If Trump Nominates John Allison as Bank Supervisor at the Fed, It Will Be a Triumph for Charles Koch and the Loony Ideas of Ayn Rand and Greenspan

By Pam Martens and Russ Martens: December 9, 2016 

John Allison (With Cato Lapel Pin)

John Allison (With Cato Lapel Pin)

On December 4 the Wall Street Journal reported that President-elect Donald Trump was considering the following three individuals for Vice Chairman of the Federal Reserve for Bank Supervision: John Allison, the long serving head of BB&T bank and a Board Member of the right-wing Cato Institute which was half owned by the Koch brothers for decades; Paul Atkins, a consultant, former member of the Securities and Exchange Commission and a Visiting Scholar at the right-wing think tank, the American Enterprise Institute, which has heavy ties and financial backing from the Koch brothers. Also under consideration, and as far removed as one could possibly get from the other two, Thomas Hoenig, Vice Chair of the Federal Deposit Insurance Corporation and the former President of the Federal Reserve Bank of Kansas City.

Thomas Hoenig would deliver America from the stranglehold of the Ayn Rand lunatic fringe and the libertarian propaganda swamp that the Federal Reserve’s been thrashing about in since Ayn Rand’s devoted disciple, Alan Greenspan, chaired the Fed for a staggering 18 years, through four Presidents, from 1987 to 2006. Atkins would dig the Ayn Rand swamp deeper while Allison would try to elevate it to become the formal creed of every college and university in America – something he and the Koch brothers are well on their way to doing already.

Charles Koch and his related foundations have famously funneled tens of millions of dollars into the economic programs at public universities, frequently mandating the approval of faculty hires and curriculum to push free markets and deregulation. In partnership with that effort, the bank that Allison formerly headed from 1989 to 2008, BB&T, was providing lavish gifts to the schools while mandating that Ayn Rand’s book, Atlas Shrugged, be taught and distributed to students.

So who exactly was Ayn Rand? The book that best connects all the pieces of Ayn Rand’s philosophy to today’s right wing free markets mantra, is Ayn Rand Nation: The Hidden Struggle for America’s Soul by Gary Weiss. 

Weiss describes the “Collective” that Rand presided over in New York City as follows: “For much of its existence the Collective was for all intents and purposes a cult. It had an unquestioned leader, it demanded absolute loyalty, it intruded into the personal lives of its members, it had its own rote expressions and catchphrases, it expelled transgressors for deviation from accepted norms, and expellees were ‘fair game’ for vicious personal attacks.”

Alan Greenspan was not only a member of Rand’s Collective but wrote essays for her “Objectivist” newsletter and contributed articles for her book Capitalism: The Unknown Ideal. One of Greenspan’s articles in the book is titled “Antitrust.” Greenspan writes:

“The churning of a nation’s capital, in a fully free economy, would be continuously pushing capital into profitable areas — and this would effectively control the competitive price and production policies of business firms, making a coercive monopoly impossible to maintain…To sum up: The entire structure of antitrust statutes in this country is a jumble of economic irrationality and ignorance. It is the product: (a) of a gross misinterpretation of history, and (b) of rather naive, and certainly unrealistic, economic theories…No speculation, however, is required to assess the injustice and the damage to the careers, reputations, and lives of business executives jailed under the antitrust laws.” At the end of this treatise, Greenspan writes, “I am indebted to Ayn Rand for her identification of this principle.”

We’re still living under this lunacy with giant banks on Wall Street being serially charged with violations of antitrust laws and colluding with each other to rig markets of every stripe.

Rand was a writer living in denial. She vilified government welfare programs but collected Social Security. She wrote on the inherent morality of the intellectual elite, then had an extra-marital affair with a younger man in her employ. She serially ranted against government intrusions, but testified willingly before the House Un-American Activities Committee in 1947 about communist intrusions into Hollywood.

As for BB&T flooding college campuses with her books, in 2012 we asked Harold Bloom, Sterling Professor of the Humanities and English at Yale University in an email to assess her writing talent. Bloom responded: “Ayn Rand was a writer of no value whatsoever, whether aesthetic or intellectual. The Tea Party deserves her, but the rest of us do not. It is not less than obscene that any educational institution that relies even in part on public funds should ask students to consider her work. We are threatened these days by vicious mindlessness and this is one of its manifestations.”

