UNSAFE BANKING NEWS ARCHIVE
PUBLISHER'S NOTE... From David Bradshaw, Idea Factory Press
Below are breaking news stories about U.S. and global bank safety (or unsafety).
Please email me banking news story links and/or your homemade videos
discussing your personal banking experiences. We would like to share them HERE.
10.22.14 - Fed is deliberately stealing from savers - Marketwatch
Recently Janet Yellen expressed both concern and puzzlement over the
rising wealth inequality in America. I found her speech to be disingenuous
and disturbing. Why? Because it is the Fed's very own policies that are
driving the expansion of the wealth gap. Either Yellen thinks we cannot
be trusted with the truth (worrisome), or the Fed is clueless as to how
its own policies operate (scarier). The academic name for the Fed's
current policy is financial repression. But a more apt name would be
"Throw granny under the bus," because the program boils down to taking
from savers and fixed-income recipients and transferring that purchasing
power to other entities ...
10.21.14 - 500 million financial records hacked - CNBC
Federal officials warned companies Monday that hackers have stolen more than 500 million financial records over the past 12 months, essentially breaking into banks without ever entering a building.
"We're in a day when a person can commit about 15,000 bank robberies sitting in their basement," said Robert Anderson, executive assistant director of the FBI's Criminal Cyber Response and Services Branch.
The U.S. financial sector is one of the most targeted in the world, FBI and Secret Service officials told business leaders at a cybersecurity event.
About 110 million Americans - equivalent to about 50% of U.S. adults - have had their personal data exposed in some form in the past year ...
10.20.14 - The Future of Money and Banking - Coast to Coast
Tonight at 10pm (Pacific) author and monetary expert Craig R. Smith will be a guest on
the Coast to Coast with George Noory show
to talk about personal bank accounts, what the future has in store
for banking institutions, the future of money, and an alternative
to handling money that makes the Federal Reserve unnecessary.
This is Mr. Smith's 4th annual appearance on Coast to Coast to
discuss his latest book, Don't Bank On It! The Unsafe World of
21st Century Banking. The show will be heard live on over
500 radio stations in the U.S. and overseas. Don't miss it!
Publisher's Note: Great job Craig ... and great public response! Special thanks to George Noory for allowing Mr. Smith two hours to share this vital information with his audience.
10.20.14 - Fed to Banks: Shape Up or Breakup - WSJ
Federal Reserve officials sent a warning shot across Wall Street on Monday, telling bank executives they must do more to curb excessive risk-taking and improve employee behavior at their firms or face stiff repercussions, including being broken into smaller pieces.
"My expectation is that if banks do not take more effective steps to control the behavior of those who work for them, there will be both increased pressure and propensity on the part of regulators and law enforcers to impose more requirements, constraints and punishments," he said ...
10.20.14 - Banks lending mostly to rich people - CNBC
Last week, investors got a sign - though not quite as positive as they may have hoped. For banks like JPMorgan Chase and Bank of America - which each reported "core" loan growth in the single-digit percent range - the uptick in borrowing came from high net-worth clients in their brokerages, not from the consumer banks.
Bank of America reported consumer loans down 3.5 percent from the same period a year ago.
Meanwhile, Bank of America's Merrill Lynch Wealth Management reported loan growth up 8 percent ...
10.20.14 - Bank of England offline for 9 hours - Telegraph
Bank of England's Real Time Gross Settlement payment system, which processes $354bn of money transfers a day including UK house purchases, resumes operations after being down for more than nine hours
The Bank said that the biggest payments were being processed manually and reassured the public that all payments would be on Monday.
The financial analyst Lorcan Roche Kelly said the event was "every central bank's nightmare" ...
10.20.14 - 64% Believe America Is 'Out of Control' - Breitbart
"An overwhelming majority of voters in the most competitive 2014 elections say it feels as if events in the United States are 'out of control' and expressed mounting alarm about terrorism, anxiety about Ebola and harsh skepticism of both political parties only three weeks before the Nov. 4 midterms," reports Politico.
The poll found that 64% of Americans believe "things in the U.S. feel like they are out of control right now."
