Tag Archives: fraud

The Victims List: Why Bernie Madoff Is The Only Crook Who Went To Gaol

13 Sep

In case you didn’t know, today is not only Friday the 13th, an “unlucky” day in Western superstition.

It is also Yom Kippur. Otherwise known as the “Day of Atonement”.

A day of “love and forgiveness”, and “The day on which G-d forgives for the less desirable actions of His nation”, according to the Jerusalem Post.

Which is both an ironic, and an apropos theme to carefully consider, in the light of today’s post.

Ever wonder why Bernie Madoff so famously and publicly went to gaol for his ponzi crimes, when no other banker or “investment adviser” did?

Take a slow, careful, thoughtful look at the list of his victims below.

See anything in those names that strikes you?

From the Wall Street Journal, March 6 2009:

Description
Fairfield Greenwich Advisors
An investment management firm
$7,500,000,000
Tremont Group Holdings
Asset management firm
$3,300,000,000
Banco Santander
Spanish bank
$2,870,000,000
Bank Medici
Austrian bank
$2,100,000,000
Ascot Partners
A hedge fund founded by billionaire investor, philanthropist and GMAC chief J. Ezra Merkin
$1,800,000,000
Access International Advisors
A New York-based investment firm
$1,500,000,000
Fortis
Dutch bank
$1,350,000,000
Union Bancaire Privee
Swiss bank
$700,000,000
HSBC
British bank
$1,000,000,000
Natixis SA
A French investment bank
$554,400,000
Carl Shapiro
The founder and former chairman of apparel company Kay Windsor Inc., and his wife
$500,000,000
Royal Bank of Scotland Group PLC
British bank
$492,760,000
BNP Paribas
French bank
$431,170,000
BBVA
Spanish bank
$369,570,000
Man Group PLC
A U.K. hedge fund
$360,000,000
Reichmuth & Co.
A Swiss private bank
$327,000,000
Nomura Holdings
Japanese brokerage firm
$358,900,000
Maxam Capital Management
A fund of funds based in Darien, Connecticut
$280,000,000
EIM SA
A European investment manager with about $11 billion in assets
$230,000,000
AXA SA
French insurance giant
N/A
UniCredit SpA
Italian Bank
$92,390,000
Nordea Bank AB
Swedish Bank
$59,130,000
Hyposwiss
A Swiss private bank owned by St. Galler Kantonalbank
$50,000,000
Banque Benedict Hentsch & Cie. SA
A Swiss-based private bank
$48,800,000
Fairfield, Conn.
town pension fund
$42,000,000
Bramdean Alternatives
An asset manager
$31,200,000
Jewish Community Foundation of Los Angeles
The largest manager of charitable gift assets for Los Angeles Jewish philanthropists
$18,000,000
Harel Insurance Investments & Financial Services Ltd.
Israel-based insurance firm
$14,200,000
Baloise Holding AG
Swiss insurer
$13,000,000
Societe Generale
French Bank
$12,320,000
Groupama SA
French insurer
$12,320,000
Credit Agricole SA
French bank
$12,320,000
Richard Spring
individual investor
$11,000,000
RAB Capital
hedge fund
$10,000,000
Banco Popolare
Italian bank
$9,860,000
Korea Teachers Pension
A 10 trillion won Korean pension fund
$9,100,000
Swiss Life Holding
Swiss insurer
$78,900,000
North Shore-Long Island Jewish Health System
health system
$5,700,000
Neue Privat Bank
Swiss bank
$5,000,000
Clal Insurance Enterprise Holdings
An Israel-based financial services company
$3,100,000
Ira Roth
individual investor
$1,000,000
Mediobanca SpA
via its subsidiary Compagnie Monegasque de Banque.
$671,000
Fred Wilpon
owner of New York Mets
N/A
Steven Spielberg
The Spielberg charity — the Wunderkinder Foundation
N/A
JEHT Foundation
A New York foundation focused on electoral and criminal justice reform
N/A
Mortimer B. Zuckerman Charitable Remainder Trust
The charitable trust of real-estate magnate, who owns the Daily News and U.S. News & World Report
N/A
Robert I. Lappin Charitable Foundation
A Massachusetts-based Jewish charity
N/A
Chais Family Foundation
A charity that gave to Jewish causes
N/A
KBC Group NV
Belgian banking and insurance group
N/A
Barclays PLC
British bank
N/A
Dexia
French bank
N/A
Allianz Global Investors
The asset management unit of German insurer Allianz SE
N/A
Banco Espanol de Credito SA (Banesto)
A Spanish bank contolled by Banco Santander
N/A
CNP Assurances
French insurer
N/A
UBS AG
Swiss bank
N/A
Yeshiva University
A New York-based private university
$14,500,000
The Elie Wiesel Foundation for Humanity
The charitable foundation of Nobel laureate
$15,200,000
Leonard Feinstein
The co-founder of retailer Bed Bath & Beyond
N/A
Sen. Frank Lautenberg
The charitable foundation of the New Jersey Senator’s family
N/A
Norman Braman
former owner of Philadelphia Eagles
N/A
Jeffrey Katzenberg
The chief executive of DreamWorks Animation SKG Inc.
N/A
Gerald Breslauer
The Hollywood financial advisor to Steven Spielberg and Jeffrey Katzenberg
N/A
Kingate Management
hedge fund
N/A
Julian J. Levitt Foundation
Texas-based charity
N/A
Loeb family
N/A
N/A
Lawrence Velvel
individual investor
N/A
Fix Asset Management.
hedge fund
N/A
Genevalor, Benbassat & Cie.
money manager in Geneva
N/A
Banco Espirito Santo
Portugese bank
$21,400,000
Great Eastern Holding
Singapore insurer
$44,266,000
M&B Capital Advisers
Spanish brokerage
$52,800,000
Oddo et Cie
French financial services firm
$36,957,000
Royal Dutch Shell pension fund
Global energy and petrochemical company
N/A
Phoenix Holdings
Israeli financial services company
$12,600,000
Credicorp
Peruvian financial services company
$4,500,000
Fukoku Mutual Life Co.
Japanese insurer
N/A
New York Law School
law school in New York City
$300,000
Nipponkoa Insurance
Japanese insurer
N/A
Sumitomo Life Insurance Co.
Japanese insurer
$22,000,000
Swiss Reinsurance Co.
Swiss insurer
$3,000,000
Aozora Bank Ltd
Japanese lender
$137,000,000
UBI Banca
Italian bank
$86,000,000
Taiyo Life Insurance Co.
Japanese insurer
$221,000
Caisse d’Epargne
French bank
$11,100,000
J. Gurwin Foundation
Charity
N/A
EFG International
Swiss private bank
N/A
Fire and Police Pension Association of Colorado
Pension fund
N/A
International Olympic Committee
Olympic organizer
$4,800,000
Support Organization for the Madison Cultural Arts District
Wisconsin cultural organization
N/A
Credit Industrial et Commercial
French financial-services group
$125,400,000
Hadassah
U.S. women’s zionist organization
$90,000,000
United Association Plumbers & Steamfitters Local 267 in Syracuse
Local union pension and health care funds
N/A
Ramaz School
A Jewish school in New York
$6,000,000
Congregation Kehilath Jeshurun
A synagogue in New York
$3,500,000
The Maimonides School
A Jewish day school in Brookline, Mass.
$3,000,000
Yad Sarah
An Israeli nonprofit
$1,500,000
Kevin Bacon and wife Kyra Sedgwick
Hollywood actors
N/A
Eric Roth
Hollywood screenwriter
N/A
Henry Kaufman
Individual investor, former Salomon Brothers chief economist
N/A
New York University
University
$24,000,000
Aioi Insurance Co.
Japanese insurer
$1,100,000
Meiji Yasuda Life Insurance Co.
Japanese insurer
$1,100,000
Mitsui Sumitomo Insurance Co.
Japanese insurer
$8,800,000
Burt Ross
former mayor of a town in New Jersey
$5,000,000
Genium Advisors
Swiss money manager
$281,400
Sterling Stamos Capital Management LP
Investment firm with offices in New York City and Menlo Park, Calif.
N/A
Gabriel Partners
Money-management firm run by GMAC Chairman Ezra Merkin.
N/A
The Diocese of St. Thomas
Catholic church in the U.S. Virgin Islands
$2,000,000
Phyllis Molchatsky
individual investor
$17,000,000
Members of the Hillcrest Golf Club of St. Paul, Minn. and Oak Ridge Country Club in Hopkins, Minn.
country clubs
N/A
Bard College
University in New York
$3,000,000
Martin Rosenman
New York City-based heating oil distributor
$10,000,000
Marc Rich
Fugitive financier
N/A
Zsa Zsa Gabor
Actress
$10,000,000
Hadleigh Holdings LLC
Miami firm owned by businessman Stanley Kriegler
$1,000,000
Argus Group Holdings
Bermuda insurance and financial services company
N/A
Auriga International Advisors Ltd.
British Virgin Islands hedge fund
$348,400,000
Repex Ventures SA
British Virgin Islands firm
$700,000
SAR Academy
A Yeshiva school in New York
N/A
Picower Foundation
Florida-based philanthropy
N/A
John Malkovich
actor
N/A
Sandy Koufax
Former Los Angeles Dodger pitcher
N/A
Tim Teufel
Former baseball player
N/A
Larry King
Talk-show host
N/A
Phyllis George
Former Miss America
N/A
Mark Green
Former NYC public advocate
N/A
Larry Silverstein
New York developer who is currently working with partners to rebuild the World Trade Center
N/A
Scott Rechler
CEO of RXR Corp.; Former CEO of Reckson Associates
N/A
Sources: WSJ reporting; Associated Press; the companies and charities