Greenspan took Rand’s deregulatory philosophy to new heights as Chairman of the Federal Reserve. He helped push through the repeal of the 1933 Glass-Steagall Act, which had kept the U.S. financial system safe for 66 years by preventing the merger of speculating Wall Street investment banks and brokerage firms with commercial banks holding taxpayer backstopped insured deposits. He was also instrumental in the complete deregulation of derivatives – the instruments that played a critical role in the epic financial collapse of 2008.

Rand’s philosophy is that the selfish desires of the individual should have no restraints by government; the poor deserve their lot and should receive no tax support from other citizens while the rich have a right to unrestricted power. Thanks to the hundreds of millions of dollars that the Koch brothers have pumped into political campaigns, think tanks, economic courses on campus, combined with BB&T flooding the books of Ayn Rand to campuses across America, the nation is living this Randian/Greenspandian nightmare today. Currently, we are looking at a billionaire President surrounded by a cabinet and advisors of billionaires with three former military generals serving as the Praetorian Guard. Adding to the Orwellian irony, corporate-owned media continues to call Trump the “populist” President.

Hoenig would make an outstanding Vice Chair for Bank Supervision at the Fed as well as a new Fed Chairman when Yellen retires or steps down. He has called for the restoration of the Glass-Steagall Act and refuses to succumb to the preposterous notion that capital levels are adequate at the behemoth global banks in the U.S.

Bombshell Dropped in Federal Court: Proof of a Silver Market “Mafia” Among Big Banks

By Pam Martens and Russ Martens: December 8, 2016

market-riggersLawyers representing traders who allege they were ripped off by a group of colluding global banks filed eye-popping evidence in a Manhattan Federal Court yesterday showing that even as global banks were being criminally probed for rigging currency markets, they continued to engage in rigging the silver market, with a UBS trader referring to the group as the “mafia.”

In order to settle the charges against it in the matter, yesterday’s filing shows that the beleaguered Deutsche Bank turned over to the plaintiffs’ attorneys “more than 350,000 pages of documents and 75 audio tapes” that implicate other banks in a very serious way. In addition to banks previously named in the lawsuit (Deutsche Bank, HSBC, The Bank of Nova Scotia and UBS), trader conversations captured in the material provided by Deutsche Bank seriously implicate Barclays, Standard Chartered, BNP Paribas Fortis and Bank of America/Merrill Lynch.

According to yesterday’s filing, a trader conversation on June 8, 2011 went like this:

UBS [Trader A]: im gonna sell a lil more we need to grow our mafia a lil get a third position involved

Deutsche Bank [Trader B]: ok calling barx10 [Barclays]

The plaintiffs lawyers writer further:

“This coordinated manipulative conduct was intended to capitalize on the zero-sum nature of derivatives trading, including in COMEX silver futures contracts, and to extract illicit profits for Defendants from Plaintiffs and other Class members who held the opposite position. For example, as one UBS trader commented while planning a series of manipulative silver transactions with Deutsche Bank on April 1, 2011, ‘if we are correct and do it together, we screw other people harder.’ Thus, Defendants knew any profit resulting from their illegitimate trading activity flowed directly from harm caused to Plaintiffs and the Class.”

Numerous trader conversations confirming the sharing of insider information among traders at global banks were provided to the court yesterday, including the following between traders at Barclays and Deutsche Bank on April 6, 2011 — where one trader suggests the collusion amounts to “one team one dream.”

Barclays [Trader A]: you are short right

Barclays [Trader A]: haha

Barclays [Trader B]: we are one team one dream

Deutsche Bank [Trader B]: haha

Deutsche Bank [Trader B]: of course short

Deutsche Bank [Trader B]: short 1 lac

Barclays [Trader A]: nice12

The plaintiffs charge the banks with “(1) conspiring to execute large transactions when they knew the silver market was illiquid; (2) uneconomically buying silver to provide artificial support for prices at an agreed-upon level; (3) placing false ‘spoof’ bids and offers to create the false impression of supply and demand where none existed; and (4) withholding pricing information from the silver market by entering secret, unreported transactions with other cartel members.”

UBS and Deutsche Bank are charged by the plaintiffs with implementing an 11 o’clock rule, “whereby they would short silver at the same time each day” and  “use a countdown sequence—‘3 2 1 boom’—to ensure their manipulative transactions were entered at the same time.”

