Financial Community: International Lawsuits Begin to Build Momentum Against Wall Street Thugs

The Argentinian government has filed a lawsuit against Wall Street firm CitiGroup over debt repayments that Argentine officials say violate national laws, reported The Guardian.

Part of the lawsuit states that the country seeks to file criminal charges against employees of the Argentinian arm of CitiGroup. The bank said in a filing with the Securities and Exchange Commission that Argentine officials had “taken certain adverse actions against Citi Argentina, including filing a lawsuit against Citi Argentina and instituting a suspension of certain activities.”

Because of this bad debt deal, the Argentine government wants not only to file charges against CitiGroup employees, but implement sanctions that bar any future operations within the country. This dispute between Argentina and CitiGroup comes during friction between the country and two other financial institutions, NML Capital and Aurelius Capital Management.

The two institutions did not accept a deal to restructure Argentina’s national debt. Argentina apparently owes a “holdout” debt of $1.3 billion to the two hedge funds, and U.S. judge Thomas Griesa ruled that it must pay that amount before receiving a restructuring deal.

Because Argentina senses a banking scam run by CitiGroup and accuses Griesa of being a banking crony, the country has ignored the judge’s ruling and blocked Citi’s capital market operations and suspended the leader of Citi’s Argentine operations, Gabriel Ribisich — who has been accused of misconduct.

The BBC recently reported that CitiGroup may plead guilty to accusations of manipulating exchange rates in foreign currency markets. Wall Street and Griesa’s cronyism have backed Argentina in a tough spot. Unrealistic expectations and international bullying pushed the country into default as Argentina is refusing to pay the hedge funds, NML and Aurelius.

Read more: International Lawsuits Begin to Build Momentum Against Wall Street Thugs

Lehman Europe creditors to get further $5.5 billion payout

More than 1,000 creditors of the European operations of failed U.S. investment bank Lehman Brothers will share a $5.5 billion payout next week, its administrators said today..

The payout means the recovery so far for creditors from one of the banking collapses at the heart of the 2008 financial crisis is 68.5 cents in the dollar.

PricewaterhouseCoopers, joint administrators for Lehman Brothers International (Europe), said a dividend of 43.3 percent of what creditors were owed - the second so far - would be paid on June 28.

Read more: Lehman Europe creditors to get further $5.5 billion payout | Reuters

Euro Bashing by US investors: "Wall Street Manipulators Say They Are Preparing for Collapse of the Euro"

Banks, investors and companies are bracing themselves for the possibility that the euro will break up -- and are thus increasing the likelihood that precisely this will happen.

There is increasing anxiety, particularly because politicians have not managed to solve the problems. Despite all their efforts, the situation in Greece appears hopeless. Spain is in trouble and, to make matters worse, Germany's Constitutional Court will decide in September whether the European Stability Mechanism (ESM) is even compatible with the German constitution.

There's a growing sense of resentment in both lending and borrowing countries -- and in the nations that could soon join their ranks. German politicians such as Bavarian Finance Minister Markus Söder of the conservative Christian Social Union (CSU) are openly calling for Greece to be thrown out of the euro zone. Meanwhile the the leader of Germany's opposition center-left Social Democrats (SPD), Sigmar Gabriel, is urging the euro countries to share liability for the debts.

On the financial markets, the political wrangling over the right way to resolve the crisis has accomplished primarily one thing: it has fueled fears of a collapse of the euro.

Note EU-Digest: All Europe needs is more pessimism and euro bashing by US investors. 


Investors Preparing for Collapse of the Euro - SPIEGEL ONLINE

Financial World: elected officials still feel compelled to protect powerful financial interests.

The long shot big hope for Wall Street reformers Wednesday was that JP Morgan CEO Jamie Dimon would trip up before the Senate banking committee and expose the need for tighter rules governing big banks. His firm, after all, recently lost billions making risky bets with depositor funds on the line.

