Fraud/Theft Commission or... CFTC for Short

[cashmcall]

Free markets? This one comes under the heading, "Putting frosting on shit and calling it cake.

The Commodity Futures and Trading Commission was designed to prevent market manipulation. Quite simply, that mission has become so corrupted over the years that the CFTC could be dismantled tomorrow and I doubt anyone would notice. Markets might actually improve. Secondly, we can have no true price discovery of commodities nor can we really even have an intelligent conversation about manipulated pricing because it's based on a manipulated, "garbage in- garbage out" data stream.

The Commodity Futures and Trading Commission oddly came about in 1974, three short years after President Nixon told France that they could no longer exchange American dollars for physical gold. In so doing, Nixon put the final nail in the coffin for the world's reserve currency. Nixon then cut a deal with Saudi Arabia and thus OPEC, to price oil in dollars- a move which guaranteed that the rest of the world would have to trade their currencies in for our dollars to buy oil. This was a brilliant move. Everyone would need dollars to buy oil. That move has greatly lengthened the lifespan of the dollar and ushered in the era of the petro dollar. That era continues to this day. Barely.

Thus the CFTC was created to regulate futures markets. Or was it? Personally, I think it was a paper tiger- a commission billed as being a regulatory body to make people feel safer- but in actuality the CFTC has become an interferent presence which allows banks and other trading desks to manipulate markets and thus profit from them. JP Morgan and Goldman Sachs have actually gone years without suffering a single day's trading losses. It is mathematically impossible to never suffer a loss while trading every day- the only way you can perform that miracle is if you have been given a license to steal.

Please consider the following statement that was issued after the 2008 banking collapse. Up until that point- nobody had ever heard of such a thing.

Since 1991 the CFTC has given secret exemptions from hedging regulations to 19 major banks and market participants, allowing them to accumulate essentially unlimited positions.[21] These exemptions came to light only after the 2008 financial crisis had unfolded and Congress requested information on market participants. A trader or bank granted an exemption as a bona-fide hedger can affect the price of a commodity without being either its producer or consumer.[22

Is it just me or does that sound as though the CFTC in fact- has no regulatory mission at all? It is simply an illusory mechanism which presents itself as some highly regarded regulatory and oversight body (governed by 4 lawyers and 1 banker, who are all from the banking industry) when in fact- it does neither. It's real mission is to run interference while allowing big trading desks to steal with impunity.

While researching this piece over the weekend, I stumbled onto this...a well researched post regarding the criminal activity that the CFTC engages in while pretending to be regulators. http://news.firedoglake.com/2013/05...o-allow-cartel-to-control-derivatives-market/

I spent all day trying to find the 19 major banks which have been given licenses to steal but in fact, they are not disclosed anywhere. I think it's a pretty safe bet that banks like Goldman Sachs, JP Morgan, and Bank of America are all part of the scam.

Yesterday, I read a piece on Zerohedge http://www.zerohedge.com/news/2014-...-slap-wrist-despite-years-fraudulent-cftc-dat about a fine that JP Morgan had to pay for giving out fraudulent commitment of traders or COT numbers every week. Today I noted a blog on Dave's site wherein he went into some detail about what a fraudulent scam the COT report is and the fact that all data from all banks is funneled to JPM. Apparently, JP Morgan manipulates that data at will and has been doing so since 2012 or about the time gold started to tank. Here's Dave's piece. http://investmentresearchdynamics.c...-of-trader-data-is-rigged-after-all/#comments

It's one giant, fraudulent, mess and between the CFTC, a banana republic presidential administration which includes that buffoon Eric Holder- it's as though the rule of law has been suspended at least through 2016.

I don't expect anything to happen until this administration gets shown the door. I think the full scope of criminal intent will eventually be discovered sometime after Obama and his minions can no longer obstruct an investigation.

I can't even begin to imagine how many people must know about all of the criminal activity taking place and I'll be damned if anyone comes forward.

They must have heard about Edward Snowden.

 

[GBFan]

If the 'free market' isn't free, then it can't work ... it's only a matter of the level of government overreach.

 

[Richard Savage]

What happened was a change in government policy for regulation of banking entities. It started with the Gramm-Leach-Bliley Act of 1999 that repealed the restrictions Glass-Steagal on banking enacted in the wake of the Great Depression; and the enactment of the "safe harbor" provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which exempted financial derivative contracts from administration in bankruptcy. See 11 U.S.C. § 546(e). This paved the way for banks and their parent holding companies to trade in derivatives on financial markets with legal immunity for the counterparties of these financial contracts.

The question is whether allowing banks to trade in financial derivative contracts is a good thing. It is not, witness the subprime mortgage debacle that triggered the stock market crash of 2008, and government bailout. There cannot be unregulated banking. The banking lobby’s argument that the banks should be given carte blanche to trade in financial derivative contracts to be competitive in world markets belies the responsibility for the risk of loss to be borne by the government, and, ultimately, the taxpayer; not to mention that derivatives are traded "over the counter" and carried "off balance sheet", which undisclosed transactions violate all rules of bank accountability. Without a regulated banking system, there can be no security for commerce, and, ultimately, financial collapse and economic chaos.

