Best of the Week
Most Popular
1.How U.S. Dollar Destruction Threatens the Global Economy - Steve Forbes
2.Why UK House Prices Will Continue Rising - 'It's Immigration Stupid' - Nadeem_Walayat
3. Bitcoin Price at Beginning of a Move up? - Mike_McAra
4.Gold Price to Plunge, Visiting Fort Knox - David_Hague
5.Silver Price Forecast - Metal to Gain Ground in August on These Factors - Jim Bach
6.Gold And Silver Will Rise With US Dollar Demise, Just Not Soon - Michael_Noonan
7.Bitcoin Price Strong Move Possible - Mike_McAra
8.Israel Gaza War Crimes - Soldier's Ordered to Shoot Civilians Including Children - C4News - C4News
9.UK House Prices Crash Warning - Daily Mail Cognitive Dissonance - Nadeem_Walayat
10.UK House Prices Boom - Top Quick Cheap Tips to Help Sell Your Home - Nadeem_Walayat
Last 5 days
The Black Box Economy - 21st Aug 14
The Bond Market is taking Advantage of Janet Yellen`s Dovishness - 21st Aug 14
Meet Your Investment Manager - 21st Aug 14
Gold and Silver Trading Alert as U.S. Dollar Soars to New Highs - 21st Aug 14
President Obama Strongest Statement Yet on Israel Gaza War - 20th Aug 14
Peak Gold? Russia To Surpass Australia As World No 2 Gold Producer - 20th Aug 14
AI, Robotics, and the Future of Jobs - 20th Aug 14
Stock Market Investors What's Your Exit? - 20th Aug 14
The Gold War - Thinker, Trader, Holder, Why? - 20th Aug 14
Ukraine Interest Rates Soars to 17.5% As External Debt Cannot be Repaid - 20th Aug 14
Rising Interest Rates and The End of Stimuland - 20th Aug 14
Inflation Watch: $245,000 to Raise a Child in United States - 20th Aug 14
Inside the Stunning Deal That Put Apple and IBM on the Same Side - 20th Aug 14
The US Gold in Fort Knox is Secure, Gone, or Irrelevant? - 19th Aug 14
Bitcoin Price On The Brink of a Possible Reversal - 19th Aug 14
Why Tesla Stock Price Will Double in the Next 12 Months - 19th Aug 14
Europe's Economic Malaise: The New Normal? - 19th Aug 14
The Coming U.S. Economic Collapse Will Trigger a Revolution - 19th Aug 14
Market Bubbles, Bubbles Everywhere - 19th Aug 14
This is Your Economic Recovery With and Without Drugs - 19th Aug 14
Stock Market Strong Start to Jackson Hole Week - 19th Aug 14
Iraq, Ukraine - Oh, What A Tangled Mess We Weave - 19th Aug 14
How to Apply Moving Averages as a Trading Tool - Video - 18th Aug 14
Why Short Stock Traders Are Losing Money This Week - 18th Aug 14
Stock Market Rally May be Complete - 18th Aug 14
Why Chinese Citizens Invest In Gold - 18th Aug 14
Palladium Reaches 13-Year High Over $900 oz as Gold Trading Volumes Surge 66% - 18th Aug 14
Understand and Profit from Surging European Volatility - 18th Aug 14
No Escape from The Dollar as The Currency Standard - 18th Aug 14
Stock Market New Highs Less Certain - 18th Aug 14
German Stock Market DAX About To Drop - 18th Aug 14
Stay on Board - Stock Market Big Picture - 18th Aug 14
Europe Economy Is Tanking, QE Is Coming - 18th Aug 14
Are You Ready for The Greatest Technology Revolution Yet? - 17th Aug 14
Why King Coal is Bigger than Oil or Gas - 17th Aug 14
U.S. Empire of Death and Lies - 17th Aug 14
Ukraine - Whose Spin Are We Caught Up In Here? - 17th Aug 14
Time Decay And No Escape For Abenomics - 17th Aug 14
India BSE SENSEX The Party Is Over In Bombay - 17th Aug 14
Stock Market Uptrend Looks Underway - 17th Aug 14
The Key Role Of Conspiracy Theory In Dumbing Down Society - 17th Aug 14
The Federal Reserve in Denial Mode - Bond Market Explained - 17th Aug 14
Stock Market Ukraine-Triggered Volatility, But a Flat Finish - 16th Aug 14
Stock Market Investors Conditioned To Catch The Falling Knife - 16th Aug 14
Decline And Fall Of The CO2 Crisis - 16th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

U.S. Government Of, By, and For The Banks

Politics / Banksters May 27, 2013 - 04:18 PM GMT

By: Global_Research

Politics

Andre Damon writes: Five years since the 2008 financial meltdown, the speculation and fraud that caused the crash are back in full force in the United States. Flush with the $85 billion in cash printed up and handed to the banks every month by the Federal Reserve, business at the Wall Street casino is booming. Stock values are at record levels and so are bank profits, amidst declining wages and mass poverty.


