Goldman Sachs Front Runs Executive Orders

Goldman Sachs has admitted that they have been front running and opportuning against their clients in the fundamental strategies group, which is not subject to the same regulatory rules that equity research departments are. That is why they are called “Hannibal Lecter” in the business.

They have been setting up clients to take losses so their trading would be profitable. That is like eating your own children. This is the bottom of the moral and ethical totem pole.

The notional value of derivatives held by US commercial banks rose $804 billion in the third quarter, or 0.49%, to $204.3 trillion. That consisted of 1,065 banks, a fall of 45 from the prior quarter. Five major banks held 97% of the amounts and 88% of the exposure. The CEO’s are sorry for their risky behavior, but they are still engaged in it in a bigger way than ever.

Incidentally, these are the same banks that have a record short position in the dollar.

New Gallup Poll figures show the President’s handling of the economy at 40% and approval of his handling of healthcare at 37%

The Federal Reserve yesterday issued sweeping new rules designed to better protect Americans from sudden increases in interest rates on credit cards.

      The rules, effective Feb. 22, bar rate increases during the first year after an account is opened. After the first year, companies must provide a 45-day notice.

      Some lenders have pushed through rate increases ahead of the new rules. That irked lawmakers in Congress who had wanted to speed up implementation of the Fed’s rules.

      The new rules also ban – with a few exceptions – increasing the rate on existing card balances. But if, for instance, a customer is behind more than 60 days on a payment, the rate can be boosted.

      Credit card companies will need a customer’s consent before charging fees on transactions that exceed their credit limits and will forbid companies from issuing credit cards to people under age 21 unless they – or a parent or other cosigner – have the ability to make the required payments.

Payments will be applied to highest interest-rate balances first, helping customers pay off their balances faster and more cheaply. And due dates will be the same every month.

          The Fed wrote the rules to carry out provisions of legislation signed into law last year. Other provisions of that law take effect later this year.

School administrators across the state of Massachusetts are crafting bleak budgets for the next school year and warning of steep cutbacks, including teacher layoffs, to cope with a probable sharp drop in funding from Beacon Hill and dwindling federal stimulus money.

Though schools grappled with thinned-down budgets last year, they got relief from a massive infusion of federal education dollars that is now all but spent, and officials are bracing for cuts that go deep into the classroom.

        Arlington is weighing the elimination of 21 elementary school teaching positions. Needham, for the first time in recent memory, is also proposing that teaching positions be cut, despite growing enrollment. Hingham, facing a $3 million deficit, has similarly placed 33 teaching positions on the block. Brockton is looking at a staggering shortfall that could approach $20 million.

       Investors are the most bearish on Treasuries in more than two years as the reliance on government debt to revive economic growth weighs on sovereign issues, a survey of Bloomberg users showed.

        Yields on the benchmark U.S. 10-year note will rise over the next six months, according to the Bloomberg Professional Global Confidence Index. The 5,437 respondents from New York to Tokyo to Paris were optimistic on the outlook for the global economy for a sixth consecutive month, pushing the index, which began in November 2007, to a record high.

        Treasury yields will rise for a second consecutive year as U.S. debt sales climb above $2 trillion and the Federal Reserve unwinds stimulus programs, according to the 18 primary dealers that trade with the central bank. The survey shows sentiment is also the most pessimistic on record for the U.K., Spain and Switzerland, where governments also enacted measures to support their economies.

         “The market will have to absorb a significantly greater amount of supply as the Fed steps away,” said Michael Pond, a survey participant and an interest-rate strategist in New York at Barclays Plc, one of the primary dealers required to bid on Treasury auctions. “We do expect yields to go higher. Bearishness across all sovereign issuers may be warranted.”

        The US Federal Reserve has reported a record profit of $52 billion in 2009 due to earnings gained from investments aimed at rescuing the US economy. 

       The Fed says it paid $46.1 billion to the US Treasury last year from its investments in Treasury bonds and mortgage-related securities — including those of mortgage giants Fannie Mae and Freddie Mac. 