Specifically, the poll found that 84% of voters believe the Islamic State (ISIS) represents a "serious" threat to America ...
10.15.14 - Russia/China Sign $200B in 'Dollarless' Deals - CSMonitor
Amid Western sanctions blocking Russian access to European
and US capital markets, Russia and China have agreed to
new deals that go beyond traditional energy and arms sales
- giving Moscow some economic relief at a sweetheart deal
for Beijing. Chinese Premier Li Keqiang signed 38 new deals
with Russia, including a big expansion in Russian gas
sales to China. In the most politically charged deal,
the two countries have agreed to a $24 billion yuan-ruble
currency swap between their central banks, which will
be used to finance bilateral trade using local
currencies rather than US dollars ...
Craig Smith comment: This is important. Superpowers China and Russia are
finding ways to continue to trade direct without U.S. dollars.
This president has made the United States, greatest superpower
in history, a joke. Trade will continue, even when the leader
of the free world uses "sanctions" to attempt forcing nations
to behave. Obama really believes he can talk the world
into doing the right thing, yet nations are laughing at him -
knowing he will not do anything except fly around raising money
for democrats. His foreign policy is an embarrassment.
10.15.14 - Banks Agree Not to Blow Each Other Up Too Quickly - Bloomberg
The banks lobbied global regulators to give them special exemptions
allowing immediate termination of derivatives in bankruptcy, and
then regulators lobbied the banks to give it back.
The new International Swaps and Derivatives Association (ISDA) protocol
is being touted as a big deal, "to address the too-big-to-fail issue
and reduce systemic risk."
But it's also an exception to an exception... The point
of the resolution process is to allow a bank's - systemically
important - business to survive, even as shareholders and
some creditors are wiped out or impaired. Every bank has
two classes of claimants: People We Care About and People
We Don't ...
Book quote: "Just 9 major banks on which the world economy depends have derivative
exposure of more than $290 Trillion in a global $693 Trillion derivatives market! Listen for a moment and you
can hear this time bomb - called by Warren Buffett a "Financial Weapon of Mass Destruction" - ticking. If
this explodes, neither the Fed nor the FDIC could put your bank or deposits back together again. The paper
dollar would be ashes to ashes, dust to dust." (Page 187)
10.14.14 - THE COMING GREAT BANK ROBBERY: - AZ Central
U.S. and U.K. are "War-Gaming" Bank Risks, Depositors Could Be "Robbed Twice," Warn Experts. Forget about Bonnie & Clyde or Jesse James. A new kind of bank robber now might be able to steal not just thousands - but billions - of dollars from single bank heists, according to a new book.
Such huge robberies have the potential not only to topple our biggest banks but also to devastate our entire economy and the value of the world's reserve currency, the U.S. Dollar. "Days ago Europol warned that criminal gangs are planning billion-dollar heists of individual financial institutions,' says monetary expert Craig R. Smith in DON'T BANK ON IT! The Unsafe World of 21st Century Banking ...
10.14.14 - Fed's 'Doomsday Book' written to save the market - NYPost
So, we learned from the trial of insurance giant AIG in New York last week that the Federal Reserve has a "Doomsday Book" that the government doesn't want the judge to make public. This is allegedly a gameplan that gives special powers to the central bank in the event of an emergency. The plan was said to have been written during the Great Depression, but I'm sure it has been updated a lot since then.
I don't know what's in the Doomsday Book, but I bet the No. 1 extraordinary power is: Keep the stock market from collapsing. And No. 2 is: Don't let anyone know you are doing it ...
10.12.14 - Sweden close to being cashless society - TheLocal
Four out of five purchases in Sweden are paid electronically or by debit card and with the development of cheaper technology the trend is moving towards a fully cash free society, according to a new report. "Sweden and the rest of Scandinavia leads the world in terms of cashless trading." Armed robberies are in decline with the reduction of cash use [but cyber crimes are up]. [Reader comment: "Last week my mother in-law walked into a Tele2 store to buy a mobile phone and she couldn't pay with cash. She was also forced to show her ID while purchasing a TV with cash at another store."]