The lawsuit leaves open the possibility that other global banks may be named. The lawyers write that “Jane Doe Defendants Nos. 1-100 are other entities or persons, including banks, interdealer brokers, cash brokers and other co-conspirators whose identities are currently unknown to Plaintiffs. The Jane Doe Defendants participated in, furthered, and/or combined, conspired, aided and abetted, or agreed with others to perform the unlawful acts alleged herein.”

The case is In re: London Silver Fixing, Ltd., Antitrust Litigation in the U.S. District Court for the Southern District of New York, case number: 1:14-md-02573

The scorching evidence produced in the case raises the question, why is the U.S. Justice Department sitting on its hands in this matter. Unlike civil cases brought by private plaintiffs, the Justice Department has the power to wire tap and issue subpoenas. Almost two years ago, Bloomberg News reported that the Justice Department “is investigating whether the world’s biggest banks manipulated prices of precious metals such as silver and gold as it pushes to wrap up probes into currency-rate rigging, according to people with knowledge of the matter.” The report said that 10 banks, including two of those named in this case, Barclays and Deutsche Bank, were being probed.

With the evidence filed yesterday, there is no longer any justification for the Justice Department to dawdle further. From Libor rigging, to currency exchange rigging, to precious metals, to the charges of stock market rigging made in the Michael Lewis book, Flash Boys, there is an overarching appearance that every market has been rigged against average investors. We need a Justice Department that will grab the reins to restore trust, transparency and honest dealing in U.S. markets.

Who’s Behind PropOrNot’s Blacklist of News Websites

propornot-credits-this-man

By Pam Martens and Russ Martens: December 7, 2016 

A shadowy group called PropOrNot (shorthand for Propaganda Or Not) that has gone to a great deal of trouble to keep its funders and principals secret, is promulgating a blacklist of 200 alternative media websites that it has labeled “Russian propaganda outlets.” On Thanksgiving Day, Washington Post reporter Craig Timberg amplified this smear campaign in an article giving credence to the anonymous group’s research.

While a handful of state-funded sites are included on the list, both the Washington Post and PropOrNot have come under withering criticism for engaging in McCarthyism by including dozens of respected sites like Naked Capitalism, Truthout, Truthdig, Consortium News and, initially, CounterPunch, on the list. (CounterPunch has since been removed and Naked Capitalism’s lawyer has sent a scorching letter to the Washington Post demanding a retraction and an apology.) The widely read Paul Craig Roberts also landed on the blacklist. Roberts is a former Assistant Secretary of the U.S. Treasury for Economic Policy under President Ronald Reagan, a former Associate Editor of the Wall Street Journal and a former columnist at BusinessWeek. He held Top Secret clearance when he worked for the U.S. government.

Wall Street On Parade closely examined the report issued by PropOrNot, its related Twitter page, and its registration as a business in New Mexico, looking for “tells” as to the individual(s) behind it. We learned quite a number of interesting facts.

As part of its McCarthyite tactics, PropOrNot has developed a plugin to help readers censor material from the websites it has blacklisted. It calls that its YYYCampaignYYY. In that effort, it lists an official address of 530-B Harkle Road, Suite 100, Santa Fe, New Mexico 87505. That’s one of those agent addresses that serve as a virtual address for the creation of limited liability corporations that want to keep their actual principals secret. The address has dozens of businesses associated with it. There should also be a corresponding business listed in the online archives of the business registry at the Secretary of State of New Mexico. However, no business with the words Propaganda or PropOrNot or YYY exist in the New Mexico business registry, suggesting PropOrNot is using a double cloaking device to shield its identity by registering under a completely different name.

PropOrNot’s Twitter page provides a “tell” that its report may simply be a hodgepodge compilation of other people’s research that was used to arrive at its dangerous assertion that critical thinkers across America are a clandestine network of Russian propaganda experts. Its Tweet on November 7 indicates that the research of Peter Pomerantsev, a Senior Fellow at the Legatum Institute in London, who has also been cooperating on research with the Information Warfare Project of the Center for European Policy Analysis (CEPA) in Washington, D.C, inspired its efforts.

According to SourceWatch, the Legatum Institute “is a right-wing think tank promoting ‘free markets, free minds, and free peoples.’ ” SourceWatch adds that the Legatum Institute “is a project founded and funded by the Legatum Group, a private investment group based in Dubai.” According to the Internet Archive known as the Wayback Machine, the Center for European Policy Analysis previously indicated it was an affiliate of the National Center for Policy Analysis (NCPA). We can see why they might want to remove that affiliation now that the Koch brothers have been exposed as funders of a very real network of interrelated websites and nonprofits. According to Desmog, NCPA has received millions of dollars in funding from right wing billionaires like the Koch brothers and their related trusts along with the Lynde and Harry Bradley Foundation, the Sarah Scaife Foundation (heir to the Mellon fortune) along with corporations like ExxonMobil.

