By greydogg, 99GetSmart
* WALL STREET LEGEND SANDY WEILL: BREAK UP BIG BANKS
Former Citibank boss Sandy Weill, who lobbied vigorously for a repeal of the Glass-Steagall act separating real banking from financial gambling – has called for them to be broken up:
What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.
I’m suggesting that [the big banks] be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading, they’re not subject to a Volker rule, they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be marked-to-market. […]
* IT’S IMPOSSIBLE FOR GOVERNMENTS TO GROW THEIR WAY BACK TO SOLVENCY
By Tyler Durden, zerohedge
While it might seem like somewhat stating the obvious, it is nonetheless worth driving home to the politicians and public policy wonks who see rates at record lows and perceive a Keynesian borrow-and-spend-fest as once again the solution to borrowing-and-spending too much. As Morgan Stanley puts it, fiscal policy is sailing between the Scylla of chase-your-tail austerity and the Charybdis of sovereign insolvency. In short, it is impossible for developed market (DM) governments to grow their way back to solvency. Doing nothing would sail governments towards the whirlpool of national insolvency – at some stage. But avoiding insolvency would risk being monstered by recession. If ‘expansionary austerity’ worked, then Europe would now be booming. The outlook for fiscal policy and public sector finances is a major uncertainty for investors and, critically, is part of the reason why risky assets are being de-rated and ‘safe’ assets are at unprecedented valuations.
Morgan Stanley:The Strait of Mess
Fiscal policy is sailing between the Scylla of chase-your-tail austerity and the Charybdis of sovereign insolvency. It may be possible – with perfect foresight, untrammeled authority, tolerant markets, accommodating central banks and a disregard for political pressure – to navigate between these two threats. History suggests otherwise. Either way, this adds what is likely to be a long-running element of political and financial risk to the investment outlook. Markets are reacting by increasing the rating on ‘safe’ assets, and de-rating riskier assets, including equities.
Most DM governments are essentially broke. Of course, governments are not businesses, so the usual rules do not apply. But it seems that the net present value of governments’ liabilities – including the commitments embodied in current social security policies – exceed the net present value of their assets (including yet-to-be collected tax receipts). Exhibit 1 shows estimates of the (negative) net worth of some G-10 governments, relative to current-day GDP. […]
* OCCUPY THE SEC URGES THE SEC TO INVESTIGATE JP MORGAN OVER LIKELY (AS IN BLOOMIN’ OBVIOUS) SARBANES OXLEY VIOLATIONS
By Yves Smith, Naked Capitalism
We’ve written at length how the Obama Administration claim that it couldn’t prosecute bank CEOs and senior executives because they didn’t do anything illegal is utter hogwash. Sarbanes Oxley, passed in the wake of Enron, was designed to prevent CEOs and other top executives from escaping liability by claiming they were clueless face men. And it provides for a clear path to criminal prosecutions.
But the way Sarbanes Oxley was defanged is by making it an exercise in form over substance. Public firms engage in compliance theater while the SEC sits on its hands as far as enforcement is concerned (Note that the SEC did fail on its lone effort to use Sarbox against a CEO in the case of Richard Schrusy and Healthsouth. But that case was tried before a jury in Birmingham, Alabama, and I will spare readers the long form account as to why you can’t generalize from these results). Both the MF Global collapse and the JP Morgan Chief Investment Office fiasco look like slam-dunk Sarbox cases, yet we’ve seen nary a sign of interest from the SEC.
Occupy the SEC has used House Financial Services Committee hearings this week on the tenth anniversary of the passage of Sarbanes Oxley to raise pointed questions as to why the SEC has not launched a probe of JP Morgan. I have a sneaking suspicion that this line of thinking won’t get any air time, and instead the Congresscritters will focus on how the nasty law inconveniences fine upstanding major corporations.
I hope you’ll read their succinct and forceful letter […]
* WAR AND MONEY: OBAMA’S BEEN A VICIOUS 1% HOAX FOR ‘HOPE AND CHANGE’
By George Washington, Washington’s Blog
President Obama and Democratic “leadership” expanded policies of President Bush and Republican “leadership” in unlawful wars and looting of literal trillions of the 99%’s wealth to a 1% oligarchy.
This is Orwellian-opposite of Obama’s campaign rhetoric for “hope, change,” and accelerated from usual war-business and rigged-casino economics throughout US history. Let’s look:
More unlawful wars:
War law is crystal-clear in letter and intent: military armed attack is illegal unless another nation’s government is attacking. This is the legal victory all our families sacrificed to win through two world wars. It also upholds the first unalienable right to “Life” from government murder.
Rather than declare the “emperor has no clothes” obvious that US wars are unlawful, Obama and Democrats acted as the Left arm of one fascist war-mongering body to:
- reject prosecution of the unlawful wars and related War Crimes, such as torture,
- expand unlawful armed attacks with drones and NATO invasions,
- continue easily proved lies to expand war onto Iran: Iran never threatened Israel; all fissionable material is fully accounted for lawful use in energy and medicine. In contrast, Israel “wipes Palestine from the map,” and the US openly violates the Non-Proliferation Treaty. […]
* ERODING SOCIAL JUSTICE IN SPAIN
By Stephen Lendman
Along with Greece, Spain represents the epicenter of decaying Western societies. Multiple rounds of social spending cuts reflect Prime Minister Mariano Rajoy’s war on his own people.
Complicit parliamentarians go along. At issue is class warfare, transferring household wealth to bankers, other corporate predators, and privileged elites, eroding Spain’s middle class, and destroying a whole youth generation and perhaps others to come. More on this below.
Spaniards protest angrily against what no one should tolerate. They’re back after the latest announced austerity package.
On July 19, London’s Guardian headlined “Spanish take to streets in protest as MPs pass ($65 billion) austerity package,” saying:
They raged in 80 cities nationwide. They’re mad as hell and won’t take it anymore. The Guardian downplayed turnout. Possibly millions participated. Around 800,000 rallied in Madrid. Other major cities saw huge crowds.
Police attacked protesters violently. “Angry civil servants had blocked traffic in several main Madrid avenues earlier in the day, with protesters puncturing the tires of dozens of riot police vans, amid growing upset at austerity, recession and 24% unemployment.” […]
* THE MAN WHO CHANGED ICELAND – THE MESSAGE FOR GREECE
The man who forced the government of Iceland to resign and kicked out the IMF representatives from his country, Hordur Torfarson, is now teaching meta-modern democracy throughout Europe.The rest of the world would benefit from following the example set by Iceland: Arresting the corrupt bankers who are responsible for the current economic turmoil.