The Mulit-Trillion Dollar Scam

I read this article today on Marketwatch and later in the Journal about how "publicly traded" Wall Street financial companies doled out $135 Billion in compensation for 2010, over the $128 Billion in 2009. Well with nearly $2 Trillion in "non publicly traded" hedge funds and another $2 Trillion in private equity, it is safe to say the wonderful regulated and unregulated financial world scraped out somewhere around $500 Billion in "compensation" in 2010, a "recovery" year for the economy in the developed world.

So where does all this money come from? Well, most of it from the economy, um, people who put their money in the banks, retirement accounts, hand over to the profits of the oligopolies that control their access to 70% of everything they buy (and since their spending is 70% of the economy that is big money). Those are the same banks that "lost" all of their money in 2008. Of course the government (Fed, Treasury etc.) just "created" all the money again and "put it back" into the system so those financial institutions would not disappear (oh, those poor citizens will be paying interest on this "created" money for like a millenia). But what if they did disappear? Then surely people would be asking questions like, "Where did all the money go?"

It baffles me TO NO END why Americans are so stupid to not ask this question in the first place. Why, they are completely ignorant of the economic system that they live under, the economic system that allows them to go to the grocery store, buy a computer, drive a car, earn money etc. They just look at their 401k statement and see they lost tens of thousands in value but NEVER think if they multiplied that by millions of people and all that "wealth" disappeared, it must have gone somewhere. Now they may be looking at those same statements and be saying, "The money has come back." But do they ever think "where did the money come back from?" Could the money have just re-appeared?

My conservative estimate is that from 2002 - 2010 somewhere around $3.2 Trillion dollars has been "removed" from the financial wealth of average people in the US and other conned countries by these "financial" institutions, regulated and un-regulated alike. Do the math. Think about it. (Then add the $1.5+ Trillion their ignorant government has "spent" on frivolous "wars" against people who live in mud huts)

This very good article I also read today from Caixin Online is a very good article in many ways. Mostly in its basic description that we have a completely dysfunctional financial system right now. The regulated, unregulated and federal financial institutions are all completely dysfunctional. Money has for some time now NOT flowed to productive uses in developed nations (esp. the US) but to asset chasing schemes, and these schemes all function like one giant casino. But, nobody really understands this that I know or speak to on a daily basis, nobody!

The collapse of a few nations' governments this year will start a snowball effect that if nothing else, should wake people in the developed economies up to the fact that even though they do not live under brutal dictatorship regimes, they still live under brutal economic criminals who have stolen their future, with their government's blessing, and when they are banging on the door of their local banks trying to get their worthless money out while a tiny regiment of people are parading around in guarded steel boxes with seemingly no connection to the hardships they are going through, maybe, just maybe they will wake up and overthrow their governments to.

Finally Agree with Geithner on Regulations Needed

I was pleased to read on Bloomberg today that Mr. Geithner has a plan to regulate over-the-counter derivatives. This is so overdue and I have been frustrated for 3 years by various leaders in Washington do anything about this market even though it was largely responsible for the collapse of the global economy.

Not only was it largely responsible for the collapse but very dangerous precedents are being set as I write this where these exotic financial products are being used as a gauge to price debt.

These contracts represent a $684 trillion over-the-counter derivatives market and they are now typically conducted over the phone between banks and customers!

What an absolute trip. I know with the "trillion" word being passed around like water lately another "trillion" figure may not sink in but Think about this number for a moment. What is the US debt, $10 Trillion? We are talking $684 trillion here. Yes, yes many of you will say, "So what." there are trillions of dollars in "derivatives" out there on every other product, commodity, stock etc. traded every day. Yes, "traded" on "open markets" with clear pricing and risks born by those who trade them and these types of "products" are not "insuring" against default of debt.

I was so incensed when I heard a clip by Lloyd Blankfein where he made this point with a straight face. The guy is a raving lunatic in my book to be able to do so. He is a "Hitler" of finance. There is no question. Some may call him a genius but he defends destruction and annihilation of all around him from a financial perspective and as I have said a million times and will continue to say, with 6 billion people on the planet all more interconnected every day, guys like Blankfein and the businesses they run no longer serve any benefit to humanity, on the contrary, they are destructive to humanity, our "capital system" and serve no allegiance to any good on the planet other than to do whatever is necessary to return 30% plus to their investors irrespective to the damage they cause economies and individuals and they operate without rules governed by any sovereign state, territory or jurisdiction (except for the strings now on his firm after taking money from the government and borrowing to feed his machine with the backing of the FDIC).

So some reasoning has entered Washington and they seem to understand the importance of regulating these derivative products. Now what about the unregulated pools of global money driving this, Hedge Funds?