Under these conditions, the banks have been pushing to rip up even the very modest restrictions on financial speculation, while broadening the scope of government bailout laws. The aim is simple: to give banks the maximum ability to speculate without constraint, while getting the maximum possible government assistance if and when the bubble collapses.

So close is the bankers’ grip on the reins of government that, no longer content to let their bought-and-paid-for politicians write laws, the banks have taken to doing the work themselves.

This was the case with a bill that passed the House Financial Services Committee this month, HR 992, which significantly expands the number of financial institutions eligible for coverage by the Federal Deposit Insurance Corporation (FDIC). The bill, which passed with majority support by both Democrats and Republicans, amends an earlier law that prevented financial institutions that trade swaps—a set of dangerous and largely unregulated derivatives—from coverage by the FDIC.

The New York Times reported Friday that, according to emails the newspaper examined, 70 out of the bill’s 85 lines were based on the recommendations of Citigroup, one of the largest US banks. Two paragraphs were inserted nearly word-for-word from an email written to lawmakers by the bank.

The bill restricts provisions in the Dodd–Frank Wall Street Reform and Consumer Protection Act, signed on July 21, 2010. This law was largely a publicity measure by the Obama administration, made to appear as a crackdown on financial speculation while in reality allowing the banks to go on with business as usual.

Instead of creating regulations, the Dodd-Frank bill merely mandated that a series of regulations be implemented at some point in the future by regulators. Nearly three years after the bill’s passage, the vast majority of these regulations have not been implemented.

Out of 135 bank regulatory rules mandated by the Dodd-Frank bill, only 40 have been put into effect. The act’s much-vaunted mandate for the creation of a “Volcker rule,” preventing deposit-taking institutions from carrying out financial speculation, remains a dead letter.

Moreover, many of the provisions of the Dodd-Frank bill, toothless as they were, are being scaled back by subsequent acts of Congress, such as HR 992, described above.

Even those regulations that have been implemented have been even further weakened by regulators to comply with the demands of the banks. Last week, the Commodity Futures Trading Commission voted to implement regulations on derivatives—speculative financial products based on other asset values—that were significantly weakened from those that were proposed under Dodd-Frank.

The Commission had initially proposed that the purchasers of derivatives be required to contact five banks when seeking to set the price of a contract. Under the new law, purchasers are only required to contact two banks, further tightening the monopoly of a handful of institutions that dominate the largely unregulated multitrillion-dollar derivatives market.

The bill likewise originally proposed that derivatives be traded on electronic exchanges similar to stock markets, so that buyers would have a better understanding of prices across the market, making price gouging by issuers more difficult. But the final rules allow for much of derivatives trading to take place over the phone, making it nearly impossible to regulate.

Despite a mountain of evidence—including a voluminous 2011 report by the Senate Permanent Subcommittee on Investigations—that the 2008 financial crash was directly linked to rampant lawbreaking by Wall Street, not a single executive at a major bank has been criminally prosecuted, much less gone to jail.

The Wall Street giants emerged from the financial crisis larger and more powerful than ever, and, as shown by government inquiries into JPMorgan’s $6 billion trading loss last year, their activities are just as speculative and parasitic as before the crash.

These factors, combined with the vast amounts of money being pumped into the financial markets by central banks make a new financial crash all but inevitable.

Throughout all this, the role of the government has been to cover up and facilitate the banks’ crimes, seeking to create the appearance of regulation, while allowing Wall Street to operate with impunity.

The main nexus between the banks and government is the Obama administration itself, which, with every new appointment, becomes ever more a government of, by, and for the financial oligarchy.

In January Obama appointed as treasury secretary Jacob Lew, who earned millions of dollars as the chief operating officer of Citigroup’s Alternative Investments unit, which made bets against the housing market as it collapsed.

This month Obama appointed Penny Pritzker, a hotel heiress and private equity firm operator, as commerce secretary. With a net worth of $1.85 billion, Pritzker is the wealthiest person in US history to serve in the president’s cabinet.

These developments demonstrate the impossibility of reining in the financial criminals within the confines of the present political system. The government and both parties serve as little more than errand boys for the bankers, who exercise a dictatorship over political life in the United States.

World Socialist Web Site

Andre Damon is a frequent contributor to Global Research. Global Research Articles by Andre Damon

© Copyright Andre Damon , Global Research, 2012

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014