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There’s No Other Game In Town: Banking Fraud (But I Repeat Myself)

2 Jul

h/t reader Kevin Moore for the following story, from presstv.ir –

Top Vatican bank officials resign after arrest of senior Italian cleric

The director and deputy director of the Vatican Bank have resigned after a senior Italian priest with close ties to the bank was arrested on suspicion of fraud and corruption.

In a statement issued on Monday, the Vatican announced that the bank’s director, Paolo Cipriani, and his deputy, Massimo Tulli, had stepped down.

On Friday, Italian authorities arrested a senior cleric known as Nunzio Scarano after an investigation of the bank, also known as the Institute for Works of Religion (IOR), produced evidence showing it may have been involved in an international fraud scheme.

Scarano was arrested along with Giovanni Maria Zito, a former Italian intelligence agent, and Giovanni Carinzo, a financial broker.

Prosecutors say Scarano paid Zito 400,000 euros ($523,000) to transport 20 million euros in cash from Switzerland to Italy onboard Zito’s private jet

The Italian daily La Repubblica reported that Scarano is also under investigation in the city of Salerno on suspicion of money laundering.

Only priests, religious, Catholic institutions, employees of the Vatican City State, and diplomats accredited to the Holy See are allowed to have accounts at the IOR, but Italian politicians and organized crime figures allegedly also have accounts at the bank.

Over the years, the Vatican Bank has been involved in a series of scandals.

The bank’s governor in the 1980s, Archbishop Paul Marcinkus, was indicted over his involvement with the collapse of Italy’s largest private bank, Banco Ambrosiano, which was owned in part by the Vatican Bank.

In the aftermath of the scandal, the chairman of the bank, Roberto Calvi, was found hanged under Blackfriars Bridge in London in 1982. Calvi was known as God’s Banker because of his close ties to the Vatican. The death was initially ruled a suicide but later prosecuted as a murder.

The activities of the infamous P2 Masonic lodge were brought out of the shadows by the collapse of Banco Ambrosiano. Some investigative journalists suspected that some of the plundered funds went to P2 or to its members.

Propaganda Due, or P2, was a Masonic lodge operating under the jurisdiction of the Grand Orient of Italy from 1945 to 1976. P2 was sometimes referred to as a “state within a state” or a “shadow government.”

And still the greatest banking fraud of all — usury — goes on.

