What is truth?

What are you ??

  • by Soeren Kern
  • Critics say that the creation of a European army, a long-held goal of European federalists, would entail an unprecedented transfer of sovereignty from European nation states to unelected bureaucrats in Brussels, the de facto capital of the EU.
  • Others say that efforts to move forward on European defense integration show that European leaders have learned little from Brexit, and are determined to continue their quest to build a European superstate regardless of opposition from large segments of the European public.
  • “Those of us who have always warned about Europe’s defense ambitions have always been told not to worry… We’re always told not to worry about the next integration and then it happens. We’ve been too often conned before and we must not be conned again.” — Liam Fox, former British defense secretary.
  • “[C]reation of EU defense structures, separate from NATO, will only lead to division between transatlantic partners at a time when solidarity is needed in the face of many difficult and dangerous threats to the democracies.” — Geoffrey Van Orden, UK Conservative Party defense spokesman.

European leaders are discussing “far-reaching proposals” to build a pan-European military, according to a French defense ministry document leaked to the German newspaper, theSüddeutsche Zeitung.

The efforts are part of plans to relaunch the European Union at celebrations in Rome next March marking the 60th anniversary of the Treaty of Rome, which established the European Community.

The document confirms rumors that European officials are rushing ahead with defense integration now that Britain — the leading military power in Europe — will be exiting the 28-member European Union.

British leaders have repeatedly blocked efforts to create a European army because of concerns that it would undermine the NATO alliance, the primary defense structure in Europe since 1949.

Proponents of European defense integration argue that it is needed to counter growing security threats and would save billions of euros in duplication between countries.

Critics say that the creation of a European army, a long-held goal (see Appendix below) of European federalists, would entail an unprecedented transfer of sovereignty from European nation states to unelected bureaucrats in Brussels, the de facto capital of the EU.

Others say that efforts to move forward on European defense integration show that European leaders have learned little from Brexit — the June 23 decision by British voters to leave the EU — and are determined to continue their quest to build a European superstate regardless of opposition from large segments of the European public.

The Süddeutsche Zeitung reported that it had obtained a copy of a six-page position paper, jointly written by French Defense Minister Jean-Yves Le Drian and his German counterpart, Ursula von der Leyen. The document calls for the establishment of a “common and permanent” European military headquarters, as well as the creation of EU military structures, including an EU Logistics Command and an EU Medical Command.

The document calls on EU member states to integrate logistics and procurement, coordinate military R&D and synchronize policies in matters of financing and military planning. EU intelligence gathering would be improved through the use of European satellites; a common EU military academy would “promote a common esprit de corps.”

According to the newspaper, the document will be distributed to European leaders at an informal summit in Bratislava, Slovakia, on September 16. France and Germany will ask the leaders of the other EU member states not only to approve the measures, but also to “discuss a fast implementation.”

Specifically, France and Germany will for the first time activate Article 44 of the Lisbon Treaty (also known as the European Constitution). This clause allows certain EU member states “which are willing and have the necessary capability” to proceed with the “task” of defense integration, even if other EU member states disapprove.

full article at source: https://www.gatestoneinstitute.org/8935/european-army

Image result for rotten apple

By Thomas Angus O Cléirigh

It seems that the “Tally Stick” is still around in modern Ireland only in a different disguise: Today’s “Tally Stick ” is “Debt” forced on to the backs of the Irish people ! every-time they show sings of becoming “Financially Independent ”   The corrupt politicians and the ruling class sell us out to their corporate friends and the ECB  forcing  more debt on to the backs of ordinary Joe! This does not end after the working life, no once you are too old to be employed you are then penalized by the state because of your age, your pension that you worked all your working life for is pushed out for another 4-5 years and in the meantime you are obliged to pester the local social welfare office for the merger Job-seekers allowance :

The gangsters in the bank who lost all your pension are enjoying their lottery pensions along with the corrupt politicians who allowed them to become casinos with the savings and pensions of hundreds of thousands of our people: Yes then we have the corporate parasites who have been prying on the Irish work force for the past 35 years as they collect billions in profits and pay lip-service in taxes ! The shortfall in  our children’s education, health, housing, and  public infrastructure , are the “Notch’s now carved into the “Tally Stick” we all carry around with us To-day clocking up billions of euros in new debt that can never be paid: But the politicians don’t care as they will collect their 30 pieces of silver the day they step of the Dáil gravy train and perhaps collect another ticket for another gravy train in Brussels :

Yes tradition in well and truly cherished by our corrupt elite:

This is the sort of story that’s almost too bizarre to believe… but it’s all verified.

