Showing posts with label Deutsche Bank. Show all posts
Showing posts with label Deutsche Bank. Show all posts

Wednesday, February 19, 2014

The Sinister Portrait that lies beneath the bodies of dead bankers : Mere random tragedies or the methodical silencing of individuals who had the ability to expose financial fraud at the highest levels,

Northeast Intelligence Network

Exposing what lies beneath the bodies of dead bankers and what lies ahead for us

By Douglas J. Hagmann
15 February 2014: I feel that this is one of the most important investigations I’ve ever done. If my findings are correct, each of us might soon experience a severe, if not crippling blow to our personal finances, the confiscation of any wealth some of us have been able to accumulate over our lifetimes, and the end of the financial world as we once knew it.  The evidence to support my findings exists in the trail of dead bodies of financial executives across the globe and a missing Wall Street Journal Reporter who was working at the Dow Jones news room at the time of his disappearance.
 
If the bodies were dots on a piece of paper, connecting them results in a sinister picture being drawn that involves global criminal activity in the financial world the likes of which is almost without precedent.  It should serve as a warning that we are at the precipice of something so big, it will shake the financial world as we know it to its core. It seems to illustrate the complicity of big banks and governments, the intelligence community, and the media.
Although the trail of mysterious and bizarre deaths detailed below begin in late January, 2014, there are others. Not only that, there will be more, according to sources within the financial world. Based on my findings, these are not mere random, tragic cases of suicide, but of the methodical silencing of individuals who had the ability to expose financial fraud at the highest levels, and the complicity of certain governmental agencies and individuals who are engaged in the greatest theft of wealth the world has ever seen.
It is often said that life imitates art. In the case of the dead financial executives, perhaps death imitates theater, or more specifically, the movie The International, which was coincidentally released in U.S. theaters exactly five years ago today.
We are told by the media that the untimely deaths of these young men and men in their prime are either suicides or tragic accidents. We are told what to believe by the captured and controlled media, regardless of how unusual or unlikely the circumstances, or how implausible the explanation. Such are the hallmarks of high level criminality and the involvement of a certain U.S. intelligence agency intent on keeping the lid on money laundering on a global scale.
Obviously, it is important that this topic is approached with the utmost respect for the families of those who died, that they be allowed to grieve for the loss of their loved ones in private. However, it is extremely important that the truth about what is happening in the global financial arena is not kept from us, as we will also be victims of a different nature.
 The missing and the dead: a timeline
The following is provided as a chronological list of those who have gone missing or been found dead under mysterious circumstances. It is important to note that this list consists of names of the most recent incidents. There are more that extend back through 2012 and beyond.
January 11, 2014
MISSING: David Bird, 55, long-time reporter for the Wall Street Journal working at the Dow Jones news room, went for a walk on Saturday, January 11, 2014 near his New Jersey home and disappeared without a trace. Mr. Bird was a reporter of the oil and commodity markets which happened to be under investigation by the U.S. Senate Permanent Subcommittee on Investigations for price manipulation.
January 26, 2014
DECEASED: Tim Dickenson, a U.K.-based communications director at Swiss Re AG, was reportedly found dead under undisclosed circumstances.
DECEASED: William Broeksmit, 58, former senior manager for Deutsche Bank, was found hanging in his home from an apparent suicide. It is important to note that Deutsche Bank is under investigation for reportedly hiding $12 billion in losses during the financial crisis and for potentially rigging the foreign exchange markets. The allegations are similar to the claims the institution settled in 2013 over involvement in rigging the Libor interest rates.
January 27, 2014
DECEASED:  Karl Slym, 51, Managing director of Tata Motors was found dead on the fourth floor of the Shangri-La hotel in Bangkok. Police said he “could” have committed suicide. He was staying on the 22nd floor with his wife, and was attending a board meeting in the Thai capital.
January 28, 2014
DECEASED:  Gabriel Magee, 39, a JP Morgan employee, died after reportedly “falling” from the roof of its European headquarters in London in the Canary Wharf area. Magee was vice president at JPMorgan Chase & Co’s (JPM) London headquarters.
Gabriel Magee, a Vice President at JPMorgan in London, plunged to his death from the roof of the 33-story European headquarters of JPMorgan in Canary Wharf. Magee was involved in “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives” based on his online Linkedin profile.
It’s important to note that JPMorgan, like  Deutsche Bank, is under investigation for its potential involvement in rigging foreign exchange rates. JPMorgan is also reportedly under investigation by the same U.S. Senate Permanent Subcommittee on Investigations for its alleged involvement in rigging the physical commodities markets in the U.S. and London.
