Another is the imposition of numerous social rules on the individual in the name of God, sometimes accompanied by dire threats about the fate of those who don’t keep them. One of the Ten Commandments, for instance, is lent force by the threat of a curse “unto the fourth generation.” Blasphemy is severely punished in the Old Testament and is still a capital offense in Pakistan. Threats have also helped to make churches rich and powerful. In the Middle Ages, enormous sums were paid in return for “indulgences,” shortening the time that someone would spend in purgatory. 
A further binding mechanism is being recognizable as a member of the group. This can take the form of distinguishing signs, like black clothing, a yarmulke, a cross, a headscarf, or a burka; or physical characteristics, like the circumcision of boys or girls; or knowledge of the holy scriptures, prayers, and rituals. You must be able to see who belongs to the group in order to obtain protection from fellow members. This mechanism is so strong that it seems senseless to try to ban people from wearing distinguishing accessories or items of clothing like headscarves...The feeling of group kinship has been strengthened over the centuries by holy relics worshiped by the various faiths. It doesn’t matter that there are wagonloads of Buddha’s ashes in temples in China and Japan, nor that so many splinters of the True Cross have been preserved that, according to Erasmus, you could build a fleet of ships from them. The point is that such things keep the group together. The same applies to the 20 or so churches that claim to have Christ’s original foreskin in their possession.
Finally, most religions have rules that promote reproduction. This can entail a ban on contraception. The faith is spread by having children and then indoctrinating them, making the group bigger and therefore stronger.

(2) Traditionally, the commandments and prohibitions imposed by religions had a number of advantages. 
   Besides the protection offered by the group, the social contacts and prescriptions (like kosher food) had some beneficial effects on health...However, the causality of these correlations hasn’t been demonstrated, and the links aren’t conclusive...An Israeli study showed that, in complete opposition to the researchers’ hypothesis, a religious lifestyle was associated with a doubled risk of dementia 35 years later. 

(3) Having a religious faith is a source of comfort and help at difficult times, whereas atheists have to solve their difficulties without divine aid. Believers can also console themselves that God must have had a purpose in afflicting them. In other words, they see their problems as a test or punishment, that is, as having some meaning. “Because people have a sense of purpose, they assume that God, too, acts according to purpose,” Spinoza said. ...So they viewed all calamities, like earthquakes, accidents, volcanic eruptions, epidemics, and floods, as a punishment by that same being. According to Spinoza, religion emerged as a desperate attempt to ward off God’s wrath.

(4) God has the answer to everything that we don’t know or understand, and belief makes you optimistic .. Faith also gives you the assurance that even if times are hard now, things will be much better in the next life. Curiously, adherents of religion always claim that it adds “meaning” to their life, as if it were impossible to lead a meaningful life without divine intervention.

(5) Another advantage of religion, it would seem, is that it takes away the fear of death — all religions promise life after death. The belief in an afterlife goes back 100,000 years. We know this from all the items found in graves: food, water, tools, hunting weapons, and toys. Cro-Magnon people also buried their dead with large amounts of jewelry, as is still done in Asia today. You need to look good in the next life, too. Yet being religious doesn’t invariably make people less afraid of dying. The moderately religious fear death more than fervent believers and those who are only very slightly religious, which is understandable when you see how often religion uses fear as a binding agent. Yet many appear to feel a little uncertain about the promised life after death. Richard Dawkins rightly wondered, “If they were truly sincere, shouldn’t they all behave like the Abbot of Ampleforth? When Cardinal Basil Hume told him that he was dying, the abbot was delighted for him: ‘Congratulations! That’s brilliant news. I wish I was coming with you.’ ”

(6) A very important element of religion has always been that it sanctions killing other groups in the name of one’s own god. The evolutionary advantage of the combination of aggression, a group distinguishable by its belief, and discrimination of others is clear. Over millions of years, humans have developed in an environment where there was just enough food for one’s own group. Any other group encountered in the savanna posed a mortal threat and had to be destroyed. These evolutionary traits of aggression and tribalism can’t be wiped out by a few generations of centrally heated life. That explains why xenophobia is still so widespread in our society. The whole world is full of conflicts between groups with different faiths. Since time immemorial the “peace of God” has been imposed on others by fire and sword. That’s unlikely to change soon."

“Religion is excellent stuff for keeping common people quiet.” — Napoleon Bonaparte
"Religion is regarded by the common people as true, by the wise as false, and by rulers as useful.” -- Seneca
“Emotional excitement reaches men through tea, tobacco, opium, whisky, and religion.” — George Bernard Shaw

Sunday, January 05, 2014

JPMorgan Chase nears a $2 billion deal in a case tied to Madoff

JPMorgan Chase nears a $2 billion deal in a case tied to Madoff
"Working through a long list of legal problems, JPMorgan Chase is starting the new year with another steep payout to the government.

The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs of Bernard L. Madoff's Ponzi scheme, according to people briefed on the case."