        ”The significant increase in earnings on securities was primarily due to increased securities holdings as a result of the Federal Reserve’s response to the severe economic downturn,” the Federal Reserve explained in a statement on Tuesday. 

        The entity that functions as a central bank for the US says it returned any profit to the Treasury Department after paying operating costs. 

        The Fed’s profit last year was $14.4 billion more than it had earned in any year since 1914. 

     The numbers are a sign that the Fed has been successful in dealing with the economic crisis triggered by a dramatic rise in mortgage delinquencies and foreclosures. 

        But there is a risk of significant future losses if the Fed sells investments or loses money on its stakes in bailed-out firms.

The president wants Wall Street banks to pay $117 billion to taxpayers for their financial blowout.

The CFTC has unveiled a proposal to rein in energy-futures speculators by limiting the number of contacts they can hold across all exchanges. This is to end concentration and manipulation. Most of the past damage has been in off-exchange trading by index investors, such as pension and endowment funds, that drove volatility. 

They will impose limits on physically and financially settled oil, natural gas, heating oil and gasoline futures and options contracts. It will cover commodity swaps as well. The edicts will be reviewed for months and be open at public meetings. We do not believe the changes are adequate. The limits are too high, if you can believe it. The CFTC cannot cap positions held in the O-T-C market because they do not have the authority to do so. It also does not address massive shorting any commodity with impunity. In addition, entities using the futures markets to hedge commercial risks, or bona fide hedgers, would still be exempt from position limits under the proposal. Rationing supply with these position limits won’t work, and the CFTC know that. It took 16 months to come up with virtually nothing. The rationing will force investors into the physical markets, which will put more upward pressure on markets, especially metals markets. Chairman Gary Ginsler came from Goldman Sachs. 

There is no question that House and Senate Democrats, the Present and selected Republicans are on the run. Their approval ratings are dreadful and they are getting worse. Global warming and climate change along with Al gore are history. The biggest academic and political scam in history is on the way out. The criminality was colossal and yet we see no criminal actions or civil lawsuits. Elections are on the way and the public is furious and outraged at what has been going on in a number of areas. We never thought we’d see 70% of Americans want an audit and investigation of the Fed. 

Being green is not chic anymore. Even the Tories in London are backing away and in the EU a massive fraud has been uncovered in the trading of carbon credits. As a result of the Copenhagen fiasco the people have stopped taxes on carbon emissions. Our current weather worldwide is testament to the scam of global warming. There goes Cap & Trade with only ten months to bi-elections. Al Gore has not been seen or heard from. Even in Australia the Senate voted down an emission’s trading scheme. Those on the Illuminists’ payroll are still barking the same tune that climate change is the biggest challenge of our time. We believe differently and politicians are catching on fast.

As we observe the congressional sideshow regarding banking we reflect on the industry’s 2009 compensation pool of $200 billion financed in part with taxpayer loans. Then there are the $80 billion in tax deductions, not to mention the profits inventoried offshore tax-free. Of the $80 billion in tax deductions $20 billion went to Goldman Sachs, JPMorgan Chase and Morgan Stanley. Those doing God’s work over at Goldman Sachs in 2008 paid a tax rate of 1%, while CEO Lloyd Blankfein made $40 million.

These are the people who strong-armed rating agencies to rate junk as Triple A graded paper and then securitized them as toxic waste causing their clients and others to lose hundreds of billions of dollars. It was plain and simply fraud, but no criminal charges have ever been filed and these are the firms that carry two sets of books, and are allowed to do so by the BIS and the FASB. 

These are the people who deliberately caused our economic collapse and control our government in Washington. We ask, what will happen when the derivative edifice collapses? Of course we all know the answer, and that is financial chaos. 

