First Blood for Elizabeth Warren -- Unregulated Derivatives Being Sold To Your Grandmother

The bell has rung.  Round 1 begins.

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Guest post from Wil Martindale, who blogs at:

• Let Them Fail

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First Blood for Elizabeth Warren

There’s been quite a stir regarding Elizabeth Warren, her background, her appointment and her role in the consumer protection agency she now oversees. 

• Will she put an end to this practice? -- Complex derivatives being sold to retirees and other retail investors (Bloomberg)
  

Monetary illusionists have argued for years that ”institutional investors should be fully aware of the risks involved in derivative instruments” to obscure the criminality of their scams with ”sophisticated” slight of hand.  And as Tavakoli has pointed out, time and again, this favorite “get out of jail pass” frequently played by Goldman and JPM, fails the sniff test of any regulator not on the Wall Street Casino’s current or future payroll.

Perhaps the best sysnopsis of how I feel about these criminals and their bailout apologists like Charlie “Fear” Munger is found here.

Now we have even more undisputable evidence of the widespread wealth confiscation of the derivative swindle, as it applies to 84 year-old retired beauticians -- a group well known for its mastery of structured bond notes, second only perhaps to their mastery of the ”ballerina bun” for prom-bound teenies of the Kennedy era. 

Simply put:

• Individual investors are incapable of valuing structured notes and their underlying derivatives, said Kevin Kelly, manager of Tontine Capital.

So what has the Dodd-Frank bill done to arrest such predatory practices, or at least address them?  What will Warren do?

This national disgrace is pretty obvious to all by now.  We have a private corporation, the Federal Reserve, dictating 0% interest policy, virtually ELIMINATING risk aversion by making the activity of traditional savings FUTILE, thereby not only ENCOURAGING riskier forms of investment, but providing liquidity to investment firms preying upon retirees with derivative schemes to rob their pensions.

They fund them because there is no capital in traditional savings accounts to serve as fractional reserves.

And all we can talk about are the capital requirements of Basel III?  If Americans could earn even 5% in risk-free savings accounts, the banks might have some capital, but currencies have one and only one utility for the global banking oligarchy: betting chips in their rigged game. 

And the house always wins, because the dealers (TBTFs) literally own the house (FED) and the house (FED) is showing them your cards (FUTURE RATE MOVEMENTS).  Or does anybody actually think they’d bet 25 times the gross domestic product of the U.S. against the house?

When the other 49 States finally wise up and begin restructuring their sovereign economies along the lines of North Dakota, then you’ll start seeing the fruits of success in ethical banking and sound fiscal management, and you'll see reasonable rates which encourage both saving and lending.

What you won’t see is dirty-dealing derivatives, siphoning off the retirement wealth of taxpayers to fund similar international scams.  Until then, we have what we have.

So now we’ll see whether Elizabeth Warren will serve as Geithner’s water boy, or a Brooksley Born with teeth, or just the next frustrated appointee to jump ship when the water gets rough.

The bell has rung – round one begins.

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Previous stories from Wil:

• Have 'GS' Become The New Scarlet Letters? (A list of Goldman Exces Now Working In Government)

• A Banking Model That Works In The Badlands

• The Predictable Odor of the Goldman Sachs Seepage

Related stories:

• PBS Frontline: The Warning -- How Greenspan, Summers & Rubin Conspired To Silence Derivatives Whistleblower Brooksley Born (Complete VIDEO

• Janet Tavakoli: "Goldman Is Guilty Of Accounting Fraud" (Must See Video)



• Arsonists With Fire Insurance: Goldman And The Collapse Of AIG

• Timothy Geithner, I Call Your Bluff (By Janet Tavakoli)

• Janet Tavakoli: How Bank Execs Hid Billions In Losses, Took Bailouts, Collected Billions In Bonuses, And Skipped Jail (And What You Can Do About It)

Comments

[Sagebrush]

I addressed all your points. Although I'm not surprised a third level drinker couldn't figure that out. You really should do something about those denial issues.

[Z]

Now you are resorting to playground taunts? How pathetic.

[Sagebrush]

Just the facts man, just the facts!
And I'm serious, Obama is the President of the United States and will be till Jan. 2012. Get over it and get on with all the other things there are to comment about out there. There is more than enough going on to keep us all busy.

[Z]

Just the facts MAN...2013...but I wouldn't bet the farm.

[S. Gompers]

"Gomp…So you can’t, okay. "

I can't because you are wrong in your flight of fancy bullshit..

http://edition.cnn.com/2010/CRIME/09/02/birther.court.martial/

This is not a civilian court and Sage knows it as well, and questioning about the POTUS status has already been denied. I am worried this will not work out well for Lt. Col. Terry Lakin.

[Sagebrush]

Agreed Gompers,

And Z thanks for correcting my date error.

I don't have a farm to bet but I would if I did!

[Texas Dar]

"DB" Here is something we can pick apart.

Most Sophisticated Malware Ever Targets Iran
A computer worm is drawing awed respect and fear from security researchers, even as they wonder how and why it was created.

Four things about Stuxnet are particularly noteworthy, according to experts consulted by ComputerWorld. One, it appears to be the most sophisticated malware anyone has ever seen. Two, because of that, researchers do not believe it could have been created by a private group. They think it's the handiwork of a nation-state. Third, it could control real world machinery, like, say, a power plant. Fourth, it appears to have targeted Iran.
http://www.theatlantic.com/technology/archive/2010/09/most-sophisticated-malware-ever-targets-iran/63420/



"What we're seeing with Stuxnet is the first view of something new that doesn't need outside guidance by a human – but can still take control of your infrastructure," says Michael Assante, former chief of industrial control systems cyber security research at the US Department of Energy's Idaho National Laboratory. "This is the first direct example of weaponized software, highly customized and designed to find a particular target."

Once a system is infected, Stuxnet simply sits and waits – checking every five seconds to see if its exact parameters are met on the system. When they are, Stuxnet is programmed to activate a sequence that will cause the industrial process to self-destruct, Langner says.

One of the last codes Stuxnet sends is an enigmatic “DEADF007.” Then the fireworks begin, although the precise function being overridden is not known, Langner says. It may be that the maximum safety setting for RPMs on a turbine is overridden, or that lubrication is shut off, or some other vital function shut down. Whatever it is, Stuxnet overrides it, Langner’s analysis shows

For those worried about a future cyber attack that takes control of critical computerized infrastructure – in a nuclear power plant, for instance – Stuxnet is a big, loud warning shot across the bow, especially for the utility industry and government overseers of the US power grid.

http://news.yahoo.com/s/csm/20100921/ts_csm/327178

All I can say is a big "WoW"...........................!

[Z]

Hmmmm, cyber bombs...