While Bitcoin has not become the super-currency that its fans had hoped, it has hit a point of critical volume that previous non-government currency had never reached. Unlike other Libertarian-based ideas such as the Liberty Dollar, Bitcoin has avoided the legal problems often found in alternative currencies by not presenting itself as a replacement to government issued currency, but only as a medium of exchange for use in place of the more traditional currencies. This has gained the attention of Wall Street, who now are seeking to tap into, and milk, the low-information, easily deceived people who seek out the cryptocurrency.
For those unfamiliar, Bitcoin is the world’s most popular cryptocurrency. Cryptocurrencies are a medium of exchange relying upon high-end computer cryptography to confirm the exchange and creation of units. It works by people using computers to process the transactions of the currency in a peer to peer manner, and in exchange for doing so, they earn units of the currency. Its decentralized design makes it difficult, but not impossible, to be controlled or monitored by a central agency. This gives it an appeal for various groups, but also makes it very difficult to track down perpetrators who seek to exploit them.
Despite the severe blow by the Mt. Gox disaster, the adherents of Bitcoin are proud to claim that it has finally stabilized and spawned a new sense of legitimacy, with the prestigious New York Stock Exchange now introducing a Bitcoin pricing index. This index would work in much the same way as the LIBOR index, and would in effect serve as a measuring stick to determine global value. A golden day for the cryptocurrency, if you listened to the fans of Bitcoin.
This does not mean that Bitcoin will be used by the NYSE for trades, or that you can trade Bitcoin on the exchange, but that now there is a semi-official standard for other markets to be based off of. This comes on the heels of popular Bitcoin market Poloniexadding Margin Trading for the first time. Bitcoin has grown up, is the belief. But the reality is much, much darker for the Libertarians who love Bitcoin.
What this also means is that now Wall Street will be firmly in control of the exchange rates, and as history showed us with theLIBOR scandal, if the opportunity for exploitation exists, Wall Street will do it. Unlike LIBOR, where there are bank records and financial filings to verify against, Bitcoin’s own decentralized nature works against it. Unlike LIBOR, the manipulation of Bitcoin cannot be easily verified, and even if demonstrated, no penalties extracted. Also unlike LIBOR, which can only be indexed a few times per day due to the nature of the banks involved, Bitcoin manipulations can happen in milliseconds, controlled by complex trading programs without human interference. One moment is all it takes for someone to lose everything they have, and more, on the Bitcoin exchange.
It is a wild west show, no rules or regulations, exactly what the Libertarians wanted. Unfortunately, there are no ruled or regulations to stop abuse, manipulation or outright fraud. Libertarians often claim that they could go to court to defend themselves, but the courts require such rules and regulations in place, else there is no state for which the victims of even overt manipulation can stake a claim and be granted any compensation for their losses. No rules or regulations, nothing for them to sue over. In short, Wall Street can rob the users of Bitcoin blind, and the victims cannot do anything to stop it.
Caveat Emptor indeed.
There is an irony in a currency which was closely associated with Occupy Wall Street now being embraced by the very institutions it stood against. That the cryptocurrency markets did not respond with alarm is even more telling. The users of Bitcoin are about to be taken for a ride, and they are in effect handing over the car keys to do so.
So, it should be said that Bitcoin is indeed an ideal example of Libertarian ideas at work, because this is what happens every time. Pity they won’t wake up and realize that the very core of their ideas will never work, because once they prove it works, the very nature of Libertarianism enables a minority to take over of the idea, and monopolize it, denying it to others. Then that monopoly will exploit and abuse those who use it.
Someday they may wake up and realize that they are only selling to others the chains with which they would be enslaved.
Well the good news is that Fox knows Elizabeth Warren is the most viable threat to implementing true corporate reform. Hence the attacks. If Elizabeth Warren were to run, I suspect that like Obama in 2008, she may start off slow but once people get to know her agenda and how she is for a revival of the middle class in America, they just might understand her message as opposed to Hillary’s pro corporate stance.
Fox News hosts held a hate-fest on Tuesday’s edition of Outnumbered, mercilessly lashing out at Sen. Elizabeth Warren in a segment discussing a possible Warren run for president in 2016.