A famous superfood company has been pretending its founder is still alive — six months after official death records show he died.

This is a famous company with products at Whole Foods and health food stores everywhere. The founder wasn’t even 50 years old yet…

At the same time, I keep finding this company’s products to be loaded with toxic heavy metals.

The entire company is in on the conspiracy, all faking like the founder is still living. This is an incredible deception at every level… unprecedented in the natural products industry.

Click here for the full, astonishing story.

Hi Thomas,

It’s an open secret: corporate lobbies enjoy a particularly cosy relationship with the trade officials at the European Commission (EC). Behind closed doors, the infamous TTIP trade deal [1] is being written hand in hand by regulators and the corporations they are meant to regulate.

For three years now, multinational lobby groups have been conspiring with the EC over TTIP to lower standards for consumer protection, undermine health and environmental policies, and transfer even more power to corporations – all in the name of profit.

Lobbyists like staying in the shadows – that’s where they are the most effective. So let’s shine a spotlight on the worst corporate offenders! Today, together with our partners, we are asking you to vote in the Democracy for Sale Awards. The Awards are our chance to expose the cosy friends-with-benefits relationships between big business and EU trade negotiators [2]. Vote now and join the thousands of European citizens in speaking out against the secrecy, injustice and unchecked corporate influence over our lives. To make it count, we need your voice!

Vote now and make them hear us!



All big industries have a lot to gain from bringing standards and regulations to their lowest common denominator – the expected consequence of TTIP which has sparked citizens’ protests everywhere in Europe. With our partners, we’ve done the research, investigated correspondence, combed through leaked documents – and we came up with six nominations for the Democracy for Sale Award.

The Democracy for Sale Awards is where for a short while you have a chance to turn the tables on corporations and point your finger at the worst of the worst from the industry lobbies co-writing TTIP. We need your vote to make these Awards the biggest ever, and pull the dodgy lobbyists into the light. Pick your nominee and help us counter corporate influence over policies which affect all of us!

Vote now!



The WeMove community is part of the ever more powerful pan-European movement against backroom trade deals, such as TTIP and CETA [3]. Together, we helped create the pressure on the EC to hand over the approval of CETA to the national parliaments. More than 93,000 people across Europe joined our common campaign to say NO to special corporate tribunals. The Democracy for Sale Awards are the fruit of cooperation between WeMove and our amazing partners: Corporate Europe Observatory, Friends of the Earth Europe and LobbyControl.

Let’s use this momentum to expose the worst lobbyists pulling the strings in the TTIP negotiations – and show the corporations that when we come together we are powerful, too!

Vote now!

Thank you,
Julia, Oliver and the WeMove EU team.

PS. We have contacted the lobby groups to let them know they have been nominated – you can read their replies on our website!

Image result for rotten apples

Ireland’s economy has had an interesting few months. In July, the Central Statistics Office (CSO) announced that the country’s GDP had surged by 26 percent in 2015. The statistic, widely lampooned in the international press, led Paul Krugman to criticize Ireland for its “leprechaun economics.”

But stranger things were on their way. On August 30, European Union competition commissioner, Margrethe Vestager, delivered a long-awaited decision regarding Irish state aid to multinational giant Apple. It found that the Irish tax commissioners had damaged competition by providing Apple state aid in a sweetheart tax deal.

Apple had paid Ireland’s generously low corporate tax rate of 12.5 percent on its domestic activities and sales. In return, however, Ireland allowed the company to book profits made in other parts of the world to a second company regarded as “stateless” and not required to pay any tax.

The effective tax rate on the combined operations of these two Apple companies was 1 percent in 2003. By 2014, It had fallen to a microscopic 0.005 percent. In effect, Apple paid just fifty euros for every million it made.