Regarding the initial reports of his death, journalist Pam Martens of Wall Street on Parade astutely exposed the controlled, scripted details of the media accounts surrounding Magee’s death in an article written on February 9, 2014. Ms. Martens writes:
“According to numerous sources close to the investigation of Gabriel Magee’s death, almost nothing thus far reported about his death has been accurate. This appears to stem from an initial poorly worded press release issued by the Metropolitan Police in London which may have been a result of bad communications between it and JPMorgan or something more deliberate on someone’s part.” [Emphasis added].
Ms. Martens also notes:
No solid evidence exists currently to suggest that the death was a suicide. In fact, there is a strong piece of evidence pointing in the opposite direction. Magee had emailed his girlfriend, Veronica, on the evening of January 27 to say that he was about to leave the office and would see her shortly. [Emphasis added].
Based on information she developed, it appears likely that Magee did not meet his fate on the morning his body was discovered, but hours earlier. Considering the possibility that Magee might now have died in the manner publicized, Ms. Martens offers speculation, and notes it as such:
If Magee became aware that incriminating emails, instant messages, or video teleconferences were not turned over in their entirety to Senate investigators or Justice Department prosecutors, that might be reason enough for his untimely death.
Looking at the death of Magee in the context of a larger conspiracy, it is difficult not to suspect foul play and media manipulation.
January 29, 2014
DECEASED: Mike Dueker, 50, who had worked for Russell Investment for five years, was found dead close to the Tacoma Narrows Bridge in Washington State. Dueker was reported missing on January 29, 2014. Police stated that he “could have” jumped over a fence and fallen 15 meters to his death, and are treating the case as a suicide.
Before joining Russell Investments, Dueker was an assistant vice president and research economist at the Federal Reserve Bank of St. Louis from 1991 to 2008. There he served as an associate editor of the Journal of Business and Economic Statistics and was editor of Monetary Trends, a monthly publication of the St. Louis Federal Reserve.
In November 2013, the New York Times reported that Russell Investments was one of several investment companies that were under subpoena from New York State regulators investigating potential “pay-to-play” schemes involving New York pension funds.
February 3, 2014
DECEASED: Ryan Henry Crane, 37, was the Executive Director in JPMorgan’s Global Equities Group. Of particular relevance is that Crane oversaw all of the trade platforms and had close working ties with the now deceased Gabriel Magee of JPMorgan’s London desk. The ties between Mr. Crane and Mr. Magee are undeniable and outright troublesome. The cause of death has not yet been determined, pending the results of a toxicology report.
February 6, 2014
DECEASED: Richard Talley, 57, was the founder and CEO of American Title, a company he founded in 2001. Talley and his company were under investigation by state insurance regulators at the time of his death. He was found in the garage of his Colorado home by a family member who called authorities. Talley reportedly died from seven or eight “self-inflicted” wounds from a nail gun fired into his torso and head.
The enormity of the lie
One must look back far enough to understand the enormity of the lie and the criminality of bankers and governments alike. We must understand the legal restraints that were severed during the Clinton years and the congress that changed the rules regarding financial institutions. We must understand that the criminal acts were bold and bipartisan, and were designed to consolidate wealth through the destruction of the middle class. All of this is part of a much larger plan to establish a one world economy by “killing” the U.S. dollar and consequently, eradicating the middle class by a cabal of globalists that existed and continue to exist within all sectors of our government. The results will be crippling to not just the United States, but the entire Western world.
What began decades ago is now becoming more transparent under the Obama regime. Perhaps that’s the transparency Obama promised, for we’ve seen little else in terms of transparency with regard to the man known as Barack Hussein Obama. For those not locked into the captured corporate media, we’re starting to see the truth emerging. The truth is that we’ve been living under a giant Ponzi scheme and we, the American citizens, are the suckers. As illustrated by the list of dead bankers above, however, the power elite need a bit more time before the extent of their criminality is revealed. The need a bit more time to transfer the remaining wealth from middle-class America to their private coffers. Timing is everything, and a magic act only works when all props are in place before the illusion is performed. Only when their timing is right will the slumbering Americans realize the extent of the illusion by which they’ve been entranced, at which time they will be forced into submission to accept a financial reset that will ultimately subjugate them to a global economy. I contend that this is the reason for the recent spate of deaths, for those who met their tragic and untimely end had the ability to expose this nefarious agenda by what they knew or discovered, or what they would reveal under subpoena and the damage they could cause to the globalist financial agenda.
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Thursday, February 6, 2014