Under normal circumstances economic fundamentals would hold forth. This time they are not going too. That is because our depression didn’t just happen, it was planned that way. Over the past year the Fed has purchased 80% of the government debt and a goodly portion of toxic debt from banks, Wall Street, insurance companies and corporate America. American taxpayers will pay that bill. It is obvious foreign dollar holders and central banks are no longer willing to buy bonds from a bankrupt country. Most intelligent Americans are in denial. They know something terrible is going on and they just don’t want to hear about it.  

Americans want to blame everyone else for their problems when the culprit is their government and those who control that government, the wealthy on Wall Street, in banking and corporate America.

The ruling class is now so arrogant that they ignore our constitution, ruled by Executive Order or by a bought and paid for congress. As a consequence our country is insolvent and the rich have most of the wealth. That is why we forecast an official devaluation and default on debt and the failure of the FDICA over the next 1-1/2 years. The financial sector can make the economy do anything it wants, it owns Washington. America is the victim of a coup, a financial coup, that we have been writing and talking about for 50 years. We knew it was coming, because we saw the Federal Reserve for what it is, a monstrous, cancerous, criminal money devouring machine. Politically it divided us into apposing political parties and played us off against each other, while at the same time exercising power over both parties. That separation in part led to great control being exercised over both parties. That separation in part led to great control over the people. Over the past 30 years financial profits have doubled to 30% of our GDP. Americans cannot understand because they don’t understand psycho political warfare. They don’t understand there will be no recovery; it is planned that way. The coming collapse of the stock and bond markets will take away more of their wealth and in most cases wipe out their financial wealth. Most Americans never had a bad day in their lives and they will have great trouble with coping with such a disaster. They sense or see the corruption, but as long as it doesn’t touch them they turn away.

Knowing these things you can understand we are working against time, which is our enemy. That is why we publish the IF twice a week and do 30 hours of radio a week. We are trying to wake people up and to get those awakened to teach the world populace why they must wake up now. We have the elitists on the run and expediting their programs. When that happens people make mistakes, sometimes big mistakes. If you do your part we can win. Spread the word and try to inform every representative and senator what you want them to do. If you do not you end up in slavery. The financial Illuminist oligarchy that controls our country, finances and economy has to be stopped and if necessary destroyed. Any success short of that will bring on our demise.

This past week a proposal, not picked up by the media, from the White House proposes the commandeering of retirement plans to fund government debt. We have been talking about this for a year and a half and now it may become reality. 

One of the President’s Czars, who hopes to be appointed to the Supreme Court, believes all personal weapons should be confiscated and they will be within three years. He also says anyone who disagrees with government should be removed from society and that the Internet and talk radio should be banned. He says they are being too effective and threaten the elitist moves to One world Government.

We have our markets pricing in a bigger probability of default among industrialized countries with top investment grade bonds. Insurance for default is now higher for France and England then top investment grade companies. Even the best countries are not considered risk free. This is a result of faulty monetary and fiscal policies deliberately foisted on all these countries.

These same countries, and countries worldwide, are still subject to rising unemployment, something that in a normal recession should have ended long ago. This starkly points out this hasn’t been a recession. We have been in a depression for a year and it is not going to go away anytime soon.

The bogus employment figures worldwide are an insult to our intelligence. The difference between private and government figures in the US for the year is 650,000 and they both use similar statistical structures. In addition, the BLS says the February birth/death adjustment will be a downward 850,000, when it should be 1.7 million.

The Securities and Exchange Commission voted to propose banning brokers from providing clients with unsupervised access to stock exchanges, a practice that accounts for about two of every five shares that trade in the U.S.  [The parasites feed on retail and institutional orders.]

Zero Hedge: …we find out that today’s crowning moment of S&P manipulation was purely a function of yet another fat finger. We say manipulation, because while according to the CME the two 200,000 ESH0 block trades allegedly offset each other, the market ended up shooting higher as a result, which was likely driven purely from favorable robotic interpretations of the volume spike. This market is so broken, and so upward biased, the mere observation of abnormal volume activity is sufficient to gun it higher. Also, can someone please explain how 200,000 e-mini contracts can possibly trade without soaking up all of the advertised bid and offer side on the NBBO?