In the segment, Fox Business host Melissa Francis predicting that Wall Street would do their vest to crush Warren as they believed she was “actually the devil.”
Co-host Kennedy Montgomery elaborated, stating that:
I can tell you from talking to people in the financial industry, in banking, on Wall Street, they think she is actually the devil. I mean, without question, Elizabeth Warren is the devil. So, they’re going to put any money they have behind Hillary Clinton, which should be a help.
After debating back and forth for a few moments about Warren’s populist message, guest host Bernard McGuirk attacked Warren as a “radical leftist” who “probably has posters” of a Mumai Abu-Jamal, a convicted cop-killer, “plastered all over her bedroom.”
Speaking of Warren, McGuirk stated:
When they shine a light on this lady, you don’t rise to the top at Harvard by being some moderate wallflower. She’s a radical leftist and you’re going to find out stuff about her that’s not palatable for her to run. So, I hope she runs.
She probably has posters of Mumai Abu-Jamal plastered all over her bedroom. I mean, she’s academia, Harvard, radical left.
- FOX’s Geraldo believes Lebron James’ shirt should say ‘be a better father’ and not “I can’t breathe”
Here’s the bottom line. The Tea Party Republicans and their Big Business and Wall Street allies plan to grab what they want while ordinary people sleep through this election.
They want ordinary Americans to stay home on Election Day.
To them, high voter turnout is like daylight to a burglar — or for that matter to a vampire. It stops them cold.
The corporate CEO’s and Wall Street bankers together with Tea Party extremists control the Republican Party. They see this traditionally low-turnout mid-term election as the perfect opportunity to take over the United States Senate, Governors’ mansions and State Houses with politicians who represent their interests.
They don’t want Senators from Iowa, Louisiana, Georgia, Kentucky, North Carolina, Alaska, South Dakota or Michigan. They want Senators from the Koch Brothers and their corporate and Wall Street allies — Senators who actually represent them and will do whatever they are told.
They want to know that when the chips are down they can count on government officials to continue rigging the economic game so they can continue to siphon off all of the economic growth for wealthiest one percent of the population.
That’s why, at the beginning of this cycle, the Koch Brothers’ network vowed to invest $300 million to smear Democratic candidates for office. That’s why Wall Street has redirected most of its giving to the GOP. And that’s why Republicans have spent the last two years passing laws to suppress voter turnout — especially among African Americans and Hispanic voters.
In order to continue taking our money, they need to take our votes. Where they can, they’ve passed “voter ID” laws that disenfranchise hundred of thousands — and impose what amounts to a poll tax — allegedly to stop the non-existent problem of voter identity fraud. Where they can, they’ve curtailed early voting periods and access to mail ballots.
In Georgia, the Republican Secretary of State has gone so far as to refuse to process 40,000 new voter registrations.
The smaller the turnout, the better for the plutocrats who want to continue to have unfettered access to virtually all of the economic growth generated by the American economy — just as they have for the last 30 years.
The fact is that over the last three decades our Gross Domestic Product per person has gone up by 80 percent. That means we all should be 80 percent better off than 30 years ago. But instead, wages have stagnated for most Americans because the rules of the game have allowed the CEO’s and Wall Street speculators to take all of that growth in income for themselves. They want to keep it that way.
But that requires that ordinary people stay away from the polls, because when most Americans vote, the electorate represents the whole population of the United States. And the fact is that most Americans support a progressive program that would change all of that.
Bottom line: they want to steal your family’s security while you sleep through the election.
There’s only one problem with this strategy: you don’t have to go along. Ordinary Americans can stop them by going to the polls.
It’s really up to us.
If you don’t have an ID, get one.
If they don’t have enough voting machines, camp there. Stand in line as long as it takes.
In 2012, thousands of people stood in line for hours – even after Barack Obama was declared the winner for President – because they were unwilling to allow the Republicans to steal their votes. If necessary, join them and do the same.
Don’t let them steal your vote.
Of course, in many places they can’t try these kind of overt voter intimidation tactics. Instead, they try to lull ordinary people to sleep by trying to convince us that the elections don’t matter anyway.