Anyone paying attention to the Irish economy in recent years wasn’t surprised by Apple’s barely there liability. After all, Ireland has become one of the world’s more respectable tax havens.

The European Union’s Poster Child

Some predicted Ireland would face a fine for their state aid to Apple. Instead, the state was awarded a €13 billion plus interest windfall from the world’s most profitable company.

Further, the European Union wouldn’t mandate that Ireland use this money to draw down its substantial national debt, accumulated during the international financial crisis. The nation could spend the money on badly needed housing, health care, and social services.

Rather than rejoicing, however, the Irish government made clear that it didn’t want the money — in fact, it would appeal the decision.

An enraged Irish establishment immediately backed the government. The major opposition party, Fianna Fáil, and the Irish Labour Party both supported the appeal. The media commentariat and business elites lined up behind them. The only serious opposition came from Sinn Féin and a smaller socialist alliance.

Meanwhile, independent members of the government, who had not been informed of Noonan’s plans, demanded a future study of tax justice in return their support.

This delayed the announcement for two days, but, with the cabinet’s full approval, finance minister Michael Noonan came out swinging. In a move that surprised many, he began to undermine his country’s previously fawning relationship with the European Union.

“There was a lot of envy across Europe about how successful we have been in putting the headquarters of so many companies into Ireland and especially into Dublin,” he said.

I want to say to international investors and to the Irish people that there will be no change to the 12.5 percent [Irish corporate tax rate]. We stand by the treaty. It’s within our competence to and no bridgehead by any commissioner is going to change that perspective in Ireland. We will fight it at home and abroad and in the courts.

A sympathetic Irish columnist described Noonan’s promise to fight on the side of multinational capital as Churchillian.

Later that day, Taoiseach Enda Kenny echoed an earlier war: “This is about the right of small nations,” he claimed. “I regard this matter as questioning Ireland’s right as a sovereign nation to actually set out policies that are appropriate for Ireland.”

Noonan and Kenny had previously distinguished themselves as Angela Merkel’s right-hand men in the effort to discipline Greece’s Syriza government. The cordial relationship they established with European policy was a point of pride, and they courted Europe’s regard for Ireland as the “poster child of austerity.”

It often seemed like Irish politicians believed they should represent Europe to the Irish people rather than represent the Irish people in Europe. But it turns out their cozy relationship with Europe was weaker than their romance with a major American multinational corporation.

As this is written, establishment Ireland has settled on a three-point justification for appealing the ruling. First, they argue that the ruling attacks Ireland’s low corporate tax rate. Second, because the decision concerns the tax rate, it demands a defense of Ireland’s sovereignty. Finally, the appeal will grant certainty to foreign companies about their tax obligations.

A parade of government ministers, bureaucrats, the respectable opposition, and conservative commentators are repeating the mantra like a drumbeat. Too bad it’s mostly false.

The commission was careful not to question Ireland’s tax rate, contending only that it should be applied to all of Apple’s profits. The ruling was made precisely to establish certainty and prevent special deals; the appeal itself created uncertainty about tax obligations.

Romance with Multinational Capital

It’s tempting to make fun of Enda Kenny’s defense of Irish sovereignty. After all, Ireland had no problem surrendering its fiscal and monetary policy to the European Union’s institutions when it endorsed the Fiscal Stability Treaty.

However, an examination of Ireland’s historical development strategy, and its more recent relationship to global neoliberalism, reveals the logic behind his argument.

Modern Ireland’s sovereign development has centered on a strategy that can be characterized as industrialization by invitation. That is, the ruling elites have worked to make the country inviting to multinational corporations. As Apple’s Tim Cook told Irish radio audiences,

We’ve been in a romance together now for thirty-seven years, we’re confident the government will do the right thing and appeal this decision.

But the strategy has been in place for a lot longer than that. In the 1930s and 1940s Ireland pursued an import-substitution industrial policy, similar to Latin American nations at the same time. The idea was to create a domestic bourgeoisie through protectionist strategies.

The policy had some success but “economic war” with neighboring Britain, the Great Depression, the outbreak of World War II, and Ireland’s small size limited its effect.

