Federal Reserve

The Fed buys $40 billion in mortgage securities every month. That means the bankers who own the Fed are buying all the houses in the US that have mortgages. This is another example of the new feudalism. The bankers are going to own everything, and we're all going to be their serfs.

Now the government is investigating JPMorgan for China hiring.  JPMorgan's plutocrats must have really made somebody angry, and now government is showing them who has the real power.

"The U.S. government is looking into whether JPMorgan Chase hired the children of Chinese officials to help it boost its business in China, according to The New York Times."

What's good for the US government goose is not good for the gander.

Matt Taibbi is shocked to discover that ratings agencies are tools of the banks.

"Thanks to a mountain of evidence gathered for a pair of major lawsuits by the San Diego-based law firm Robbins Geller Rudman & Dowd, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash."

The government only licenses three ratings agencies so it can control them, ensuring they are tools of the banks.

"In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.
"Lord help our fucking scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more."

There's nothing surprising here. This is the massive, institutionalized corruption government has created. These emails show the corruption is so ubiquitous, they don't even bother to hide it.

"Ratings agencies are the glue that ostensibly holds the entire financial industry together. These gigantic companies – also known as Nationally Recognized Statistical Rating Organizations, or NRSROs – have teams of examiners who analyze companies, cities, towns, countries, mortgage borrowers, anybody or anything that takes on debt or creates an investment vehicle.
Their primary function is to help define what's safe to buy, and what isn't. A triple-A rating is to the financial world what the USDA seal of approval is to a meat-eater, or virginity is to a Catholic. It's supposed to be sacrosanct, inviolable: According to Moody's own reports, AAA investments "should survive the equivalent of the U.S. Great Depression.""

But the reality is bankers make a bunch of money and people who work at ratings agencies don't. Therefore the best, brightest and most aggressive people work for the banks and the dullards work for the ratings agencies. Guess who gets the better of whom.

"That this happened is even more amazing because these companies naturally have powerful leverage over their clients, as they are part of a quasi-protected industry that enjoys massive de facto state subsidies. Largely that's because government agencies like the Securities and Exchange Commission often force private companies to fulfill regulatory requirements by retaining or keeping in reserve certain fixed quantities of assets – bonds, securities, whatever – that have been rated highly by a "Nationally Recognized" ratings agency, like the "Big Three" of Moody's, S&P and Fitch. So while they're not quite part of the official regulatory infrastructure, they might as well be."

Taibbi has this backwards. This arrangement puts the bankers in charge because they make all the money.