Tag Archives: Donald Trump

Too Big to Jail Is Being Tested by US LIBOR Trial

Friday, 16 Oct 2015 07:27 AM

Dollar banknotes, handcuffs and judge's gavel isolated on white

Financial behemoths have paid handsome penalties to settle criminal and civil charges related to manipulation of the LIBOR. Now American citizens may be in jeopardy, thereby disrupting the implication that bank employees are “too big to jail.”

In recent years, more than $5 billion have been ponied up by several financial institutions for these transgressions: $2.5 billion from Deutsch Bank, $1.5 billion from UBS, $450 million from Barclays, and $325 million from Rabobank. Other perpetrators include Citigroup, The Royal Bank of Scotland, JP Morgan, Lloyds, and ICAP.

LIBOR, or the London Interbank Offered Rate, is the interest rate paid by banks to borrow funds from other banks. It represents the average lending rate offered by the 16 participating banks. These offers are submitted daily to the British Bankers’ Association for five currencies and 7 borrowing periods, spanning overnight to one year loans. Other lenders, including financial institutions, mortgage banks, and credit card companies set their rates relative to these. It is estimated that $350 trillion of derivatives and other financial products are based on the LIBOR.

The Justice Department issued a memo last month that prioritizes the investigation of employees for financial malfeasance before seeking settlement with corporations. In an important test for U.S. prosecutors, two Rabobank employees are now being tried in a Manhattan federal court for manipulating LIBOR in order to benefit other Rabobank traders’ trading positions that were tied to the LIBOR. The traders on trial are Anthony Conti, a senior U.S. dollar trader, and Anthony Allen, a former global head of liquidity and finance, and supervisor of Rabobank’s Libor submitters, including Mr. Conti. They are alleged to have conspired to rig the rate on or about May 2006 through early 2011.

Thirteen individuals have been charged thus far in the U.S. in relation to the LIBOR investigation. While several defendants have pleaded guilty, including three other former Rabobank traders, none have gone to trial yet. Six former brokers accused of rigging LIBOR are currently on trial in the U.K. This comes on the heels of Tom Hayes’ conviction in London several months ago. He was a former UBS and Citigroup trader sentenced to 14 years for LIBOR manipulation.

Former Federal Reserve Chairman Ben Bernanke believes some Wall Street executives deserve jail time for their roles in the financial crisis, since individuals, not abstract firms, committed these crimes. He lays the blame with the Department of Justice and others who are responsible for enforcing the laws of our country.

Wide swaths of the political spectrum are extremely dismayed with the way the financial industry operates. In the recent debate, democratic presidential candidate Bernie Sanders claimed the banking business model is one predicated on “fraud.” And republican presidential candidate Donald Trump believes too many in the financial industry do not pay their fair share of taxes.

The maximum tax rate for capital gains on financial products is 23.8 percent, while that for ordinary income is 39.6 percent. Further, unlike ordinary income, capital gains are not subjected to social security taxes of 12.4 percent, which is shared equally by the employee and employer.

The only effective deterrent to financial misdeeds is the possibility of personal punishment.

© 2015 Newsmax Finance. All rights reserved.

The Time Is Ripe for a Third-Party Presidential Candidate

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Donald Trump essentially represents an independent third-party candidate, since he is a self-financed, non-ideologue, who seems to believe as I do that neither political party has a monopoly on poor public policy.

While never a politician or government employee, Trump brings transferable skills and experiences to the table: an innovative, creative and productive entrepreneurial record.

The following article was originally published on Friday, November 15, 2013.

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By Barry Elias | Friday, 15 Nov 2013 07:17 AM

The credibility and trustworthiness of both political parties have waned significantly over the past few decades.

Extreme political polarization in Congress and recent polling that indicates many people would not elect their current Congressman suggests the time is ripe for a centrist, third-party candidate for president.

Republicans and Democrats created the public policy landscape that caused the financial crisis, which continues to this day.

After a $29 trillion Wall Street bailout, Main Street has barely felt a nudge, and Obamacare and the government shutdown have further eroded the future of our fiscal integrity.

Andrew Huszar, a former Federal Reserve official in charge of administering the massive bond-buying program labeled quantitative easing (QE), suggested in a Wall Street Journal op-ed piece that this was the first time in the nearly 100-year history of the Fed in which mortgage bonds were purchased from banks.

The result was a huge windfall for banks. They received nearly $4 trillion in capital over a five-year period from the Fed and recorded massive profits as a result of low-borrowing costs, bond capital gains and brokerage commissions for the bond-purchasing transactions.

However, this $4 trillion expenditure created only $40 billion in economic growth, or 1/4 of 1 percent — a very poor return for the American people indeed.

Further, Democrats are beset by Obamacare and Republicans by the government shutdown and intransigent social policies.

The Real Clear Politics eight-poll average indicates Congressional net disapproval has grown from 22 percent to 75 percent over the past four or five years (a 53-point negative move). Since the beginning of his term, the president’s net approval has fallen from 44 percent to -11 percent (a 55-point negative move). Net approval of their own Congressperson fell from 47 percent in 1990 to 1 percent today (a 46-point negative move), according to the Gallup.

In 1992, Ross Perot won nearly 19 percent of the presidential vote when the political chasm was much smaller. Eighty years earlier, Theodore Roosevelt captured more than 27 percent of the vote in the 1912 presidential election running as the Progressive “Bull Moose” candidate, garnering more votes than his Republican counterpart, William Taft.

Today, a third-party presidential candidacy can be viable, since both party brands have been severely tarnished in recent decades.

This independent candidate must embrace the best of both parties — a fiscal conservative who demonstrates compassion toward the indigent and a social moderate who empathizes with the vast complexities of the human condition.

New Jersey Gov. Chris Christie will have a very difficult time surviving the Republican primary despite his social conservative credentials, and Hillary Clinton is beset with huge policy failures that will hurt her at the national level.

The issues surrounding Hillary Clinton include the Benghazi debacle and her overwhelming support for the sinking Obamacare legislation. The Affordable Care Act (ACA) is eerily reminiscent of the massive universal healthcare overhaul in 1993 that she chaired under President Bill Clinton, which was jettisoned in bipartisan fashion.

Recent efforts by Bill Clinton to remedy the ACA may prove insufficient in salvaging her reputation. Bill Clinton has recommended that President Obama fulfill his powerful, oft-repeated promise that you can keep your doctors and insurance plan if you so choose.

There is a tremendous void in the center that awaits an independent, third-party candidate for president — one who can champion a clear path toward economic prosperity, individual responsibility, equal opportunity and respectful empowerment for those facing tough times.

If ever there was a time for an unprecedented independent win, this is it.

© 2015 Newsmax Finance. All rights reserved.