They Actually Expect Us To Have Faith In These Financial Markets After This Week?

NASDAQ MarketSite TV studio - Photo by Luis Villa del CampoWhat in the world is happening to our financial markets?  Trading on the Nasdaq was halted on Thursday for more than 3 hours, and the only formal explanation that we got was that it was a “technical issue”.  On Tuesday, Goldman Sachs made thousands of “erroneous trades” that are now being canceled.  If those trades had not been canceled, it could have cost Goldman “hundreds of millions of dollars” according to the Wall Street Journal.  How nice for them that they get a “do over”.  When Knight Capital made a similar “trading error”, they were not so fortunate.  Our financial system has become completely and totally dependent on computers, and that means that it is extremely vulnerable.  After what we have witnessed this week, how can they actually expect us to have faith in these financial markets?  And what happens if these “technical issues” get even worse?

The stoppage on the Nasdaq on Thursday was unprecedented.  Trading in literally thousands of stocks and options was halted.  Big names like Apple, Netflix, Intel and Facebook were affected.

As of right now, officials are not telling us what caused the “technical issue”, but there are rumblings that hacking was involved.

And the Nasdaq would hardly be the first exchange to be hacked.  In fact, according to NBC News, about half of all the security exchanges around the world were hacked last year.

USA Today is suggesting that a group of Iranian hackers known as “Cyber Fighters of Izz ad-Din al-Qassam” may be responsible for what happened to the Nasdaq.  Apparently they have been quite active since last September…

The first wave of denial-of-service attacks attributed to the Cyber Fighters of Izz ad-Din al-Qassam began last September and lasted about six weeks. Knocked offline for various periods of time were Wells Fargo, U.S. Bank, Bank of America, JPMorgan Chase & Co. and PNC Bank.

The second wave commenced in December and lasted seven weeks, knocking out mid-tier banks and credit unions.

And a third wave of high-powered denial-of-service attacks commenced in March targeting credit card companies and financial brokerages.

But of course the Iranians have not been the only ones hacking financial institutions.  According to Gartner banking security analyst Avivah Litan, some “profit-minded hackers” have had quite a bit of success attacking U.S. banks…

More recently, a copycat group of profit-minded hackers has conducted denial-of-service attacks against certain U.S. banks as a smoke screen to divert attention while they execute an Ocean’s 11-style wire transfer fraud.

Litan earlier this month blogged about that caper. These bad guys, she says, set into motion sophisticated denial-of-service attacks that overwhelmed pretty sturdy bank network security. While tech staff labored manually to get the banks’ websites back into service, the crooks scrambled behind the scenes to extract funds from a bank employee’s privileged account, which they had gained access to.

Instead of getting into one customer account at a time, the criminals used the employee’s account to control the master payment switch for wire transfers, and moved as much money as they could from as many accounts as possible for as long as possible, Litan reports.

“Considerable financial damage has resulted from these attacks,” says Litan.

However, let’s certainly not blame all of the “technical issues” in the financial markets on hackers.  What happened to Goldman Sachs on Tuesday appears to be very much their own fault

A programming error at Goldman Sachs Group Inc. caused unintended stock-option orders to flood American exchanges this morning, roiling markets and shaking confidence in electronic trading infrastructure.

An internal system that Goldman Sachs uses to help prepare to meet market demand for equity options inadvertently produced orders with inaccurate price limits and sent them to exchanges, said a person familiar with the situation, who asked not to be named because the information is private. The size of the losses depends on which trades are canceled, the person said. Some have already been voided, data compiled by Bloomberg show.

Of course if those trades had made hundreds of millions of dollars for Goldman they would have been allowed to stand.

But because Goldman was about to lose hundreds of millions of dollars authorities worked very rapidly to start “breaking” those trades.

This is just another example that shows how much of a joke our financial system has become.

Wall Street has become a massive computerized casino, and at some point this fraudulent house of cards is going to come crashing down hard.

The seeds for all of this were planted back in the late 1990s.  The Glass-Steagall Act was repealed and the big banks started to go hog wild.

And according to an absolutely shocking memo uncovered by investigative reporter Greg Palast, a certain U.S. Treasury official was at the heart of the plot to make this possible…

When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it.

