Citibank Continues Its Economy-Crashing Ways

Synthetic CDOs. Banksters didn't pay a price for foisting them on the world and wrecking the economies of several countries in the process. So, guess what?

Two years ago, if I read the closing credits to The Big Short correctly, Bloomberg reported that banks were selling something called a “bespoke tranche opportunity,” which Bloomberg concluded was merely another name for a CDO. And now this.

[...]

From Bloomberg:

The 35-year-old Citigroup Inc. director has spent the past two years meeting clients, speaking at industry panels and becoming the face of a resurgent market for synthetic CDOs -- complex derivatives that let buyers make big, leveraged bets on the health of corporate America. Along the way, she’s helped establish Citigroup as its dominant player.

[...]

Why in the everloving fck would we trust these clowns again? And, even if we all got really stoned and decided to do that, why would we trust them with the same goddamn hand grenades that blew up everything the last time? There’s recividism and there’s recidivism and then there’s a genetic predisposition to stick your hands in everyone’s pockets and steal every last lint-covered penny that’s in there.

[...]

Once, a long time ago, a man named Charles Ponzi was so good at being a crook that his name came to define a certain mechanism for mass financial fraud, wrote that:

Then, as now, nobody gave a rap for ethics. The almighty dollar was the only goal, and its possession placed a person beyond any criticism for any breach of ethics incidental to it.

  Charles P Pierce

...but hey, do what you want...you will anyway.

Where Have All the Bankers Gone?

A popular myth persists that there were wholesale suicides after the 1929 Great Crash. Centre-left economic historian, JK Galbraith, skewered this theory when he analyzed the statistics in the wake of the Wall Street Crash, which preceded the great depression.

Nearly a century later, a remarkable uptick in banker suicides has raised questions with at least 6 suspicious deaths in recent weeks. Two men jumped from the top of JP Morgan skyscrapers alone (one each in London and Hong Kong).

[...]

Pending toxicology reports on a third JPMorgan death, and even if we dismiss the death of a Tata motors MD in Thailand, a remarkable number of dubious deaths/suicides have occurred in recent weeks, alongside some unexplained disappearances.

  RT

Hate to see them go.

And about that myth - wholesale suicides?  Hey, six in a few weeks seems like a pretty big deal. 

There are many things wrong with contemporary finance which need fixing (especially those dubious links with government), but the premature demise of fellow humans is not something to celebrate here.

Well, excuuuuuuuuse me.  Who's celebrating?  I just don't feel all that sorry.

Ultimately, all banks have a surfeit of candidates at the top and many talented personnel are squeezed out. Stress driving insecurity builds alongside a gradual realization that outside the (perversely) competitive but cosseting investment bank environment, many managers simply cannot envisage coping. In a world where the taper terror and a decade of dismal government have led us to the brink of ongoing crisis, it is easy to see why sadly, some are driven to take their lives.

Okay. So where does that leave the unexplained disappearances? Did those bankers take the money and run?  Were they "removed" from the possibility of spilling the beans?

However, with the euro crisis festering, emerging markets in chaos and no clear understanding of western economic resilience to tapering...one thing ought to be clear: Bankers have never been more insecure.

Gee, I feel bad for them.

Yet another dark cloud is looming over global banks as officials examine their behavior in the massive foreign exchange market, threatening to deal a new blow to earnings and reputations.

Regulators in the U.S., Europe and Asia are in the early stages of investigating whether traders at the world's top banks manipulated foreign exchange benchmarks to profit at the expense of their clients.

Goldman Sachs (GS, Fortune 500), Citigroup (C, Fortune 500), JP Morgan (JPM, Fortune 500), Deutsche Bank (DB), Barclays (BCS), Royal Bank of Scotland (RBS), UBS (UBS) and HSBC (HBCYF) are among the firms in their sights.

  Money, Nov. 2013

More than 20 traders across Wall Street have either been put on leave, suspended or fired since the foreign exchange investigations were formally announced in October.

  Reuters, Feb 5, 2014

And what are they keeping from us this time? All that’s gone before could well have just been the beginning cracks.

...but hey, do what you want...you will anyway.

Banksters in the News

The European Commission has slapped record fines of 1.7 billion euro on eight major banks for manipulating lending rates that play a key role in the global economy. The penalties will add to already escalating costs for leading global lenders.

The EU fines marks the latest to be levied on banks and financial institutions for making profits or masking their problems by fraudulently rigging the rates that reflect the cost of lending money to each other.

The banks fined are Citigroup, Deutsche Bank, Royal Bank of Scotland, JPMorgan, Barclays, Societe Generale, UBS and RP Martin, the EC said in a statement.

[...]

The fines from the EU are the first time a US bank has been involved in the rate-rigging scandal, as Citigroup has been fined 70 million pounds.

[...]

The Libor rate is seen as an indicator of a lender’s stability. Put simply, the stronger the bank, the lower the interbank lending rate it has.

Barclays, RBS, UBS, Rabobank and brokerage ICAP have already paid out a total of $3.5 billion in fines to settle the accusations related to Libor rate-rigging, the Financial Times reported.

