Banks Beware!

The mu$ic is still playing:

"West Newton man turns local bank deposits into riches" by Deirdre Fernandes Globe Staff  May 21, 2015

John Matthews has more bank accounts than most people have shoes: more than a dozen, and counting.

His deposits, usually $1,000 in each account, are scattered in community banks throughout Eastern Massachusetts: Avidia Bank, Mutual One Bank, Needham Bank. But Matthews’s interest in these small, local institutions does not spring from some “It’s a Wonderful Life” nostalgia. Quite the opposite.

For more than two decades, the 76-year-old West Newton retiree has profited from the belief that these mutually owned banks, many started by local leaders more than a century ago, cannot all last. And when they are sold, he stands to earn thousands of dollars.

Matthews is among a type of investor, including the legendary Fidelity fund manager Peter Lynch, who bet on a competitive financial services market in which bigger is often better.

Bigger bailout.

The strategy involves opening deposit accounts at mutual banks, waiting for them to convert to stock companies, buying shares at the lower prices offered to depositors, and waiting again, this time for a larger rival to buy the bank and drive up share prices — often to double what the initial public offering’s price was.

Matthews used this strategy with Peoples Federal Savings Bank, bought earlier this year by Rockland Trust, and with Danversbank, acquired in 2011 by a Connecticut bank. When Peoples Federal went public in 2010, Matthews bought 6,000 shares for $60,000, or $10 a share. When Rockland bought the bank at about $21 a share, his investment grew to $126,000.

Matthews will not say how much he earned in all his transactions, only that they were lucrative.

“It’s perfectly legal,” said Matthews, a lanky former apartment building owner and property manager. “There is an opportunity for the average investor. They can take advantage of it.”

Bank executives, however, are wary of professional depositors, who do not take out loans or buy other services from the banks. Other critics say these investors contribute to the demise of small banks that are connected to their communities and help support local businesses, charities, and residents.

Oh, like my bank.

“They have no interests in these banks and the communities that they serve other than an opportunity to force the bank to be converted to stock and make a quick profit,” said Stanley Ragalevsky, a partner at the Boston law firm K&L Gates LLP who has represented many mutual banks.

That's the foundation of our $y$tem, so what i$ the complaint?

Matthews, who keeps track of his bank accounts in file folders, rather than on computer spreadsheets, began making bank-conversion investments in the early 1990s when a business partner recommended the strategy to him. He said he is just a savvy investor, benefiting from trends driving bank consolidation.

Easier to burn and not something that can be electronically collected by the NSA!

As low interest rates squeeze lending profits and small banks face higher costs to comply with new financial regulations, many are left without sufficient capital to grow. To raise more capital, many have considered changing from mutual to stock companies.

Bank executives also have an incentive to convert, since they usually hold significant stakes in the institutions and could reap big payouts if the bank is sold. When Danversbank was sold to People’s United Financial Inc., the community bank’s chief executive, Kevin Bottomley, earned $16 million in compensation and other payments.

Last year, six Massachusetts banks, including Blue Hills Bank of Hyde Park, Melrose Cooperative Bank, and Pilgrim Bank of Cohasset, decided to sell stock to the public. The sales raised from $22 million for Pilgrim Bank to $278 million for Blue Hills. Under state law, these banks must wait three years before they can be sold to another institution.

For Matthews, his bank picking is as much a hobby as it is investing. He reads financial newspapers to determine which banks may convert and keeps track of bank stock prices post-conversion.

“You have to have the patience to wait,” Matthews said. “People play bridge. Guys stay up all night playing poker. Instead of playing poker, I do this.”

Some of his mutual-to-stock bank investments have disappointed. The stock of Westfield Bank in Westfield, for example, is trading at about $7.58 a share, down from the IPO price of $10.

Other banks where he has accounts show no interest in going public. But Matthews is an optimist: “You never know, the management may change,” he said.

For banks preferring to remain mutually owned, depositors such as Matthews can be troublesome. They can lobby for conversions at sparsely attended annual meetings for depositors, said Julieann Thurlow, president of Reading Cooperative Bank.

When Reading’s depositors voted last year to make it harder for future bank boards to convert to a stock company, she was concerned that the investors would come out in force. They didn’t, and the measure passed.

