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A Million Lives

  Uploaded - Thursday, November 16, 2017

Relevance of the image - the largest nuclear explosion ever filmed (1.6 megaton): it is an indication of the next Financial Crisis - vastly more powerful, destructive beyond comprehension, potentially devastating life as we have known it. (The largest nuclear explosion ever was 50 megaton).

Before the last financial crisis, FRCS warned the world that organized crime in banks would bring financial calamity - it did exactly that!

FRCS warned that honest banks could not compete against criminal banks - hundreds went bankrupt because they refused to engage in crime.

We are now warning that organized crime in banks has become worse.

Even old traditional banks like Australian Commonwealth Bank and Danish Danske and Nordea Banks have entered into the criminal bank zone.

Bank crime is like a contagious disease which is spreading rampantly - because of the easy "criminal profits" and corruption they bring.

Unless action is taken NOW, the next financial crisis will be worse.

The people in power refused to listen to us the last time, and they are not listening now.

Our answer is to warn honest people:

A Million Lives: the Movie

Dedicated to the million people who died because of organized crime in the financial system - stupidly called "the financial crisis".

Donate here to support our work warning honest people.

The death toll from both Hiroshima and Nagasaki atomic bombs was around 250,000 - less than a quarter of those who died because of the Great Organized Crime Recession. It was misnamed the Global Financial Crisis - as if "no-one was to blame." 

The causes - organized crime - were never addressed - have now escalated, making it likely to repeat itself in a more severe form.

The above image shows the explosion of a megaton hydrogen bomb - around 40 times more powerful than the combined power of the two bombs dropped on those Japanese cities.

The image is an indication of the next Financial Crisis - vastly more powerful, destructive beyond comprehension, potentially devastating life as we have known it.

The Difference

The threat of nuclear war was tangible and inescapable, but the coming financial war is approaching invisibly.

Powerful and wealthy people would suffer with the rest of us in a nuclear war. 

Russian and US politicians were horrified that they could so easily destroy the world - and they stopped their madness.

Not so in a financial war.

For years, powerful and wealthy people have prepared for the next financial calamity by hiding trillions of dollars into secrecy jurisdictions and tax havens.

They will be on the beaches of Bermuda while good people die by the thousands.

The rest of us have been stuck with paying off debts from bailing out criminal banks and paying for the immense damage they did. 

There is nothing effective which is containing crime in the financial system.

The last Financial Crisis was caused by organized crime in banks - and the  next one will be too.

But it will be worse - unless action is taken now:

None of the chief perpetrators were jailed and most kept obscene bonuses.

Profitable crime will only grow until stopped.

Donate here to support our work.

A hundred years from now, historians and economists will curse this generation for being "stupid beyond belief" for putting everyone at risk by allowing criminal banks with "no conscience or remorse" to roam free, as top predators, able to buy influence - to fund terrorists, murderers, drug dealers and nuclear bombs - to control politicians, pension funds and vast swathes of economic activity - and to crucify loyal employees as "sacrificial rogues" in order to conceal and continue evil activities. On that, at least, we can all agree.

The Business Assessment

David M. Einhorn is an American hedge fund manager, and philanthropist. He is president of Greenlight Capital. It has generated 16.5% annualized return for investors from 1996 to 2016. As of 2017, Greenlight Capital has US$9.27 billion in assets under management. He bet against Lehman Brothers before it collapsed and won.
Einhorn was ranked 44th in the Time 100 most influential list of people in the world in 2013. According to Forbes Magazine, Einhorn has a net worth of US$1.54 billion, making him the 44th youngest billionaire on the Forbes 400. These are quotes from his Oxford Union address this week:

The world has not learned from the financial crisis
We are still hanging on to the criminals of the financial crisis
If you took all of the obvious problems from the financial crisis, we kind of solved none of them
We sweep as much under the rug as we can and move on as quickly as we can
Issues That Caused the Crisis Are Not Solved

The Political Assessment

Gordon Brown was Prime Minister of the United Kingdom from 2007 to 2010. Brown was a Member of Parliament from 1983 to 2015. He is now the United Nations special envoy for global education. These are extracts from his new book entitled My Life, Our Times:

Banks have not learnt lessons of 2008 crisis
bankers (are) still ‘rewarded for failure’
Little has changed since the promise in 2009 that we bring finance to heel
The banks that were deemed ‘too big to fail’ are now even bigger.
bankers were still being “rewarded for failure”. He said that instead of being thrown in jail for dishonest conduct, bankers were paid too much and could fall back on state support if things went wrong. Mr Brown added that in the next crisis regulators “would still not know what is owed and by whom and to whom” because of the way assets have shifted out of banks into the more lightly regulated “shadow banking” system. He said that “2009 has proved to be the turning point at which history has failed to turn”. If bankers’ conduct was dishonest by the ordinary standards of what is reasonable and honest, should there not have been prosecutions in the UK as we have seen in Ireland, Iceland, Spain and Portugal? “Dividends and bankers’ pay today represent almost exactly the same share of banks’ revenues as before the crisis hit,”
a “more relevant” tool to crack down on bankers who carry out fraud, fail to disclose information or abuse their position would be the 2006 fraud act
Barclays’ strategy during the crisis was “unconscionable”,
Fred Goodwin, the disgraced former chief executive of RBS, who was stripped of his knighthood after being fired in the wake of a £45bn bailout of RBS by the government in 2009. By the time the bank collapsed he had from his company a private suite in the Savoy costing £700,000 a year, a fleet of 12 chauffeur-driven Mercedes limousines with RBS emblazoned all over them, and he regularly used a private jet at the weekend — whether for boar hunting in Spain or following the glamorous F1 circuit around the world.” He recalled how Mr Goodwin was the only banker to oppose a plan to fund community causes using as much as £1bn of “orphan assets” left in banks by customers who disappeared or died without leaving any instruction for their money.

The Expert Assessment

Professor Larry Randall Wray is professor of Economics at the University of Missouri–Kansas City, Senior Scholar at the Levy Economics Institute of Bard College and Research Director of the Center for Full Employment and Price Stability. These are extracts from his research paper "Lessons We Should Have Learned from the Global Financial Crisis but Didn’t" written for the Levy Economics Institute:

... the worst part is the cover-up of the crimes. …. we cannot resolve the crisis until we begin going after the fraud.

Unregulated and unsupervised financial institutions naturally evolve into control frauds.

… so far, none of the big Wall Street crooks have been prosecuted for high crimes. There have been some fines and civil cases, and a few lesser criminals like Bernie Madoff were sacrificed, but all the big banksters are not only free—they are still running their criminal organizations (called “chartered banks” in polite conversation), advising the White House, and gearing up to fund the next presidential campaign. Nothing can be done until the next Wall Street–induced crash.

It was massive insolvency across at least the largest financial institutions (both banks and shadow banks) that led to the “run on liquidity” (really, a refusal to refinance one’s fellow crooks—criminal enterprise always relies on trust, and when that breaks down, war breaks out.)

…. all backed by nothing other than a fog of deceit. All it took was for one gambling banker to call the bluff. Every banker looked for an even bigger sucker to refinance the junk. The only saps left standing sat (so to speak) in Washington. And that is why it took tens of trillions of lending, spending, and guaranteeing of trash by Uncle Sam acting as sucker of last resort to stop the carnage. (As every gambler knows, if you do not know who the sucker is within five minutes of beginning the game, you are the sucker.)

The hired gun in charge of a financial institution can strip the bank of far more money than the owners or bank robbers will ever get.

But policy makers still do not want to recognize that there is fraud everywhere. We know that the banks committed lender fraud on an unprecedented scale (the best estimate is that 80% of all mortgage fraud was committed by lenders); we know they continue to commit foreclosure fraud (and that their creation, MERS—Mortgage Electronic Registry System—has irretrievably damaged the nation’s property records; this will take a decade to sort out); and we know they duped investors into buying toxic waste securities (using bait and switch— substituting the worst mortgages into the pools) and then bet against them using credit default swaps. Every time an investigator finally musters the courage to go after one of these banks, fraud is uncovered and a settlement is recovered.

