THE CAUSE OF SUPER CRASH – UNDERFUNDING SEC AND CFTC
Aitan Goelman, a partner of the Zuckerberg Law firm and THE FORMER OBAMA head of enforcement for the multi TRILLION DOLLAR class of assets known as structured assets, which includes the derivative markets, the swap markets, counter party agreements and settlements, and much of the new ETF market space, is NOT a HAPPY CAMPER. Aitan resigned to make way for the new TRUMP TEAM, ripping out the guts of the experience at the top who really knows what is going on in world markets.
Aitan suggests there is a MASSIVE AMOUNT OF MISCONDUCT in futures, options, swaps and related derivative markets, that goes undetected.
OF the 350 MILLION trading records landing on the CFTC ( not counting a larger number at the SEC ) desk every single DAY – the CFTC is under funded to data mine and prosecute the criminals. In two cases Aitan failed to bring last year in his last year the two cases if he brought the criminals to court would have consumed a full year of his operating budgets for enforcement across the landscape.
Lets look at this issue in the following summary way to begin:
- The CFTC and the SEC have in “after inflation dollars” had a net DECLINE in their funding budgets after Frank Dodd. Said another way the two agencies were given the largest new mandate to regulate financial markets by Congress, without a doubling of their budget that is required in order to execute the congressional call to regulate.
- The crash of 2007 took place in large part because stake holder trading that drives economies – investment in plant infrastructure venture growth and jobs – is not 2.7 trillion a year – slightly up from 2008 – while speculative and price manipulative trading that adds zero to economies – driven by no regulation – and leverage – is 440 trillion annually. Manipulating price is now a larger market than demand and supply economics.
- The laws regulating industry were created when trades where in paper fifteen years ago and cleared by traditional movement of paper. Today in only a decade the trading is digital with software platforms manipulating markets for which regulators have no OPPOSING Software.
- The laws are all LOCAL the trades are all IN THE CLOUD. No regulation.
- The agencies of nations are in software wars using old obsolete software that fails to review the data in real time and to block abuse in the system.
Goelman the most knowledgable regulator to hit the DIGITAL PATCH yet saiid the CFTC empowered by Frank Dodd to regulate the rampant speculation, lacks the funding, and software and IT manpower to review the 350 trades a day landing on their desk and to take action against the global abuse and greed.
Goelman stated this week that:
THERE IS MUCH MORE MANIPULATION, INSIDER TRADING, FRONT RUNNING, FRONT LOADING, PONZI SCHEMING IN GLOBAL MARKETS THAN IS BEING IDENTIFIED AND PROSECUTED AND THE PUBLIC HAS NOW CLUE NOR DO THE LAW MARETS IT SEEMS.
Lets look at this in plain english. The price of EVERYTHING is the target of SUPER MONEY. Following the crash of largely Real Estate that stopped LIQUIDITY and account CLEARING in financial systems between nations and account balances, where did the fantastic POOLS of SUPER MONEY GO? The first generation of software had create new markets. Structured assets. These assets could manipulate the PRICE OF EVERYTHING for the first time since the depression when the abuse took place from credit pouring into speculation trading. Today software makes such abuse of the system much greater than the depression years of the 1920’s.
The commodity Modernization Act passed by a UNANIMOUS ACT OF CONGRESS ( see 60 minutes clip on that ) tore down all the depression laws. Now your grandmother’s deposits in banks, owned by investment banks, can and would be invested in price manipulation ( speculations for profits ) upon the PRICE OF EVERY ASSET CLASS. Commodities, corn sugar wheat rice everything – and currencies – and trade itself plus all stocks and bonds.
Said in English – the trading in a side bet – just a bet like in Vegas – as to WHICH WAY a future price might go – is controlled by SUPER POOLS in structured assets or derivatives. Think of derivatives as just AN AGREEMENT in which fantastic money makes bets and pays off on these bets up or down in a time frame. The new asset class is now driven by software. The software can move prices up and down and regulatory agencies have lost control of digital trading.
Stake holder trading – buying a stock or a bond – is regulated by local agencies like the SEC. Commodities and derivative agreements by the Commodity Future Trading Commission CFTC both needing a doubling of their budget with regular growth annually to keep pace with the SUPER MONEY investment to GO AROUND the regulations.
The GO AROUND is largely achieved as LEGAL THEFT.
Legal THEFT takes place under NEW LAW via shadow banking – which is off shore institutions, commercial clearing firms – trading platforms and firms, dark pools, and a host of developing each year new ENTITIES designed to reduce tax and maximize profit by BETTING into CASINO CAPITALISM.
In the CASINO CAPITALISM the software manipulates prices of EVERYTHING which has done two things in a decade since the dot.bomb speculation and meltdowns and the crash 2008 to 2010.
- Casino Capitalism adds zero to growth of economies as capital circulation is inside th e casino profit making versus stake holder longer term investing.
- Casino Capitalism creates a system abuse serial driven by fantastic leverage and credit – say a bank deposit dollar may trade fifty dollars or 50 to 1 on leverage – illegal under local laws – but possible inside the GLOBAL CANSIO – facilitating ever larger asset classes to buy back stocks, manipulate price, and add zero to real growth of economics. The regulatory frame work has lost control of the digital market place in only a decade.
