Read this article from Chris Whalen carefully. The Wall Street banks are free to steal your money. The legislative, judicial and executive branches of the United States government agree that this is OK. Goldman Sachs, Jon Corzine and a myriad of other sociopathic predators have already gotten away with it. Not one banker has gone to jail for the greatest control fraud in the history of mankind. On some future weekend your owners are going to pull the plug and steal all your money, and do it legally because they write and interpret the laws as they deem fit. Get your money out of the Wall Street banks ASAP.
How Congress Helps the TBTF Banks Steal Your Money with Impunity
Submitted by rcwhalenon 08/20/2012 22:08 -0400
Well I won’t back down, no I won’t back down
You could stand me up at the gates of hell
But I won’t back down
Gonna stand my ground, won’t be turned around
And I’ll keep this world from draggin’ me down
Gonna stand my ground and I won’t back down
Tom Petty
There is a very important article on Jesse’s Cafe Americain blogspot, “Warren Pollock and Ann Barnhardt On the Increased Risk to Customers In the US Financial System,” that illustrates how the US bankruptcy laws now enable theft brazen theft of customer funds by the largest banks. I have written about this issue in the past on ZH, but Pollock and Barnhart really do a nice job of presenting the issue.
http://jessescrossroadscafe.blogspot.com/2012/08/this-is-interesting-dis…
My friend and mentor Walker Todd of AIER, who worked as a legal counsel at the Federal Reserve Banks of New York and Cleveland, states the situation succinctly:
“Basically, there is a new 7th Circuit opinion saying that there is no reason to impose a constructive trust on a lender’s takings of customers’ funds from client commodity firms that were used (inappropriately) to secure the firms’ borrowings, as long as the lender can say that it did not know WITH CERTAINTY that customers’ funds were being repledged. Negligence and misappropriation (vs. knowing criminal intent) are now a sufficient excuse for letting the lender keep the money and go to the head of the line for distributions in bankruptcies of the client commodity firms. Spread the word.”
Walker goes on to say that this decision does rise to the level of “what were they thinking’ when the Powers That Be think that somehow this is saving or strengthening the financial system. He refers to the now infamous 2005 bankruptcy reform legislation, where the banks made themselves senior to the very customers and savers they are supposed to protect. Pollock summarizes the situation nicely in the article:
“The way I read it was that basically you no longer have property rights. If you have your money in any (US) financial institution, you now have no property rights because in a crisis situation a bankruptcy judge now has the right to say that all of this speculation (by the banks and brokers) takes precedence over your savings.”
Another veteran attorney that I have quoted often in past articles about creditor rights comments thusly:
“This decision is just further incentive to steal. And if you do it in Fl., state attorneys say they will not prosecute theft when conducted without the use of violence. So, unless the broker threatens to injure customers that do not turnover money, in Fl., it’s freedom to steal.”
I won’t go over all of the fine post from Jesse’s Cafe Americain, but here are a couple of basic recommendation to readers of ZH and investors generally about the custody of customer funds:
First, no customer should EVER use a broker-dealer as custodian, either for securities or cash. The 2005 bankruptcy reform legislation and the Seventh Circuit decision make clear that customers of a broker dealer have no legal protection from the predatory behavior of the large banks that clear for these firms.
Second, no customer should maintain funds in a depository about the FDIC insured limit if that bank has a broker dealer subsidiary. Based on my reading of the Seventh Circuit decision, it is entirely possible for a bank to place a broker dealer affiliate into bankruptcy and then raid the customer accounts to protect the bank. Keep in mind that the Seventh Circuit is simply interpreting the law as changed by the lobbyists for the TBTF banks.
Third, everyone in the financial markets needs to start pressing members of Congress to repeal the 2005 bankruptcy reform laws in its entirety. The bankruptcy reform legislation passed during Bush II is one of the most hideous laws ever passed by the national congress. And this travesty was supported and encouraged by the Fed and other regulators, proof again that the zombie banks are calling all of the shots in Washington.
The liberal notion of “regulation” begun in the 1930s has become a bad joke. This legal decision shows that the only way we can regain control of the US politically is to see the largest banks broken up. Unfortunately, neither of the political candidates for the presidency is likely to do anything of the kind. At the end of the day, the only alternative for people who will not live as slaves to the big banks may be to seek the peaceful overthrow of the government of the United States, at least as it currently exists today. Shall we start the revolution now? Or wait for the big banks to take everything that we have and more?
Bob says:
The S&P hit a new high for the current move. This means that the economic downdraft that will precede the collapse hasn’t even started yet, in spite of how bad things are right now!
We may be within days of the final top of the bear market rally from March 2009 — the last few waves are tracing out with abnormally low volume. It is chilling that the primary bear market trend has not yet resumed — things sure looked and felt like it had, didn’t they?
The message is clear — BRACE YOURSELF! We literally have not seen ANYTHING yet!
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21st August 2012 at 12:24 pm
Administrator says:
Bob
I can always count on you to make any of my depressing posts even more depressing.
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21st August 2012 at 1:05 pm
Yojimbo says:
Who is Warren Pollock? Has anyone heard of this guy before? It seems that with this story he has zoomed to the forefront.
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21st August 2012 at 2:12 pm
AWD says:
Asset seizures and land-grabs. Exactly what happened in Nazi Germany and Europe before the fascists took power. Banks have the right to call your mortgage due, to be paid in full, anytime they want. Can’t pay your mortgage in full? Instant foreclosure. They can seize your money anytime they want. They won’t be happy till they get it all, and you are dependent of them to survive. At that point the atrocities begin. It’s happened a hundred times before. We won’t be any different.
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21st August 2012 at 2:24 pm
Appalachian Trail Deblazer says:
Now, do you know why Ann has CRAZY EYES!
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21st August 2012 at 3:54 pm
Yojimbo says:
OK. I need to ask everyone a big question:
Let’s assume other people, like me, are laypeople regarding finance.
What kind of bank is a non-Wall Street bank? How do we know if a bank does not have exposure to the coming financial collapse?
Is a local credit union OK? Is a local small bank OK? How small is small?
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21st August 2012 at 7:50 pm
Administrator says:
Yojimbo
There are 8,000 banks in the U.S. and less than 10 control 50% of the total deposits, 75% of all credit cards, and 100% of all derivatives in the country. They are pure evil. Most of the banks and credit unions are run by honest people. When the system implodes it won’t matter if your money is in a small bank or credit union. The panic withdrawals will crash the system.
I wish I could tell you there will be someplace safe to put your cash, but I can’t.
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21st August 2012 at 8:00 pm
AWD says:
The only safe place to stash your cash
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21st August 2012 at 8:09 pm
Bob says:
Admin, glad to lend support and commentary when I think I have something to contribute to your top-quality site. I actually consider myself an optimist, for what that is worth! As far as everyday life goes, I hope we can keep our families intact and in place, and the country can split up while avoiding all out civil wars.
It appears that TPTB have taken an additional 3.5 years and approximately $15+ Trillion to get us all down to the very end of our financial and economic ropes. Hopefully, there will be a lot of surviving historians to tell us whether the extra time and expense made things worse or better — I fear worse.
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21st August 2012 at 12:33 pm