Book quotes: "As we plunge into the 'cashless society,' banks as we have known them will begin to vanish ... Soon your cell phone or tablet will be your bank, holding your electronic wallet - and behind this, whether heavily publicized or not, will be the government whose Federal Deposit Insurance Corporation (FDIC) already says it insures your accounts." (Page 196)
"A few days later, the government announces that the cashless accounting unit being exchanged will no longer be called dollars. Henceforth they will be called 'credits.' From that moment, nobody actually has spendable dollars anymore, the news reports. Dollars must be exchanged within 30 days on a one-for-one basis for the new 'credits.' It is now illegal to exchange dollars in any other way. Days later the government announces - and notifies everyone via their cell phone - that, in the name of Progressive egalitarianism, all old-fashioned accounts containing 'money' have been redistributed so we all have an equal share of America's wealth." (Page 197)
10.12.14 - Walmart Making Banking Affordable for the Poor? - NYMag.
It is expensive to be poor, as the saying goes. Live hand-to-mouth, cashing your checks and taking out payday loans? You get hit with fee after fee as well as three-digit interest rates. This month, the big-box store is unrolling a low-fee checking account across the country. The big-box retailer might help make banking accessible to millions of currently ill-served low-income families. It is called GoBank. Customers buy a $2.95 starter kit in Walmart, then receive a MasterCard debit card. Big banks, community banks, credit unions, payday lenders, and other fringe financiers have much to fear from Walmart's expansion ...
10.10.14 - U.S. and UK testing big bank collapse - Reuters
Regulators from the United States and the United Kingdom will get together in a war room next week to see if they can cope with any possible fall-out when the next big bank topples over, the two countries said on Friday. Salvaging a bank with operations in several countries - which is the norm for most of the world's largest banks such as Deutsche Bank, Citigroup Inc and JPMorgan - has proven to be a particularly thorny issue ...
10.10.14 - Russian gangs $1bn cyber raid plot - Standard
Criminal gangs are plotting a $1 billion cyber-heist on global financial institutions, Europol has warned, as they ratchet up the pressure on banks reeling from the record-breaking hit on JPMorgan Chase. Secret listening on internet chatrooms by the European police investigative body has discovered planning by sophisticated Russian cyber-criminals aimed at pulling off one massive hit on a bank. "The criminals don't want to make thousands of small thefts, said Troels Oerting, head of Europol's European Cybercrime Center in The Hague. "Instead they want one big one on a financial institution." ...
Craig Smith comment: I hope and pray someone or group who can stop this type of large-scale cyber attack is paying attention. This is the reason Lowell and I wrote this book. more...
10.7.14 - Big Banks Face Another Round of U.S. Charges - NY Times
The Justice Department is preparing a fresh round of attacks on the world's biggest banks, again questioning Wall Street's role in a broad array of financial markets. With evidence mounting that a number of foreign and American banks colluded to alter the price of foreign currencies, the largest and least regulated financial market, prosecutors are aiming to file charges against at least one bank by the end of the year. Ultimately, several banks are expected to plead guilty. Traders at competing banks met in private chat rooms. Some traders became so cozy that they earned the nickname "the cartel" and "the bandits club." ...
Book quote: "When fined, bankers understand that no matter what violations of law they are accused of committing, none of them will go to jail so long as they pay the millions or billions of dollars the politicians demand. This has become the tradeoff for banker acquiescence, compliance and submission." (Page 182)
10.6.14 - Bitcoin Prices Dive Below $300 Over Weekend - WSJ
The price of bitcoin dropped sharply over the weekend, trading under $300 at one point on Sunday, amid heavy volume but without any obvious trigger. The latest slide emphasizes an ironic year for the digital currency: even as more merchants, miners and enthusiasts have flocked to it, it's price has been falling steadily. After peaking at $1,147 in December, amid a much-publicized wave of hype and hyperactive news that involved regulators in the U.S. and officials in China, the price has come down fully 75% ...
Lowell Ponte comment: In DON'T BANK ON IT! Craig Smith and I warned readers to be skeptical of those calling Bitcoin "Gold 2.0." We warned that Bitcoin's value could plummet (pages 191-195).
