The Cyprus Bailout Exposes a World of Thieves, Cheats, and Liars

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Let's talk about the Cyprus bailout, the International Monetary Fund, and the European Central Bank.

Let's call what the IMF and ECB are doing what it really is. After all, it is the ultimate institutional goal. It's thieving.

So let's start with the thieves…

The IMF, on behalf of the big global banks it serves, and the ECB, on behalf of the big European banks it serves, is stealing, without any authority whatsoever (other than under cover of the European Commission, which they jointly own) depositors' money in all the banks in Cyprus.

Because all the banks that lent to the Cypriot banks to keep them in business are now about to get shafted.

Why?

There's a few missing seats in their musical chairs merry-go-round, so they are enforcing their right to get bailed out.

How will the banks do it?

They'll deputize the European Commission to go in, with the international backing of the IMF (the ultimate tool of global bankers) and the local backing of the ECB, to steal enough money to give back to themselves.

This is so they can then use what they stole that as "reserves" to make themselves look better.

That in turn makes the ECB and IMF look healthier, so the IMF and ECB can lend more money to the same banks in Cyprus, whose depositors they just stole from, to bail them out.

I am not kidding.

If you can't make money the old fashioned way, by earning it through diligent, methodical work, the easy way to make it is to just steal it.

That's what banks do. They used to (though I can't remember that far back, if ever) earn their money slowly and incrementally, which is why bankers used to have two-martini lunches and play golf on Wednesdays with their doctors and corporate clients. They had time back then. Not everybody and their brothers were in the game.

That's all changed.

Now banking is about gigantic economies of scale. Blankets of schemes covering industrial sectors, nations, and the globe are woven from soiled cloth for massive earnings to pay fantastic bonuses that make doctors and most corporate executives seem like paupers.

How does it all work without them blowing themselves up and going to jail?

How can an amalgamation of small and large cartels – all in the same game, all shaking down the same sheep – be part of a grand cartel and not really have a worry in the world?

That's because the banks themselves created central banks and the IMF. They created their saviors to look like they were subject to them, in terms of rules, regulations, the safety of the system, and the public. But that's just what they wanted the world to think.

The IMF and the ECB are the thieves' bosses in Cyprus. Actually, they are their sycophant underlings masquerading as hall monitors in an elementary school where the bankers themselves are the principals.

The lenders of last resort are about to resort to the unthinkable. Instead of just printing money to give to their banker constituents (purchasing power stolen through inflation) they are about reach into depositors' accounts, look them in the eye and say, "We're sorry, but it's our money anyway."

This changes everything.

For the first time in modern history the light of day is being cast on the great vampire squids from depths of Mordor. Maybe (but I doubt it) the world can begin to see the noose that banks have around our necks.

And that we will hang ourselves if we don't break up all the big banks and the central banks that use government power to back the true usurpers of humankind.

Then there are the cheats.

SAC Capital Advisors just paid over $600 million dollars to settle civil insider trading charges. But of course they're not guilty. They didn't admit to anything – other than some stuff happened that they promise to not let happen again.

Are they cheats at SAC? No, they just like paying big fines and distancing themselves from former employees who were convicted of insider trading. What a coincidence.

Then there are the liars.

Yes, all of them, but I'm specifically talking about JPMorgan Chase.

Make that allegedly, as in allegedly liars. After all, I don't want to get sued by a bunch of trillionaire bullies for calling them what they are… allegedly.

But if I were to call you all liars

You, Jamie Dimon…

You, Douglas Braunstein…

You, Ina Drew…

You, Michael Cavanaugh…

Would you be willing to take lie detector tests tomorrow – without prep time – to prove I'm a worthless, muckraking tool?

Would you be willing to test your mettle – not against the patsies in Congress who you all just lied to – but to a machine that's as cold as you all are? Would you like to tell us what you really hid from the regulators about the London Whale's losses?

Come on. Here's a chance to clear your names. I'll ask the questions…

For background, I'd tell you that I know how trading desks work. I've been a trader on some very interesting desks.

I was at a former Primary Dealer that had to be bailed out because one of our government traders sank the firm. He hid his trading loses (in his locked desk drawer… this was the old days) so the winning side of his bets could net him a million dollar bonus (which he received). In those days, that was the equivalent of what about $10 million is today.

I was at one of the world's biggest banks, brought in to hedge their government bond desk, the currency desk, and the derivatives desk, and long after I left I saw that bank get bailed out. What I saw there I can't talk about, I'd get sued. But I saw what I saw.