Ten banks turned over evidence to the U.K. Financial Conduct Authority as part of an investigation into the manipulation of foreign-exchange benchmarks

Ten Banks in FX Trading Probe Have Handed Evidence to FCA

Feb 4, 2014 9:55 AM CT


Photographer: Simon Dawson/Bloomberg
The allegations are “as bad as Libor,” Wheatley told lawmakers in London today,... Read More
Ten banks turned over evidence to the U.K. Financial Conduct Authority as part of an investigation into the manipulation of foreign-exchange benchmarks, its chief executive officer told lawmakers.
The allegations are “as bad as Libor,” FCA CEO Martin Wheatley said in London today, referring to the global probe into rigging of the London interbank offered rate. Those investigations have resulted in global fines of about $6 billion and led to reviews of other benchmarks, including currency rates.
The regulator is investigating “a number of benchmarks that operate in London,” Wheatley said. The foreign-exchange probe is unlikely to be concluded this year, he said, without identifying any banks under investigation.
The regulator said in October it was opening a formal probe into currency-rate trading, joining regulators in the U.S. and Switzerland in reviewing the $5.3 trillion-a-day market. The world’s seven biggest foreign-exchange dealers have now all taken action against their employees, with at least 17 traders suspended, put on leave or fired.
Royal Bank of Scotland Group Plc has handed over records of instant messages to the FCA after concluding a former currency trader’s communications with counterparts at other firms may have been inappropriate, according to two people with knowledge of the matter.

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WRAPUP 2-Forex probe widens as New York banking regulator steps in

Emily Flitter and Jamie McGeever
Feb 5 (Reuters) - New York banking regulator Benjamin Lawsky is seeking documents from some of the biggest banks in foreign exchange trading, including Deutsche Bank, Goldman Sachs and Barclays, a source familiar with the matter said Wednesday, as a global probe into possible market manipulation widens.
At least seven other law enforcement offices and regulators internationally are investigating whether banks rigged the $5.3 trillion-a-day currency markets. Martin Wheatley, chief executive officer of Britain's Financial Conduct Authority, said on Tuesday that his watchdog group's probe could extend into 2015, and that the allegations it is looking into are "every bit as bad" as the Libor manipulation scandal.
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UPDATE 1 -Citi's global head of foreign exchange to leave bank -memo