CEPA’s InfoWar Project is currently listed as a “Related Project” at PropOrNot’s website. Indeed, there are numerous references within the report issued by PropOrNot that sound a familiar refrain to Pomerantsev and/or CEPA. Both think the U.S. Congress is in denial on the rising dangers of Russian propaganda and want it to take more direct counter measures. Pages 31 and 32 of the PropOrNot report urge the American people to demand answers from the U.S. government about how much it knows about Russian propaganda. The report provides a detailed list of specific questions that should be asked.

In the August 2016 report released by CEPA (the same month the PropOrNot Twitter account was established) Pomerantsev and his co-author, Edward Lucas, recommend the establishment of “An international commission under the auspices of the Council of Europe on the lines of the Venice Commission” to “act as a broadcasting badge of quality. If an official body cannot be created, then an NGO could play a similar advisory role.”

On its website, PropOrNot recommends a much stronger censorship of independent media websites, writing:

“We call on the American public to… Obtain news from actual reporters, who report to an editor and are professionally accountable for mistakes. We suggest NPR, the BBC, the New York Times, the Wall Street Journal, the Washington Post, Buzzfeed News, VICE, etc, and especially your local papers and local TV news channels. Support them by subscribing, if you can!”

It has been the experience of Wall Street On Parade that the editors of the New York Times are more than willing to ignore brazen misreporting of critical facts, even when the errors are repeatedly brought to their attention; even when those erroneous facts are then repeated by the President of the United States. (See our report: President Obama Repeats the Falsehoods of the New York Times and Andrew Ross Sorkin on Restoring the Glass-Steagall Act.)

CounterPunch was quick to point out that the Washington Post’s former publisher, Philip Graham, supervised a disinformation network for the CIA during the Cold War, known as Mockingbird. Graham was reported to have died of a self-inflicted gunshot wound at his farm in 1963.

CEPA’s website indicates that on May 10 it hosted Senators Chris Murphy and Rob Portman to discuss “Russia’s sophisticated disinformation campaign.” CEPA’s President, A. Wess Mitchell is quoted as saying: “What’s missing is a significant effort on the part of the U.S. government. Not nearly enough has been done.”

Six days after Washington Post reporter Craig Timberg ran his first PropOrNot story, he published another article indicating that “Congressional negotiators on Wednesday approved an initiative to track and combat foreign propaganda amid growing concerns that Russian efforts to spread ‘fake news’ and disinformation threaten U.S. national security.” Quoted in the story was none other than the very Senator who had met with CEPA in May on that very topic, Senator Rob Portman.

Portman is quoted as follows: “This propaganda and disinformation threat is real, it’s growing, and right now the U.S. government is asleep at the wheel.” Among Portman’s top three donors to his 2016 Senate race were Citigroup and Goldman Sachs, two Wall Street behemoths that would very much like to pivot the national debate to anything other than Wall Street power and corruption.

Is Wall Street Trying to Rig Trump’s Business Advisory Panel?

By Pam Martens and Russ Martens: December 6, 2016

Wall Street Bull Statue in Lower Manhattan

Wall Street Bull Statue in Lower Manhattan

On December 2 President-elect Donald Trump’s transition team sent out a press release advising that he had formed a business advisory panel “which is composed of some of America’s most highly respected and successful business leaders, will be called upon to meet with the President frequently to share their specific experience and knowledge as the President implements his plan to bring back jobs and Make America Great Again.”

In fact, according to the Chair of the panel, Stephen A. Schwarzman, Chairman and CEO of Blackstone, a private equity/hedge fund/investment bank headquartered in New York City, it was Schwarzman who actually selected the members of the panel and Trump went with the full group he had selected. (See Schwarzman’s Bloomberg TV interview here.)

Aside from being a disparate cacophony of voices from wildly different businesses ranging from Boeing, a commercial jet manufacturer, to the Cleveland Clinic with no representation at all from labor or consumers, the panel has an outsized representation from the financial sector with one particularly curious member.