Banks do not have to accept all deposits, and some may deny accounts to customers who live out of the area and are suspected of being speculators. Occasionally, Thurlow said, bankers have circulated watch lists among themselves of serial depositors.

Matthews said he was denied an account at a bank more than a decade ago because he lived outside of its service area. But mostly, banks want deposits, Matthews said. And if a mutual bank goes public, it needs depositors like him to buy stock.

He brushed off critics who charge that professional depositors contribute to the rise of big banks and fewer choices for consumers and businesses. All industries consolidate to get more efficient, Matthews said.

Meaning the big banks that caused the crisis with their frauds are getting even bigger.

“It’s inevitable,” he said. “I’m participating in it. It’s going to happen anyway.”

That is what Nazi collaborators said.

--more--"

Got any money to deposit?

More like beware of banks!

"Banks fined more than $5b, to plead guilty to market rigging" by Ken Sweet and Eric Tucker Associated Press  May 21, 2015

WASHINGTON — Four of the world’s biggest banks agreed Wednesday to pay more than $5 billion in penalties and plead guilty to rigging the currency markets — a rare instance in which federal prosecutors have wrung an admission of criminal wrongdoing from a major financial institution.

Oh, yay, they admitted guilt this time. Anyone going to goddamn jail?

Traders at JPMorgan Chase, Citigroup, Barclays, and the Royal Bank of Scotland were accused of conspiring among themselves to manipulate rates on the foreign-exchange market, where hundreds of billions of dollars and euros change hands.

So how many billions did the fraud make for them?

The penalties are a victory for the government and reflect a broader effort by the Justice Department, long criticized as reluctant to prosecute big banks, to tackle financial misconduct.

Tastes $our to me.

In the past 12 months, prosecutors have brought criminal cases against banks accused of tax evasion and sanctions violations and have sued several others for their roles in the 2008 financial meltdown.

Still, the punishment may have limited practical consequences, and it’s far from clear whether it will deter misconduct by others.

The four banks can continue to do business in the currency markets.

No executives have been charged, though that part of the investigation continues.

And the fines, while large, are a fraction of what the institutions have made through currency trading over the past decade.

It's the government's kickback for aiding and abetting the fraud -- and they crow victory! 

Have you had enough of these rat-f*** bastards, America (with all apologies due rats)?

Prosecutors say the traders shared customer orders through chat rooms and used that information to profit at their clients’ expenses.

They called themselves ‘‘The Cartel,’’ and in one of those chat rooms, a Barclays employee wrote: ‘‘if you aint cheating, you aint trying.’’

The foundation of private central banking, which is why economies are in the Al-CIA-Duhs.

The banks will pay a combined $2.5 billion in criminal penalties for manipulation of currency rates between 2007 and 2013.

The Federal Reserve is slapping them with an additional $1.6 billion in fines.

Oh, a slap!

In addition, Britain’s Barclays is paying an additional $1.3 billion to British and US regulators.

Lot of banks in Britain.

A fifth bank, Switzerland’s UBS, has agreed to plead guilty to manipulating key interest rates and will pay a separate criminal penalty of $203 million.

Who blew that whi$tle?

‘‘Having to enter into a guilty plea, at the parent level by a major financial institution, is not something that they enter into lightly, nor is it something they enter into with any great joy in their hearts,’’ Attorney General Loretta Lynch said. 

There will be a little more from her later.

All told, including an agreement announced last year, the group of banks will pay nearly $9 billion in fines for manipulating the $5.3 trillion currency market.

By comparison, JPMorgan Chase had $4.1 billion in revenue from its fixed income and currencies business in the first quarter of this year alone, while Citi had $3.48 billion.

It is rare to see a bank plead guilty to wrongdoing. Even in the aftermath of the financial crisis, most financial companies reached ‘‘nonprosecution agreements’’ or ‘‘deferred prosecution agreements’’ with regulators, agreeing to pay tens of billions in fines, but not admitting any guilt. If any wrongdoing was acknowledged, it was usually by one of the bank’s subsidiaries or divisions, not the overall company.

An earlier case against UBS underscored the difficulty of deterring banks from bad behavior.

Why? What kind of $cum are running them?

In 2012, the bank signed a nonprosecution agreement with the Justice Department regarding manipulation of interest rates. But after it became clear that UBS was involved in currency-rate manipulation, the government tore up that agreement.