LONDON Wed Feb 5, 2014 2:59pm GMT

Feb 5 (Reuters) - The global head of foreign exchange at Citigroup, the world's second largest currency trader, is leaving the bank, according to an internal bank memo seen by Reuters on Wednesday.
London-based Anil Prasad's departure, however, is not related to the global investigation into allegations of currency market manipulation, a source familiar with the matter said.
"Anil's decision is his own and entirely unrelated to the on-going FX investigations," the source said.
Citi sees 14.9 percent of the average $5.3 trillion that flows through the world currency markets every day, according to the last annual poll by Euromoney, just behind market leader Deutsche Bank AG which sees 15.2 percent.
Prasad joined Citi in India in 1986 and relocated to New York two years later. In 1996, he moved to London but left the bank the following year to join Natwest Capital Markets.
He returned to Citi in 2000, and was appointed Global Head of Foreign Exchange & Local Markets in February 2007. His successor will be announced in the coming weeks.

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In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. All employed by financial firms under investigation for potentially serious financial fraud. And an oil markets reporter has vanished without a trace

A Rash of Deaths and a Missing Reporter – With Ties to Wall Street Investigations


By Pam Martens: February 3, 2014

Senator Carl Levin's Permanent Subcommittee on Investigations Is Probing Global Banks' Involvement in the U.S. Commodities Markets
In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. Both media and police have been quick to label the deaths as likely suicides. Missing from the reports is the salient fact that all three of the financial firms the executives worked for are under investigation for potentially serious financial fraud.
The deaths began on Sunday, January 26. London police reported that William Broeksmit, a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London. The day after Broeksmit was pronounced dead, Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, was scheduled to speak at Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the financial crisis with the knowledge of senior executives. Two other whistleblowers have brought similar charges against Deutsche Bank.
Deutsche Bank is also under investigation by global regulators for potentially rigging the foreign exchange markets – an action similar to the charges it settled in 2013 over its traders’ involvement in the rigging of the interest rate benchmark, Libor.
Just two days after Broeksmit’s death, on Tuesday, January 28, a 39-year old American, Gabriel Magee, a Vice President at JPMorgan in London, plunged to his death from the roof of the 33-story European headquarters of JPMorgan in Canary Wharf. According to Magee’s LinkedIn profile, he was involved in “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives.”
Magee’s parents, Bill and Nell Magee, are not buying the official story according to press reports and are planning to travel from the United States to London to get at the truth. One of their key issues, which should also trouble the police, is how an employee obtains access to the rooftop of one of the mostly highly secure buildings in London.
Nell Magee was quoted in the London Evening Standard saying her son was “a happy person who was happy with his life.” His friends are equally mystified, stating he was in a happy, long-term relationship with a girlfriend.

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Friday, January 31, 2014

London Stunned By Spate Of Financial Worker Deaths

Business Insider



LondonReflections
Seena Photos/Didier Delmas
A series of deaths among finance workers has shaken London and raised more concerns about stress levels of bankers, Ben Wright and David Enrich of The Wall Street Journal report.
On Tuesday morning, a 39-year-old JP Morgan employee died after falling from the roof of the European headquarters of JP Morgan in London.
The man, Gabriel Magee, was a vice president in the investment bank's technology department, a source told WSJ.
On Sunday, London police found William Broeksmit, a 58-year-old former senior executive at Deutsche Bank AG, dead in his home after an apparent suicide.

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Two top American bankers commit suicide in London as one jumps 500ft to his death from JP Morgan skyscraper and another hangs himself in luxury home