As our book went to press Bitcoin was trading around $513. This past weekend Bitcoin's price plummeted briefly to around $290 - a loss of nearly 44% percent in little more than one month.
A lot of those who joined the Tulipmania-like stampede into the potential Fool's Gold of Bitcoin - a frenzied speculation that once pushed Bitcoin momentarily close to the price of gold itself - are now wishing they'd bought genuine physical gold instead. This plunge shows that Bitcoin is far riskier and more volatile than gold.
10.3.14 - It's A Brave New Banking World - Pat Boone, IFP
Thrift, saving, honesty and alertness are time-proven virtues, taught by the Bible.
Another book also helped me learn the value of thrift: the little bank book of my first childhood savings account, which taught the rewards of saving today for tomorrow. But bank accounts today offer little reward and growing risk! Over a century ago, Henry Ford summarized modern banking: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." It is this lack in understanding of our money and banking system that prompted my long-trusted friend and advisor Craig R. Smith and former Reader's Digest Roving Editor Lowell Ponte to write DON'T BANK ON IT! The Unsafe World of 21st Century Banking ...
10.2.14 - J.P. Morgan breach hits 76 million households -Marketwatch
This security breach J.P. Morgan Chase discovered this summer exposed contact information for about 76 million households and 7 million small businesses, including names, addresses, phone numbers, email addresses and internal bank information, the nation's largest bank said in a government filing. Breaches are affecting institutions across every facet of people's lives. Where we bank. Where we shop. Where we eat. The hospitals where our illnesses are treated It's hard to feel that our data are safe anywhere. A global watchdog warned last month that the next major financial shock will come in the form of a cyber attack ... Real Time Cyber Attack Tracking
"A modern criminal gang can steal not only what you saved in past years but also your present financial identity and future credit. Stagecoach robbers used to demand 'your money or your life.' Today's cyber criminals can, in a very real sense, rob you of both at the same time." (Page 25)
9.30.14-Uncle Sam's $8 Trillion Annual Debt Churn - David Stockman
When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months.
But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year.
In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7.5 trillion and new debt totaling $8.3 trillion was issued.
The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.
the truth is that another great crisis is rapidly approaching, and we are in far worse shape financially than we were back in 2008.
Don't get blindsided by what is ahead ...
Craig Smith comment: This is the message Lowell and I have told the public for years in our last five books. Sooner or later lenders will stop buying U.S. debt and then ... game over!
9.29.14 - Subprime loans driving the US economy - again - Quartz
Yes, subprime is back. In the market for vehicles, car purchases are being driven increasingly by loans to the less-than-credit-worthy. How do we know? By looking at the the credit markets where auto loans are packaged up and sold as securities to investors. Asset-backed securities (ABS) were a key source of instability during the financial crisis. For example, the US Department of Justice has confirmed it is looking into lending and securitization practices at two large subprime car lenders, GM Financial and Santander Consumer USA, in the wake of a scorching story in the New York Times that detailed unsavory lending practices in the market ...
Lowell Ponte comment: This story is no surprise to the readers of our new book
DON'T BANK ON IT! THE UNSAFE WORLD OF 21st CENTURY BANKING.
After explaining how political pressure forced the bank
subprime lending that led to the near-crash of America's
economy in 2008 and today's continuing malaise,
Craig R. Smith and I wrote:
"As added incentive for the banks to lend to government, the government
imposed new tighter lending rules following the subprime lending debacle
caused by the Community Reinvestment Act (CRA). The banks face potentially
huge penalties and fines if they make 'risky' loans, with risk to be defined
after the fact by bureaucrats and partisan government lawyers."
"Yet by mid-2014, an election year, the banks were rapidly increasing their loans
to risky private homeowners and businesses after much forceful persuasion from
"As we explained in Chapter 6, under the CRA, during the presidencies of Jimmy
Carter and Bill Clinton, Progressives nearly twisted off the arms of bankers to
force them to make such loans by threatening regulatory retaliation if they refused."
"The very politicians who imposed the CRA and its rules, after things soured,
condemned banks for making the risky loans to uncreditworthy borrowers that
government officials had demanded of them."