Instead, with some notable exceptions, the senators themselves turned the cross-examination into a coronation, and exposed the extent to which elected officials still feel compelled to genuflect to powerful financial interests.

For reformers, that adds up to an opportunity missed. But that came as no surprise to one of the Democrats with a stake in strong financial oversight – Volcker rule author Jeff Merkley (D-OR).
"I think that if Dimon came in and surprised everyone … if he came in and said there are systemic issues that have been raised here, that I think do need to be addressed, it would change the conversation to have a champion among one of the major banks," Merkley told TPM this week in advance of Dimon's appearance before the committee. "I would be very surprised if we saw that testimony."

Read more: Senators fawn over Jamie Dimon despite JP Morgan trading fiasco | Brian Beutler | Comment is free | guardian.co.uk

Financial community: JPMorgan loss another headache for markets - by PAN PYLAS

 Global markets fell on Friday after a big surprise trading loss at JPMorgan Chase shook investor confidence, while political chaos in Greece continued to cast uncertainty over its future in the euro currency bloc.

JPMorgan, the largest U.S. bank, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.

The company's stock plunged almost 7 percent in after-hours trading, and the unexpected loss at one of the world's most venerated banks undermined investor confidence. British banks were hit hard - Barclays, which has a large investment banking arm, was the biggest loser in London trading, down 2.9 percent by midmorning.

Read more: JPMorgan loss another headache for markets - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Nothing Has Changed On Wall Street - Felix Riley

The most important thing to take from this story is this: Wall Street has learnt nothing. The same people who took us to the brink of financial Armageddon in 2007-2008 are still at it. Still executing wild, greedy bets in the hope of taking the upside, knowing they can walk away from the downside.

It would be bad enough if it just hurt their own, but these people threaten us. They threaten our investments, they threaten our government balance sheets, they threaten our economic well-being. And for all that not one - not one - Wall Street sort has been jailed for the crimes of the credit crunch. Am I optimistic that it will be different this time with MF Global? No. I am not.

Congress - of the billionaires, by the billionaires, for the billionaires - has choked all attempts at reform (the funds-starved Frank-Dobbs act has been on life-support since day one) and the SEC doesn't have the teeth or manpower to act.

For more: Felix Riley: Nothing Has Changed On Wall Street

Wall Street, Financial Market Traders - Its Not About You Or Rescue Packages - Its About Making Money For Themselves

People who believe Wall Street or the Financial Industry give one damn about the interest of the shareholder or for that matter the interest of any country, think again.  They don't. Specially today, the enormous volatility in the market is a day-traders wet dream. Due to today's market volatility, you can't swing a dead cat without hitting a stock making a 10%-40% move in one day. You've got large numbers of companies stock like Goldman Sachs, making 30% moves in a few days. One often doesn't realize how incredible that is, major stocks like those mentioned aren't supposed to move like that, they're supposed to be steady, safe investments.

Today selling high, buying low and making a killing on the margins is the name of the game. Unfortunately most, if not all of the profits go into the traders and their company's pocket, not  in that of the shareholder.

Working in the financial Industry has also become extremely popular. Economics and Finance students at Cornell University say its a well known fact that after five years on Wall Street, you could expect to be making half a million a year in salary and bonuses; after 10 years you could expect a million or more.

Unfortunately as the size of the financial industry grew, the original purpose of banking to allocate capital to its most productive uses has been forgotten not only by the bankers, but probably by the public as well. According to Jeff Madrick, who wrote "The Age of Greed: The Triumph of Finance and the Decline of America, 1920 to the Present", the current system that pushes the socially beneficial goals of the industry to the periphery only encourages greed. Now, banking shifts money around the world while rarely increasing market efficiency.

Financial advisors in major trading companies enjoy dealing with derivatives and often funneling income to offshore holding companies, so rich people and corporations don't have to pay taxes. These trading companies have lawyers on retainer in the Cayman Islands and Jersey – and a quick phone call to them will set it all  up, no more taxes for their clients. This is not what the financial industry should be doing, this is basically criminal behavior.