 

[dogtowner]

What happened was a change in government policy for regulation of banking entities. It started with the Gramm-Leach-Bliley Act of 1999 that repealed the restrictions Glass-Steagal on banking enacted in the wake of the Great Depression; and the enactment of the "safe harbor" provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which exempted financial derivative contracts from administration in bankruptcy. See 11 U.S.C. § 546(e). This paved the way for banks and their parent holding companies to trade in derivatives on financial markets with legal immunity for the counterparties of these financial contracts.

The question is whether allowing banks to trade in financial derivative contracts is a good thing. It is not, witness the subprime mortgage debacle that triggered the stock market crash of 2008, and government bailout. There cannot be unregulated banking. The banking lobby’s argument that the banks should be given carte blanche to trade in financial derivative contracts to be competitive in world markets belies the responsibility for the risk of loss to be borne by the government, and, ultimately, the taxpayer; not to mention that derivatives are traded "over the counter" and carried "off balance sheet", which undisclosed transactions violate all rules of bank accountability. Without a regulated banking system, there can be no security for commerce, and, ultimately, financial collapse and economic chaos.

Without Fanny Mae buying the derivitive paper which they were well aware had sub prime loans mixed in with the rest, there would not have been money to loan out in subprime.

 

[Richard Savage]

Fanny Mae was a secondary purchaser. The subprime loans were tranched and traded on financial markets to counterparties (e.g., Goldman-Sachs) subject to master repurchase agreements secured by cash collateral. When the interest rates on the subprime loans went up, the borrowers started to default on the mortgages triggering the bank's obligation to repurchase them; which eventually resulted in an impairment of capital and bank failures. That's where Fanny Mae comes into the picture as a player in the secondary mortgage market.

 

[dogtowner]

Fanny Mae was a secondary purchaser. The subprime loans were tranched and traded on financial markets to counterparties (e.g., Goldman-Sachs) subject to master repurchase agreements secured by cash collateral. When the interest rates on the subprime loans went up, the borrowers started to default on the mortgages triggering the bank's obligation to repurchase them; which eventually resulted in an impairment of capital and bank failures. That's where Fanny Mae comes into the picture as a player in the secondary mortgage market.

But that us the source of cash to loan for lenders (banks). Fanny cant buy duborime by its own rules but bought it anyway. Fanny resold it and these are the ones looking for the quick buck on derivitives trading. Take the cash away and lenders have to look elsewhere for cash.

 

[dogtowner]

Fanny Mae was a secondary purchaser. The subprime loans were tranched and traded on financial markets to counterparties (e.g., Goldman-Sachs) subject to master repurchase agreements secured by cash collateral. When the interest rates on the subprime loans went up, the borrowers started to default on the mortgages triggering the bank's obligation to repurchase them; which eventually resulted in an impairment of capital and bank failures. That's where Fanny Mae comes into the picture as a player in the secondary mortgage market.

But that us the source of cash to loan for lenders (banks). Fanny cant buy duborime by its own rules but bought it anyway. Fanny resold it and these are the ones looking for the quick buck on derivitives trading. Take the cash away and lenders have to look elsewhere for cash.

 

[Richard Savage]

No, the source of the funds for the mortgages was the counterparties to the debt securities, i.e., the securitized mortgages. Fannie Mae part was to provide additional liquidity for the secondary mortgage market; however, it did not work because a mortgage is an illiquid asset in the possession of the holder, which under the repurchase agreement was bought back by the banks. What you are referring to is the "legacy" loans sold directly to Fannie Mae (e.g., the loans generated and sold by Countrywide Financial, which was acquired by Bank of America in 2008). See Bank of American news release:
http://investor.bankofamerica.com/p...=irol-newsArticle&ID=1771565#fbid=ej9rRnztzJN

 

[Richard Savage]

This will follow-up my previous post, supra, regarding the subprime mortgage debacle in which I had personal experience, both before and in the aftermath of the bank failures and market crash of 2008.

In December 2007, I attended a dinner party hosted by Bank of America (BofA) to promote the bank’s renewed partnership with Epiq Systems providing management and automated accounting programs for fiduciary accounts. At the party, I had the opportunity to speak at some length with (then) CEO Ken Lewis about the bank’s proposed acquisition of Countrywide Financial, which had not yet been announced to the public. (At that time, BofA was heavily into fiduciary banking services that required a very high cash collateralization; and there was concern that the Countrywide deal would create an "impairment of capital" situation for the bank due to the large portfolio of at risk loans subject to "repurchase agreements" for securitized mortgages that had been traded on the financial markets or sold directly to Fannie Mae.) Lewis was all for the deal (the bank was acquiring Countrywide at a "fire sale" price and the bank already had a substantial equity position); however this was questionable considering just the loses already posted by Countrywide that would have to be absorbed. And, as it turned out, the acquisition of Countrywide was a big mistake resulting in huge losses in settlements with state and the federal government agencies. As a consequence, BofA was forced to downsize, closing hundreds of branches, cutting thousands of jobs and eliminating many departments, including fiduciary banking services that terminated in October 2012. That is what happens when there is a lapse in regulatory oversight of banking entities.