During the 1950s, the Irish government came to feel it was missing out on the postwar expansion. The First Programme for Economic Expansion, prepared under the leadership of prominent civil servantT. K. Whitaker, was published in 1958. This strategy marked the definitive end of Ireland’s autonomous development strategy and the beginning of a consistent program that prioritized foreign direct investment (FDI).

Ireland pursued FDI on a number of fronts. It introduced an extended tax holiday on profits from export. When the European Union found this discriminatory, the state replaced it with its famously low tax regime.

In 1981, Ireland introduced a corporate tax rate of 10 percent on all manufacturing profits, whether for domestic or international sales. Subsequent legislation extended this low rate to a larger range of industries: mostly notably, in 1984, data processing, computer software companies, and software development services were granted the low rate.

In the 1990s, most corporate tax rates were harmonized to 12.5 percent to avoid charges of discrimination against non-manufacturing industries.

The Corporate State

In addition, state agencies intervened to connect the Irish economy with global capital. In the 1960s, the Industrial Development Authority (IDA) began promoting foreign direct investment. As Maynooth academic Sean O Riain put it, “It is usually the IDA that speaks most clearly for the interests of the TNCs [transnational corporations]” within the Irish state.

In 1987, the IDA’s capacity to bring in investment was applied to a new realm. The incoming Fianna Fáil government decided to target international financial services by building the International Financial Services Centre (IFSC) in a previously derelict section of Dublin’s Docklands.

Financial incentives — including 100 percent capital allowances, double rent deductions, and a ten-year remission on local taxes — were provided to any company located inside the designated twenty-seven acre area. In addition, a 10 percent corporate tax rate was approved.

While its promoters deny that IFSC is an offshore tax haven, the low rate has been integral to its international appeal. As of 2006, over 450 international financial services companies had headquarters in Ireland.

Further, the Irish parliament has enacted more than forty pieces of legislation to facilitate the financial services industry and has integrated industry representatives into decision-making through aclearinghouse where they can discuss policy with senior government figures.

The Irish government’s approach to regulation has been widely characterized as a light touch. During the economic boom, its principles-based approach — in which a regulator laid down principles rather than rules, leaving banking institutions to interpret them — exemplified this.

The state’s preference for foreign companies extended throughout its economic policies.

Centralized wage bargaining, conducted through Ireland’s now-suspended social partnership process, linked wage increases in the multinational sector to wage and productivity increases in the backward domestic manufacturing sector.

Despite the explicit broadening of this process to include social welfare, it remained focused on creating employment through FDI. Consequently, successive partnership agreements did little to challenge Ireland’s lean welfare state and, in fact, facilitated the maintenance of the low corporate tax rates.

Partnership also failed to seriously challenge Ireland’s voluntary approach to industrial relations and union recognition, allowing incoming corporations to maintain a nonunion policy.

The industrialization-by-invitation strategy has remained relatively consistent in part due to Ireland’s primarily two-party system. Fianna Fáil and Fine Gael — both pro-business — have used coalitions to alternate power without fundamentally altering the country’s economic direction.

The Irish capitalist model has long placed multinational corporations at its heart. The state facilitates and enables these companies, giving them direct or indirect influence over many policy decisions. Government institutions primarily shape a favorable business environment by offering incentives — particularly the low tax rate — to would-be foreign investors.

All other policy domains — labor, education, governance, the welfare state — have become subordinate to the primary goal of attracting international capital.

The latest chapter has seen corporate headquarters and their associated assets physically relocate to Ireland to avail of the low tax rates. “Inversions” — when large foreign firms merge with smaller Irish firms — have accelerated this process.

Legally, it appears as if the smaller firm has acquired the larger one and transferred its headquarters to Ireland. In practice, it drives up recorded investment and artificially boosts GDP. The “leprechaun economics” Paul Krugman criticized is one consequence of these practices.

A Model Under Threat

The Apple ruling puts the Irish government’s economic model in a bind. Ireland’s low tax and loose regulation model cannot directly oppose the European Union, since the multinational corporations attracted to Ireland still want access to European markets. But breaking with the long-standing policy would be difficult for the ruling class, which has facilitated corporate tax avoidance for so long it is written into their DNA.