The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3 percent unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.

The Treasury official playing the bankers’ secret End Game was Larry Summers. Today, Summers is Barack Obama’s leading choice for Chairman of the US Federal Reserve, the world’s central bank.

If Summers and U.S. Treasury Secretary Robert Rubin had not been working so hard for the benefit of the big banks, we might not be facing a quadrillion dollar derivatives bubble today…

The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.

Second, the banks wanted the right to play a new high-risk game: “derivatives trading”. JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as “assets”.

Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary) body-blocked any attempt to control derivatives.

But what was the use of turning US banks into derivatives casinos if money would flee to nations with safer banking laws?

The answer conceived by the Big Bank Five: eliminate controls on banks in every nation on the planet — in one single move. It was as brilliant as it was insanely dangerous.

To learn more about how they used the WTO to transform the global financial system into a gigantic casino, head on over and read the rest of Palast’s outstanding article right here.

And you know what is truly frightening?

Larry Summers appears to be Barack Obama’s top choice to become the next chairman of the Federal Reserve.

That statement should send chills up your spine.

The truth is that Larry Summers should not even be running a Dairy Queen, much less the most powerful financial institution on the planet.

If Larry Summers becomes the next head of the Federal Reserve, it will be an unmitigated disaster.

But it looks like that is exactly what we are going to get.

We are rapidly heading toward the next major global financial crisis, and on top of everything else we will probably have Larry Summers running things soon.

What a nightmare.

80 Percent Of Americans Say That They Are Not Better Off Than They Were Four Years Ago

Are you better off today than you were four years ago?  If not, then you are just like most other Americans.  According to a CBS News/New York Times poll that was released a few days ago, 80 percent of Americans say that their financial situation is not “better today” than it was four years ago.  But if you turn on the television and listen to what the “pundits” are saying, you would be tempted to think that we were in the midst of a robust economic recovery.  You would be tempted to think that the U.S. economy is in great shape and that we are heading for a really bright future.  But the fact that the stock market is soaring does not mean much to most Americans.  In fact, most Americans couldn’t care less that the Dow is well above 13,000 and that the NASDAQ is above 3,000.  What most Americans care about is having a job and being able to provide for their families.  If you haven’t paid the mortgage in three months or if you don’t have enough money to take your daughter to go see the doctor it really is not going to matter to you how well the boys and girls over on Wall Street are doing.  Right now most American families are doing worse than they were doing four years ago, and no amount of media hype is going to change that fact.

Yes, the stock market is doing really well for the moment, but the truth is that more than 50 percent of all stocks and bonds are owned by just 1 percent of the U.S. population.

Good for them.  It looks like the trillions of dollars that the Federal Reserve poured into the big Wall Street banks is really paying off nicely for the financial community.

Meanwhile, much of the rest of the country is deeply suffering.

It was recently reported that 1.5 million American families live on less than two dollars a day (before counting government benefits).

That is horrifying.

According to the U.S. Census Bureau, the percentage of Americans living in “extreme poverty” is now sitting at an all-time high.

All across this country poverty is exploding.  Food banks are experiencing more demand than ever before and those offering free healthcare are absolutely swamped.

And every single measure of government dependence has gone way up since Barack Obama entered the White House.

For example, since Barack Obama became president the number of Americans on food stamps has gone up by 45 percent.

Just think about that.

At this point the federal government is helping to feed an all-time record 46.5 million Americans every month.

Oh yeah, times are good.

According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government.

That is much higher than it has been historically.

For example, back in 1983 less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.

The big problem is that there are simply not enough jobs for everyone.

Listening to the media, you would be tempted to think that the U.S. economy is now pumping out huge numbers of good jobs.

But that is simply not the case.

Right now there are 5.6 million fewer jobs than there were when the last recession began back in late 2007.

So where are the millions of jobs you promised us Obama?

The federal government is trying to convince us that the unemployment rate is going down, but that is not really true.