Unchecked, and unchallenged.

With the heretical support of the Roman Catholic Church, and indeed, pretty much all of modern-day Churchianity.

Massive Fraud In Australian Listed Investment Company (LIC) Sector

18 Apr

fraud-victim

Serendipitously discovered this during my cyber surfing this morning; a presentation “outlining massive fraud in the Australian listed investment company (LIC) sector”:

The Great Australian Investment Ponzi

The A$16 billion Australian listed investment company (LIC) sector has become one of the largest Ponzi schemes in history, surpassed only by Bernie Madoff and MMM.

For years, the dividends from the LICs have been financed by the LICs issuing shares, with the LICs thus paying their returns by seeking new investor funds.

The LIC’s manipulate their share prices by buying each other and themselves, in the process creating inflated reported net tangible assets (NTA).

The companies named include:

Washington H Soul Pattinson & Company Limited (SOL)
Brickworks Limited (BKW)
Argo Investments Limited (ARG)
Australian Foundation Investment Company Limited (AFI)
Milton Corporation Limited (MLT)
Australian United Investment Company Limited (AUI)
Diversified United Investment Limited (DUI)
BKI Investment Company Limited (BKI)
Djerriwarrh Investments Limited (DJW)
Mirrabooka Investments Limited (MIR)

Screen shot 2013-04-18 at 1.24.05 PM

Your humble blogger is not a shares guy, and so cannot comment on the veracity of this impressively comprehensive (85 page) presentation.

Perhaps readers with more knowledge of the subject would care to analyse and comment?

UPDATE:

Some excerpted highlights, for those unwilling to wade through such comprehensive details –

“LIC share manipulation is not performed for vanity alone, it allows the managers to perpetuate premium fraud. Premium fraud is committed by inflating the LIC share price beyond NTA and then issuing shares… Over the years premium fraud has netted the LICs hundreds of millions of dollars, at the expense of small investors, and ASIC has done nothing. Of the $1.6 billion in LIC shares issued between 2006 and 2012 a significant proportion has been lost due to this form of securities fraud. All the major LICs currently engage in flagrant securities fraud of this kind.”

“SOL (Washington H Soul Pattinson & Co Limited) is one of the most manipulated shares on the ASX, and has been for years. SOL and its accomplice bankers have set up a fake share price, with the most common trade size being one single share. The manipulators can then ramp the price as they see fit…

Screen shot 2013-04-18 at 2.51.17 PM

This is a multibillion dollar company. On the 29/6 at 15:58, SOL was ramped 3% by HFT algos trading 5 shares.

Regulators, bankers, research analysts and financial journalists do not ask any questions, even after years of blatant fraud. In most cases they are incompetent, in many cases they are corrupt, and in some cases they have been silenced. The LICs can either buy off editors or sool lawyers on them.”

“The LIC managers have a cartel of crossbuying, with three beneficial effects for the criminals:

* The crossbuying ramps LIC share prices from true market values
* The crossbuying distorts reported NTAs from real asset values
* The crossbuying increases manager fee income and distorts reported fee income

The crossholdings allow the managers to charge multiple fees and hide it.”

“A cartel owns most BKW (Brickworks Limited) shares and controls the share price. The cartel openly ramps the share price after employee share plan issues, so insiders can cash out at a higher price. This is of course the very definition of insider trading. On the 3rd October, BKW issued a quarter of a million shares to employees at a consideration of $10.07. The cartel then ramped the share price 12%, to close at $11.25 on 5th October. It is clear they have given up any pretense and are now not even bothering to cover their tracks.

Screen shot 2013-04-18 at 2.10.17 PM

The bankers and analysts associated with these criminals are fully aware of what is going on, with the BKW scheme alluded to in internal communications, thus leaving proof of collusion in share manipulation and insider trading. These criminals are 100% confident in ASIC’s complete incompetence and impotence.

Granny investors buying BKW shares at the inflated price, perhaps under the misapprehension that ASIC does its job, can consider themselves screwed. If you think ASIC is doing nothing, you are wrong. Much worse, ASIC is endorsing BKW as non-manipulated to granny investors and is abetting criminals.”

“Some of the richest and most well-connected people in Australia are directly involved in the scam. The LIC managers openly refer to their industry as ‘The Gentlemen’s Club’, where goodfellas back each other up rather than honouring their fiduciary duty to investors. This cooperation is crucial for coordinating ramps, as defectors taking profits would crash a ramp before it even started. But the protozoan parasites have evolved an entire ecosystem:

1) Managers form cartels to buy each other and chosen manipulable shares
2) Lawyers cover up any mention of fraud using legal threats
3) Auditors sign off that inflated asset valuations are fair
4) bankers provide leverage for share price ramps
5) Brokers churn shares to create the illusion of liquidity
6) Stock exchange personnel advertise the scam and provide misleading statistics
7) Analysts are directly and explicitly bribed to shill the LICs
8) Journalists tout individual ramped stocks and the entire fraudulent industry
9) Regulators legitimize the scam and rubberstamp its abuses

In every single link of the chain, the LIC managers have close friends and accomplices, and these receive their rewards in the form of cash, insider tips and future appointments. The entire knot could be unwound with an Alexandrian solution: Ban LICs from ever again issuing a single share to granny investors. The goodfellas would of course apoplectically protest, as this would starve the ponzi of new cash inflows, and thus sound its death knell. But if they are such great managers and all outperform the market, why do they need to constantly beg for more cash?”

“The Australian government Future Fund recently revealed it had underreported fees, with investment fees actually totalling $1bn instead of $500m last year. The reason for this slight miscalculation of 100% was ‘non-consolidated investment vehicles’. If two investment vehicles own part of each other, and the Future Fund invests in them, part of the holdings will be charged fees twice. Sound familiar?

The geniuses at the Future Fund have discovered fee distortion from crossholdings… Of course this.. applies to the entire Australian superannuation and managed funds industry. Of $1.9 trillion unconsolidated assets in managed funds, crossholdings constitute $382bn or 20%.”

