It appears the Gordon Gekkos are still churning out the Counterparty transactions that somehow create "money" out of, well, NOTHING, as far as I can tell. Why, please tell me, is Counter-partying not also COUNTER-FEITING? That activity that the Secret Service used to chase down and prosecute, before the Birther-Death Threaters doubled their workload just keeping the Second Amendment Solutioneers from succeeding with their great fantasy?
"In the last three decades, the over-the-counter derivatives marketplace has grown up, but it remains unregulated. From total notional amounts of less than $1 trillion in the 1980s, the notional value of this market has ballooned to more than $300 trillion in the United States – that’s more than 20 times the size of the American economy..."
http://www.cftc.gov/...
Anybody thought about whether what these creatures are doing, acting like their very own principality, might be characterized as COUNTERFEITING?
$300 trillion in leverage-created casino bets, though the real figure in this under-the-counter, unregulated Financial Industrial Complex scam is hard to pin down -- not-real-but-most-people-will-take-it-in-exchange-for-a-pizza-or-$480-million-SuperMegaYacht Funny Munny. It even looks just like the real stuff, as real as the greenback dollar bill I used in the candy machine yesterday, when tabulated in neat columns in bank and brokerage and hedge fund statements and corporate financials. But as far as I can tell, these "dollars" are NOT REAL.
Also, as far as I can tell, Derivative Funny Munny dollars are clearly intended by the folks who are issuing them as the means to obtain Real Wealth, in exchange for worthless paper and bytes of nothing. "Managing risk" by creating huge, overwhelming risk, for the dumb taxpayers and Real Wealth creators to make good on, does not seem to be any kind of socially useful activity.
This, folks, seems to me to be COUNTERFEITING, on a scale that would shame the Nazis and Iranians and Libyans and the North Koreans and Chinese and other Enemies of America. Who over the years have (allegedly) attacked the US economically by debasing our currency, by inserting valueless, non-existent, imaginary, fake, paper and now bit-streamed pseudo-dollars into our commerce. The Secret Service is reportedly out of the counterfeiting-enforcement business: not enough agents to do that and address all the death threats and plots against the President. But somebody still picks up counterfeit money and eventually burns it, after using it as evidence to convict. And cybercrime and "national security" statues have criminal enforcement provisions for electronic assaults on the General Welfare. I am morally sure that there's a secret government hacker group that tracks and tries to protect The Economy against electronic fraudulent dollar creation. Why no attention to what seems so obviously to be a Goldman-plated fraud of the worst kind, dwarfing that Madoff-Enron-level stuff?
This kind of Funny Munny, that is created by "private fiat" of the lowest kind, seems to me to be as potentially fatal as a direct exposure to a nuclear detonation to the folks who don’t have any kind of shelter from the fallout of that kind of explosion. Any idea what the "bailout" is doing and going to do to Main Street?
And even the simplistic little wiki article paints but a small part of the picture of the damage that counterfeiting can do to a nation:
Some of the ill-effects that counterfeit money has on society are:
1.Reduction in the value of REAL MONEY [emphasis added]
2.Increase in prices (inflation) due to more money getting circulated in the economy – an unauthorized artificial increase in the money supply [which is what the remarks of many that I have read are kind of hinting at -- adding $25 or $300 trillion in apparent liquid "wealth" to the US net has no inflationary effect at all, I'm sure]
3.Decrease in the acceptability (satisfactoriness) of money – payees may demand electronic transfers of real money or payment in another currency (or even payment in a precious metal such as gold)
4.Companies are not reimbursed for counterfeits. This forces them to increase prices of commodities.
http://en.wikipedia.org/...
Maybe "we the people," or our legal representatives, could treat this Made-Up Funny Munny as simply "counterfeit," and "burn it" right out of the electronic vaults in which it is kept. It seems plain enough that it is not real, never has been, is made up of pretense printed on Charmin, that it devalues the rest of the currency, not to mention the whole freakin’ economy. Libertarians whine about "the Fed" and "inflationating." Those things are piker stuff compared to $300 trillion in fee-generating CDSs. Unless I am hugely mistaken, isn't the essence of these transactions a simple casino bet, with 15 or 20 percent for the House, where the only way there is not a huge collapse, again, is that the players at the table all get to play with chits and chips that are guaranteed by people who don't even get to sit in on the game.
To this former enforcement attorney, it seems to me that there is, at least for the moment until our Congress legislatively renders this toxic trash "not illegal," all kinds of law that could be used to address and redress the intentional actions of Lehman and JP Morgan-Chase and G-S and the other malefactors. The US Criminal Code, 18 USC has all kinds of stuff in it, from mail and wire fraud (1001) to chapter 25 (counterfeiting) to RICO, of course, and even the Patriot Act, and Foreign Corrupt Practices and all that. Screw the pantywaist civil fraud stuff, hey? That’s 98-pound weaklings picking fights with Andre the Giant or The Undertaker. Mail and wire fraud and counterfeiting convictions ought to be a lay-down for an enterprising US Attorney.
There’s enforcement stuff aplenty, tools like:
18 USC 472 – Uttering counterfeit obligations or securities
Whoever, with intent to defraud, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or with like intent brings into the United States or keeps in possession or conceals any falsely made, forged, counterfeited, or altered obligation or other security of the United States, shall be fined under this title or imprisoned not more than 20 years, or both.