The key is to look at the percentage of working age Americans that actually have jobs.  During the last recession that percentage fell dramatically as you can see from the chart below.  After every other recession since World War II the employment to population ratio has always bounced back.  But it has not happened this time.  Instead, the employment to population ratio has remained between 58 and 59 percent since the end of 2009….

We have not had a jobs recovery.  Hopefully we will have one before the next recession hits, but we are running out of time for that.

Tonight there are millions upon millions of hard working Americans that are staring at their television screens and wondering why they can’t find good jobs.  The pretty people on television are telling them that the employment situation is getting much better but they can’t find work no matter how hard they try.  It is a cruel joke on them.

When Barack Obama entered the White House, the number of “long-term unemployed workers” in the United States was approximately 2.6 million.  Today, that number is sitting at 5.6 million.

Thanks for the improvement Obama.

Meanwhile, the average duration of unemployment continues to hover near a record high.  Just look at the chart posted below.  Does this look like a “jobs recovery” to you?….

But of course Obama and those that support him want to make things sound like they are getting better.  They want people to run out and vote for him again in November.

If things are going well for you right now, be thankful, and also remember the millions upon millions of Americans out there that are deeply hurting in this economy.

If you gathered together all of the workers that are “officially” unemployed in the United States at this point into one nation, they would constitute the 68th largest country in the entire world.  It would be a nation larger than Greece or Portugal.

That is a lot of people.

Obama promised us that the Wall Street bailouts would make everything better.  He promised us that if we poured gigantic mountains of money into Wall Street that it would end up helping “Main Street”.

Well, the last time I looked Goldman Sachs was doing just fine.

So where is the help for Main Street?

In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

How much wealthier do they have to get before they start creating more jobs for the rest of us?

Obama (like most of our politicians) is a complete fraud when it comes to the economy.  He is all saddle and no horse.  He talks a good game but he doesn’t have any game.

As Wall Street has recovered, the rest of the country has actually been in decline.  Median household income in the United States is down 7.8 percent since December 2007 after adjusting for inflation.  Millions of American families are reaching the breaking point and millions of other families have already reached it.

Incomes have been declining but the cost of living has not.

For example, health insurance costs have risen by 23 percent since Barack Obama became president.

Has your paycheck increased by 23 percent?

The average price of a gallon of gasoline in the United States has increased by more than 90 percent since Barack Obama became president.

Has your paycheck increased by 90 percent?

Millions of American families have lost their homes while Obama has been president and millions more will soon lose their homes.  At this point there are more than 6 million mortgages in the United States that are overdue.

It is a horrible, horrible feeling to know that you can’t pay your mortgage and that you will soon lose your home and your family will be put out on the street.

None of us would ever want to end up in that situation.

And the housing market sure has not shown any signs of recovery under Barack Obama.

In January, U.S. home prices were the lowest that they have been in more than a decade.

Weren’t home prices and home sales supposed to be turning around by now?

Under Barack Obama, new home sales in the United States set a brand new all-time record low in 2009, they set a brand new all-time record low again in 2010, and they set a brand new all-time record low once again during 2011.

That trend is not going in the right direction.

Of course Barack Obama is not solely responsible for the performance of the U.S. economy.  Congress should share part of the blame as well, and the Federal Reserve is more responsible for our economic performance than anyone else is.

But one area where Barack Obama has had a huge impact is in the area of government spending.

While Barack Obama has been president, the U.S. national debt has risen from 10.6 trillion to 15.5 trillion.

Thanks Obama.

During the first three years of the Obama administration, the U.S. government has accumulated more debt than it did between 1776 and 1995.

So is Obama planning a change of course?

Of course not.

At this point, our national debt is increasing by about 150 million dollars every single hour.

So should we be thanking Obama for stealing 150 million dollars from our children and our grandchildren every hour?

Should we be thanking Obama for ruining our future?

I think not.

But you know what?

According to the CBS News/New York Times poll mentioned above, about half of America would actually vote for Obama if the next presidential election was held today.

That alone is a clear sign that this country is in a massive amount of trouble.

The truth is that the leaders we elect are an accurate reflection of who we are as a country.

And when you look at the collection of misfits in Washington D.C. right now, that does not say a lot about the character of this nation.

So where does America go from here?

That is up to you America.

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