“Most of the LICs are now manipulating their share price with algo share trading. The reason for this is simple; the cost is low, the risk of apprehension zero, and the rewards considerable. The top chart shows DJW share trades on the 29/6/12, when the price was ramped from $3.60 to $3.75. The bottom chart shows the volume distribution of trades, illustrating how two thirds of the trades were for ten shares or less.

Screen shot 2013-04-18 at 2.28.08 PM

The share prices of the LICs are fraudulent, mere empty quotes put up by the managers themselves. In reality the LIC sector is insolvent and has nowhere near enough money to cash out investors.

The LIC sector has devolved into fraud along the lines of Stratton Oakmont. The only difference is that Jordan Belfort required hundreds of boiler room traders, whereas today with HFT trading the costs are much lower.”

“EQT (Equity Trustees Limited) has ramped LIC shares with its superannuation and managed funds, including EquitySuper products and the EQT Flagship Fund. The LIC crossholdings allow the same assets to be counted on several balance sheets, in a form of rehypothecation, and fraudulently inflates NTAs…

ASIC is well aware the the EquitySuper and EQT Flagship products are fraudulent with overstated NTAs and unit prices, yet helps cover up the fact the millions in super money has been stolen by a criminal crossramping cartel.”

Managers of several Australian fund management companies have started using pension funds entrusted to them by granny investors to ramp their own share prices. This can either be done directly, by using funds under management to buy shares in the fund management company, or indirectly by using FUM to crossbuy with one or more other fund management companies. The managers then reap the direct benefit from own shareholdings and performance metrics related to their fund management company share price.”

“Executive share plans can be used for ramping, as ESPs are allowed to buy the shares to be awarded to executives on-market. For thinly-traded shares or for shares with concentrated ownership, this allows the executives to ramp their own shares before they are awarded. The net effect is that insiders can off-load their shares to granny investors at a temporarily inflated price.

Between 28/08 and 20/09, the Mortgage Choice executive plan issued 2,500,000 shares to executives using options with a $0.76 exercise price. MOC was then ramped 30%.”

Screen shot 2013-04-18 at 2.47.02 PM

And much, much more.

Carbon Derivatives 101

19 Nov

Do not fear, dear reader. You are not about to be subjected to a boring, #JAFA-style lecture.

101 is just my shorthand for “1-on-1”.

Today we are going to compare notes. On the topic of carbon derivatives.

Whose notes?

The SMC University in Switzerland’s recent Working Paper titled, “Carbon Derivatives and their Application within an Australian context”.

And, excerpts from my numerous articles predicting and forewarning that the Green-Labor government’s Clean Energy Future legislation is nothing more, and nothing less, than a banker-designed carbon derivatives scam.

Let’s begin, shall we?

SMC Working Paper (page 8):

Risks involved with carbon markets and carbon-based derivatives are those that are typical to standard derivatives, including price, counterparty, credit, operational, spread, currency and liquidity. Again like any derivative, the value of a carbon derivative is based upon the value of the underlying commodity.

Compare Ticking Time Bomb Hidden In The Carbon Tax (Nov 2011):

[A “security interest in” a carbon unit is, quite simply, a derivative or “security” that is based on the underlying “value” of the carbon “unit”]

And compare Our Bankers’ Casino Royale – “Carbon Permits” Really Means “A Licence To Print” (July 2011):

The “creation of equitable interests”, and “taking security over them”, simply means this.  The carbon permits can be used as the basis for bankers to create other, new financial “securities”.

Carbon derivatives, in other words.

Derivatives (or “securities”) are the toxic, wholly-artificial financial “products” that were at the heart of the GFC.  The same bankster-designed “widgets” that the world’s most famous investor, Warren Buffet, spoke of as “a mega-catastrophic risk”, “financial weapons of mass destruction”, and a “time bomb”.

SMC University Working Paper (page 9):

Questions therefore arise as to how an odourless and colourless emission can be considered a commodity. For example, “…the commodity traded as ‘carbon’ does not actually exist outside of the numbers flashed up on trading screens or the registries held by administrators (Gilbertson & Reyes, 2009, pg. 12).”

Compare Our Bankers’ Casino Royale – “Carbon Permits” Really Means “A Licence To Print” (July 2011):

They are an artificial construct – “an electronic entry” – that is deemed by government decree to be a new “financial product”.

And compare Carbon Permits Do Not Even Exist (Aug 2011):

As I have said all along, the carbon permits will not even be printed on physical paper.

They will be electronic bookkeeping entries.

Electronic digits.  In a computer.

It is yet another similarity with the completely farcical EU system, where over 3 million of these “permits” – which only exist as numbers in a “Registry” computer – were stolen between November 2010 and January 2011

From our government’s exposure draft Clean Energy Bill 2011, Part 4, Division 2 (emphasis added):

98 How carbon units are to be issued

(1) The Regulator is to issue a carbon unit to a person by making an entry for the unit in a Registry account kept by the person.

(2) An entry for a carbon unit in a Registry account is to consist of the identification number of the unit.

SMC Working Paper (page 9):

With stark disparities in existence, how can countries come to accept as true fact the admissions made by another? Further, if countries have such different approaches, how can companies across nations be asked to trade an underlying commodity that has different measuring techniques!!! As highlighted by one paper, “…this makes putting a price on carbon largely an arbitrary exercise and uncertain as predicting a price of even the most mundane commodity is at best guesswork… (Gilbertson & Reyes, 2009, pg. 13).

Therefore, due to a lack of transparency and lack of a generally accepted approach on quantification and pricing, the primary concern with carbon trading is the ability of carbon derivatives markets to be manipulated.”

Compare Government’s RIS Admits Carbon Emissions “Audits” A Propaganda Exercise (Aug 2011):

… the question still remains – how are they going to measure the “emissions”?

Answer: They are not going to measure them.

They are not even going to audit any but a very few of the very largest “emitters” either.

It is all a hoax.

Just as under the present National Greenhouse and Energy Reporting (NGER) department “system” – one that only came up with 299 companies reporting emissions in their latest Report – the companies “caught” in the system will be asked to “estimate” their own emissions…

Let us take a look at the Government’s Clean Energy Future Regulatory Impact Statement.