Tea Party extremists masquerade as moderates. Politicians who owe everything to rich plutocrats parade around in old cars and workshirts to look like they understand the “common man.”
They come out with mushy position papers on issues that are overwhelmingly popular — like raising the minimum wage. But they never mention that if you elect enough Republicans for them to control the House or Senate, the leadership in those bodies will simply refuse to call a minimum wage bill for a vote — just like John Boehner did this year.
Want to pass immigration reform? Then get out and vote against Republicans, who blocked an up or down vote in the House on comprehensive immigration reform — a bill that would have passed the House if the Republican leadership had simply called the bill to the floor.
Want to restore long-term unemployment compensation benefits? A bill passed the Senate that would have been signed by the president, but the House Republican leadership refused to call it for a vote.
Want to cut the cost of student loans? The Republican leadership in the House refused to take up the very popular measure sponsored in the Senate by Elizabeth Warren. If Mitch McConnell becomes Senate Majority Leader, the Senate won’t call it for a vote either.
Want to stop cuts in Social Security and Medicare? The House Republicans passed a budget that would end the Medicare guarantee and replace it with vouchers for private insurance that would raise out-of-pocket costs for retirees by thousands of dollars.
Want tax policies that shift the burden from ordinary working people to the one percent that has received all of the benefits of our growing economy? It won’t come from Republicans — ever.
In fact, elections matter enormously to the economic well-being of every American. And no one’s vote counts more than yours — unless you don’t vote. Because if you don’t vote, everyone’s vote counts more than yours. In political terms, if you don’t vote, you don’t count. And we know that if you’re not at the table, you’re on the menu.
If nothing else will convince you to vote, think about this. If millions of ordinary middle and working class Americans sit this election out and let the Koch Brothers of the world have their way, can’t you just imagine how they will yuck it up over drinks in their exclusive private clubs, or onboard their private jets?
They have no respect for working people — or the value of hard work. Many of them disdain ordinary working people. To them, it will just confirm their view that ordinary people can be sold a bill of goods if they just spend enough money and repeat enough lies.
In the end we will prove them dead wrong. The moral arc of the universe does in fact bend toward justice. But don’t give them the satisfaction — even for a few fleeting months at the end of 2014 — to think that their money can buy our democracy and there is nothing we are willing to do about it.
This is excellent news because those guys truly believe they are “The Masters of the Universe“. Now let’s see a few of their bubbles burst…H/t: PamK741
Wall Street On Parade – 9-23-2014
In addition to hundreds of Federal bank examiners permanently stationed at Wall Street’s biggest banks by the Federal Reserve and Office of the Comptroller of the Currency in an effort to eradicate a serial crime spree, an unknown number of Justice Department moles are now roaming about the mahogany corridors of power, chatting up potential criminals around the water cooler and hoping to make it out alive before being detected.
Avoiding detection as a mole becomes so much more challenging when the highest law enforcement officer in the land, U.S. Attorney General Eric Holder, comes to New York to address Wall Street’s lawyers and tells them, flat out, that he’s got moles stationed inside his Wall Street targets. (There were likely 100,000 text messages flying about Wall Street before Holder got to the next paragraph of his speech.)
The revelation by Holder came on September 17, not in off the cuff remarks, but in a carefully prepared speech delivered at NYU School of Law in Manhattan. Discussing an insider trading case, Holder stated:
“It was only because the government had a cooperating witness inside the company – a witness who had agreed to wear a wire – that the department was able to record a verbal account of these actions, to illuminate other obstruction, and to uncover illegal conduct that otherwise might never have come to light.
“Similarly, in our full-court press to investigate and prosecute the ongoing LIBOR matter – which is being led by the Criminal and Antitrust Divisions, and involved a wide-ranging scheme to rig one of the world’s benchmark interest rates – witnesses from inside some of the world’s leading financial firms have played important roles. They have strengthened our ability to follow leads; to obtain guilty pleas from subsidiaries of major banks like UBS and RBS; and to pursue individual charges against nine former traders and managers at these institutions. Our ongoing investigation into the manipulation of foreign exchange rates has relied on similar investigative techniques involving undercover cooperators, as well.” [Italics added.]
