The Devil in the Details, And Why it Matters to US…

So for every lame-stream media talking head who told you that “the US economy is decoupled from Europe now”, which is nearly all of them in the past 3 years, you can now firmly affix the label “LIAR”.  They all knew that the markets had gone from being a reasonably civil game to being a gladiatorial death-match in the wake of the 2008 crisis, but chose to deny it in public.

Why do I say this?  Because, following the announcement yesterday that Barclay’s was being fined some $453 Million for “rigging” the value of its LiBOR transactions with certain counter-parties, we have learned that Royal Bank of Scotland (RBS), HSBC, UBS, and CitiGroup also participated in this massive manipulation of the market (and presumably other such manipulations, long suspected, but yet to be proven).  Everyone who follows the markets already knew that things were rigged – there was too much nano-data to deny it.  Various large “houses” had teamed up at certain times to flash-force other institutions into buying or selling at a major disadvantage.  Options, Swaps, and other “synthetic”  leveraged outlier contracts can make it very hard to tell who is against you, but the proof of the manipulation itself is painfully evident to every player on the field – at this point, any claim by a brokerage or other active party that this is “surprising” is totally incredulous.

All of the companies called out in this investigation are taking it right in the MarketCap this morning, with Barclays down 16% and RBS down 13%,  and if the market knows itself, then LLOYDS is definitely an ‘unindited co-conspirator’ because their stock is also plummeting, down 7% this morning as well.  The Chancelor of the UK stated, “Barclays and these other banks were in flagrant breach of proper market conduct”, and regulators in the UK confirmed that criminal prosecution was under consideration in the matter.

So why should a typical American care about a London trading violation?  Because YOU will pay for every cheat, swindle, and mistake these big banks have made – When the Euro goes, no matter whether it collapses in a loud, violent spectacle, or with a long, drawn out whimper, it WILL drag the US economy along with it, and no one will escape the penalties these monsters are piling up against us.  This is the penalty we will all pay for going down the satanic path of Globalism, which gave a whole new scope to Crony Corporatism.

Read the names of these banks again, and think about the amount of US impact each of them has -

RBS - operates 1460 retail banking branches in 12 states across the US, primarily under the name “Citizens Bank”, which holds US deposits of roughly $100 Billion, and assets of ~$130 Billion, serving approximately 12 million American account holders.  RBS/Citizens also operates non-branch financial services offices in 30 states, including retail and commercial lending, merchant and consumer credit accounts/processing services, as well as domestic and international investment services.  This is the same RBS which suffered a “glitch” for several days last week which caused depositors to be denied access to their accounts.

HSBC - One of the worlds largest banks, with over $1.25 Trillion in deposit accounts globally, offset by $930 Billion in outstanding loans, and a claimed total equity of $1.66 Trillion.  HSBC has over 1200 retail offices in 23 states across the US, serving some ~26 million deposit account holers and nearly 50 million consumer and small business credit card accounts across America.  They are perhaps the most important retail bank in the world to “expats”, when considering that over 75% of American and British citizens living and/or working in foreign countries around the world bank with HSBC.

UBS - Union Bank of Switzerland, one of the largest public investment banks in the world.  With 1.49 CHF (~$1,56 Trillion USD) total assets under management, and with the ability to transact retail business in over 80 countries worldwide, UBS truly touches *everything, everywhere*.  Just for reference, UBS provides the 401.K and employee investment  (Stock Options, ESOP, Matching Funds) to nearly half of the companies in the Fortune 1000.

CitiGroup - Over 200 Million customer accounts worldwide, in 160+ countries. $839 Billion in deposits, and over $1.44 Trillion in assets ($978B Risk Weighted Assets) under management.  1 in 6 Americans have some type of an account with CitiGroup.

Now, knowing all this, please explain how anyone can claim anything like a “decoupling” of our economy from that of Europe? (or any other portion of the world, for that matter?)  Just these four banks have direct relationships with well over half of the account-holding citizens of the United States, and nearly 75% of small and medium sized businesses.  Throw in Bank of America and those figures would rise above 90% in both categories! [Yeah, I believe that BoA is dog dirty in a whole bunch of scams - in their Mortgage group, in their Investments group, and in their FX trading, too]

Consider that just 5 banks touch every American household.  Three of them are primarily European banks.  All are fully exposed, not only to the issues in Europe, but also to various extents in China, India, Russia, the Mid-East, and South America.  “Too Big To Fail” is not only alive and well in America, it has grown by over 100% since 2008!  It will continue to grow until it blows…it can do nothing else.  From the American perspective, it doesn’t matter where it starts – what matters is that it will all come right into our daily lives in a big way, and we have no control over it.

You can’t play dodge-ball with this, folks.  As Americans, we are all going to get hit with financial  disruptions and major losses when any one of these currency/fiscal/debt issues around the world explodes… and they must, sooner or later, come to a head.  Human nature will demand it when enough people experience enough hardship - if not here in the US, then in India, China, Russia, Europe, or some place that most folks have never heard of…

The writing is on the wall all over the world – so stop doubting, and start preparing for these facts to manifest themselves, because “the hour is getting late”.

We have been warned…

LT
~Those who discard Liberty, do so at their own peril!

      
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