[...]

Manipulation of the Libor rate is one of the largest scandals to hit the finance industry in recent years.

It forced both Barclays CEO Bob Diamond and chairman Marcus Agius to resign. Barclays’ new chief Anthony Jenkins has now insisted that employees sign a “code of honor” to avoid future rigging scandals.

  RT

Code of honor amongst banksters. Like the code of honor amongst thieves, I suppose.

...but hey, do what you want...you will anyway.

Obama's Bad Replacement Choice for His Current Bad Treasury Sec

[Jack] Lew was only at Citi for about a year and a half—but it was the year and half leading up to the 2008 financial crash, which also totaled CAI. When Lew walked away from the wreckage, he managed to take his $1.1 million salary and a $900,000 bonus with him—even as Citigroup was becoming a poster child for the Treasury’s new AFDC (Aid to Financially Dependent Corporations) program.

The gory details of how Lew earned his money at Citi (by shorting the housing market, in cahoots with a hedge fund manager who helped Goldman Sachs do the same at the expense of its long clients) have already been well reported, so I won’t reexamine the entrails here.

  Billmon

President Obama won reelection in part by beating up on his opponent for receiving big corporate payouts in exchange for dubious work and for socking away money in tax havens such as the Cayman Islands.

So it’s a bit, well, rich that Obama chose as his new Treasury secretary a man who received a big corporate payout for dubious work and who socked away money in the Cayman Islands.

[...]

Lew, who was White House chief of staff while Obama’s campaign was pummeling Romney over his pay and taxes, received a $945,000 bonus in January 2009 after a brief tenure at Citigroup — just as the bank announced huge losses and took a taxpayer bailout. Lew also invested $56,000 in a Citigroup venture-capital fund registered in the Cayman Islands — registered in the very building[Ugland House], in fact, that Obama labeled “the largest tax scam in the world.”

[...]

“It’s no wonder that maybe you and the president haven’t proposed legislative solutions to what you consider, or what the president considers, a tax scam,” Grassley observed.

[...]

Lew’s confirmation isn’t in doubt, a fact supported by the way he sauntered down the hall to his hearing in the Dirksen Senate Office Building, hands in pockets.

  Dana Milbank - WaPo

They like to take shots at each other, but as long as the end result is the status quo, their arguments are just for show.

Have a quick look at the information available at the time Obama made Lew his Chief of Staff. 

...but hey, do what you want...you will anyway.

Another Bankster at the White House

When President Obama last January announced the departure of Rahm Emanuel as White House Chief of Staff, many liberals were furious that his replacement was the Midwest Chairman of JP Morgan and Boeing Director William Daley, who was also an opponent of the Consumer Financial Protection Bureau and a critic of Obama’s health care bill as too leftist.

[...]

Yesterday, the White House announced Daley’s departure — he will now co-Chair Obama’s re-election campaign, which basically means raising huge amounts of money from his Wall Street friends.

  Glenn Greenwald

You can’t say President #Compromise isn’t forward thinking when he chooses his appointments.

So let’s have a look at the new Chief of Staff, Jacob Lew (previously serving as a top aide to Hillary Clinton).

President Barack Obama's choice to lead the White House budget office oversaw a Citigroup unit that profited off the housing collapse and financial crisis by investing in a hedge fund king who correctly predicted the eventual subprime meltdown and now finds himself involved in the center of the U.S. government's fraud case against Goldman Sachs.

[...]

[His unit made] investments in a hedge fund that bet on the housing market to collapse -- a reality suffered by millions of American homeowners.

[...]

That sounds pretty nasty, doesn't it?" said Gary Bass, executive director of OMB Watch, a group that monitors the budget office. "Any activity and any player that contributed to the economic calamity needs to be looked at.

"We already got enough players in this administration that certainly were key players in the economic malaise that we currently have," Bass continued. "Why shouldn't we have another one?" he said with a slight chuckle.

But Bass added that he thought Lew was an otherwise excellent choice for the position, noting that as budget director Lew has a proven track record (he held the position during part of the Clinton administration).

  Huffington Post

Sure. Crooks can be good at their regular jobs, can’t they?

"Obviously, Jack has been through a vetting process before," [WH Press Sec Robert] Gibbs told a reporter who had asked whether Obama ever questioned Lew about his work at Citigroup. Gibbs eventually said he didn't know.

Asked if Lew's time at Citigroup was "relevant" and whether it would be "relevant" during his next confirmation hearing, Gibbs said that "those questions have been dealt with."

Indeed.

And, as a result of Lew’s unit’s losses, Citi got that huge bailout ($45 billion) from the taxpayers, Lew himself receiving a $1 billion salary and a $900,000 post-bailout bonus.

And why would Obama question Lew about his work at Citigroup? He already knows. They just shuffle these guys around amongst themselves up there in the Big House.

In case you’ve forgotten, Mother Jones listed the banksters and financial fraudsters who were brought directly from their roles in the financial collapse into the Obama administration. You can read it here.

...but hey, do what you want...you will anyway.