It is yet another telling indictment of the total fraud that this carbon pricing scheme scam actually is (emphasis added):

“Under the proposed reporting requirements liable entities will report on their own emissions. As they will also have to acquire (buy) permits to cover these emissions, they will have an incentive to underreport their emissions… It is to be expected that most (intentional) misreporting would result in an underestimation of emissions and less permits being surrendered to Government. This would have implications for the accuracy of national emissions estimates…”

SMC Working Paper (page 9-10):

…one might argue that due to carbon-based derivatives being founded upon carbon emissions and ownership is via computerised notations, it would be difficult to manipulate such a market. In other words, like more typical commodity markets, influence the price of the deliverable up the supply curve.

Whilst that is a feasible argument, it needs to be also remembered that financial-based derivatives, such as treasury notes and bonds, are also based upon computerised systems where such price manipulation still occurs. This was recently noted in 2006, where the U.S. Treasury “…observed instances in which firms appeared to gain a significant degree of control over highly sought after Treasury issues and seemed to use that market power to their advantage (Forbes, 2006).” Hence, if markets can come undone so traumatically after pricing investments which contain apparently measurable levels of risk, difficulties will easily arise in how markets can price a commodity that can hardly be seen!!!

Compare Flash Crash “Had Something To Do With Some Derivatives”, Says Goldman Trader (Aug 2011):

… it is all about preparing the way for international banking’s latest casino – carbon dioxide futures and derivatives trading. A mega-casino with trading via the bankers favourite new toy, HFT (High-Frequency Trading) – advanced computerised platforms directly linked into the stock exchanges and able to execute fully-automated trades in under 10 milliseconds

The government’s scheme is all about putting in place the necessary laws to allow banksters the legal right to create trillions of new carbon “securities” – that is, new carbon derivatives, and futures “products”.

The kind of “products” that lead to “flash crashes” which can wipe out 98% of the sharemarket value of one of the world’s biggest mining companies in less than 4 minutes.

SMC Working Paper (page 10-11):

 It has been claimed that derivatives were a major contributing factor in the most recent Global Financial Crisis in 2008-2009, whilst also a causative in distorting energy and food market prices during 2007-2008…

Of course there has been much debate about the introduction of the Waxman-Markey Bill, much to the enormous potential it has in creating the next global financial crisis. For instance, according to Friends of the Earth, an independent organisation that aims for the establishment of environmentally sustainable solutions, “…the development of secondary markets involving financial speculators and complex financial products based on the financial derivatives model brings with it a risk that carbon trading will develop into a speculative commodity bubble. This in turn would risk another global financial failure similar to that brought on by the subprime crisis (Clifton, 2009, pg. 32).”

Compare Our “Squeeze Pop” Carbon Bank (May 2011):

And derivatives, well, they’re safe-as-houses too.

After all, the mortgage-backed derivatives market that blew up America is only a tiddling little market.

So there’s clearly no cause for concern about yet another bankster-driven scheme, to blow up a global, air-backed derivatives bubble…

And compare Doing God’s Work – Turnbull An Angel of Death Derivatives (May 2011):

To banksters, insurance companies, and superannuation fund managers, the possibility of your living “longer than expected” is considered a “risk“.

Nice.

And now, thanks to the sick, evil genius of global banksters like Goldman Sachs, this “risk” factor of you and your loved ones living longer than expected can be packaged up into a tradeable commodity.

A ‘death derivative’.

A new artificial “commodity” – exactly like “carbon permits” – that can be used to attract “investors” who want to place bets with despicable scumbag banksters like Goldman Sachs, on how long each securitised “pool” of human beings will live for…

Can you imagine just how many elderly (and not so elderly) people will suffer physically in the future, when current record-high electricity prices double?

From The Age, May 22 2011:

One of Australia’s largest home and business electricity suppliers, TRUenergy, has warned that household power bills will double in six years after a carbon price is introduced and uncertainty over its implementation might lead to power shortages.

That would be bad enough for older Australians.  People just like your mum and dad. Your nanna and grandpa.

Imagine the impact on elderly folk in the much-colder Northern Hemisphere, where far more of the world’s total population lives. And where, right now, 44 million (about 1 in 7) Americans already depend on food stamps for survivalAll thanks to the banksters’ GFC.

The effect of our allowing CO2 taxes / emissions trading to be enacted, is now very clear…

Thanks to carbon dioxide derivatives trading, more and more human beings will die earlier and earlier than “investors” in death derivatives have estimated.

Superannuation fund managers, insurance companies, “investors” and speculators will find that they have made the wrong bet on average life expectancies.

Meaning – the banksters will first make a killing on the trade in carbon dioxide derivatives.

And then make another killing on the trade in their new ‘death derivatives’ too.

Compare also, Bankers’ Chief – Carbon Price Is “Essentially Creating A New Market” (July 2011):

The carbon permits can be used as the basis for bankers to create other, new financial “securities”.

Carbon derivatives, in other words. Derivatives (or “securities”) are the toxic financial “products” that were at the heart of the GFC.

And compare most recently, Ticking Time Bomb Hidden In The Carbon Tax (Nov 2011):

Derivatives are a toxic, wholly artificial and unregulated financial product, created and traded en masse by the banks; they are held Off Balance Sheet so that noone really knows anything about their real activities. It was toxic derivatives over mortgages that nearly blew up the world in 2008.

SMC Working Paper (page 11-12):

Today, via the European Climate Exchange (ECX) and cleared through the Intercontinental Exchange (ICE), futures and options contracts are based upon three types of carbon-related units being European Union Allowances (EUAs), Certified Emission Reductions (CERs) and Emission Reduction Units (ERUs).6 Another derivative referred to as the European Carbon Futures (ECFs) contract, again based upon the EUA is traded via the European Energy Exchange (EEX)…

All contracts are standardised in respect to contract terms. Across either exchange, the futures contracts allow the holder the right and obligation to buy or sell 1,000 EUAs at a certain date in the future at a pre-determined price.