  • Gabriel Magee, a 39-year-old JP Morgan bank executive, died this morning after he threw himself off the top of the bank's European headquarters
  • On Sunday, former Deutsche Bank senior manager, William 'Bill' Broeksmit, 58, was found hanging in his home in South Kensington
  • Both deaths have been ruled non-suspicious by the Metropolitan Police
  • Magee had lived in London for seven years after transferring from the Unites States with JP Morgan
  • Broeksmit had been in London many years but still owned an apartment in an exclusive Central Park building in New York
  • Both were thought highly of by their bosses and colleagues, sources said
By Martin Robinson and Mark Duell and Kieran Corcoran
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Two top ranking American bankers working in senior positions in London have committed suicide in the space of two days.
Gabriel Magee, a 39-year-old JP Morgan bank executive, died early this morning after he jumped 500ft from the top of the bank's European headquarters. His body was discovered on the ninth floor roof, which surrounds the 33-story Canary Wharf skyscraper.
Just two days earlier, on Sunday, fellow American banker, William 'Bill' Broeksmit, 58, was found hanging in his South Kensington home.
Broeksmit - who retired last February - was a former senior manager at Deutsche Bank and had lived in London many years. He started working for the bank in 1996 but left for a period of 7 years before returning in 2008.
Tragedy: IT executive Gabriel Magee has been found dead today after jumping from the top of JP Morgan's headquarters in Canary Wharf, London, and landing on a surrounding roof
Tragedy: IT executive Gabriel Magee has been found dead today after jumping from the top of JP Morgan's headquarters in Canary Wharf, London, and landing on a surrounding roof
Magee was a vice president in the corporate and investment bank technology department having joined JP Morgan in 2004 and moved with the bank from the U.S. to Britain in 2007.
Magee was named in an email sent to all JP Morgan staff Tuesday afternoon.
A company spokesman said: 'We are deeply saddened to have lost a member of the J.P. Morgan family at 25 Bank Street today. Our thoughts and sympathy are with his family and his friends'.

A source close to Magee said he was in 'good standing with his bosses and colleagues. He was well liked.'
Scotland Yard said they were called to 25 Bank Street at 8.02 a.m. and detectives are not treating the death as suspicious.
'No arrests have been made and the incident is being treated as non-suspicious at this early stage', a spokesman for the Metropolitan Police said.
Canary Wharf workers were in shock today, with one trader telling MailOnline that his body lay on the flat roof until around midday.
'My colleague yelled that he could see that someone had jumped from the top of the building onto a lower roof. His body lay there uncovered for at least two hours,' he said.
In shock: A JP Morgan worker looks out of his window as Mr Magee's body was recovered today
In shock: A JP Morgan worker looks out of his window as Mr Magee's body was recovered today
The man was found on the 9th floor of the bank's European headquarters building
People look out of the window of the J P Morgan building at Canary Wharf
Roof death:  Workers at Canary Wharf said hundreds were looking at the man's body from their windows
Investigation: Police at the scene outside the JP Morgan building this morning, where the man was found dead at around 8am
Investigation: Police at the scene outside the JP Morgan building this morning, where the man was found dead at around 8am
'Hundreds were looking out of their windows at him.
'It was bonus week at JP Morgan last week so I hope it wasn't to do with that'.
Another Canary Wharf worker who could see where the man fell told the Evening Standard: 'It’s upsetting what’s happened but the thought of somebody lying up there for four hours is awful.
'I got into the office at about 8.10 and the body was on the floor and there were police up there, and they put a white cover on him.
'I think he was in a suit. As far as I could see the was dressed appropriately, but there was quite a lot of blood, so me and my colleagues were a bit upset.

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William Broeksmit, Ex-Deutsche Bank Risk Manager, Dies at 58




Photographer: Krisztian Bocsi/Bloomberg
William Broeksmit had two stints at Frankfurt-based Deutsche Bank, Europe’s biggest... Read More
William Broeksmit, a recently retired executive at Deutsche Bank AG (DBK) who worked at Merrill Lynch in the 1990s with Anshu Jain, now Deutsche Bank’s co-chief executive officer, has died. He was 58.
He died on Jan. 26 at his home in London, according to a memo to employees obtained by Bloomberg News. Deutsche Bank spokesman Michael Golden confirmed the contents, which didn’t give a cause. In an interview, a spokesman for the London police said a 58-year-old man was found hanging in a residence on Evelyn Gardens, the street where Broeksmit lived, and that authorities aren’t treating the death as suspicious.
“He was considered by many of his peers to be among the finest minds in the fields of risk and capital management,” Jain and co-CEO Juergen Fitschen wrote in the memo. They said Broeksmit was “instrumental as a founder of our investment bank” and called him “a dear friend and colleague to many of us who benefited from his intellect and wisdom.”
Broeksmit had two stints at Frankfurt-based Deutsche Bank, Europe’s biggest investment bank by revenue, first from 1996 to 2001, then from 2008 until his retirement last February. He worked as an independent consultant in the interim. When he rejoined the bank in 2008 it was in a newly created position, head of portfolio risk optimization.

