Go, Economy!

[Advocate]

Theres a DEAPER meaning hear than Y'ALL REALEYES!

[PaCrappa]

This is what the academy is doing for those afflicted by the economy. The first couple lines made me LOL

[Gooch]

That's awesome.

[Gooch]

According to the United States' Federal Reserve, fractional reserve banking provides benefits to the economy and the banking system:

The fact that banks are required to keep on hand only a fraction of the funds deposited with them is a function of the banking business. Banks borrow funds from their depositors (those with savings) and in turn lend those funds to the banks’ borrowers (those in need of funds). Banks make money by charging borrowers more for a loan (a higher percentage interest rate) than is paid to depositors for use of their money. If banks did not lend out their available funds after meeting their reserve requirements, depositors might have to pay banks to provide safekeeping services for their money. For the economy and the banking system as a whole, the practice of keeping only a fraction of deposits on hand has an important cumulative effect. Referred to as the fractional reserve system, it permits the banking system to create money.

[Gooch]

NOTE: This is posted for its economic discussion. I am taking no view on religion or other national disputes via this posting.

This is definitely a biased perspective, but it's certainly not the first time I've heard this argument, particularly about the reason we went into Iraq. As sensational and agenda filled as this may be interpreted as, it's an interested read that shouldn't be completely dismissed. It never hurts to hear other viewpoints even if you don't agree with them.

Fake Dollars

By Muhim Iqbal Khan

In order to understand how Zionists have fooled the whole world with their trickery, keep in mind that for last few decades America has been the hub of their activities. England, previously their haven, is still under their control, just like the other European countries. The Zionists made England their economic slave with the establishment of Bank of England, and trapped America in their clutches from the first day of their freedom. They now have everything in the U.S. under their control, including education, trade and commerce, banking and Media Theater (known as “showbiz”).

Despite their small numbers, the Zionists are bending America and Europe according to their own desires and wishes because of their superiority in planning and resources. With the help of these countries and some of their established organizations like UNO, IMF, WTO and the World Bank, etc., they are earning billions of dollars and shedding the blood of all mankind through the wars they created, which are now running their weapons industry.

The purpose of this article is to unveil the hidden Zionist economic fraud. For the first time in 1971, America completely disregarded the universal principle of holding bullion reserves before printing paper currency. In spite of this requirement, America printed many more dollars than it had reserves and then spent the money. The billions of dollars printed under this new policy were basically nothing more than bits of paper. The whole world was cheated into using these pieces of paper, and thus the world’s economy was damaged. When France learned about this fraud, it demanded that America convert the dollars it held into bullion. America, however, rejected France’s demand since it did not have huge bullion reserves; the U.S. had spent its reserves all over the world. It should be noted that if this had happened with any country other than America, that country would have been immediately declared bankrupt.

To hide its great economic fraud and financial scandal, America immediately approached Saudi Arabia and made a deal in which it was decided that Saudi Arabia (and OPEC) would connect their oil exports with U.S. dollars. In other words, the oil-purchasing countries of the world could only buy oil in exchange for dollars, which were merely the product of printing presses - worth nothing at all. In a practical sense, the oil which America has been purchasing for four decades has been totally free of cost. This exchange has been tolerated by the other countries of the world, making them voluntary and foolish accomplices to America’s theft of trillions of dollars.

Sensing this fraud by America and the Zionists, Saddam Hussein completely rejected it and began selling oil in exchange for euros. He openly dared to finish the American free-for-all, which was obviously not well received by the Zionists. Finally, they planted a fake story about Saddam Hussein stocking “weapons of mass destruction” and not only was Saddam Hussein killed, but Iraqi oil reserves were directly occupied. Later, a dummy ruler Hamid Karzai was appointed in Afghanistan. The readers are aware of the rest of the story.

Venezuelan President Hugo Chavez also started cursing U.S. dollars and started to sell its petrol in all currencies other than U.S. dollars, which caused many assassination attempts on his life. After investigation, the attacks made on Hugo Chavez were linked to the CIA. Iranian President Ahmadinejad had been waiting for an opportunity to give the “Great Satan” (America) a powerful kick, so he also dared to sell oil in currencies other than U.S. dollars and turned the idols of American pride and conceit into dust.

The natural and logical end of this shell game is not far away, because now that the prudent nations of the world are aware of the Zionists’ crookedness and wicked economic fraud, the members of OPEC will be compelled to stop the connecting the sale of oil with U.S. dollars.

The worst news for America is that after being made aware of the real value of their dollars, the Americans will be compelled to purchase oil with euros or another currency besides dollars, and the American people will witness the nightmare of their economy sinking completely.