I've run hedge funds, too. So, you might say I'm fairly well-versed on how traders interact with their desks, with their immediate supervisors, with senior management, with risk managers, and how what they do gets reported up the line to the CIO, the CFO, and the CEO.

Now let me ask each of you a few questions, and remember you're hooked up to that machine.

Wait, where are you going, Come back, you're flying out of here with all those wires attached to you.

Oh, well. They're gone.

Maybe they were telling the truth.

Maybe pigs do fly.

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About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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  1. david tarbuck | March 20, 2013

    Why I Don't Support Europe's Bailouts
    Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments
    By TIMO SOINI
    When I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the bailouts of euro-zone member states. Europe is suffering from the economic gangrene of insolvency—both public and private. Unless we amputate that which cannot be saved, we risk poisoning the whole body.
    To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them.
    At the risk of being accused of populism, we'll begin with the obvious: It is not the little guy ho benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments.
    In a true market economy, bad choices get penalized. Instead of accepting losses on unsound investments—which would have led to the probable collapse of some banks—it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund.
    The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.
    Further contrary to the official wisdom, the recipient states did not want such "help," not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.
    That was not to be. Ireland was forced to take the money. The same happened to Portugal.
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    Unfortunately for this financial and political cartel, their plan isn't working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.
    Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and failed bankers, creating a huge moral hazard and destroying what remains of Europe's competitive banking landscape.
    Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.
    Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.
    If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.
    For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country's debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.
    This is not just about economics. People feel betrayed. In Ireland, the incoming parties to the new government promised to hold senior bondholders responsible, but under pressure they succumbed, leaving their voters with a sense of disenfranchisement. The elites in Brussels have said that Finland must honor its commitments to its European partners, but Brussels is silent on whether national politicians should honor their commitments to their own voters.
    I was raised to know that genocidal war must never again be visited on our continent and I came to understand the values and principles that originally motivated the establishment of what became the European Union. This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom and justice. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe's ordinary people in order to protect certain corporate interests.
    Mr. Soini is chairman of the True Finn Party in Finland.

  2. david tarbuck | March 20, 2013

    I use the term "fictitious capital" to describe what the Big Bankers, public and private, are attempting to inflict on the ordinary 99% people who through their entrepreneur led labour create ALL REAL value, capital included.
    In the middle of the 19th century Karl Marx coined this term to describe the notes and loans that governments and gentry used to finance wars, luxuries, estates and otherwise living beyond their REAL means. Only his term was really new, Aristotle and many who followed him before Marx, elaborated on the dangers of worthless money. Democratic Athens and militaristic Sparta supplied the concrete examples of value and fictitious (worthless).
    At Marx’ time such paper would accrue during "Boom" times as the economy expanded and would usually max out at around 10-12% of a countries GDP. As long as the good times rolled on it was not a problem, but came a crisis of over production (of all the wrong things) there would be the day of reckoning. Ergo, the bill collectors came and cash not paper promises was the order of the day. This resulted in a variety of ways to settle; some were paid in part or in full but more often bankruptcies and swindles resulted. Then the stage was set for the next cycle – boom bust.
    Today though the situation with 'fictitious' or 'counterfeit capital is vastly different.
    100 years of pumped up growth for growths sake first based on the now discredited ideas of John Maynard Keynes has produced a situation where some 20 times the worlds gross product exists as fictitious capital, a counterfeit collection of deficits, bills, bonds, exchanges, derivatives, bubbles (real estate) swaps and the latest fraud, "quantitive easing". (Le Monde Diplomatique puts it at 50 times)
    $$Dollars, ??uros, RRubles, ??, &?…all the same!!
    To grasp the idiocy inherent in these figures imagine approaching your friendly personal banker for a loan, line of credit or mortgage some 20 times your net collateral worth; how far do you suppose that might fly?
    Yet with the above listed gimmicks, that is precisely what members of the bankster clique, supported by military-industrial complexes do amongst themselves.
    Every day we read of new Central and private bank meetings, "Increasing capital base" is their current fad.
    OFF THE WALL! There is not a farthing of REAL capital in all of this rat-bag of lies, swindles and manipulations.
    REAL capital is ONLY accumulated labour dedicated to enhancing future production. Ergo entrepreneur led LABOUR (of the 99%) is the only source that can augment existing capital or create new.
    The banksters, led by the IMF, USA FED, and British "financial services" are well aware of this fact but that will not stop them from attempting to download this fraud onto the REAL product of Labour in the form of "bailouts" of "sovereign" debts, to be serviced by taxes on the REAL producers.
    The 99% will be robbed of (much prepaid) social services and benefits to service "debts". “Austerity” it is called when those who had NO hand in running up this fraud are required to pay interest that will amount to 40-60% of the future product of their labour. Gone will be pensions, good schools, decent medical care, infrastructure (e.g. utilities that work reliably), environmental protection; even adequate diets will be history. "Let them eat cake!" exclaimed La Royale Marie Antoinette.
    Let them eat (genetically modified) garbage, implies La Grande Dame Christine La Garde, of the International Monetary Fascists(IMF)
    So Greece, you are the front line today, Italy and Spain may be next, but do not think that any country, including the relatively well off Germany or the resource rich Canada and Australia will be forever exempt. Ms Merkel, beware!
    The "poor little ones" are but appetizers; they will whet the appetites of these financial service vultures and jackals. For certain, like buzzards flocking to road kill. if they succeed in the beginning the taste of financial carrion will make them hunger for more, and they will finish only when the 99% of humanity is subject as debtors to enslavement by the 1%.
    But this does not have to be!
    Greece, Cyprus, you can repudiate the fraud! Lead the way! DEFAULT, Repudiate, is the way to go!
    99%; be inclusive! Occupy-Idlenomore, Support Greece and Slovenia today, Italy Spain, …, &c. tomorrow and…/?/ the world in future.
    Hold on to your souls! Hang tough!
    You have a WORLD to WIN!!
    P.S. For those of you who may have read this comment previously, Churchill’s advice immediately springs to mind:
    “When you have an important point to make, don’t try to be subtle or clever. Use a pile-driver. Hit the point once. Then come back and hit it again. Then hit it a third time – a tremendous whack.”