Risk Overseer

In 2012, as they prepared to take over as CEOs, Jain and Fitschen advanced Broeksmit’s name to become the new chief risk officer. The bank retreated on his nomination after German financial regulator BaFin raised concerns that Broeksmit’s lack of experience managing a large number of employees.
Stuart Lewis was named head of risk management instead.
Broeksmit “was a pioneer in interest rate swaps” while at Continental Bank in Chicago “and brought his expertise to Merrill Lynch,” Janet Tavakoli, who managed asset swaps under Broeksmit at Merrill in the late 1980s, said today in an interview. “He was brilliant.” Tavakoli is president of Tavakoli Structured Finance Inc. in Chicago.

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Monday, December 30, 2013

On Defensive, JPMorgan Hired China’s Elite



JPMorgan Chase's offices in Hong Kong. The bank and its rivals have hired well-connected employees in China.

Lam Yik Fei for The New York Times JPMorgan Chase’s offices in Hong Kong. The bank and its rivals have hired well-connected employees in China.
In a series of late-night emails, JPMorgan Chase executives in Hong Kong lamented the loss of a lucrative assignment.
“We lost a deal to DB today because they got chairman’s daughter work for them this summer,” one JPMorgan investment banking executive remarked to colleagues, using the initials for Deutsche Bank.
The loss of that business in 2009, coming after rival banks landed a string of other deals, stung the JPMorgan executives. For Wall Street banks enduring slowdowns in the wake of the financial crisis, China was the last great gold rush. As its economy boomed, China’s state-owned enterprises were using banks to raise billions of dollars in stock and debt offerings — yet JPMorgan was falling further behind in capturing that business.
The solution, the executives decided over email, was to embrace the strategy that seemed to work so well for rivals: hire the children of China’s ruling elite.
“I am supportive to have our own” hiring strategy, a JPMorgan executive wrote in the 2009 email exchange.
In the months and years that followed, emails and other confidential documents show, JPMorgan escalated what it called its “Sons and Daughters” hiring program, adding scores of well-connected employees and tracking how those hires translated into business deals with the Chinese government. The previously unreported emails and documents — copies of which were reviewed by The New York Times — offer a view into JPMorgan’s motivations for ramping up the hiring program, suggesting that competitive pressures drove many of the bank’s decisions that are now under federal investigation.
The references to other banks in the emails also paint for the first time a broad picture of questionable hiring practices by other Wall Street banks doing business in China — some of them hiring the same employees with family connections. Since opening a bribery investigation into JPMorgan this spring, the authorities have expanded the inquiry to include hiring at other big banks. Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley have previously been identified as coming under scrutiny. A sixth bank, UBS, is also facing scrutiny, according to interviews with current and former Wall Street employees. Neither JPMorgan nor any of the other banks have been accused of wrongdoing.
Still, the investigations have put Wall Street on high alert, said the current and former employees, who were not authorized to speak publicly. Some banks, they said, have adopted an unofficial hiring freeze for well-connected job candidates in China.
The investigation has also had a chilling effect on JPMorgan’s deal-making in China, interviews show. The bank, seeking to build good will with federal authorities, has considered forgoing certain deals in China and abandoned one assignment altogether.
The pullback comes just as JPMorgan had regained a significant share of the Chinese market. Its deal-making revived a few years after it escalated the Sons and Daughters program in 2009, an analysis of data from Thomson Reuters shows. In 2009, JPMorgan was 13th among banks winning business in China and Hong Kong. By 2013, once other banks had scaled back their Chinese business, it had climbed to No. 3. Other data shows that the bank was eighth in 2009 and — after losing market share in 2011 and 2012 — is now No. 4 in deal-making. While the hiring boom coincided with the increased business, the data does not establish a causal link between the two.
Yet the Securities and Exchange Commission and federal prosecutors in Brooklyn, which are leading the JPMorgan inquiry, are examining whether the bank improperly won some of those deals by trading job offers for business with state-owned Chinese companies. The S.E.C. and the prosecutors, which might ultimately conclude that none of the hiring crossed a legal line, did not comment.
JPMorgan, which is cooperating with the investigation, also declined to comment. There is no indication that executives at the bank’s headquarters in New York were aware of the hiring practices. The six other banks facing scrutiny from the S.E.C. declined to comment on the investigations, which are at an early stage.
Economic forces fueled the hiring boom by Wall Street banks.
An era of financial deregulation in Washington coincided with a roaring economy in China, enabling questionable hiring practices to escape government scrutiny. The hiring became so widespread over the last two decades that banks competed over the most politically connected recent college graduates, known in China as princelings.
Goldman’s employee roster briefly included the grandson of the former Chinese president Jiang Zemin. And Feng Shaodong, the son-in-law of a high-ranking Communist Party official, worked with Merrill Lynch.
In recent months, though, federal authorities have adopted a tougher stance toward Wall Street firms suspected of trading jobs for government business. The S.E.C. and the Brooklyn prosecutors have bolstered enforcement of the Foreign Corrupt Practices Act, which effectively bans United States corporations from giving “anything of value” to foreign officials to gain “any improper advantage” in retaining business. JPMorgan would have violated the 1977 law if it had acted with “corrupt” intent.