More broadly, the Irish state finds itself on the frontline of a historic shift in international capitalism. Capital has attempted to resolve the crisis of global neoliberalism by intensifying its logic — cutting wages, eliminating social services and labor protections, selling public enterprises, shrinking public employment, and relying on export surpluses. These measures have proved ineffective, and some ruling elites are looking toward a more regulated capitalism.

Following the argument of Thomas Piketty’s Capital in the Twenty-First Century, sections of the European business class have concluded that effective international tax cooperation must be secured to restore capitalist political legitimacy. This is why the pro-business European Commission, headed by a Danish centrist, has taken on Ireland and its tax haven.

Lacking an alternative economic model, Ireland’s ruling class has decided to stand up to the European Union, illustrating the difficulty in securing an international consensus.

Ireland’s elite may succeed in its appeal and get away with helping transnational capital escape taxation. Or it may find itself on thewrong side of both an emerging capitalist order and an intensifying popular struggle against global exploitation.



Ms. Bailey, the Citizens Bank customer in Massachusetts, had sold a condo in Maine in 2013, a year after the death of her husband, who she says had handled their finances. She went to a Citizens branch in Arlington, a suburb of Boston, to deposit the money. She says bank employees pressured her not to just park the money in a savings account.

She says she was directed to Citizens broker Andrew Jurkunas, who steered her to a CD called the GS Momentum Builder Multi-Asset 5 ER Index-Linked Certificate of Deposit Due 2021. It is one of a series of CDs based on a Goldman Sachs-designed index that tracks the performance of up to 14 exchange-traded funds and a cash-like holding. The index aggregates the performance of different combinations of some or all of the underlying funds, relying on a complex formula designed to smooth volatility.

When Ms. Bailey received her first statement showing that the value of her CD had dropped by more than $4,000, she complained to Massachusetts state securities regulators. This January, the office filed civil charges against the bank alleging that Mr. Jurkunas, who wasn’t named or accused of wrongdoing, didn’t adequately disclose the risks of the market-linked CD.

– From yesterday’s excellent Wall Street Journal article: Wall Street Re-Engineers the CD—and Returns Suffer

Wall Street is an industry that should have been allowed to go down in flames back in 2008. Bailing out these career criminals and sociopaths was one of the gravest errors in American history. An error that we as a nation continue to suffer from to this day.

As an example, yesterday’s Wall Street Journal reported on the industry’s latest scheme to pocket the hard earned savings of those dwindling Americans who still have a few pennies left — structured CDs.

What follows are some key excerpts from this must read article, Wall Street Re-Engineers the CD—and Returns Suffer:

Mary Bailey, a 79-year-old widow in Arlington, Mass., made a big deposit for her grandchildren at her Citizens Bank branch when a financial adviser there sold her on a newfangled $100,000 certificate of deposit. It would, he said, double her savings in six years, according to a later state enforcement action.

So she was irate when her first statement showed the CD’s value had fallen to $95,712, thanks to upfront fees. “This was not a CD as I know a CD,” Ms. Bailey says.

Traditional certificates of deposit offer better interest rates than normal savings accounts for customers who agree to lock up funds for a period of time. Since the 1960s, they have been among the most popular products retail banks offer. Now Wall Street has re-engineered the most bread-and-butter of investments in a way that leaves many investors with lower returns, and facing losses if they have to cash out early.

Returns on such CDs, known as market-linked or structured CDs, depend on the performance of a basket of stocks or other assets instead of a flat interest rate. CD holders get their original money back when the CD matures, usually after three to 10 years, plus a return based on the performance of certain assets or benchmarks.

Sounds good, but as always, the devil is in the details.

Most issuers of such CDs don’t publicly disclose any performance data, so it is difficult for would-be investors to assess how good a deal the products are. The Wall Street Journal obtained from an investment adviser returns data on hundreds of market-linked CDs created by Barclays PLC, a leading player. The data show that many underperformed conventional CDs, in part because their design puts a limit on the upside from gains in the underlying assets.