When the real value of these fake dollars is revealed to whole world, America will see only darkness everywhere as it bears the heavy expense of spreading its military forces all over the world. The American intellectuals will have no solution for this. Their Jewish masters, however, will want to make them commit the mistake of initiating the world’s worst war (or the world’s last war) to destroy the Islamic world, including Pakistan, using American atomic weapons. This would fulfill Israel’s long-awaited dream of establishing Greater Israel and making it the world’s headquarters, ruling over the whole planet. However, nobody knows the Wisest Ruler’s plan, and that which Allah has decided will happen no matter what.

[Drewbacca]

Gooch = terrorist scum?

(He's not wrong about the federal reserve, though. I've read about them printing money with no real value behind it. I've also seen a video asking some old guy in the Federal Reserve why they're doing it, and how it isn't criminal, and the response was nothing short of an maniacally evil laugh like Dr. Evil from Austin Powers)

[Bojack]

Gooch = terrorist scum?

(He's not wrong about the federal reserve, though. I've read about them printing money with no real value behind it. I've also seen a video asking some old guy in the Federal Reserve why they're doing it, and how it isn't criminal, and the response was nothing short of an maniacally evil laugh like Dr. Evil from Austin Powers)

Technically there's no real value beyond the metal or paper it's minted/printed on and this goes for any currency. It might be pegged to something but the real value of any money is arbitrary in nature. It isn't criminal because we'd still be bartering w/o it.

[Gooch]

I'd limit your assessment to paper currency. There is certainly intrinsic value in gold and silver coinage/currency as those are precious metals.

This may seem to many like the conspiracy theory ramblings of a madman, but this was posted over the weekend:

There is a rumor about Goldman Sachs flying around on the street - allegedly they are about to report their second-best quarter in history, +$12 billion or so.

In addition, there is this from Bloomberg:

A 47 percent gain for the company’s stock price this year and a return to profitability in the first quarter may help Chief Executive Officer Lloyd Blankfein raise new money, analysts said. That might let Goldman Sachs, the sixth-biggest bank, return the cash received in October from the Treasury’s Troubled Asset Relief Program and shake off compensation and hiring restrictions imposed on banks that took the U.S. aid.

Gee, you don't think being paid by the taxpayer through AIG's "conduit" for losses that didn't (yet) happen at 100 cents on the dollar might have anything to do with that, do you?

And further (and potentially much worse) there is the repeated statement by Goldman executives that they were "fully hedged" against a potential counterparty default by AIG.

One wonders - was that "hedge" to be short the equity on AIG itself, perhaps?

Why is this important?

Because if that's how Goldman hedged they got paid twice and the taxpayer literally got robbed.

Someone in Congress needs to look into this now; there are already rumblings of investigation. Those rumblings need to get a lot louder and turn into subpoenas, not "polite inquiries."

If in fact Goldman (or anyone else) was "hedged" against a possible credit loss from their CDS with AIG and they were able to collect on that hedge (no matter what it was) those payments through AIG need to be clawed back immediately as nobody is entitled to be paid twice for the same risk and reap what amounts to a windfall profit by quite literally engineering a multi-billion dollar transfer of funds from the Taxpayer to the firm!

This is not small potatoes either - we're talking $100 billion+ in aggregate with these various banks on a worldwide basis.

We the people deserve answers on this right now and if persons in our government handed these banks $100 billion dollars of our tax money for what was a covered bet, allowing them to collect twice on a risk that had not yet been realized (when at most they were entitled to collect once via their private hedging activity) every single person involved in that scandal must be immediately removed from office, prosecuted if possible, and every nickel of those funds must be clawed back by whatever means are necessary.

Then there is strong suspicion that Goldman Sachs was recently manipulating the markets (aided by the SEC conveniently reinstituting the uptick rule requiring a price uptick before any stock - especially weak, vulnerable financials like GS - from being shorted).

Key to note here is that Goldman's program trading principal to agency+customer facilitation ratio is a staggering 5x, which is multiples higher than both the second most active program trader and the average ratio of the NYSE, both at or below 1x. The implication is that Goldman Sachs, due to its preeminent position not only as one of the world's largest broker/dealers (pardon, Bank Holding Companies), but also as being on the top of the high-frequency trading/liquidity provision "food chain", trades much more often for its own (principal) benefit, likely in tandem with the other top dogs on the list: RenTec, Highbridge (JP Morgan), and GETCO. In this light, the program trading spike over the past week could be perceived as much more sinister. For conspiracy lovers, long searching for any circumstantial evidence to catch the mysterious "plunge protection team" in action, you should look no further than this.