Like one Wall Street analyst said: "Governments don't control today's world, Goldman Sachs does."

To prove the above point also see the BBC news clip "Financial Armageddon Imminent 2011"

As for those who continue watching and listening to those fast talking, so-called, financial "Gurus" on Fox News, CNBC, CNN and other corporate owned News Media, please take it for what this really represents -Corporate Orchestrated Populist Financial Reality Shows.

EU-Digest

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only if EU-Digest is quoted as the source.

EU proposes 0.1 percent financial transaction tax

Reuters reported this morning that the EU's executive European Commission formally adopted on Wednesday plans for a financial transaction tax from January 2014, which it hoped would be extended worldwide.

The measure will need approval from EU states to become effective. "With this proposal the European Union becomes a forerunner in the global implementation of a financial transaction tax," EU Tax Commissioner, Algirdas Semeta, said in a statement.

"Our project is sound and workable. I have no doubt this tax can deliver what EU citizens expect -- a fair contribution from the financial sector. I am confident that our partners in the G20 will see their interest in following this path." Stock and bond trades would be taxed at the rate of 0.1 percent, with derivatives at 0.01 percent. The EU executive said the tax would be imposed on all transactions in financial instruments between financial firms when at least one party to the trade is based in the bloc.

EU-Digest

GOD OR GREED ? A Muslim view - by Chandra Muzaffar

Like in Christianity greed is a vice in Islam because a) it is an act of stark selfishness; b) it distorts and perverts one’s character. It makes one vain and arrogant; c) it makes one overly materialistic ; d) it leads to the spread of corruption in society ; d) it is the antithesis of sharing and giving; and e) it undermines a person’s love for God and subverts values such as justice, fairness and compassion.

In the Qur’an, the embodiment of greed is Qarun (28:76-82; 29: 39) who was preoccupied with the accumulation of wealth and riches, and cared little for his fellow human beings or for God.

Islam and Christianity concur on this fundamental belief: that the human being cannot serve both God and greed at the same time.  If we choose God then we should declare war on those structures and attitudes that allow greed to breed in contemporary civilization. As Muslims and Christians we should write, speak, organize and mobilize against greed.  In this monumental struggle we should work with people of other faiths and those who may not belong to a particular faith community.  The war against greed is putting into action God’s eternal message: Believe in God and do good.

For more: GOD OR GREED ? A MUSLIM VIEW

EU: The heir apparent

The economic system has to serve the people, not vice versa. At least this has been the resolution of any liberal and free market apologist. Over the neo-liberal age of the past 2 decades we have left behind this principle, with every new speculation bubble, for good.

Only utopists believe that one can change underlying priorities of the management of a company by allowing employees to participate in a democratic way in the key decisions of a company, because as long as the owners concentrate the economic power in their hands they will always dominate the management and use their funds to always get their way, if not legally, then illegally by bribing the worker’s representatives the latter for which there are countless examples to be found in history.

For more: The heir apparent - New Europe

Financial Sector: Germans on the brink of taking over control of Wall Street while London Stock Exchange seeks merger with Toronto Stock Exchange

It seems the Germans (the Deutsche Bourse), are on the brink of taking over the Walhalla of American Capitalism, the New York Stock Exchange, better known around the World as "Wall Street ".

"I don't look good in lederhosen," said Benedict Willis, 51, a 25-year veteran of the trading floor and the director of floor operations for Sunrise Securities Corp.  Several traders, however, were saying they were optimistic about the proposed deal, hoping it would help to grow the exchange's business.

"Wall Street for well over 100 years has had prominent German-Jewish bankers operating here," said Richard Sylla, a financial historian at New York University's Stern School of Business. The proposed deal also recalls a long history of German investment in New York City and on Wall Street, experts said. Some of Wall Street's most famous titans were also of German heritage. They have included German-born Paul Warburg, who was nominated to the New York Federal Reserve's first board in 1918, and the founders of Goldman Sachs and Lehman Brothers, Marcus Goldman and Henry Lehman.