Goelman reported last week his one regret on his watch as TOP REGULATOR in America was that the massive amount of abuse is not having action taken to stop the enormous spiral of speculations.
Think of scale on regulatory mission. The Frank Dodd regulations attempted to expand the CFTC regulatory oversight, from a 50 TRILLION dollar futures market place into a 400 TRILLION DOLLAR new asset class market space it is charged to regulate WITH a huge decrease in the CFTC budget. The CFTC charged to develop tools and new trained experts to regulate ever changing market asset classes ( agreements ) required a doubling and tripling of budget.
But Doff Frank passed with a net cut back in the regulatory budget. The SEC and the CFTC need a DOUBLING OF THEIR BUDGET which CEO SPACE is lobbying for. However the financial lobby makes our work like spit into the wind as the financial lobby from the CASINO is now the largest voice in all national capitols.
The laws are local. The trades are in the cloud unregulated. The PRICE OF EVERYTHING is fully manipulated for greed today.
We have suggested for five years that the solution is:
A GLOBAL CONSTITUTIONAL CONGRESS OF G -100 NATIONS ON THE BIG ISLAND OF HAWAII – NUTRAL MID POINT TO WORLD MARKETS – OVER A THREE YEAR CHARTER TO CREATE THE MOST SIGNIFICANT DIGITAL RE-FRAME OF WORLD REGULATIONS FOR TRADE AND MARKET SUPERVISION. ALL PARTICIPATING NATIONS WOULD RATIFY THE NEW ECONOMIC CONSTITUTION WHICH WOULD BE REVISED AND SELF CORRECTING BY RECONVENING THE CONGRESS EVERY 25 YEARS FOUR TIMES EACH CENTURY.
Technology requires the largest RE-THINK of regulatory frame work since the Great Depression. Without that COOPERATION between all G 100 nations the platform to regulate will continue to fail. The end result due to system abuse debt and leverage within the speculation BUBBLE is always SUPER CRASH – world depression and world war.
If capital circulation were redirected into stake holder investing the ECONOMIC CONSTITUTIONAL CONGRESS ECC could return depression laws as a firewall to unwanted system speculations – where:
- Short selling is a crime.
- Future side betting is a crime.
- Capital would have equal access to stake holder bets
- World trade would be fair and full partnership for all nations
- The insanity of the present CASINO model would stop by law
If the CLOUD digital CASINO CAPITALISM continues the entire system remains at risk. The largest HIDDEN TAX is paid by all of the peoples of the world and they have no clue.
Price is manipulated in the world CASINO.
Elite SUPER MONEY is 1% of the population and controls and owns more world wealth than 99%. This is unwanted as a system model for economics and it is always inherently unstable economically.
The elite SUPER MONEY in the system is the FEW against the many or upside down economics. As the SUPER MONEY controls the POLITICS ( law making ) the Casino is insulated by the laws that protect them. Frank Dodd has so many LOOP HOLES that the law does not apply to THEM. Legal Theft is constructed into the laws.
As the core issues are economic and complex the public has no clue.
This is the SOURCE versus the symptom of all problems in the global market place. Goelman suggested looking at a 1.6 billion dollar SEC enforcement budget, over a smaller asset class group, versus a CFTC regulating the 400 trillion speculation industry, at only 250 million in total annual budget is insane.
The spiral of capital to manipulate prices is endless. There is no regulatory frame work that is working. REGULATIONS ARE BROKEN as the market has gone digital. The SEC and the CFTC need double their budgets because the dollars we spend are repaid at 10 to 1 in profits as they develop NEW TOOLS & NEW TACTICS – TO REBALANCE ACCOUNTS for economic versus speculation market re-sets. The idea of giving these two agencies new mandates without massive new funding is folly.
The world system at core is broken.
Without the largest RE-THINK of the regulatory frame work the system globally will fail. Due to system abuse. When the leading regulator in the world tells you this week his regret on leaving is the LEGACY OF “MASSIVE” ABUSE taking place in the core market of trading derivatives – futures – swaps – and related asset classes – criminal abuse – Ponzi scheme abuse – all unchecked in the overall market at numbers that when the musical chair stops – which is a WHEN not an IF event – the system fails world wide.
You can feel Goelman’s frustration to as he defines, as top regulator, the financial system IS broken, the regulations are NOT working and the SYSTEM lacks the software tools and enormous upgrading to get current and stay ahead of the software wars in financial trading.
The world markets are now a giant CASINO controlled by one SUPER POOLS software against and another without oversight YOU thought was present but it is in fact NOT OCCURRING.
Keep in mind this is the CAUSE the SOURCE Of SUPER CRASH – the digital trading AGE has outgrown the regulatory frame work and no one at the G 100 is making a call for a REGULATORY RE FRAME TO REBALANCE TRADING ACCOUNTS.
This then is the CAUSE of SUPER CRASH at its source – a lack of WILL to take on the Super Money.
Berny Dohrmann – Explaining the truth behind market phony price states