We learn two things in that last sentence. Moles are now called “undercover cooperators” by the U.S. Justice Department and the U.S. Attorney General wants Wall Street to know they’re there.
One can just imagine the paranoia that has spread exponentially on Wall Street since September 17. Every question asked by a colleague is assumed to be a trap. Every wrinkle in those crisp, $400 Gekko shirts is assumed to be a wire. A pair of new eyeglasses might be equipped with a Justice Department mic.
So why would Eric Holder want to throw cold water on all that wonderful synergism on Wall Street — “The Cartel” and “The Bandits’ Club” in the world of foreign currency trading come to mind.
Based on the rest of Holder’s speech, one has the feeling that since multi-billion dollar fines have not worked; deferred prosecutions have not worked; the 849-page Dodd-Frank Wall Street Reform and Consumer Protection Act didn’t work; and perp walks of the lower ranks haven’t worked, the new crime deterrent strategy on Wall Street appears to be to spread the word of an army of moles hiding out in bathroom stalls, boardrooms, and perched on bar stools to record loose tongues.
Holder is nothing if not straight-forward. He came right out and acknowledged that those jaded ways of Wall Street that collapsed the financial system six years ago are back. “…we are already witnessing a troubling return to some of the very same profit-driven risk-taking that contributed to the 2008 collapse,” said Holder.
Holder went to great lengths to explain how hard it is to prosecute Wall Street’s top dogs, saying it “is true for any number of reasons – from possible advice-of-counsel defenses; to the adequacy or inadequacy of written disclosures; to the difficulty to establish materiality and intent. And in some instances, it is simply not possible to establish knowledge of a particular scheme on the part of a high-ranking executive who is far removed from a firm’s day-to-day operations.”
The new thinking at the Justice Department, according to Holder, involves incentivizing individuals. Holder told the audience of lawyers: “…no financial fraud case is prosecutable unless we have sufficient evidence of intent – we should seek to better equip investigators to obtain this often-elusive evidence. This means, among other things, thinking creatively about ways to incentivize witness cooperation and encourage whistleblowers at financial firms to come forward.”
One way to do that, according to Holder, is to increase the bounty for whistleblowers on Wall Street to the one-third of recovered amounts that can be paid to whistleblowers under the False Claims Act, which is limited to fraud against government-funded programs. Holder said he would “implore” Congress to take that action.
Holder explained further:
“…the Justice Department has come to rely on a statute known as the Financial Institutions Reform, Recovery, and Enforcement Act – or FIRREA – a little-used law passed after the savings and loan crisis of the 1980s. Over the last few years, the Residential Mortgage-Backed Securities Working Group – a part of the President’s Financial Fraud Enforcement Task Force – has been aggressive in using this law to develop the types of cases that have resulted in major settlements with JPMorgan, Citigroup and Bank of America, among many others…
“Like the False Claims Act, FIRREA includes a whistleblower provision. Butunlike the FCA, the amount an individual can receive in exchange for coming forward is capped at just $1.6 million – a paltry sum in an industry in which, last year, the collective bonus pool rose above $26 billion, and median executive pay was $15 million and rising.
“In this unique environment, what would – by any normal standard – be considered a windfall of $1.6 million is unlikely to induce an employee to risk his or her lucrative career in the financial sector.”
So the new plan at Justice to rein in an unrepentant Wall Street appears to be spreading moles about like rat traps in an infested basement while dangling the incentive cheese that they may be able to retire sooner and better off than their bosses.
Of course, there is also the less taxpayer-costly plan of simply breaking up these global behemoths so that they can’t ever again crash the economy by restoring the one law that actually worked for 66 years – the Glass-Steagall Act.
I know this is the second consecutive Salon article, but economist, Paul Krugman has something to say and I wanted to share it…
The New York Times columnist argues that America’s large financial sector has done more harm than good
In his latest column for the New York Times, best-selling author and award-winning economist Paul Krugman argues that the financial sector of the American economy is not only outsized but that it’s hurting the economy and making Americans’ lives worse.