If the deal proceeds it will create the world's largest market in equities and derivatives.The merger also means the focus will be far more on high-speed electronic trading, with far less human interface than before. It will also that approximately 1000 traders will become redundant.

The other blockbuster deal to merge the Toronto Stock Exchange with its London counterpart was left up in the air amid widespread worries that the TSX could be overwhelmed in a marriage with the financially powerful London Stock Exchange. Ontario Finance Minister Dwight Duncan and the Quebec government called for public hearings to vet the proposed $6.9 billion deal and federal Industry Minister Tony Clement said Ottawa has begun a preliminary investigation of the merger.

 EU-Digest 

Charlemagne: Europe's dark secret ?

When history comes to write the tale of the euro-zone crisis, the chief villains, if Europe’s leaders have any say, will be not dissembling Greeks or dithering Germans, but the financial markets. Traders subjected Greece to “psychological terror”, declared George Papandreou, its prime minister. They were “making money on the back of the unhappiness of the people”, lamented Michel Barnier, the European commissioner for the single market. The crisis was blamed on wolf-pack markets (Anders Borg, Sweden’s finance minister), cynical hedge funds, cocky credit-ratings agencies, neoconservative capitalism (José Luis Rodríguez Zapatero,

Spain’s prime minister), a duplicitous Anglo-Saxon press (Mr Zapatero again), and other wicked forces still.
Not all Europeans demonise the market. Ex-communist Europe, which only recently threw off the command economy, is less hostile. So are the Germans, with their small-business Mittelstand and consensual labour relations. Elsewhere, though, market-aversion seems to go deeper than mere disapproval of extravagant stock options or bonuses (which is common to market-friendly Britain and America too). Fully 29% of Spaniards and Italians, and 43% of the French, told a global poll last October that free-market capitalism was “fatally flawed”. Only 13% of Americans shared that view.

At best, too much meddling in markets will condemn Europe to gentle decline. At worst, it will undermine the capitalist enterprises on which its prosperity and social model depend. A few years ago, an ambitious centre-right French politician seemed to agree. “For 25 years, France has never stopped discouraging initiative and punishing success,” he said. “Preventing the most dynamic from getting rich has by consequence impoverished all the others.” His name? Nicolas Sarkozy
.

Note EU-Digest: a most bias report by the Economist, obviously inspired by its friends in the Anglo Saxon "conservative" financial community who are very much opposed to the legislation initiated by the EU and the Obama administration to curb the free wheeling ways of the global financial community. What happened in 2008 to the worlds economic structure as a result of deregulation and greed must never happen again.

Charlemagne: Europe's dark secret | The Economist

G-20: No Concrete Result - 'MORE BLA -BLA- BLA'

EU-Digest

G-20: No Concrete Result - 'MORE BLA -BLA- BLA'

At the conclusion of the two-day summit, leaders of the G-20 nations, comprised of the largest developed and emerging countries, issued a 23-page statement that promised, among other things, to fix problems in the financial system that contributed to the economic crisis. They stated they would discourage excessive risk-taking and reduce the chance of future financial meltdowns, the leaders endorsed practices to limit bonuses and to tie executive compensation to long-term performance. European leaders had pressed for pay caps, but the idea was resisted by the United States and Britain and was never on the negotiating table, officials said.

Bottom line: once again there was lots of talk, many promises, but no real results to report. No caps on bonuses, or specific regulatory agreements were announced. Climate Change Advocate Groups which had hoped that under the chairmanship of US President Barack Obama the Group of 20 summit might agree to set aside 150 billion dollars to pay for this work and convince emerging economies to sign the deal were also disappointed. The final summit statement agreed on by the leaders, however, was extremely vague on this issue and the specifics, with only a promise they would study the matter more carefully. Pressure groups were outraged, singling out Obama and Germany's Chancellor Angela Merkel for particular scorn. "This is a crisis of leadership. The rich-country G20 leaders -- especially Merkel and Obama -- set themselves a deadline for a climate finance proposal, and then slept right through it," said Ben Wikler of Avaaz.