Compare what I said in Our Bankers’ Casino Royale -“Carbon Permits” Really Means ” A Licence To Print”, the day after the release of the draft legislation (July 2011):

Now, why have I bold underlined “borrowing“?

And why have I bold underlined “advance auctions of flexible price permits…”?

Because these are the key words from the “banking and borrowing” section. The words that tell you all you need to know.

That this SCAM is nothing whatsoever to do with the global climate.

And that it is 100% about creating a new, global, CO2 derivatives-trading market for the banksters.

The world’s biggest-ever financial cesspool.

Of toxic, intrinsically-worthless, humanity-raping financial “instruments” called derivatives.

Non-existent, digital “widgets”.

That can be borrowed from the future – ie, before these artificial carbon “widgets” are even issued – and leveraged by scum-of-the-earth banksters.

And then, traded by these parasites at multiples of hundreds and thousands of times more than the underlying, artificially-created “value” of the carbon permit.

Furthermore, the “advance auctions of flexible price permits in the fixed price period” proves beyond all shadow of doubt, that I was right.

That this “carbon pricing mechanism” is the bankers’ CPRS by another name. From Day 1.

Why does it prove it?

The advance auctions of flexible price permits “in the fixed price period” means this.

From Day 1, the government is effectively allowing the setting up of a futures trading market, for Australian CO2 permits.

Futures trading of nothing. Before the nothing is even created.

The banksters’ wet dream.

And compare Bankers’ Chief – Carbon Price Is “Essentially Creating A New Market” (July 2011):

The news gets even better for the bankers.

Because the Government’s scheme scam will also set up an “advance auction” system, during the so-called “fixed price period”, where carbon permits valid for the later “flexible price” system can be purchased in advance.

Which is essentially nothing less than a Futures trading system for the bankers and speculators to exploit…

It’s easy to see why the banksters’ are pleased right now.

The Government’s scheme allows them to:

1. Begin creating and trading in carbon “securities” (ie, derivatives of carbon permits) from Day 1.

2. Earn fees and commissions from trade in “freely allocated” permits during the “fixed price” period.

3. Earn fees and commissions from Futures trading in the “advance auctions” of “flexible price” permits during the “fixed price” period.

4. Create other derivatives products on top of the Futures trade in advance auctions of permits.

SMC Working Paper (page 14):

A number of submissions were made to the Australian Competition and Consumer Commission (ACCC), requesting that the permits within the current scheme be included as financial products. Yet counter submissions took a different route, with requests made by the Australian Bankers Association and Australian Financial Markets Association recommending that permits be regarded as commodities. Such arguments were made on the basis “…that traders are relatively uninterested in permits…”

Compare Ticking Time Bomb Hidden In The Carbon Tax (Nov 2011):

The fees and commissions on the straight trading in carbon permits … is peanuts.

The real monster action is in the unlimited, unregulated derivatives market, that sits on top of the basic carbon trading market. Just imagine an inverted pyramid, with the trade in carbon permits at the bottom, pointy end.

What the banks really want – and what this blogger predicted and forewarned of time and again leading up to the release of the draft legislation – is a mechanism that allows them to create and trade carbon derivatives.

In unlimited, unregulated quantities.

And compare I Was Right – Banks Begin Preparing Carbon Derivatives Market (July 2011):

ANZ’s head of energy trading said the value of the derivatives carbon market would dwarf the $10 billion initially raised by the government, according to the AFR.

SMC Working Paper (page 15):

It is therefore interesting to note that the scheme eventually allows freely allocated permits to be traded within the compliance year of issue. Such a statement seems to indicate a profit making opportunity not to dissimilar to the situation within the EU ETS, where power companies generated large profits. In a submission to the House of Commons by Ofgem, the energy and gas regulator in Great Britain stated that between 2008 – 2012, UK power companies could receive windfall profits approximately amounting to £9bn (House of Commons, 2008). Concerns are still being voiced about such astonishing revenues, with the European Commission further indicating that via the accumulation of excess free credits (i.e. freely allocated permits), “…the surplus is estimated to amount to 500 – 800 million allowances with an economic value of around €7bn – €12bn (European Commission, 2011, pg. 2).”

Compare A Disturbance In The Farce (July 2011):

… even the Green-Left Weekly is aware of the disturbance in the farce:

Europe’s biggest polluters have made billions out of the European Emissions Trading System (ETS). But a new briefing by Carbon Trade Watch (CTW) says the scheme will ensure industry will not have to cut its emissions until at least 2017.

The first phase of the ETS ran from 2005 to 2007. It made no dent in emissions. But power companies made about 19 billion euros by charging customers for the “cost” of permits they were given for free.

Manufacturers made about 14 billion euros in windfall profits with the same trick.

The European Commission said the scheme’s problems would be ironed out in the second phase, from 2008 to 2012. It claimed the ETS was working when emissions from the 11,000 polluters covered by the scheme fell by 5% in 2008 and 11.6% in 2009.

But CTW points out the emissions fall was due to the impact of the global recession, which caused a fall of 13.85% in industrial and electricity production in 2009.

In 2010, as the economic crisis eased, emissions shot up again by 3.5%.

The polluters stand to make more money for doing nothing in the ETS’s second phase. By 2012, power companies will make between 23 billion and 71 billion euros from passing on the cost of their free permits.

The third phase of the ETS, which will run from 2013 to 2020, won’t solve the problems. Companies will still be able to use the excess permits given out in the second phase. The World Bank has estimated about 970 million permits will be available.

This means polluters won’t have to cut their own emissions until 2017 — they can just cash in their free permits instead.

SMC Working Paper (page 15-16):

The Way Forward

Within the Australian context, what does this treatment of permits mean for carbon-based derivatives? With permits freely allocated to emitters and with the ability of permits to be price squeezed because they are allocated rather than auctioned, the possibility of carbon-based derivatives to be manipulated increases substantially. Such instances have been witnessed within the EU ETS and are one of the major criticisms levelled against derivatives as a whole (Clifton, 2009; Pirrong, 2009; Wood & Jotzo, 2010; Holly, 2011).