Of the 325 Barclays CDs reviewed by the Journal, 239 had announced at least one annual return payment. More than half of those returns were lower than an investor would have earned from an average five-year conventional CD. Of the 118 structured CDs that were issued at least three years ago, only one-quarter posted returns better than those of an average five-year conventional CD. And roughly one-quarter produced no returns at all as of June 2016.

A Journal analysis of 147 market-linked CDs issued since 2010 by Bank of the West, part of French bank BNP Paribas SA, revealed a similar pattern. Sixty-two percent produced returns lower than an investor would have received from a five-year conventional CD, while almost a quarter have yet to pay any return at all, the analysis found.

A Barclays spokesman said in a written statement the structured CDs market has “seen significant evolution over the last few years to meet the needs of clients, investors and distributors seeking to navigate the continued challenges of a low interest rate environment.”

The unusual CDs have been around in some form since the 1980s, but sales have taken off since the financial crisis. That is partly because, at a time of rock-bottom interest rates, investors have been desperate to find anything that appears it might generate higher yields.

Banks, for their part, are looking for inexpensive sources of funding. In addition, such CDs generate fees. Fee income, in particular, has been hard hit, leaving banks looking for new products yielding more than conventional savings accounts and CDs.

Market-linked CDs don’t have to be registered with the Securities and Exchange Commission, so there are no official sales data.Bankers and other experts on the product estimate sales of $5 billion to $15 billion a year. U.S. investors held about $22.7 billion of market-linked CDs last month, up 36% from 2012, according to StructuredRetailProducts.com.

I suppose it doesn’t matter how many times the public gets scammed by Wall Street, they keep coming back for more. In this particular case, this is partly due to the fact that these products are created by the TBTF banks, but then marketed at the retail level by local bank branches.

The CDs are sold to customers of regional banks and brokerages by bankers and brokers, who receive commissions. Brokers say each month they receive lists of new market-linked CDs created by Wall Street firms, including Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Barclays and others.

Typically, everyone in the sales chain—a wholesale broker, a financial adviser and a bank teller—gets paid more for selling a market-linked CD than a conventional CD or a mutual fund. The adviser who actually sells the CD, for example, can get commissions of up to 3% of the CD’s value, according to information sent to brokers reviewed by the Journal.

“Banks have to be delighted with these structured products,” said Steve Swidler, a finance professor at Auburn University. “There’s virtually no risk to them, and [the banks] sit back and rake in fees.”

The Barclays CDs reviewed by the Journal generally are linked to underlying “baskets” of five, 10 or 20 stocks. Most pay income based on an “adjusted” version of the basket’s actual return, calculated by applying a cap and floor to each stock’s performance.

Now here’s how the sausage is made…

Suppose a basket of 10 stocks has a cap of 5% and a floor of 20%. If eight of the stocks go up 20% and two go down 20%, the average actual performance would be 12%. But because each increase is capped at 5%, while up to 20% of each decrease is counted, the adjusted average performance is zero—a much worse return for the customer.

For the 247 Barclays CDs analyzed by the Journal that used this method, the adjusted overall stock performance tended to be worse—on average, 28 percentage points lower—than the actual performance of the underlying stocks. Investors in the CDs also forfeit the dividends they would have received by owning the stocks outright.

One Barclays six-year CD due to mature in October is based on 20 stocks. The shares’ average values had more than doubled as of June. But the CD was designed to cap positive returns at 6% and negative returns at 30%. That translated into an adjusted performance of negative 4% for the whole basket.

As a result, four of the annual coupons the CD has paid were zero. A fifth was 0.04%. That means a $100,000 deposit would have generated a $40 return over five years. A conventional five-year CD, by contrast, would have generated an average of $8,100 in interest, according to Bankrate.com.

Other structured CDs from Barclays and other issuers fared better, including some that track a stock index.

“I’ve worked in the kitchen and seen how it’s made, so I’m not interested in consuming them,” says Keith Amburgey, who used to design market-linked CDs at Morgan Stanley and now runs Tampa-based financial advisory firm Rutherford Asset Planning. Morgan Stanley declined to comment.