Mr. Sarkozy who had promised to go back home to France if there were no pay caps imposed on bankers bonuses, did not leave, even though the EU proposal for bonus caps was shot down by the US and Britain. Apparently, Mr. Sarkozy was pacified with the limelight given to him by being allowed to appear on stage with Mr. Obama and Mr. Brown on the unrelated G20 issue of Iran's nuclear proliferation problems. Mr Sarkozy and fellow political leaders remained in Pittsburgh for the full two days of the conference, which can only be described as another Bla-Bla-Bla meeting, paid for by the taxpayer. A sad state of affairs, as the worlds financial community continues happily on its unregulated path.

NPR: What Happened To The Push To Reform Wall Street? : by Kevin Whitelaw

For the complete report from NPR click on this link

What Happened To The Push To Reform Wall Street? - by Kevin Whitelaw

Michael Bernstein, an expert in political and economic history who is currently serving as provost at Tulane University, says Obama's position is very different from that of President Franklin Roosevelt during the Great Depression, when FDR harnessed popular anger against bankers to pass key financial reform laws as part of the New Deal.Both then and now, it was largely up to the president to rally public sentiment, Bernstein says. "But I don't see Obama out there on the road, saying, 'You have to help me here go after the moneybags.' That's the kind of card Roosevelt played."

Heather Booth who runs Americans for Financial Reform, an advocacy group with nearly 200 institutional members, including AARP and the AFL-CIO has organized a push for widespread financial reforms. She expects a growing grass-roots call for change. She says - "We think people have been operating out of not just frustration, but fear. If that fear turns to hope for a real solution, and also, as fear changes to anger towards those who created this, we think there will be mobilization for change."

"If political leaders wanted to make it an issue, they could succeed in mobilizing people, but they're not," says Robert Shapiro, a political scientist and expert on public opinion at Columbia University. "For the people to mobilize themselves, it would take either another big drop in the stock market, or if not that, something worse."

Still, even if Americans aren't clamoring for a regulatory overhaul, the rest of the world is, says Fred Block, a professor who specializes in economic and political sociology at the University of California, Davis. "The Europeans, the Chinese and the Japanese are putting on continuous pressure," Block says. "If this were simply a matter of internal American politics, one would have to be more pessimistic. But the rest of the world has suffered from what the US allowed to happen in the financial market."

Note EU-Digest: So far nothing substantial has been done by our politicians to really correct what has gone wrong in the financial markets except help those who caused the problems. Politicians are the ones to blame for failing to do the job we "hired" them to do - watching over the well being of the citizens who elected them. Instead they turned a blind eye to the real needs of their constituents and a financial community gone out of control. The question which now must be answered without delay - can we trust our politicians with the power we gave them or should we get rid of them and the corrupt system they created? The answer should be quite simple.

The Nation - US Politics: President Obama and the Big Dogs - by William Greider

For the complete report from The Nation click on this link

US Politics: President Obama and the Big Dogs- by William Greider

"What we are witnessing is a high-stakes melodrama of glandular politics. This rival power center, though gravely weakened, is contesting for control with the president. For three decades, the Wall Street guys in good suits have ruled the economy, demanding deference from the political system and from corporate managements, too. Those who failed to follow them were punished, either through stock prices or election financing. Despite their catastrophic failure, the surviving bankers and financiers are trying to hold on to their thrones. Obama wants to govern through public-spirited cooperation. The financial titans play hardball in return. I say "seems" because we do not yet know about Obama and how he will resolve this mess. The administration has been stalling action on the troubled banks, as if it believes in its own wishful forecasts about an early recovery for the economy.