Citing journalist Michael Lewis’ new book on high-frequency trading — which opens with a story about an expensive tunnel being drilled for fiber-optic cable to cut down the communication time between Chicago’s futures markets and the stock market in NYC by three milliseconds — Krugman argues that American public policy has become overly influenced by high finance, with inequality and economic instability as a result. “[American] society,” Krugman writes, “is devoting an ever-growing share of its resources to financial wheeling and dealing, while getting little or nothing in return.”
After claiming that the large financial sector in the U.S. doesn’t increase overall prosperity and doesn’t promote economic stability, Krugman writes that its primary function seems to be to prey off of less powerful economic actors. “[Wall Street’s] playing small investors for suckers,” Krugman says, “causing them to waste huge sums in a vain effort to beat the market.” The result, Krugman posits, is a select few Wall Street players making a lot of private profits while contributing little to the overall public.
In short, we’re giving huge sums to the financial industry while receiving little or nothing — maybe less than nothing — in return. [NYU Professor Thomas] Philippon puts the waste at 2 percent of G.D.P. Yet even that figure, I’d argue, understates the true cost of our bloated financial industry. For there is a clear correlation between the rise of modern finance and America’s return to Gilded Age levels of inequality.
So never mind the debate about exactly how much damage high-frequency trading does. It’s the whole financial industry, not just that piece, that’s undermining our economy and our society.
The stock market closed out a record year at an all-time high [at the end of the year] giving stockholders in 2013 their biggest annual gains in almost two decades.
But the real news here, that went completely unreported, is that the 2013 bull market widened inequality because
(1) the richest 1 percent of Americans own 35 percent of the value of all shares of stock, and the richest 10 percent own over 80 percent,
(2) the corporate profits on which these gains were based came largely from keeping the wages of ordinary workers low,
(3) the capital gains and dividends these gains generated are taxed at a lower rate than most of the income of the middle class, and
(4) the biggest winners are the top executives and Wall Street traders whose year-end bonuses are tied to the stock market, and the hedge-fund and private-equity managers whose “carried interest” loophole allows them to cash in big-time. When will we stop measuring the health of the economy by the Dow Jones Industrial average? —
Uh, America, are we listening to this man?
This is the guy that wants to take away the chance for millions of working Americans to have affordable health care…
The wife of Sen. Ted Cruz (R-Texas) confirmed in an interview with The New York Times what the tea party star’s opponents have insinuated gleefully for weeks: The most vocal opponent of Obamacare enjoys a high-priced health plan through investment bank Goldman Sachs.
“Ted is on my health care plan,” Heidi Nelson Cruz, who has worked in the firm’s management division for eight years, told the paper in a story published Wednesday.
Cruz’s plan through Goldman appeared to be an uncomfortable fact for the conservative senator as he lambasted the health care reform law and helped drive what would become a two-week government shutdown. In an exchange during Cruz’s 20-hour anti-Obamacare marathon on the Senate floor in September, Sen. Dick Durbin (D-Ill.) tried unsuccessfully to get Cruz to admit where he gets his own coverage.
“Will the senator from Texas for the record tell us now — and those who watched this debate — whether he is protected and his family’s protected?” Durbin asked.
Cruz deflected the discussion toward an uninsured diabetic woman that Durbin had been talking about earlier.
A spokeswoman for Cruz confirmed to the Times that the senator gets his coverage through Goldman. The Wall Street bank told the paper the coverage is worth at least $20,000 a year. “The senator is on his wife’s plan, which comes at no cost to the taxpayer and reflects a personal decision about what works best for their family,” the spokeswoman, Catherine Frazier, said.
As a HuffPost reader noted, it’s debatable whether such a plan comes at no cost to the taxpayer. Employer-sponsored health plans are generally tax-deductible for companies, so the Cruz family’s expensive health plan presumably reduces Goldman’s tax liability.
“Ted is very much a visionary,” Heidi Cruz Nelson told the Times. “He is very strategic, and he’s very practical, and he does what needs to be done, not what everybody wants him to do.”