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Tuesday, November 26, 2013

Wallstreet's Unchecked Greed and Corruption : The next Housing Bubble?

 The mortgage crisis, fueled by racially discriminatory lending practices, destroyed 53% of African American wealth and 66% of Hispanic wealth.    Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire on the backs of those who fell victim the first time around.   Where is the justice?


~Desert Rose~
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The Empire Strikes Back: How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme -- Again

You can hardly turn on the television or open a newspaper without hearing about the nation’s impressive, much celebrated housing recovery. Home prices are rising! New construction has started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is brewing.(Cover for the book of the same title by Bryan M. Chavis)
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown.
Wall Street’s foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up -- again.
Since the buying frenzy began, no company has picked up more houses than the Blackstone Group, the largest private equity firm in the world. Using a subsidiary company, Invitation Homes, Blackstone has grabbed houses at foreclosure auctions, through local brokers, and in bulk purchases directly from banks the same way a regular person might stock up on toilet paper from Costco.
In one move, it bought 1,400 houses in Atlanta in a single day. As of November, Blackstone had spent $7.5 billion to buy 40,000 mostly foreclosed houses across the country. That’s a spending rate of $100 million a week since October 2012. It recently announced plans to take the business international, beginning in foreclosure-ravaged Spain.
Few outside the finance industry have heard of Blackstone. Yet today, it’s the largest owner of single-family rental homes in the nation -- and of a whole lot of other things, too. It owns part or all of the Hilton Hotel chain, Southern Cross Healthcare, Houghton Mifflin publishing house, the Weather Channel, Sea World, the arts and crafts chain Michael’s, Orangina, and dozens of other companies.
"In other words, if Blackstone makes money by capitalizing on the housing crisis, all these other Wall Street banks -- generally regarded as the main culprits in creating the conditions that led to the foreclosure crisis in the first place -- make money too."
Blackstone manages more than $210 billion in assets, according to its 2012 Securities and Exchange Commission annual filing. It’s also a public company with a list of institutional owners that reads like a who’s who of companies recently implicated in lawsuits over the mortgage crisis, including Morgan Stanley, Citigroup, Deutsche Bank, UBS, Bank of America, Goldman Sachs, and of course JP Morgan Chase, which just settled a lawsuit with the Department of Justice over its risky and often illegal mortgage practices, agreeing to pay an unprecedented $13 billion fine.
In other words, if Blackstone makes money by capitalizing on the housing crisis, all these other Wall Street banks -- generally regarded as the main culprits in creating the conditions that led to the foreclosure crisis in the first place -- make money too.
An All-Cash Goliath
In neighborhoods across the country, many residents didn’t have to know what Blackstone was to realize that things were going seriously wrong.
Last year, Mark Alston, a real estate broker in Los Angeles, began noticing something strange happening. Home prices were rising. And they were rising fast -- up 20% between October 2012 and the same month this year. In a normal market, rising home prices would mean increased demand from homebuyers. But here was the unnerving thing: the homeownership rate was dropping, the first sign for Alston that the market was somehow out of whack.
The second sign was the buyers themselves.
Click here to see a larger version