The financial crisis poses the first great moral dilemma of the Obama presidency. Sometime in the next few months, he will be compelled to choose between his technocratic inclinations--rescuing certain financial institutions deemed "too big to fail"--and the obvious moral wrongness of his policy of rewarding the very players who caused our national disaster. The broad public does not doubt that this is morally wrong. I saw a Zogby opinion poll the other day that said only 6 percent of the public supports the financial bailouts. Obama is on the wrong side of that bipartisan consensus."

EU-Digest: US Financial woes - The World's Financial System Needs a Drastic Overhaul

A EU-Digest report on the world-wide financial crises

US Financial woes - The World's Financial System Needs a Drastic Overhaul

The basic economic objective of any country should be to guarantee sufficient individual income to everyone. Governments should not need to be worried about, or cave in to the wishes of the stock markets. Stock markets, lets face it, are very similar to gambling casino's. They fuel on speculative games focusing on hedge, equity, and a variety of other funds. Of these, the so-called hedge funds are probably the most dangerous to any economy, because they are unregulated and account for more than one third of all stock trades. The hedge funds in the US represent approximately $2.5 trillion in assets and they pay their managers exorbitant salaries. The problem is that the debt-laden US economy with a manufacturing base which is mainly outsourced, is no longer capable of providing its population with a adequate living standard which utilizes its own productive resources. Cutting interest rates also increases the danger of inflation. The reasoning used by President Bush to promote his permanent tax cuts, tax relief and the financial deregulation for corporations and the wealthy is that these benefits will eventually trickle down to the general public and make the economy healthy again. As one would say, "Tell me another story". The actual situation is quite different. The British Guardian wrote recently, "The Fed is doing its best to give the impression that it is still in control of the US economy, but its reassurances are as hollow as that given by Herbert Hoover - on the weekend after Black Thursday in October 1929 - that the fundamentals of the economy were sound. If anybody is running economic policy, it is the big banks and investment houses on Wall Street. The World's economic system needs a drastic overhaul.

The control over the economic wellbeing of the world needs to be taken out of the hands of the private banking system and investment houses and returned to transparent democratically elected governments. This might appear to be a revolutionary solution, but it really means moving away from the idea of jobs to that of income. A world economy which is not burdened by interest bearing debt can provide a good income to just about anyone on the planet. Unfortunately the actions undertaken by the US Fed can only increase the problems. Instead he should have proposed; the regulation of the financial industry, a return to the gold standard; a general amnesty of all personal debt for anyone earning less than $50.000; a total ban on unsecured personal credit; a national productivity fund in which every corporation puts a percentage of their pre-tax profits to provide a minimum income for the most needy; a universal health care program; and moving 60% of the military budget to education, research and development, including alternative energy resource development. Regardless of what the doom sayers, industry or financial establishment will say, this new approach would shift the present economic emphasis from a financier-banking controlled system to an economic democracy which will enable to energize the world economy through the forces of innovation, natural wealth and indigenous resources. Time is running out and pumping more money into the financial system won't work.

EarthTimes.org: "No more "Hanky Panky" by Financial Community" say Germany, France, Britain as they seek transparency on financial markets

Merkel, Sarkozy and Brown - the EU's power brokers

For the complete report from the Earthtimes.org click on this link

"No more "Hanky Panky" by Financial Community" say Germany, France, Britain as they seek transparency on financial markets

The leaders of the EU's three biggest economies - Germany, France and Britain - called Friday for new rules and greater transparency on the financial markets following the recent turmoil sparked by the US sub-prime mortgage crisis. At a meeting in Portugal, Chancellor Angela Merkel, President Nicolas Sarkozy and Prime Minister Gordon Brown said EU ministers would be asked to discuss the appropriate measures at a Council meeting scheduled for the spring of 2008. "The recent global financial turmoil has highlighted that confidence in and between financial institutions is vital for the proper functioning of financial markets," a joint statement signed by the three leaders read.

"As a key global financial marketplace, the European Union should have a strong role in developing the global response to these events," the statement added. Merkel, Sarkozy and Brown also called for greater cooperation between national regulatory authorities and identified a number of key areas where action is necessary.