The maturity of the carbon market within Australia is still in its infancy and debate will continue about how the country should undertake its approach to CO2 emissions. At this early stage, it would seem that carbon-based derivatives will mainly be used once the fixed-price period begins

[Compare what I have said countless times – that “our” system enables banksters to begin creating and trading carbon derivatives from Day 1.  Our government has successfully conned the Australian public (and all mainstream commentators) into believing that their scheme is a fixed price “tax” for the first 3 years, and only after three years will trading commence. That is pure deception. While “purchased” permits cannot be traded, “freely allocated” permits can; and far more importantly, banksters are enabled to begin creating derivatives based on the underlying “value” of permits, from Day 1. The SMC Working Paper confirms my warning/prediction, as does the Clean Energy Future legislation itself.]

Globally, even though a mixture of regional policies are currently in existence or are looking to come online, inconsistent methodologies across countries make it difficult for a truly global acceptance of carbon derivatives to take off.

As such, the acceptance and establishment of any true global exchange or global central bank of carbon is some time away. Simply, this retains the odour of trouble, with increased opportunities for manipulation and failure. Whilst volatility and manipulation is in no means isolated to only carbon-based derivatives, “…due to the lack of policy towards the development of an efficient carbon derivatives market and the absence of a standard pricing tool (Leconte & Pagano, 2010, pg. 3),” greater opportunities for manipulation and fraud are present.

Exactly.

Which, as I have long said and demonstrated, is precisely what the true architects of both the Great Global Warming Hoax, and its popularly advocated “solution” (carbon trading), have always wanted.

A new, bigger, rigged, derivatives casino. One that they control. With no regulation, or government oversight.

A galactically-huge speculative financial bubble.

Based on thin air.

Hot, thin air.

Guaranteed to end like this –

Next week, we will take a look at a webinar by the President of the Institute For Agriculture and Trade Policy on Carbon Derivatives: The Next Toxic Asset, where we will see how derivatives have been used by banksters to manipulate markets and drive up the price of other commodities. Especially food … wheat, corn, sugar, soybeans, and more.

And we will again consider the implications of allowing our politicians to allow greed-obsessed banksters to create wholly unregulated derivatives, thus enabling them to manipulate the prices of food (and now, power/energy) worldwide … and ultimately, as a direct result, to make yet another killing on those new ‘Death Derivatives’ they are selling, that we mentioned earlier.

Here’s a teaser –

Click to enlarge | Source: IATP

Click to enlarge | Source: IATP

Click to enlarge | Source: IATP

Click to enlarge |Source: IATP

Support For Carbon Price Means Support Killing Black People: Oxfam Report

14 Oct

See all the happy little politicians, dear reader?

And see all the happy little carbon tax / trading supporters?

What all these people are really supporting … is genocide.

Of black people.

From the New York Times (via Oxfam):

New Forests Company, grows forests in African countries with the purpose of selling credits from the carbon dioxide its trees soak up to polluters abroad. | Credit: Sven Torfinn for The New York Times

In Scramble For Arable Land, Groups Says, Company Pushed Ugandans Out

KICUCULA, Uganda — According to the [New Forests Company’s] proposal to join a United Nations clean-air program, the settlers living in this area left in a “peaceful” and “voluntary” manner.

People here remember it quite differently.

“I heard people being beaten, so I ran outside,” said Emmanuel Cyicyima, 33. “The houses were being burnt down.”

Other villagers described gun-toting soldiers and an 8-year-old child burning to death when his home was set ablaze by security officers.

“They said if we hesitated they would shoot us,” said William Bakeshisha, adding that he hid in his coffee plantation, watching his house burn down. “Smoke and fire.”

William Bakeshisha, farmer and local chief, lost his house and land and now rents a room in a neighboring village. In his briefcase, he keeps documents that provide proof that he inherited the farm from his father | Credit: Sven Torfinn for The New York Times

According to a report released by the aid group Oxfam on Wednesday, more than 20,000 people say they were evicted from their homes here in recent years to make way for a tree plantation run by a British forestry company, emblematic of a global scramble for arable land.

“Too many investments have resulted in dispossession, deception, violation of human rights and destruction of livelihoods,” Oxfam said in the report. “This interest in land is not something that will pass.” As population and urbanization soar, it added, “whatever land there is will surely be prized.”

Across Africa, some of the world’s poorest people have been thrown off land to make way for foreign investors, often uprooting local farmers so that food can be grown on a commercial scale and shipped to richer countries overseas.

But in this case, the government and the company said the settlers were illegal and evicted for a good cause: to protect the environment and help fight global warming.

The case twists around an emerging multibillion-dollar market trading carbon-credits under the Kyoto Protocol, which contains mechanisms for outsourcing environmental protection to developing nations.

The company involved, New Forests Company, grows forests in African countries with the purpose of selling credits from the carbon-dioxide its trees soak up to polluters abroad. Its investors include the World Bank, through its private investment arm, and the Hongkong and Shanghai Banking Corporation, HSBC.

In 2005, the Ugandan government granted New Forests a 50-year license to grow pine and eucalyptus forests in three districts, and the company has applied to the United Nations to trade under the mechanism. The company expects that it could earn up to $1.8 million a year.

But there was just one problem: people were living on the land where the company wanted to plant trees. Indeed, they had been there a while…

An evicted woman shows proof of land ownership | Credit: Sven Torfinn for The New York Times

Olivia Mukamperezida, 28, said her house was among the first in her community to be burned down. One day in late 2009, she said, her eldest son, Friday, was sick at home, so she went out to find medicine. Villagers suddenly told her to rush back. Everything was incinerated.

“I found my house when it was completely finished,” she said. “I just cried.”

Ms. Mukamperezida never found the culprits. She buried Friday’s bones in a grave, but says she does not know if it is still there.

“They are planting trees,” she said.

(Read the rest of the NYT story here.)