It is apparent that fraud became normal business practice. I have compared the home finance food chain to Shrek’s onion: every layer was not only complex, but also fraudulent, from the real estate agents to the appraisers and mortgage brokers who overpriced the property and induced borrowers into terms they could not afford, to the investment banks and their subsidiary trusts that securitized the mortgages, to the credit ratings agencies and accounting firms that validated values and practices, to the servicers and judges who allow banks to steal homes, and on to CEOs and lawyers who signed off on the fraud. To say that this is the biggest scandal in human history is an understatement. And the fraudsters are still running the institutions.

The lender banks created Orwellian-named “affordability products” that insiders called neutron bomb mortgages (designed to blow up and kill the borrower, but leave the home standing) and told the brokers to make those and to refuse the usual documents required for loans—such as W-2 forms and bank account information. Why? As Ollie North put it, “plausible deniability.” Banks could claim “Hey, we didn’t know this unemployed guy couldn’t afford a half million dollar home in Brookside Acres with an exploding adjustable rate mortgage loan at 120% of home value! That borrower defrauded us (add whimpers for effect)!”

... lending was so much easier and cheaper to do if you did not bother to check the financial capacity of the borrower. Hence, we ended up with Liar’s Loans and NINJA Loans (no income, no job, no assets, no problem!).

Once a bank has made a Liar’s Loan, every other link in the home finance chain must be tainted. And that means every transaction, every certification, every rating, and every signature all the way up to the CEO of the investment bank is part of the cover-up.

… the biggest banks have been paying a series of fines imposed for fraudulent behavior.

The only questions remaining for everyone operating in that chain were these: How can I make a buck? How can I get out of this Ponzi scheme before it collapses? And how can I stay out of jail? As we know, they made the bucks as they were rewarded with multi-million dollar bonuses. While most did not exit before the collapse, Uncle Sam covered their losses with trillions of dollars of bailout. And now they are waiting for the statute of limitations on their probable crimes to run out while the nation’s top cops look the other way.

Another path to crisis could be that banking supervisors discover that a major bank is massively insolvent. There is no question that banks have been cooking their books—largely to justify reduction of loan loss reserves in order to record profits so that bonuses can be paid. The problems could begin at Bank of America, or CitiBank, both of which are saddled with bad mortgage debt that they have not written down sufficiently. Many analysts think they are insolvent, so all that is needed to trigger a crisis is for some information to get out, leading to downgraded credit ratings and generating another huge liquidity crisis. Fortunately or unfortunately, Congress is probably not going to let the Fed do what it did last time. Indeed, after Dodd-Frank, most of the actions taken by the Fed and Treasury in the 2007–08 crisis are now illegal or require approval of the President and/or the Congress. It is not likely that such approval could be obtained quickly enough to avert a run.

There is another avenue for contagion. Many people think that European banks are more fragile than American banks, so the problem could start in Europe then spill over to the United States. There is a very easy path from US money market mutual fund holdings of Eurobank assets to a global financial crisis. That is $3 trillion of extremely short-term liabilities that are like deposits, but not insured. Last time, the US government extended the guarantee to all of them; Dodd-Frank outlaws such intervention.

So appearance of a problem among Eurobanks could bring down that whole market—about twice the size of the US subprime mortgages that brought on the global financial crisis last time.

Unfortunately, we haven’t learned any of these lessons. We’ve done no reforming. We let the Ponzi schemes continue, run by the same crooks.

…. economies of scale in banking are reached at a very small size. Supposed economies of scope have proven to be mostly the ability to dupe customers with “bait and switch” schemes. Charles Keating’s Lincoln Savings used its FDIC seal of approval to sell risky and ultimately worthless assets to its elderly widows who thought they were buying insured certificates of deposit (CDs). More recently, Goldman Sachs allowed hedge fund manager Paulson to design sure-to-fail synthetic collateralized debt obligations (CDOs) that Goldman sold to its own customers, allowing both Goldman and Paulson to use credit default swaps (CDSs) to bet on failure (Eisinger and Bernstein, 2010). In other words, the “synergy” allows the institution to bet against its customers. Worse, large institutions invariably become too complex to manage, regulate, or supervise. This allows top management to run the institution as a control fraud, duping owners of equity while top management is enriched. And, finally, since the institution is thought to be “too big to fail,” government will also get swindled when it is called in for the inevitable bailout.


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