Of the 16 member group, 7 members hail from the financial/investment sector. In addition to Schwarzman, those members are:

Paul Atkins, CEO, Patomak Global Partners, LLC, Former Commissioner of the Securities and Exchange Commission;

Jamie Dimon, Chairman and CEO, JPMorgan Chase;

Larry Fink, Chairman and CEO, BlackRock;

Kevin Warsh, Former Member of the Board of Governors of the Federal Reserve System;

Adebayo Ogunlesi, Chairman and Managing Partner, Global Infrastructure Partners (a company buying up key infrastructure, like airports and pipelines, in countries around the world);

Daniel Yergin, an oil and energy expert who is Vice Chairman of a fascinating company known as IHS Markit. IHS merged with Markit Ltd. this year in a tax inversion, where it “officially” moved to London to avoid paying higher U.S. corporate taxes. But it’s the Markit part of the company that makes its inclusion on the business advisory group so interesting.

IHS Markit employees 4200 people, which right off the bat makes its inclusion on this panel suspect. It’s going to be sitting next to the likes of Jamie Dimon, whose JPMorgan Chase employees 235,000 people and Doug McMillon, President and CEO of Wal-Mart Stores, that has an employee roster of 2.3 million people worldwide with 1.5 million of those in the U.S., according to the company’s web site.

If you look at IHS Markit’s web site and the description of what it says it does for its customers, you will have no idea of what it’s talking about – unless you’re a trader on Wall Street or some other financial capitol around the globe.

The most fascinating aspect of Markit is that it was created with funding and backing from some of the largest firms on Wall Street who provided the market pricing for the instruments known as Credit Default Swaps — the instruments that played a major role in blowing up the U.S. economy and century old financial institutions in 2008.

We took an in-depth look at Markit in January 2008 in an article we headlined “How Wall Street Blew Itself Up” when the company was known as Markit Group. In exploring why Wall Street did not list its derivatives on exchanges to ensure a transparent form of price discovery, we wrote at the time:

“…the unabridged story is breathtaking in its callous disregard for the economic well being of this nation and its people. Exchange traded products did not emerge to hedge this risk because, behind the scenes, Citigroup, along with 12 other big banks and securities firms were funding a private company to gobble up all the necessary components to keep this burgeoning cash cow to themselves in the opaque, unregulated, over-the-counter (OTC) market, despite the fact that they knew it was dysfunctional.

“The private company that would become Wall Street’s ticker tape for pricing exotic credit instruments (derivatives on subprime mortgages and credit default swaps) started out as Mark-it Partners in 2001, the brain child of Lance Uggla while he was working for a division of Toronto Dominion Bank, TD Securities.

“The official story goes like this: Mark-it Partners needed big broker dealers to submit daily price data. As an incentive, it offered 13 large security dealers options to buy shares in the company providing they would be regular providers of pricing data: ABN AMRO, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Dresdner Kleinwort Wasserstein, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, TD Securities, UBS. By 2004, according to an archived company press release, all of the companies had kicked in capital. The Financial Times would later report that these banks and brokerage firms held a majority interest of approximately 67%, hedge funds owned 13%, and employees 20%. The firm’s web site currently says it has 16 banks as shareholders, without naming the banks.”

We ended this January 2008 article with this warning:

“It was four years after the crash of 1929 before the major titans of Wall Street were forced to give testimony under oath to Congress and the full magnitude of the fraud emerged. That delay may well have contributed to the depth and duration of the Great Depression. The modern-day Wall Street corruption hearings in Congress were cut short by the tragedy of  9/11. They must now resume in earnest and with sworn testimony if we are to escape a similar fate.”

As we now know, we didn’t escape a similar fate. In March of 2008 Bear Stearns blew up. In September 2008, Lehman Brothers filed bankruptcy. AIG received a $185 billion taxpayer bailout; Fannie Mae and Freddie Mac were put into government conservatorship and Citigroup received the largest financial rescue in U.S. history, including a then-secret $2.5 trillion in cumulative loans from the Fed from 2007 to 2010. The collapsing Wachovia Bank was bought by Wells Fargo. The collapsing Washington Mutual bank was bought by JPMorgan Chase. And the collapsing Merrill Lynch was bought by Bank of America – all while the Fed had secretly hooked up a feeding tube of $16 trillion in super-cheap cumulative loans to keep Wall Street’s corrupt carcass on life support.