And
18 USC 473 – Dealing in counterfeit obligations or securities
Whoever buys, sells, exchanges, transfers, receives, or delivers any false, forged, counterfeited, or altered obligation or other security of the United States, with the intent that the same be passed, published, or used as true and genuine, shall be fined under this title or imprisoned not more than 20 years, or both.
And there’s some decent judicial gloss on what is meant by "counterfeit:"
"An obligation or security is counterfeit if it "bears such a likeness or resemblance to any of the genuine obligations or securities issued under the authority of the United States as is calculated to deceive an honest, sensible and unsuspecting person of ordinary observation and care when dealing with a person supposed to be upright and honest" (United States v. Wethington, 141 F.3d 284, 287 (6th Cir. 1998)).
There's lots of commentary on the history, and the increasing sophistication, of both the nature of "currency," which now patently includes all those bits of magnetized or laser-written stuff that make up your bank deposits and mine, and the means of debasing and corrupting same. http://www.encyclopedia.com/... If you create a non-existent dollar, or a billion of ‘em, by a two-sided derivative transaction, which of necessity requires that you use "wires" to do so and maybe "mail" as well, why, Dandy Boy, don’t you wish you have found a place that does not extradite for venal crimes, especially if you can afford to bribe the local despot to protect your privacy while you live and can pay protection money. REAL money, that you got in exchange for the Funny Munny you passed back in the days of GoGo Public Risk-Private Gain "Capitalism."
Seems to me that what these guys have done is create "money" and put it into circulation, "money" that did not exist, was not issued by the Treasury or even by the Fed, that other fraud, and that so obviously has debased and debt-loaded our economy and currency. The total, world-wide, of fake greenbacks, is maybe a couple of billion. Piker fare compared to the Funny Munny that the Goldman-bugs have dumped into circulation.
And of course the cry will be that "we NEED these tools" and "that's not how it's done" and "these are not the right tools to regulate this important industry" and "wait for regulatory reform" and "you don’t understand the complexity," and all that. While the beating down and mugging go on.
Not that Holder, of course, or even Cuomo, are likely to go there...
And it's not like I'm the only one with this notion in mind. I didn't go far enough down the tree in research, or I would have run into Matt Taibi, who just lately had this to say:
Our economy is so completely fucked, the rich are running out of things to steal.
If you squint hard enough, you can see that the derivative-driven economy of the past decade has always, in a way, been about counterfeiting. At their most basic level, innovations like the ones that triggered the global collapse — credit-default swaps and collateralized debt obligations — were employed for the primary purpose of synthesizing out of thin air those revenue flows that our dying industrial economy was no longer pumping into the financial bloodstream. The basic concept in almost every case was the same: replacing hard assets with complex formulas that, once unwound, would prove to be backed by promises and IOUs instead of real stuff. Credit-default swaps enabled banks to lend more money without having the cash to cover potential defaults; one type of CDO let Wall Street issue mortgage-backed bonds that were backed not by actual monthly mortgage payments made by real human beings, but by the wild promises of other irresponsible lenders. They even called the thing a synthetic CDO — a derivative contract filled with derivative contracts — and nobody laughed. The whole economy was a fake...
... The same is true for mortgages. When lenders couldn’t find enough dope addicts to lend mansions to, some simply went ahead and started selling the same mortgages over and over to different investors. There are now a growing number of cases of such double-selling of mortgages: "It makes Bernie Madoff seem like chump change," says April Charney, a legal-aid attorney based in Florida. Just like in the stock market, where short-sellers delivered IOUs instead of real shares, traders of mortgage-backed securities sometimes conclude deals by transferring "lost-note affidavits" — basically a "my dog ate the mortgage" note — instead of the actual mortgage. A paper presented at the American Bankruptcy Institute earlier this year reports that up to a third of all notes for mortgage-backed securities may have been "misplaced or lost" — meaning they’re backed by IOUs instead of actual mortgages.
How about bonds? "Naked short-selling of stocks is nothing compared to what goes on in the bond market," says Trimbath, the former DTC staffer. Indeed, the practice of selling bonds without delivering them is so rampant it has even infected the market for U.S. Treasury notes. That’s right — Wall Street has actually been brazen enough to counterfeit the debt of the United States government right under the eyes of regulators, in the middle of a historic series of government bailouts! In fact, the amount of failed trades in Treasury bonds — the equivalent of "phantom" stocks — has doubled since 2007. In a single week last July, some $250 billion worth of U.S. Treasury bonds were sold and not delivered.
The counterfeit nature of our economy is troubling enough, given that financial power is concentrated in the hands of a few key players — "300 white guys in Manhattan," as a former high-placed executive puts it. But over the course of the past year, that group of insiders has also proved itself brilliantly capable of enlisting the power of the state to help along the process of concentrating economic might — making it less and less likely that the financial markets will ever be policed, since the state is increasingly the captive of these interests.
http://www.debtdebtrelief.com/matt-taibbi-%E2%80%93-wall-street%E2%80%99s-naked-swindle%E2%80%A6/
Of course Mr. Taibbi is just some outre freak critic who uses "fuck" in his public discourse...