           Between 11:03 and 11:04 CT today, there were a series of transactions in ESH0 in which a market participant appears to have inadvertently traded approximately 200,000 contracts as both buyer and seller.  CME maintains trade practice and risk management rules and procedures respecting such matters.  In keeping with standard practices and CME’s self-regulatory responsibilities, CME is reviewing the circumstances of this event. 

One of the things that zero interest rates bring is if you add in inflation you are looking at an official 2.4% loss and in real terms a 8-1/4% loss. That means the cost of carrying gold is less than zero, and that makes gold move higher.

In addition, gold is money, a monetary unit, and has been for 6,000 years. The ratio of gold to fiat money is rising. Central banks can expand currencies faster than gold can be produced putting additional upside pressure on gold. 

The ten-year rise in gold and silver haven’t really been noticed. Those who have noticed trash these two metals with distain and skepticism knocking them at every turn. The move in gold and silver are just entering phase 2 of 3 or 4 major phases. As markets fall gold and silver will regain their luster and the real excitement will begin.

What is of interest is that central banks have been buyers of gold since the second quarter of 2009. Net sales fell 90% from 2008. The amount of gold held in the euro system fell by only 110 tons in 2009 versus 2008. Remember, they could have sold the quota of 500 tons. The buyers were India, Malta, Sri Lanka, Mauritia and Mexico. The three largest sellers were France, Switzerland, Spain and the ECB itself in operations to suppress gold prices.

France, Germany and Italy hold more than 65% of their gold and foreign exchange holdings in gold, while Portugal holds 80% in gold. The Swiss hold only 30% now, the ECB 20% against a world average of 11%. It should be noted as well that the big players have asked for the delivery of gold in large quantities in a relatively illiquid market. There is a growing element of demand that wants only physical delivery. That is stopping the gold suppression cartel dead in its tracks. We reckon they are short more than 70,000 tons on the paper exchanges and it will be impossible to fill when buyers demand delivery, which more and more are doing because they do not believe that depositories have the gold they say they have.

The only things holding the gold and silver markets together are derivatives. That link of the manipulators will break sooner or later. Those in the gold camp have been right all along, and for the right reasons. It has been pure common sense.

One of the things that zero interest rates bring is if you add in inflation you are looking at an official 2.4% loss and in real terms a 8-1/4% loss. That means the cost of carrying gold is less than zero, and that makes gold move higher.

In addition, gold is money, a monetary unit, and has been for 6,000 years. The ratio of gold to fiat money is rising. Central banks can expand currencies faster than gold can be produced putting additional upside pressure on gold. 

The ten-year rise in gold and silver haven’t really been noticed. Those who have noticed trash these two metals with distain and skepticism knocking them at every turn. The move in gold and silver are just entering phase 2 of 3 or 4 major phases. As markets fall gold and silver will regain their luster and the real excitement will begin.

What is of interest is that central banks have been buyers of gold since the second quarter of 2009. Net sales fell 90% from 2008. The amount of gold held in the euro system fell by only 110 tons in 2009 versus 2008. Remember, they could have sold the quota of 500 tons. The buyers were India, Malta, Sri Lanka, Mauritia and Mexico. The three largest sellers were France, Switzerland, Spain and the ECB itself in operations to suppress gold prices.

France, Germany and Italy hold more than 65% of their gold and foreign exchange holdings in gold, while Portugal holds 80% in gold. The Swiss hold only 30% now, the ECB 20% against a world average of 11%. It should be noted as well that the big players have asked for the delivery of gold in large quantities in a relatively illiquid market. There is a growing element of demand that wants only physical delivery. That is stopping the gold suppression cartel dead in its tracks. We reckon they are short more than 70,000 tons on the paper exchanges and it will be impossible to fill when buyers demand delivery, which more and more are doing because they do not believe that depositories have the gold they say they have.

The only things holding the gold and silver markets together are derivatives. That link of the manipulators will break sooner or later. Those in the gold camp have been right all along, and for the right reasons. It has been pure common sense.