And today, a day earlier than they were schedule to release earnings, with the aid of altered accounting rules, government intervention and manipulation, and SEC assistance, Goldman Sachs reported the following:

Goldman Sachs Group Inc., the sixth-biggest U.S. bank by assets, plans to raise $5 billion to repay U.S. government rescue funds after posting profit that exceeded the most optimistic Wall Street estimates.

The New York-based bank said today it will use proceeds from the common stock offering plus “additional resources” to redeem the $10 billion it got from the U.S. Treasury’s Troubled Asset Relief Program. The company said it earned $1.81 billion, or $3.39 a share, in the first quarter as a surge in trading revenue outweighed asset writedowns, beating the $1.64 estimate of 16 analysts surveyed by Bloomberg.

[kingoffighters]

Gooch, where did you find that GS article? Want to show this to my coworker.

[Razor Ramon]

Wonderful!

May 19, 2009
Overhaul Likely for Credit Cards
By ANDREW MARTIN

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.

“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.

People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.

“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”

Robert Hammer, an industry consultant, said the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders — “deadbeats” in industry parlance, because they generate scant fee revenue.

“They aren’t charities. They have shareholders to report to,” he said, referring to banks and credit card companies. “Whatever is left in the model to work from, they will start to maneuver.”

Banks used to give credit cards only to the best consumers and charge them a flat interest rate of about 20 percent and an annual fee. But with the relaxing of usury laws in some states, and the ready availability of credit scores in the late 1980s, banks began offering cards with a variety of different interest rates and fees, tying the pricing to the credit risk of the cardholder.

That helped push interest rates down for many consumers, but they soared for riskier cardholders, who became a significant source of revenue for the industry. The recent economic downturn challenged that formula, and banks started dumping the riskiest customers and lowering their credit limits in earnest as the recession accelerated. Now, consumers who pay their bills off every month are issuing a rising chorus of complaints about shortened grace periods, new hidden fees and higher interest rates.

The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.

Citigroup and Capital One referred comments to the A.B.A. Discover and American Express declined to comment. Bank of America intends to “provide credit to the largest number of creditworthy customers possible, while also remaining prudent in our lending practices,” said Betty Riess, a spokeswoman. Together with JPMorgan Chase, which has said the changes will force it to limit credit availability and raise fees, these banks account for 80 percent of the credit card industry.

Banks are not required to publicly reveal how much money they make from penalty interest rates and fees, though government officials and industry consultants estimate they constitute a growing portion of revenue.

For instance, Mr. Hammer said the amount of money generated by penalty fees like late charges and exceeding credit limits had increased by about $1 billion annually in recent years, and should top $20 billion this year.

Regulations passed by the Federal Reserve in December to curb unexpected interest charges would cost issuers about $12 billion a year in lost fees and income, according to industry calculations. The legislation before Congress would build on the Fed rules and would further squeeze banks’ revenue when they are being hit with a high rate of credit card charge-offs. The government’s stress tests showed that the nation’s 19 biggest banks will take on $82 billion in credit card losses in the next two years.

A 2005 report by the Government Accountability Office estimated that 70 percent of card issuers’ revenue came from interest charges, and the portion from penalty rates appeared to be growing. The remainder came from fees on cardholders as well as retailers for processing transactions. Many retailers are angry at the high fees and plan to pass them on to shoppers once the Congressional legislation takes effect.

Consumer advocates say they have little sympathy for credit card issuers, arguing that they have made billions in recent years with unfair and sometimes deceptive practices.

“The business model will change because the business model doesn’t work for the public,” said Gail Hillebrand, a senior lawyer at Consumers Union.

“In order to do business under the new rules, they’ll actually have to tell you how much it’s going to cost,” she said.

With many consumers mired in debt and angry at what they consider gouging by credit card companies, the issue of credit card reform has broad populist appeal. Members of Congress and the Obama administration have seized on the discontent to push reforms that the industry succeeded in tamping down when the economy was flying high.

Austan Goolsbee, an economic adviser to President Obama, said that while the credit card industry had the right to make a reasonable profit as long as its contracts were in plain language and rule-breakers were held accountable, its current practices were akin to “a series of carjackings.”

“The card industry is giving the argument that if you didn’t want to be carjacked, why weren’t you locking your doors or taking a different road?” Mr. Goolsbee said.

Ron Lieber contributed reporting.

In short, credit bureaus are going to punish customers who pay on time because 66% of their consumer base aren't going to pay their bills. Icarus is already living the no-credit card lifestyle, I may be next if they hike my interest rate, add immediate interest to any purchase I make, and charge me an annual fee.