One series of CDs from HSBC Holdings PLC is called “Industry Titans” because the instruments are pegged to brand-name stocks. The 10 stocks underpinning a 2012 version of the CD, including Tiffany & Co. and ConAgra Foods Inc., were up by 46%, on average, at the end of July, according to FactSet. But a 6% cap on positive returns and a 30% floor on negative ones reduced the CD’s adjusted performance, which determines the amount paid to the investor, to negative 1.1%. The CD paid a zero return in July, for the fourth year in a row, according to HSBC.

In 2013, a broker at Fifth Third Securities Inc. advised an 88-year-old customer to put about $200,000 from his retirement account, nearly 80% of the total, into market-linked CDs, according to the customer’s lawyer, Howard Rosenfield of Farmington, Conn.

The investor had to sell the CDs early, in part to make the minimum withdrawals required under retirement-account rules—a cash need that was foreseeable at the time Fifth Third sold him the CDs, Mr. Rosenfield says. His client lost more than $20,000 on the sales.

Ms. Bailey, the Citizens Bank customer in Massachusetts, had sold a condo in Maine in 2013, a year after the death of her husband, who she says had handled their finances. She went to a Citizens branch in Arlington, a suburb of Boston, to deposit the money. She says bank employees pressured her not to just park the money in a savings account.

She says she was directed to Citizens broker Andrew Jurkunas, who steered her to a CD called the GS Momentum Builder Multi-Asset 5 ER Index-Linked Certificate of Deposit Due 2021. It is one of a series of CDs based on a Goldman Sachs-designed index that tracks the performance of up to 14 exchange-traded funds and a cash-like holding. The index aggregates the performance of different combinations of some or all of the underlying funds, relying on a complex formula designed to smooth volatility.

A spokeswoman for Goldman, which hasn’t been accused of any wrongdoing in relation to the case, said the bank was “not a party in the customer’s complaint or settlement, and had no direct relationship with the investor” and that the product’s risks were “clearly explained” in its documents.

Indeed, here’s how the Vampire Squid “clearly explained” the product…

Documents related to the CD, including a description of the methodology behind the Goldman index, run to 266 pages and feature calculus, hypothetical backtested data and flowcharts. Ms. Bailey says she didn’t read the documents.

When Ms. Bailey received her first statement showing that the value of her CD had dropped by more than $4,000, she complained to Massachusetts state securities regulators. This January, the office filed civil charges against the bank alleging that Mr. Jurkunas, who wasn’t named or accused of wrongdoing, didn’t adequately disclose the risks of the market-linked CD.

At this point, Wall Street is essentially a purely parasitic industry. It adds virtually nothing of value to the U.S. economy or society, it just constantly rips off the public and redistributes wealth to itself.

Still don’t believe me? Chew on the following excerpts from an article published yesterday at Naked CapitalismDoes Wall Street Do “God’s Work”? Or Even Anything Useful?

In the wake of the 2008 crisis, Goldman Sachs CEO Lloyd Blankfein famously told a reporter that bankers are “doing God’s work.” This is, of course, an important part of the Wall Street mantra: it’s standard operating procedure for bank executives to frequently and loudly proclaim that Wall Street is vital to the nation’s economy and performs socially valuable services by raising capital, providing liquidity to investors, and ensuring that securities are priced accurately so that money flows to where it will be most productive. The mantra is essential, because it allows (non-psychopathic) bankers to look at themselves in the mirror each day, as well as helping them fend off serious attempts at government regulation. It also allows them to claim that they deserve to make outrageous amounts of money. According to the Statistical Abstract of the United States, in 2007 and 2008 employees in the finance industry earned a total of more than $500 billion annually—that’s a whopping half-trillion dollar payroll (Table 1168).

There’s just one problem: the Wall Street mantra isn’t true.