How Markit was created is a tragic reminder of how little has changed today in how Wall Street prices derivative risk and the monstrous job that any President will have in cleaning out this swamp. (See related articles below.)

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Italy’s Referendum Should Be a Warning to Donald Trump

FTSE Italia All-Shares Banks Index (Green Line), January 2016 to December 5, 2016 Versus Germany's Deutsche Bank (Orange Line)

FTSE Italia All-Shares Banks Sector Index (Green Line), January 2016 to December 5, 2016 Versus Germany’s Deutsche Bank (Orange Line)

By Pam Martens and Russ Martens: December 5, 2016

Populist backlash, which has been running rampant on both sides of the Atlantic, just handed Italian Prime Minister Matteo Renzi his walking papers in a widely anticipated referendum vote. Renzi pushed for the referendum to reform the legislative system in Italy and said he would resign if it didn’t pass. Voters saw it as a power grab by Renzi and soundly defeated it with just under 60 percent voting against the measure. Under the terms of the referendum, Italy’s Senate would have shrunk from 315 members to 100 while the Senate’s right to hold a vote of no confidence in the government would have been severed.

Italian Prime Minister Matteo Renzi Casts His Vote in Italy's Referendum, November 4, 2016

Italian Prime Minister Matteo Renzi Casts His Vote in Italy’s Referendum, November 4, 2016

Much like Donald Trump’s appeal to the working class in America, Renzi took office in 2014 on an anti-establishment campaign. Ironically, or perhaps not, Renzi used the identical words as Trump, promising to clean out “the swamp.” The swamp in Italy includes the same cronyism, political pay-to-play and entrenched corruption that has Americans outraged and seeking drastic change from the status quo. Opposing voices who triumphed in yesterday’s referendum painted Renzi as too chummy with bankers and financiers, a narrative that is increasingly coming into sharp focus in Donald Trump’s Cabinet appointments.

Donald Trump’s Senior Counselor/Chief Strategist in the White House will be Steve Bannon, a previous Goldman Sachs banker and right-wing propaganda filmmaker. For one of the most powerful posts in government, the U.S. Treasury Secretary, Trump has tapped a former 17-year veteran of Goldman Sachs, Steven Mnuchin. An heiress to a family worth more than $5 billion, Betsy DeVos, was tapped by Trump for Education Secretary while billionaire investor and corporate raider Wilbur Ross has been named by Trump as his nominee for Commerce Secretary.

Trump, himself a billionaire, has attempted to justify his packing his administration with millionaires and billionaires by saying these people “know how to make money.” In many cases, however, the money has been made on the backs of the very working class to whom Trump made elaborate promises. While the U.S. legislative system does not function like European Parliaments, a President who makes grandiose promises to the little guy, then works on behalf of the one percent, would suffer a serious loss of credibility in U.S. opinion polls. This could result in backlash against Republicans in the 2018 midterm elections.

Trump also faces a banking reform problem not all that dissimilar to Renzi. Eight of Italy’s banks are experiencing distress. The FTSE Italia All-Share Banks Sector Index shown above is down 50 percent since the beginning of the year. Italy’s banks are estimated to have more than €360 billion of bad loans against equity of approximately €225 billion.

While the problems at U.S. banks rarely make front page news at corporate owned newspapers in America, there is a serious and growing problem with the largest Wall Street banks holding tens of trillions of dollars in derivatives at their taxpayer-backstopped insured depository units that hold the life savings of the little guy. Whom the counterparties are to these derivative gambles is a tightly-held secret. Thanks to an IMF report, however, we know that Germany’s Deutsche Bank, which has lost almost 40 percent of its market value this year, is deeply intertwined with Wall Street’s derivatives. (See related articles below.)

In a normal world and stock market, global banking stocks should have been hammered at the opening in New York this morning. As of mid-morning, Deutsche Bank is trading up 3 percent on the New York Stock Exchange with Wall Street banks like Goldman Sachs, JPMorgan Chase and Citigroup up approximately 2 percent. Typically, banks don’t like instability nor do they relish populism fervor and visions of pitchforks. What likely accounts for the cherry reaction this morning is the fact that multiple central banks around the world now have the right to levitate markets by making multi-billion-dollar purchases in the markets when things go south.

But as we found out in 2008, central bank intervention only works when things don’t all go south at the same time.

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Citigroup Has More Derivatives than 4,701 U.S. Banks Combined; After Blowing Itself Up With Derivatives in 2008