‘‘UBS has a rap sheet that cannot be ignored,’’ said Bill Baer, the Justice Department’s top antitrust lawyer.

But still too big to jail.

UBS said it received partial immunity from the currency-market charges by being the first bank to report the corruption to the Justice Department and cooperate.

Unlike stocks and bonds, currencies trade nearly 24 hours a day, seven days a week. The market pauses two times a day, a moment known as ‘‘the fix.’’ Traders in the cartel allegedly shared client orders with rivals ahead of the fix and pumped up currency rates to make profits. 

See: Free Financial Markets Are A Hoax

And here my printed pre$$ is promoting it!

Global companies do business in multiple currencies and rely on their banks to give them the closest thing to an official exchange rate each day. The banks are supposed to be looking out for them. Travelers who regularly exchange currencies also need to get a fair price for their euros or dollars.

The number of traders who took part in the currency fixing was small. JPMorgan said the one trader has been fired. Citi said it fired nine employees. Barclays has dismissed eight employees tied to ‘‘The Cartel,’’ according to New York regulators.

The banks have agreed to help prosecutors investigate individuals who took part in the rigging.

Pfffft!

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Notice there was never a reference to LIBOR!!

Meanwhile, what is the FBI busy doing?

Investigating corruption in.... FIFA!

Charges will be pressed, and Lynch says those involved "corrupted the business of worldwide soccer to serve their interests and to enrich themselves ... They did this over and over, year after year."

Of course, the Wall Street meltdown happened on her watch, which was also during all the rate-riggings and the rest. Now you know why she is at Ju$tice the last two years of Obummer.

As for the FBI, Comey claims, "If you touch our shores with your corrupt enterprise, you will be held accountable for that corruption. Nobody is above or beyond the law."

Except Wall Street banks (and western war criminals)!

UPDATES: 

"Arrests by US as FIFA mulls giving Israel boot" by Jonathan Cook:

"UPDATE:
Anyone who doubts how seriously Israel is taking the threat of being ousted from FIFA and how actively its supporters are working behind the scenes at the world body should read the comments of Avi Luzon, Israel’s representative to UEFA, European football’s governing body. Ominously, he says UEFA’s support for Israel is sown up and suggests that UEFA will prevent Israel’s suspension whatever the outcome of the vote.

I’ve said it before and I’ll say it again: UEFA will not let Israel be harmed, especially as there is no reason for it. An agreement has been reached on a four-point draft that is acceptable to [Israeli PM Benjamin] Netanyahu, [UEFA president Michel] Platini, [FIFA president Sepp] Blatter and now [Palestinian soccer chief] Jibril Rajoub.
In the worst case scenario, if the Palestinians do not agree to pull the proposal and the congress is held as planned, UEFA will prevent the suspension of Israel in a very clear way. From the conversations with important people, face to face here in Warsaw, I can say without a doubt that concern over Israel’s suspension through a vote will not happen.

www.haaretz.com/life/sports/1.658317"

"Ahead Of Israel Expulsion Vote U.S. Orders Raid On FIFA"  The Americans left the most obviously crooked guy untouched.

"Us Attacks FIFA Just Days Before Vote On Israeli Suspension From The League"

"Chart: The Qatar World Cup Death Toll Is Stunning

--MORE--"

Also see: The US Uses FIFA to Ostracize Russia 

NDUs: 

"JPMorgan Chase & Co. will cut about 5,000 jobs over the next year as the bank closes branches and slims down its operations, The Wall Street Journal reported Thursday, citing anonymous sources. A representative of the New York bank declined to comment. The job cuts will occur across the bank, but particularly at the consumer bank. Chief executive Jamie Dimon, at an investor conference this week, said the average Chase branch would lose one employee — mostly through attrition. In February, JPMorgan executives said they expected to have 300 fewer branches over the next two years — roughly 5 percent of the network — because more customers are doing everyday transactions online or on smartphones. The bank had 5,570 branches as of the first quarter."

From the above I can see why the soccer coverage isn't getting much play beyond the $ports $ection -- unless it concerns pimping for a new stadium for Kraft.

Time for me to withdraw from this post.

UPDATE: FIFA Scandal is Hogwash – U.S. DOJ Fails to Stop Conference so SOMEONE Resorts to Terrorism to Stop it