"By mid-2014 it was obvious that bankers were again having their arms nearly
twisted off at the shoulder politically to again increase subprime lending."
(DON'T BANK ON IT!, pages 185-186)
The political tool used to torture car loans out of banks by President Obama
is the CFPB, the new Consumer Financial Protection Bureau. It now
threatens terrifying regulatory revenge and retribution against any lender
that refuses to make huge numbers of subprime auto loans.
CFPB was created under the Dodd-Frank law when Democrats controlled
both houses of Congress. It is the one government agency funded not
by elected representatives of the people in Congress, but directly by
the Federal Reserve. CFPB's extravagant powers, therefore, cannot
be reined in by congressional pursestrings. It could, as we warned,
quickly become the most powerful rogue regulatory body in the Federal
(CFPB, as we reveal, is also the government agency planning in
the next financial crisis to confiscate American retirement accounts --
for our own safety and protection, of course.)
Readers of DON'T BANK ON IT! also now know how to protect
their money against these dangers.
We have painfully learned that America cannot tax, spend or borrow
its way back to prosperity. We should also have learned that we
cannot regain prosperity by forcing banks to lend to uncreditworthy
borrowers. Yet the current regime continues trying to buy votes by all
these failed means.
9.28.14 - Goldman Sachs to Stop Banker Stock Buying - Bloomberg
Goldman Sachs Group Inc. (GS), the top adviser on corporate takeovers, is changing a policy addressing conflicts of interest to bar investment bankers from trading individual stocks and bonds. They also aren't allowed to invest in activist or event-driven hedge funds.
The change came on the same day that a former Federal Reserve Bank of New York examiner's recordings of her ex-colleagues' dealings with Goldman Sachs were featured in reports by public radio. Spokesmen for Goldman Sachs Group, Bank of America Corp., Citigroup Inc. and Morgan Stanley declined to comment on the policies at their companies ...
Craig R. Smith comment: This topic is covered in our new book, Don't Bank On It! Bankers should never be allowed to buy stocks because it could manipulate the market and distort pricing. Time will tell whether or not this new policy is enforced. Meanwhile, the London Financial Times reports the Bank of International Settlements says a "poisonous combination" of record debt and slowing growth suggest the global economy could be heading for another crisis.
9.25.14 - 5 U.S. Banks Each With Over $40 Trillion In Derivatives -MND
When is the U.S. banking system going to crash? I can sum it up in three words. Watch the derivatives. It used to be only four, but now there are five "too big to fail" banks in the United States that each have more than 40 trillion dollars in exposure to derivatives. After the last financial crisis, we were promised that this would be fixed. But instead the problem has become much larger. In 2007, the total notional value of derivatives contracts worldwide had risen to about 500 trillion dollars. According to the Bank for International Settlements, today the total notional value of derivatives contracts around the world has ballooned to a staggering 710 trillion dollars ...
Don't Bank On It! Chapter Eight: The Death of Banking, (Page 187)
"Listen for a
moment and you can hear this time bomb - called by Warren Buffett a "Financial
Weapon of Mass Destruction" - ticking. If this explodes, neither the Fed nor
the FDIC could put your bank or deposits back together again. The paper dollar
would be ashes to ashes, dust to dust. Borrowers, meanwhile, increasingly turn
to shadow banks, venture capitalists, crowdsourcing, and other less-regulated
sources of lending and credit."
G20 edging towards deal on 'bail-in' for banks - Reuters
Government leaders are expected to agree in November that the world's top banks must
issue special (GLAC) bonds to increase the amount of capital which can be tapped in
a crisis instead of calling on taxpayers to come to the rescue. Regulators believe
all the world's top 29 banks will need a significant cushion of such so-called
"bail-in" bonds for some time to show they can be shut without public aid.
The G20's focus will now shift to implementation of its rules and behavior at
banks after lenders were fined for rigging the Libor interest rate benchmark,
with similar allegations in the currency markets now emerging ...
Ways hackers take over your phone, data and money - Marketwatch
With hacking attacks and other cyber crime making the news almost on a
daily basis, it's time we realize that no place is safe. And if you think
only computer users should be worried, you are in for an unpleasant surprise.
