humans out of control; machines are single minded

It might not surprise others, but it does me, when we
can see how those in the investment business, brokers,
bankers on one side, and suckers on the other are
setting some patterns of behaviour because of the
lack of regulator oversight.

The bankers, the human ones, not the machines,
like shitty-assed bully boys in your
school (we all knew some) are running amok,
stealing everything that isn't nailed down, and
houses, too. and countries.

The machines on the other hand, while also not
under control of any humans, are doing the grunt
work of making markets, fake ones, but markets
nonetheless.
The problem here is that the HFT algos are reading
Twitter automatically and cannot discern truth from
bullshit. That means that a hack of AP last week
led to a small flash crash.

the Twitterers leading the machines

jokers leading the blind

Now, I've been hoping for just such a black swan,
so I'm happy, but when you wish for chaos, you
really have nothing left to lose. The markets
are really out of control.

Eric Scott Hunsader is also worried:
twitter-

Eric Scott Hunsader ‏@nanexllc 9m

To think the capitalization value of Western 

World over next minute hinges on how 

algos interpret news.

 
Here are two stories about the behaviour of the
shitty-assed bullies I told you about. the humans

check it:
1 The Reformed broker

“absolutely out of control”

    Joshua M Brown

    April 28th, 2013

    “I meet a lot of these people on Wall Street on a regular basis right now...I am going to put it very bluntly: I regard the moral environment as pathological. And I am talking about the human interactions . . . I’ve not seen anything like this, not felt it so palpably...They have no responsibility to pay taxes; they have no responsibility to their clients; they have no responsibility to people, to counterparties in transactions...They are tough, greedy, aggressive and feel absolutely out of control in a quite literal sense, and they have gamed the system to a remarkable extent.”

The above comes from a no-holds-barred talk Jeffrey Sachs gave that literally stunned the crowd at a recent conference focused on fixing the financial system.

There are many industry insiders and watchers who agree with Mr. Sachs that things are more disgusting than ever, thanks in part to the de facto guarantee that none of the surviving institutions post-crisis are going to be touchable for new offenses. The government has admitted as much with their brand new Too Big To Prosecute mentality. Yes, this exists, in recent congressional testimony from Eric Holder, US Attorney General, the following incredible comment was given a public airing (but then The Voice came on that night and we all forgot about it):

    “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy,” Mr. Holder told the Senate Judiciary Committee. “I think that is a function of the fact that some of these institutions have become too large.”

I see this attitude creeping back along with the fund flows and the major stock market averages. Everyone on The Street can feel it. The thing is, most people are someone's payroll or are benefitting from the new Niagara Falls of legal and investment fees to some extent. They have no incentive to open up the way Jeffrey Sachs does here. The politicians on both sides are similarly silent, having taken in more than a quarter of a billion from The Street during the last election year.

Business as usual and the music's playing once again - we're all dancing.

 2

Ny post

Influential economist says Wall Street's full of 'crooks'

    By JOHN AIDAN BYRNE

    Last Updated: 3:55 PM, April 28, 2013

    Posted: 11:26 PM, April 27, 2013

Corruption, insider trading and criminal behavior are rampant on a vast scale on Wall Street today as financiers and Washington play the same greedy games that brought us to the brink five years ago, according to one of the world’s most influential economists.

Wall Street is full of “crooks,” and it never properly cleaned up its act after the financial crisis of 2007 and 2008, Columbia University professor Jeffrey Sachs told a distinguished gathering of bankers and professionals in bombshell remarks at the Philadelphia Federal Reserve building earlier this month.

What’s behind this, says the high-profile academic twice named one of Time magazine’s 100 Most Influential People in the World, is “a docile president, a docile White House and a docile regulatory system that absolutely can’t find its voice.”

Sachs pulled no punches. “What has been revealed, in my view, is prima facie criminal behavior,” he said.

“It’s financial fraud on a very large extent,” the adviser to the World Bank and IMF added. “There’s also a tremendous amount of insider trading — you can even watch when you are living in New York how that works.”

In his live remarks, via video teleconference from New York, an emotionally charged Sachs also ripped into practices at Goldman Sachs and into the political classes on both the left and right. (The Post listened to the audio.)

“We have a corrupt politics to the core, I am afraid to say, and . . . both parties are up to their neck in this. This has nothing to do with Democrats or Republicans,” Sachs told the Philadelphia conference, “Fixing the Banking System for Good.”

Sachs described an environment of Wall Street buying off politicians with their huge campaign contributions. In the 2012 election cycle, political contributions by the securities and investment sector totaled some $271.5 million, compared with $176 million in 2008, according to the Center for Responsive Politics.

TAG Team 2: CBC shows how Central Bankers abet crime

What happens when you let Central Bankers, bankers

with access to a massive printing machine, go to town

one money supply and regulation, when there's no
political oversight.

Nobody even consults a government to see if the
M1, M2 sh*t that they're pulling is legal, fundable
or in the interest of any country.

Result: Chaos in a three-piece suit

It all happens in Basel. I don't know why nobody
called "BULLSHIT" on Mark Carney.