  3. Gerald Cunningham | March 20, 2013

    is anyone out there in capitol hill with the moral courage to expose and denounce the cabal of
    robber barons of the banking industry? It is obvious to me that congress placates to the interests
    of thieves in order to protect their own political survival at the expense of the American prol
    etariat. We need political leadership who have the brass balls to confront incompetent banks
    here and abroad, but the root cause of this greed lies with the federal reserve bank who is not accountable to anyone. I demand that congress audits the books of this institution and the results should be given to the American public. I will not tolerate the use of state secrecy laws to shield the identity of this crooks who have committed high crimes against the American dollar.
    Failure to do so will make people believe that this country is no longer a government of the people by the people and for the people. Congress seems to ignore history, look what happened
    during the French revolution ,it too could happen here.Is this why president Obama wants to use drones as means of doing political contracts on anyone who oppone his socialist police apparatus? It seems like the old saying that power corrupts is true. Congress must get their heads and assess wired together or we the people are going to find the leadership that will do away with status quo.

  4. stewart short | March 20, 2013

    i have to say that criminal proceedings don't scare these corrupt bankers and corporate fiddlers
    BERNIE MADOFF- should be waiting on all of these financial crooks for company,however central banks are owned by private stockholders ,these sleeper bilderbergers are not subject to any law anywhere-Rothchilds – elitist bunch of cinical crooks have been at it since the NAPOLEONIC WAR
    ROCKEFELLER's- snake oil salesman, at it during first world war and ever since, unchecked they buy presidents and prime ministers and every mainstream media outlet is either owned by them or terrified of them every investment market is fixed by them-every person doubting my opinion should look up-DR STEVE PIECEZNIC OR MAX KEISER WEBSITES BLOGS AND TV PROGRAMMES.

  5. Robert in Canada | March 20, 2013

    I'm no fan of banks, but banks and bankers in Canada are like the old fashioned ones that Shah mentions in his article.

    That's because Canada has strictly enforced laws that govern what bankers can and cannot do.

    Without such laws, Canadian bankers would be sewer rats like most other bankers in the world.

