Posted Oct 2, 2012 by Martin Armstrong
In China, the top scandal is about corruption. The story of Bo Xilai, a charismatic and ambitious politician, who was the Communist Party secretary of China’s sprawling Chongqing municipality. The papers talk about how he was driven by the greed of his wife. At least it is in the open and being discussed. This stands in contrast to the constant cover-up of serious corruption within the New York banking community that is threatening the entire world economy.
Instead of addressing the issues, analyst Dick Bove argues that the New York banks face “constant hostility” and that they ought to leave New York and head for friendlier terrain after the New York Attorney General Eric Schneiderman announced a lawsuit against JPMorgan Chase, The lawsuit against JPMorgan Chase has sued JP Morgan Chase for allegedly defrauding investors who lost more than $20bn on mortgage-backed securities sold by Bear Stearns.
The analyst Bove said it’s time for banks to head to states where they won’t face such an unwelcoming environment claiming “I am constantly struck by the fact that Michigan does not sue the auto industry; Texas is not suing the oil industry; California is not suing the entertainment industry; and Florida is not suing the tourism industry,” Bove wrote. “They do not sue farmers in Iowa. New York never stops suing the financial industry. Why? What do these other states understand that New York does not?”
Bove avoids any discussion of the merits, only that the banks should move to be unaccountable for their actions. The Fed will never touch them. The only check against them remains the State of New York. The gist behind the curtain was that they used Elliot Spritzer to remove the head from AIG that allowed the whole Mortgage fraud to take place since he tried to keep AIG out of the scam. The NY bankers are also said to have allegedly bribed the rating agencies to the bless the crap they created as AAA so it could be salable on par with US Treasuries for REPO. That is why Lehman and Bear were able to collapse in 24 hours. When Elliot then turned on the bankers, they had him removed with the hooker scandal.
The other industries do not constantly try to make money by engaging in proprietary trading against their own clients. If the banks were JUST BANKS and satisfied with making money the old fashioned way, we would not have these problems. But they want to be hedge funds with other people’s money keeping all the profits for themselves. They then use their primary dealer status to threaten the Feds that they will collapse if they are not bailed out for every failed trade. They then have the audacity to claim they make money because they are smarter than everyone else. That is true. But not regarding trading. They did a reverse takeover of the Feds and control every committee. That is damn smart.
The irony is there seems to be more accountability in China than in the United States. They at least talk about the corruption here. In the USA, they pretend there is none. The world is getting very pissed-off at this whole mess. When will it end?