What the Basel gang does is :

going behind the backs of government

while getting them further in debt 

to pay for past and future banking crimes

so, basically it's "F$%^&k democracy time."

when people start to complain that 

their government and private 

pensions have disappeared,

Mark Carney, Central Banker says

"people get the government 

that they deserve"

OBVIOUSLY

we've all got a government

that is de facto ruled by bankers

and that's supposedly the 

fault of the voters.

BULLSH*T!

Did any of them, bankers

or politicians ask us if we 

wanted a bankocracy?

Oh, ya, that happened last
week while you were working
70 hours at minimum wage
to pay off your student loan.
There was a plebiscite down
at the pub.
fat F%^&&kin' chance

Checkit:  Cbc

Neil Macdonald: The 'monarchs of money' and the war on savers

Power Shift: First in a series on the rise of the central bankers and the global imposition of cheap credit

By Neil Macdonald, CBC News

Posted: Apr 29, 2013 5:03 AM ET

Quietly, without much public fuss or discussion, a new ruling class has risen in the richer nations.

These men and women are unelected and tend to shun the publicity hogged by the politicians with whom they co-exist.

They are the world's central bankers. Every six weeks or so, they gather in Basel, Switzerland, for secret discussions and, to an extent at least, they act in concert.

Watch Neil Macdonald's full documentary The Monarchs of Money tonight on The National at 10 p.m. /10:30 NT

The decisions that emerge from those meetings affect the entire world. And yet the broad public has a dim understanding, if any, of the job they do.

In fact, these individuals now wield at least as much influence over the lives of ordinary citizens as prime ministers and presidents.

    Who are the world's central bankers?

The tool they have used to change the world so profoundly is one they alone possess: creating money out of thin air.

There is an economic term for this: quantitative easing. More colloquially, it's called printing money.

… When the record of the 2008 global financial catastrophe is fully written — that story remains a work in progress — the world's central bankers will emerge either as heroes, or as the people who administered a cure that turned out to be as bad as the disease.

… One is that no one really understands the consequences of pumping such vast amounts of money into the world economy. It's already distorted the prices of certain assets, and some fear hyperinflation or market crashes are inevitable (the subject of tomorrow's column).

The other is that it's caused a massive shift in wealth, from savers to borrowers, and is taking money out of the pockets of almost everyone approaching or at retirement age.

… British pensioners Judy White and her husband Alan, at their home in Teddington, south of London: 'I now have 50 per cent less. 'British pensioners Judy White and her husband Alan, at their home in Teddington, south of London: 'I now have 50 per cent less.' (CBC )

The policy has savaged pension and savings returns worldwide, but particularly in Britain, a nation of savers and pensioners.

There is more money in British pension funds than in the rest of Europe combined, and now that money is just sitting, "dead," as some call it, not working for its owners.

Ask Judy White, a retiree in her late 60s who lives in Teddington, south of London, with her husband, Alan.

… But surely he understands the anger of an older person watching their savings being eroded, I ask him.

Carney smiles grimly. That question is clearly a sore point. He gets a lot of mail on the topic.

Canadians, he says, must understand that the alternative is massive unemployment and thousands of businesses going under, and "my experience with Canadians is that they tend to think about their neighbours and their children and more broadly … they care a little bit more than just about themselves."

Asked whether central bankers are not in fact enabling irresponsible behaviour by speculators enamoured of cheap money, not to mention politicians who can't curb their borrowing and spending, Carney merely remarks that voters in a democracy get the governments they choose.

TAG Team, part 1: Taibbi- how lawbreaking works for bankers

This awesome article is the linchpin
to the whole deal, showing how bankers
are now, in this regulatory vacuum,
destroying whole countries, because
countries don't dare to get them
under control.

IT’S A SMALL STEP FROM BANKING 
CORRUPTION/COLLUSION TO INVASION 
OF THE PENCIL NECKS. coming to a 
country near you 

checkit: Rolling stone 

Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There's no price the big banks can't fix

By Matt Taibbi

April 25, 2013 1:00 PM ET

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

The Scam Wall Street Learned From the Mafia

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

"It's a double conspiracy," says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. "It's the height of criminality."

The bad news didn't stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. "Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry," CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

"A farce," was one antitrust lawyer's response to the eyebrow-raising dismissal.

"Incredible," says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

… Yet despite so many instances of at least attempted manipulation, the banks mostly skated. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level flunkies overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution.

Two of America's top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it's dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to "collateral consequences" in the economy.

.. In practice, it might be a country like Greece or a regional government like Jefferson County, Alabama, that borrows money at a variable rate of interest, then later goes to a bank to "swap" that loan to a more predictable fixed rate. In its simplest form, the customer in a swap deal is usually paying a premium for the safety and security of fixed interest rates, while the firm selling the swap is usually betting that it knows more about future movements in interest rates than its customers.

… All of these benchmarks based on voluntary reporting are now being looked at by regulators around the world, and God knows what they'll find. The European Federation of Financial Services Users wrote in an official EU survey last summer that all of these systems are ripe targets for manipulation. "In general," it wrote, "those markets which are based on non-attested, voluntary submission of data from agents whose benefits depend on such benchmarks are especially vulnerable of market abuse and distortion."

Translation: When prices are set by companies that can profit by manipulating them, we're fucked.

"You name it," says Frenk. "Any of these benchmarks is a possibility for corruption."