  6. sallie daiger | March 22, 2013

    I have a trust controlled by JPMorgan Trust. It was set up at Chemical Bank, bought out by CHase Bank and then by JPMorgan. Until Morgan got it, it was invested in top blue Chip income producing stocks like Exxon and ATT. Morgan then gradually sold the stocks, and put it in their own poorly performing funds which added more layers of costs on the Trust, and more losses, even while the DOw was going up from 2009 at the bottom of the market, when it held 400,000 in cash, until now. THe result has been a large drop in income, and a drop in the trusts value from the time it took over. I suggested a number of stocks, all of which have gone up dramatically. They refused and put more in hedge funds providing no income, and more money paid to them. In other words, behind Jamie DImons mask, is a bunch of rip off artists.,

  7. Paul De Lange | March 22, 2013

    I've read the article and the comments and it stuns me to see how people miss the simple truths behind the current situation.

    Here is the way I see it.

    Human beings are by our very nature opportunistic. We want things for nothing, little or no effort. That's how we got to the top of the food chain in the first place. By taking advantage of situations to gain something.

    We don't vote for politicians who promises us fiscal responsibility, hard times or austerity. True to our nature we vote for politicians who promise us goodies without having to pay for it. Except those goodies cost a lot of money. In order to make good on their promises the politicians have to get the money somewhere. If not raised by taxes,the way it should be (think Conservatives or Republicans) they end up borrowing the money (think of Democrats or Socialists. Those borrowings are done through banks and passed along or sold as "assets".

    In the mean time the people have the "benefit" of those promises without having to pay for it. We voted for and received the healthcare benefits and the generous retirement benefits and the social security support network and the education grants and the farm subsidies, the list is endless. Except those debts are lurking in never never land disguised as deficits, bonds, guilts, financial assets or derivatives or whatever it is called, being traded all over the globe. And everybody is happily cruising along in blissful "ignorance". Why? Because it suits us to turn a blind eye. After all we got something for nothing, didn't we.

    Then something like Greece comes along. Holy sh*t! A government has run out of money! First we are appalled! Who the f**k caused this. Throw them out! Send them to jail! And we complain bitterly. We strike and wave flags and protest. Why? Because we want our "free" benefits. We are entitled to it, aren't we? Then the banks announce they have run out of money too. Why? Because they bought the IOU's issued by the government. The "assets" the government sold for the borrowed money and which the banks traded with other banks all over the world.

    And so the mess snowballs all over the world. Spain, Portugal Italy, Cyprus. Who is next?

    And what do "we the people" do. We blame our governments for not being responsible – for making lax laws that allows banks to do reckless lending. We blame the banks for being irresponsible with our money. We blame "our friends" in other places for not lending us any more money. We blame everybody but ourselves for our misfortune. Why? Because true to our opportunistic nature we want something for nothing and playing the blame game is the easiest way out without having to pay for the mess we caused to ourselves by voting for people who promised us things for nothing.

    Mother nature has her cycles. In Africa when the rain comes everything grows fat in abundance, but when the rain stops and drought sets in most things starves and die out until the rain comes again.

    Right now it is a money drought in Europe. It is time to tighten our belts, to demand less from our governments, to consume less. But what do we do? True to our nature we demand abundance even in difficult times. We try to shift the burden to somebody else. And we complain bitterly about how unfair life is. We are just being opportunistic, aren't we?

    Shah calls it robbery. others calls them rip off artists or banksters, others calls them robber barons.

    The bottom line is when we should have been personally fiscally responsible in our expectations from government and voted for fiscally responsible governments expecting them to make responsible laws instead we voted for reckless politicians, who made lax laws that allowed reckless lending and borrowing.

    In conclusion: We the people are responsible for the present mess and for as long as we the people remain true to our human nature we will remain in this mess. This austerity being forced on us is all the result of our own irresponsible actions both personally and collectively. And to solve this mess we have to step up to the plate and accept responsibility. But alas we are creatures of opportunity wanting something for nothing.

    • Pick the soap up | April 3, 2013

      I agree wholeheartedly with you and sentiments on this, because the reality is, we humans are greedy shortermist who cannot wait for the things we ought. We only have to look at the growth of credit and its abuses throughout the whole world. Look at the behavior of bankrupt countries since 2010? Just look at the long list of bankrupt countries who have applied for IMF loans? It is staggering and shocking the number of countries who have lived and spent beyond their means.

      Paul, I concur with you wholly on, we the people, being responsible for this easily preventable mess we are in. Yet there is still more to this. What we are seeing going on around the world: with governments and banks and financial institutions robbing the public is a demonstrable example of virtual money chasing the real money. That is, money earned by real labour graft and skill. This is why it is becoming more important to keep our hard earned money out of any financial system. -From MF Global to financial safe havens. -From Government Bonds to institutional investment plans.

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