“I went two years without selling to a black family, and that wasn’t for lack of trying,” says Alston, whose business is concentrated in inner-city neighborhoods where the majority of residents are African American and Hispanic. Instead, all his buyers -- every last one of them -- were besuited businessmen. And weirder yet, they were all paying in cash.
Between 2005 and 2009, the mortgage crisis, fueled by racially discriminatory lending practices, destroyed 53% of African American wealth and 66% of Hispanic wealth, figures that stagger the imagination. As a result, it’s safe to say that few blacks or Hispanics today are buying homes outright, in cash. Blackstone, on the other hand, doesn’t have a problem fronting the money, given its $3.6 billion credit line arranged by Deutsche Bank. This money has allowed it to outbid families who have to secure traditional financing. It’s also paved the way for the company to purchase a lot of homes very quickly, shocking local markets and driving prices up in a way that pushes even more families out of the game.
“You can’t compete with a company that’s betting on speculative future value when they’re playing with cash,” says Alston. “It’s almost like they planned this.”
In hindsight, it’s clear that the Great Recession fueled a terrific wealth and asset transfer away from ordinary Americans and to financial institutions. During that crisis, Americans lost trillions of dollars of household wealth when housing prices crashed, while banks seized about five million homes. But what’s just beginning to emerge is how, as in the recession years, the recovery itself continues to drive the process of transferring wealth and power from the bottom to the top.
From 2009-2012, the top 1% of Americans captured 95% of income gains. Now, as the housing market rebounds, billions of dollars in recovered housing wealth are flowing straight to Wall Street instead of to families and communities. Since spring 2012, just at the time when Blackstone began buying foreclosed homes in bulk, an estimated $88 billion of housing wealth accumulation has gone straight to banks or institutional investors as a result of their residential property holdings, according to an analysis by TomDispatch. And it’s a number that’s likely to just keep growing.
“Institutional investors are siphoning the wealth and the ability for wealth accumulation out of underserved communities,” says Henry Wade, founder of the Arizona Association of Real Estate Brokers.
But buying homes cheap and then waiting for them to appreciate in value isn’t the only way Blackstone is making money on this deal. It wants your rental payment, too.
Securitizing Rentals
Wall Street’s rental empire is entirely new. The single-family rental industry used to be the bailiwick of small-time mom-and-pop operations. But what makes this moment unprecedented is the financial alchemy that Blackstone added. In November, after many months of hype, Blackstone released history’s first rated bond backed by securitized rental payments. And once investors tripped over themselves in a rush to get it, Blackstone’s competitors announced that they, too, would develop similar securities as soon as possible.
Depending on whom you ask, the idea of bundling rental payments and selling them off to investors is either a natural evolution of the finance industry or a fire-breathing chimera.
“This is a new frontier,” comments Ted Weinstein, a consultant in the real-estate-owned homes industry for 30 years. “It’s something I never really would have dreamt of.”

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