And then there’s this:

Armed troops acting on behalf of a British carbon trading company backed by the World Bank burned houses to the ground and killed children to evict Ugandans from their homes in the name of seizing land to protect against “global warming,” a shocking illustration of how the climate change con is a barbarian form of neo-colonialism.

The evictions were ordered by New Forests Company, an outfit that seizes land in Africa to grow trees then sells the “carbon credits” on to transnational corporations. The company is backed by the World Bank and HSBC. Its Board of Directors includes HSBC Managing Director Sajjad Sabur, as well as other former Goldman Sachs investment bankers.

The company claims residents of Kicucula left in a “peaceful” and “voluntary” manner, and yet the people tell a story of terror and bloodshed.

Villagers told of how armed “security forces” stormed their village and torched houses, burning an eight-year-child to death as they threatened to murder anyone who resisted while beating others.

“We were in church,” recalled Jean-Marie Tushabe, 26, a father of two. “I heard bullets being shot into the air.”

“Cars were coming with police,” Mr. Tushabe said, sitting among the ruins of his old home. “They headed straight to the houses. They took our plates, cups, mattresses, bed, pillows. Then we saw them getting a matchbox out of their pockets.”

An Oxfam report documents how the British outfit has worked with the Ugandan government to forcibly expel over 20,000 people from their homes using terror and violence as part of a lucrative scramble for arable land that can be used to satisfy the multi-billion dollar carbon trading ponzi scheme, which is worth $1.8 million a year to the company.

(Read the full article here.)

This is just one example of the unintended (?) consequences of the universally-ignorant support by multitudes of morally self-righteous, urban rich white people, for “pricing carbon” in the name of “saving the planet”.

But that’s ok … those are just dirt poor BLACK people, aren’t they? And the urban white self-righteous hate everything black … think black balloons coming out of air conditioners … except perhaps for their oh-so-fashionable “wicked” little black dress for an indulgent night out.

As has been demonstrated countless times on this blog – including from the government’s legislation – the “carbon tax” has never had anything whatsoever to do with climate change.

It is, and always has been, all about money. Derivatives, to be precise.

“Putting a price on carbon” is all about legally enabling the predatory financial sector to rape the world all over again, with a new derivatives-based ponzi scheme, after their Western world real estate derivatives bubble exploded (GFC1).

It is a very simple scam.

Carbon “pricing” creates in law a new artificial ‘commodity’ called “carbon ‘units’, having an artificially-created (by proclamation) monetary value.

Who benefits?

On the lower level, governments. The basic carbon “price” for selling (on threat of gaol) their “permits” to “pollute”, represents a new cashcow for politicians. For handing out to their mates, favouring special interests, and bribing the ever-more welfare-dependent electorate to vote for them (ie, keep them in power).

On the higher (unseen) level, the international shadow banking sector. “Pricing carbon” means they can (a) cream off billions in fees and commissions on the trade in those permits, but far more importantly (b) instantly create unlimited quantities of wholly unregulated carbon derivatives, to gamble on unregulated international trading markets.

Exactly like the Western real estate bubble.

If you support “putting a price on carbon”, then what you are really supporting is two outcomes.

Impoverishing the West.

And genocide of black people.

All for the benefit of … not the environment … but bankers.

Bankers – The Root Of Evil

11 May

Banking was conceived in iniquity and born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take away that power, and all the great fortunes like mine will disappear — as they ought to in order to make this a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, then let them continue to create deposits.

Sir Josiah Stamp (1880-1941), one time governor of the Bank of England, in his Commencement Address at the University of Texas in 1927. Reportedly he was the second wealthiest individual in Britain.

Bankers have become even more ‘sophisticated’ in the many decades since Sir Josiah Stamp let the cat out of the bag. Now, not only do they create ‘money’ out of thin air by signing you up to a loan – which is entered into a computer as a brand new “deposit” for you to spend – they also ‘manufacture’ all kinds of ‘synthetic’ money substitutes too.

They’re called “derivatives”. Or, as Warren Buffet called them, “Financial weapons of mass destruction”.

And bankers can create as many of them as they wish, because there is absolutely zero regulation of the derivatives markets. To give you some idea, at the peak of the first wave of the GFC in 2008, there was around 1.44 Quadrillion $USD worth of OTC (“Over The Counter”) derivatives in existence.

Why is this important?

Because the $1 Trillion funding to save the Eurozone announced yesterday is meaningless.  The Eurozone cannot be saved, no matter how much money the EU tries to beg, borrow, steal… or print.  Because banksters like Goldman Sachs can simply create ever greater mountains of ‘synthetic’ derivatives with which to attack debt-laden countries, one by one, starting with the weakest.

From ZeroHedge:

Jim Rickards: “Goldman Can Create Shorts Faster Than Europe Can Print Money”

Jim Rickards, who recently has gotten massive media exposure on everything from the JPM Silver manipulation scandal, to the Greek default, was back on CNBC earlier with one of the most fascinating insights we have yet heard from anyone, which demonstrates beyond a doubt why any attempt by Europe to print its way out of its current default is doomed: “Look at what Soros did to the Bank of England in 1992 – he went after them, they had a finite amount of dollars, he was selling sterling and taking the dollars, and they were buying the sterling and selling the dollars to defend the peg. All he had to do was sell more than they had and he wins. But he needed real money to do that. Today you can break a country, you don’t need money you just need synthetic euroshorts or CDS. A trillion dollar bailout: Goldman can create 10 trillion of euroshorts. So it just dominates whatever governments can do. So basically Goldman can create shorts faster than Europe can create money.

The world is not ruled by politicians.  It is ruled by banksters.  Most of us simply don’t quite understand that, because we don’t understand how they do it.

It is very simple.  Well before most of us were born, bankers were given the exclusive power to create ‘deposits’.  Which you and I know as ‘debt’.  And which is now called ‘credit’ … because it appeals to our Pride, and sounds so much nicer, to delude ourselves that we have been given ‘credit’.

When in reality, what we have been given is a Debt.  By accepting the offer of ‘credit’ (Debt), we sell ourselves as slaves to the bankers.

They know it.  They’ve always known it.

Now you do too.

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