Let’s start with the notion that Wall Street helps companies raise capital. If we look at the numbers, it’s obvious that raising capital for companies is only a sideline for most banks, and a minor one at that. Corporations raise capital in the so-called “primary” markets where they sell newly-issued stocks and bonds to investors. However, the vast majority of bankers’ time and effort is devoted to (and most bank profits come from) dealing, trading, and advising investors in the so-called “secondary” market where investors buy and sell existing securities with each other. In 2009, for example, less than 10 percent of the securities industry’s profits came from underwriting new stocks and bonds; the majority came instead from trading commissions and trading profits (Table 1219). This figure reflects the imbalance between the primary issuing market (which is relatively small) and the secondary trading market (which is enormous). In 2010, corporations issued only $131 billion in new stock (Table 1202). That same year, the World Bank reports, more than $15 trillion in stocks were traded in the U.S. secondary market– more than the nation’s GDP. Yet secondary market trading is fundamentally a zero sum game—if I make money by buying low and selling high, it’s money you lost by buying high and selling low.

So, what benefit does society get from all this secondary market trading, besides very rich and self-satisfied bankers like Blankfein? The bankers would tell you that we get “liquidity”–the ability for investors to sell their investments relatively quickly. The problem with this line of argument is that Wall Street is providing far more liquidity (at a hefty price—remember that half-trillion-dollar payroll) than investors really need. Most of the money invested in stocks, bonds, and other securities comes from individuals who are saving for retirement, either by investing directly or through pension and mutual funds. These long-term investors don’t really need much liquidity, and they certainly don’t need a market where 185 percent of shoes are bought and sold every year. They could get by with much less trading—and in fact, they did get by, quite happily. In 1976, when the transactions costs associated with buying and selling securities were much higher, fewer than 20 percent of equity shares changed hands every year. Yet no one was complaining in 1976 about any supposed lack of liquidity. Today we have nearly 10 times more trading, without any apparent benefit for anyone (other than Wall Street bankers and traders) from all that “liquidity.”

So, what does Wall Street do that benefits society? Doctors and nurses make patients healthier. Firefighters and EMTs save lives. Telecommunications companies and smart phone manufacturers permit people to communicate with each other at a distance. Automobile executives and airline pilots help people close that distance. Teachers and professors help students learn. Wall Street bankers help—mostly just themselves.

source: http://libertyblitzkrieg.com/2016/09/07/wall-streets-latest-retail-fleecing-product-is-revealed-structured-cds/#more-37415

For years we have wondered why Wells Fargo, America’s largest mortgage lender, is also Warren Buffett’s favorite bank. Now we know why.

On Thursday, Wells Fargo was fined $185 million, (including a $100 million penalty from the Consumer Financial Protection Bureau, the largest penalty the agency has ever issued) for engaging in pervasive fraud over the years which included opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. Regulators said such illegal sales practices had been going on since at least 2011.

In all, Wells opened 1.5 million bank accounts and “applied” for 565,000 credit cards that were not authorized by their customers.

Wells Fargo told to CNN that it had fired 5,300 employees related to the shady behavior over the last few years. The firings represent about 1% of its workforce and took place over several years.  The fired workers went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

How Wells perpetrated fraud is that its employees moved funds from customers’ existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as “widespread” and led to customers being charged for insufficient funds or overdraft fees, because the money was not in their original accounts. Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Many customers who had unauthorized credit cards opened in their names were hit by annual fees, interest charges and other fees.

According to the NYT, regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for drumming up new business. Many current and former Wells employees told regulators they had felt extreme pressure to expand the number of new accounts at the bank.

And, since it is US government policy never to send a banker to prison, they thought that engaging in criminal behavior was not such a bad idea.

Federal banking regulators said the practices reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks.

“Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences,” said CFPB Director Richard Cordray. He added that “unchecked incentives can lead to serious consumer harm, and that is what happened here.”

Consumers must be able to trust their banks. They should never be taken advantage of,” said Mike Feuer, the Los Angeles City Attorney who joined the settlement.

On its behalf Wells fargo issued a statement saying it “is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said in a statement adding that “at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action.”

As the NYT puts it, “this is an ugly moment for Wells Fargo, one of the few large American banks that have managed to produce consistent profit increases since the financial crisis.” Now we know one of the reasons why.

As CNN redundantly adds, “the scope of the scandal is shocking.”

And since nobody will go to prison, in a few months we will read another such “shocking scandal” perpetrated by another bailed-out bank.


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