Recession: The Decimation of Bank Profits

Falling revenues, increasing losses, profits adrift: this is the Western banking background in late 2011! And yet all this is happening in a very favorable context for banking institutions’ balance sheets who continue to assign their own prices to their assets (using the accounting tricks of « hold to maturity » (1) – or « fair value »). But even this may not last more than a further quarter or two ... because of Greece and Euroland! And yes, they really are the causes of something very damaging to the banking model of recent decades, but not in the sense that Wall Street and the City would want to believe, i.e. because the Euroland banks would collapse dragging down the whole world with them (so far, only Wall Street and the City in 2008 gave us a banking system collapse, sealed off - for a time - by a raid on taxpayers' money (2)). No, if there really is Greek and Euroland responsibility, it’s in Euroland’s willingness to require creditors to include the losses in their balance sheets, putting pressure on the banks to take on a substantial portion of these losses. This wasn’t done in 2008. Greek debt is now at a 50% discount. But Greece is but a drop in the ocean of coming bank losses: the entire Western banking system floats on a sea of more than doubtful debts. 

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http://globalresearch.ca/index.php?context=va&aid=29190

Nick Beams - IMF Warning On Global Downturn

The International Monetary Fund (IMF) has added its voice to those of the World Bank and the United Nations in warning of a global slowdown and increased financial risks flowing from the eurozone crisis.

Revising its forecast for global growth in 2012 to 3.3 percent—0.7 percentage points lower than its September forecast—and warning of outright recession in Europe, the IMF said world recovery was threatened by “intensifying strains in the euro area and fragilities elsewhere.” Growth began to decline in the fourth quarter of 2011 “as the euro crisis entered a perilous new phase.”

While there had been higher than expected growth in the advanced economies, these developments were not expected to sustain significant momentum. In view of the often repeated claim that “emerging markets” will provide the basis for a new expansion of the world economy, the IMF’s comments on these regions were particularly significant.

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http://countercurrents.org/beams250112.htm

Ellen Brown - Why All the Robo-Signing? Shining a Light on the Shadow Banking System

The Wall Street Journal reported [6] on January 19 that the Obama administration was pushing heavily to get the 50 state attorneys general to agree to a settlement with five major banks in the "robo-signing" scandal. The scandal involves employees signing names not their own, under titles they did not really have, attesting to the veracity of documents they had not really reviewed. Investigation is revealing that it did not just happen occasionally, but was an industry-wide practice, dating back to the late 1990s; and that it may have clouded the titles of millions of homes. If the settlement is agreed to, it will let Wall Street bankers off the hook for crimes that would land the rest of us in jail - fraud, forgery, securities violations and tax evasion.

To the president's credit, however, he seems to have shifted his position on the settlement in response to protests before his State of the Union address. In his speech on January 24, President Obama did not mention the settlement, but announced instead that he would be creating a mortgage crisis unit to investigate wrongdoing related to real estate lending. "This new unit will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans," he said.

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http://www.truth-out.org/why-all-robo-signing-shining-light-shadow-banking-system/1327502824

Peter Schroeder - Disputed rule intended to shame CEOs

Business groups and unions are sparring over a little-known provision in the Dodd-Frank reform law that supporters concede is an effort to shame the nation’s highest-paid CEOs. The rule, which predates the Occupy Wall Street movement but channels it in spirit, requires companies to disclose the difference in pay between their chief executives and average employees. “It’s really a political talking point that’s managed its way into legislation,” said Tom Quaadman, vice president of the capital markets center for the U.S. Chamber of Commerce.

Critics of the provision are at work trying to repeal it. The House Financial Services Committee approved legislation sponsored by Rep. Nan Hayworth (R-N.Y.) that would do away with the disclosure requirement. But the repeal movement is unlikely to make headway in the Senate, where Democrats are lining up behind President Obama’s election-year message of working to “level the playing field” for workers and reduce income inequality.

With repeal unlikely for now, industry groups are encouraging regulators to take their time implementing the provision, and to solicit plenty of business input along the way. Labor groups and other critics of Wall Street, meanwhile, are urging the Securities and Exchange Commission to move swiftly to put the requirement in place, and dismiss arguments that it’s more trouble than it’s worth.

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http://thehill.com/business-a-lobbying/208161-disputed-rule-intended-to-shame-ceos

Bob Chapman - In the Wake of Davos -- The Fed overshadow's the European Central Bank

On Friday from the Bilderberg conclave at Davos, appointed European Central Bank President, Mario Draghi proclaimed that Europe had averted financial disaster and cited the improvement in euro zone markets in recent weeks. He said it was the ECB’s duty to guard against deflation as well as inflation. The fact of the matter is that he and his friends at the Fed arranged a currency swap of $1 trillion of which the ECB dispersed $660 billion to 523 EU banks, at 1% interest for three years. He also cut interest rates twice and extended loans for 1 to 3 years. Mr. Draghi could be expected to take the easy Anglo-American way out. He is fully Illuminati trained and that is where his orders emanate from.

He continued about how the conclusion of a fiscal pact, the ESM, the European Stabilization Mechanism, where budgets and fiscal spending policies would be determined by unelected, Treasury appointees, who have been officially immunized by the EU government. Mr. Draghi makes no note of these qualifications and forgets to let us know that in this new ESM pact all the nations lose their sovereignty.

As yet, after a month, there is no evidence that the funds had reached the real economy. The banks that just received the funds at 1% interest have been depositing them at ¼% interest with the ECB. They have not lent to each other because bankers say they do not trust each other. What a sad state of affairs. In addition to the above the ECB now accepts loan collateral of much lower quality than previously was approved. As you can see there were a lot of facts Mr. Draghi deliberately left out.

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http://www.globalresearch.ca/index.php?context=va&aid=29011