Chaos continues to rage at many of the world's most important banks. And yet the corporate media is NOT giving us clear, accurate, UNBIASED information on what's really happening. What follows here is an attempt to provide such information, based on the reports of financial analyst Mike Larson at WeissResearch and a new article by Matt Taibbi.
As Mike Larson
says, the world's financial system is a complete mess right now. Europe's major banks are bursting at the
seams with lousy government bonds. Asian
banks are at risk as growth slows sharply there. Many U.S. institutions remain on life
support, propped up only by huge and repeated injections of easily acquired,
central bank funny money, created out of thin air (QE3 etc.).
Inescapable conclusion: We are on the verge of a global banking
disaster that could very well eclipse the crisis we saw during the collapse of
Lehman Brothers back in 2008! (See Matt
Taibbi's dynamite comment in the first post of the discussion that follows this
article.) But you'd never know we're on
the verge of another global banking disaster by scanning the results of the
so-called "stress tests" that governments around the world have been performing
on their nation's banks. Nor would you
get an inkling of what's about to happen by listening to bank executives when
they talk to investors. And what's
absolutely unconscionable, Mike Larson continues, is the fact that even the world's
major credit ratings agencies are
still telling us that everything is fine -- even as Europe's financial heart
lingers on the verge of cardiac arrest!
after having defrauded us in the past, these credit ratings agencies are the same companies that are now supposed to be providing investors
around the world with accurate, unbiased information about the financial
companies and financial products that their bankster paymasters want us to invest
Examples of ratings agency
fraud from our recent past
The 1980s S&L Crisis: In a landmark 1994 study of the rating
agencies, the Government Accountability Office (GAO) concluded that Standard
& Poor's didn't issue a "vulnerable" rating for one of the
biggest failed companies, Fidelity Banker's Life, until six days before the
failure; and for another, Monarch Life, until 351 days
AFTER the failure! Similar instances of
outright neglect by ratings agencies were provided by Moody's and A.M. Best.
The Enron Failure of 2001: The New York Times reported that ratings
agencies saw signs of Enron's deteriorating finances, but did little to warn
investors until at least five months later, long after more problems had
emerged and Enron's slide into bankruptcy had already begun to accelerate. And it wasn't until November 28, just days before Enron filed for Chapter 11,
that the major agencies first lowered their debt ratings below investment
The mortgage meltdown of 2007 and 2008: Congress, regulators, investors, and even some
of the ratings agencies' former executives generally agree that:
ratings on mortgage-backed securities grossly overestimated the investments'
played a pivotal role in the debt crisis
primary factor behind their inflated ratings were multiple conflicts of
interest between them (the ratings agencies) and the bankster issuers of the fraudulently
overvalued mortgage-backed securities (MBSs).
These conflicts of interest were, and still are, glaringly obvious!
starters, nearly all ratings issued by the major agencies are still paid
for by the MBS issuers, i.e. the companies (and their financial products) that
are supposedly being objectively rated. In
addition, the ratings agencies have often earned substantial additional
consulting fees for helping to structure
the very securities they rate.
Finally, to add insult to injury, it's been proven that the major
ratings agencies have revealed their ratings formulas to issuers, thereby
helping the issuers manipulate their data, to thereby more effectively game the
system! Problem is, when they game the
system, it must inevitably be done at someone else's expense -- namely the
investors who are being played for suckers.
We all know
that central bankers around the world are trying to bail out their banker
buddies. It's happening in Japan. It's happening in Europe. It's happening right here in the U.S. of A.
giving banks gobs of nearly free money.
They're pledging to buy lousy bonds to artificially inflate prices. They're doing anything and everything to
continue the charade that the underlying banking sector fundamentals are sound.
what you need to understand about how banks now function: cheap money can allow them
to finance and hold on to their lousy assets for a while longer than they
otherwise might. But if the quality of
those assets continues to rot from the inside out, none of that will
matter. Eventually the bank will be
pushed towards failure.