Posted by: coastcontact | July 19, 2012

Investment Scandal is Standard Operating Procedure

You Can’t Trust Banks or Brokers

The Madoff scandal seems like many years ago but it was December 2008.  Then there was the Allen Stanford February 2009 scandal that the SEC called a “massive ongoing fraud” involving $7 billion.  We had to wait to December 2011 for the MF Global bankruptcy.  Jamie Dimon of JP Morgan Chase announced in May of this year that the bank lost $2 Billion but as things turned out the amount may be closer to $7.5 Billion.  A mere $15 Million is missing in the accounts of an Iowa futures brokerage named Peregrine – the 64 year old founder is suspected of falsifying customer accounts for at least two years (sounds like the Madoff affair).  He tried to commit suicide – we should have let him – It would have saved the government the cost of his imprisonment.

Not to be outdone, the banks that set the Libor (London Interbank Offered Rate) has been rigging the rates and Barclays has been fined $450 Million.  Some American banks may be involved.  Many American consumer and home mortgage loans are based upon this rate.

Mere mortals, such as myself, are at the mercy of the wheeler dealers.

If there was another failure of any of our large banks the United States would come to their rescue even though politicians say they won’t. Why?  Because just four of the conglomerates have assets totaling 51% of our annual national economy.

The list:

  • Bank of America
  • JP   Morgan Chase
  • Citi  Group
  • Wells Fargo

Their assets total $7.7 Trillion.  The national GDP $15.1 Trillion.

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