In interviews with the Times, friends of Heidi Nelson Cruz described her as “less ideological” than her husband, who, recent polls have shown, is still adored by tea party adherents and loathed by liberals and many independents after the shutdown. Before her time at Goldman, she held several posts in the George W. Bush administration, including in the Treasury Department and the National Security Agency.
“Nothing in her background remotely approached Ted’s Scalia-like conservatism,” one friend said, referring to Supreme Court Justice Antonin Scalia.
- Ted Cruz Gets His Health Insurance Through Goldman Sachs, His Wife Confirms (lunaticoutpost.com)
- Ted Cruz Has a Health Insurance Plan from Goldman Sachs (theatlanticwire.com)
- Cruz depends on Goldman Sachs (msnbc.com)
- Ted Cruz’s Taxpayer-Subsidized Health Insurance (dish.andrewsullivan.com)
- Ted Cruz’s Wife Confirms He’s Covered Under Her Blue-Chip Health Plan (talkingpointsmemo.com)
Have you looked at the major Wall Street indexes this morning? As I type, the Dow Jones Industrial Average is up over 200 points, and as a matter of percentage, the S&P and Nasdaq indexes are doing even better. After weeks in which stocks were on a downward trend, what caused the sudden spike?
Wall Street is now under the impression that congressional Republicans are not going to use the debt ceiling to crash the economy on purpose. This leads to a variety of questions, not the least of which is whether Wall Street’s exuberance is rational.
It may not be. Jane Timm reports from Capitol Hill:
On Thursday, House Speaker John Boehner proposed a short-term debt ceiling increase — if President Obama will negotiate on opening the government.
That plan may be presented to Obama this afternoon, when a delegation of Republican negotiators will meet at the White House.
And this is where things start to get messy.
We talked earlier about the subtle shifts in the Republicans’ posture, as it slowly dawns on them that they’re losing the public; they won’t achieve their goals through extortion; and they need to find a way out of the trap they set and then promptly fell into.
So, Boehner and his team came up with a plan. They’ll let the government shutdown continue, but raise the debt ceiling for six weeks. In exchange for not crashing the economy on purpose, Democrats will have to agree to participate in budget negotiations.
Will Republicans agree to let the government reopen during the budget talks? No.
Will Republicans take the prospect of a debt-ceiling crisis off the table? No.
Is there any chance in the world Democrats will consider this a credible solution? No.
Indeed, it’s already been rejected.
The White House indicated that while the president might sign a short-term bill to avert default, it rejected the proposal as insufficient to begin negotiations over his health care law or further long-term deficit reductions because the plan does not address the measure passed by the Senate to finance and reopen the government.
“The president has made clear that he will not pay a ransom for Congress doing its job and paying our bills,” said a White House official, speaking on the condition of anonymity.
The Democratic appeal to Republicans can basically be summarized in a few words: Just do your job. The government needs to be funded, so fund it — without strings attached or a series of demands. The debt ceiling needs to be raised, so raise it — without demanding treats or taking hostages. At that point, the parties can enter negotiations on just about anything and everything.
But the GOP’s new “offer” is predicated on the same assumptions as the other “offers”: Republicans won’t talk unless the threat of deliberate harm hangs over the discussion. It’s effectively become the GOP’s prerequisite to every process: only plans involving hostages will be considered.
Indeed, why raise the debt ceiling for just six weeks? Either Republicans are prepared to hurt Americans on purpose or they’re not. This is either a threat or it isn’t. Boehner is willing to put the pin back in the grenade, but he wants Democrats to know he’s prepared to pull it again around Thanksgiving?
I suppose it’s evidence of some modicum of progress that GOP officials are looking for a new way out of this mess, but this new “plan” is hardly any more credible than the others.
I wish I could share in Wall Street’s excitement, but I don’t.
- GOP mulls short-term debt ceiling extension (nbcpolitics.nbcnews.com)
- House Republicans propose short-term debt limit hike (kmov.com)
- Shutdown enters Day 9 (cltv.com)
- Obama: Short-term deal OK (cltv.com)
- Constructing An Illusory Compromise (washingtonmonthly.com)