Even with an incredible 20-fold explosion in the theft of financial details
from mobile devices, not many people realize just how open and vulnerable to
hacking their cell phones are. In today's article I'll focus on less-known
strategies that cyber criminals employ to take over your smartphone,
your data and your money ...
Fed Plays "Whack-A-Mole" With Inflation - FirstTrust
On Thursday, The Federal Reserve Bank's annual retreat in Jackson Hole,
WY will start. The topic is: "Re-Evaluating Labor Market Dynamics."
Economists have been studying labor market dynamics for many decades,
if not centuries. So, why does the Fed need to do any re-evaluating?
The Fed has now been easy for over five years, so it is
impossible to argue that monetary policy is being used as a
short-term tool. If the labor market is still having problems it
must be because fiscal policy is harming potential growth.
Artificially low interest rates may cause other problems, like a
bubble in some sector, which the Fed has now decided to deal
with using "macro-prudential policy tools." It sounds really
technical, but it's essentially playing "whack-a-mole" once
excesses from easy money pop up ...
Banks Speed Up Drive to Add Chips to Credit, Debit Cards - WSJ
Morgan Montgomery inserted a credit card into a device, pulled it out and
tried to pay for her groceries. But the transaction failed because she
didn't realize the card was supposed to stay in the machine while she
signed for the purchase. "I don't like letting go of it," she said of
the card. "I'm worried about leaving it behind." Just last week, grocery
chain Supervalu Inc. disclosed that it was investigating a breach that
could affect shoppers at roughly 1,000 supermarkets. Major lenders, regional
banks and credit unions are rolling out the new cards, which contain a
computer chip in addition to the traditional magnetic strip on the back ...
The Bulgarian Banking Disaster - Forbes
Two months after it was taken into conservatorship by the Bulgarian
National Bank (BNB) after a catastrophic bank run, Bulgaria's CorpBank
is still closed. Well, nearly closed. It is now open for loan repayments.
Depositors can't get their money out of CorpBank, but borrowers can pay
their debts. According to Zheni Stefanova from KTB ALive, a Facebook
group of CorpBank depositors which is organizing street protests against
its continuing closure (the next one is today, Monday August 18th):
"We can't use our savings and money at all. As an addition, the
companies can't use their frozen accounts... There are many health
institutions that can't function normally because of that problem.
There were 6,000 retired people with blocked accounts" ...
Fed Vice Chair Fischer On U.S. Bail-in Proposals - ZeroHedge
Federal Reserve Vice Chairman Stanley Fischer delivered his first speech on the U.S. a
nd global economy in Stockholm, Sweden yesterday. Fischer said that the U.S. was preparing
proposals for bank bail-ins for "systemically important banks." "The United States is
preparing a proposal to require systemically important banks to issue bail-inable
long-term debt that will enable insolvent banks to recapitalize themselves - this
cushion is known as a "gone concern" buffer." Fischer who previously was chief economist
at the World Bank, also makes it clear that he expects ultra loose monetary policies
to continue in the U.S. which will be bullish for gold and silver ...
Banks' Failure Plans Inadequate Say Regulators - ABCNews
Federal regulators have told the biggest banks in the U.S. that their plans
for unwinding their operations in case of failure are inadequate to prevent
the sort of financial disaster that struck in 2008 and led to a massive
government bailout. The Federal Reserve and the Federal Deposit Insurance
Corp. on Tuesday criticized as "not credible" the so-called "living wills"
that the 11 largest banks were required to submit under the 2010 law
overhauling financial regulation. The regulators said the banks' plans
make unrealistic assumptions about likely developments in case of failure ...
US banks braced for trillion dollar deposit outflows - FT
US banks are steeling themselves for the possibility of losing as much
as $1 trillion in deposits as the Federal Reserve reverses its emergency
economic policies and raises interest rates. JPMorgan Chase, the biggest
US bank by deposits, has estimated that money funds may withdraw $100bn
in deposits in the second half of next year as the Fed uses a new tool
to help wind down its asset purchase program and normalize rates ...