From my appearance on RT's Prime Interest last Tuesday.

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From one of my reader's comments on the topic of NSA, privacy and Android..

"most people see Google Glass as real-time snooping tool for the NSA."

That's because most people are (if your statement is in any way true) are ignorant to how things truly work. Glass is powered by Android, which is open sourced. This means that anyone and everyone can modify the code base and if those modifications (improvements) are accepted into the official code base then the whole world has the ability to examine those changes as well as the entire code base. 
This makes Android and the hardware running Android the safest popular mobile OS available because it is near impossible to hide things from driven eyes that want to find things.
Contrast this to a closed commercial system like Windows Phone or iOS where the government simply has to compromise one codebase or one company and it has an in to all users, none of which can see or modify what they have purchased.
NSA to Android is like having to lock a million doors, with tens of millions of keys floating around in the hands of hundreds of thousands of locksmiths. NSA to Apple iOS, et. al. is like having one door with one lock, and nobody has the key - locksmith or not!

If you were the NSA, which would oyu rather have as the world's primary OS? Mass adoption of a single commercial, closed system such as Windows of iOS is the NSA's wet dream in comparison to the veritable nightmare that Android and all of its eyes and tinkerer's must be. Yet through disinformation borne ignorance, we already have the masses clamoring for a "safe' closed proprietary OS like iOS as compared to an open tool chest exposed to oh so many eyes.

Published in BoomBustBlog

Let's face it, in order for the few to thrive, a majority have to suffer in apathy, ignorance and the resultant bliss before the storm! Is that the way it is? Is that the way it has to be? Well, apparently that's the way it's going down in Europe. I have issued very, very explicit warnings on the ex-sovereign entity known as Portugal. Despite such. and despite my track record on such matters (see Who is Reggie Middleton?), the financial media, sell side and practically the rest of the world hailed an "all's clear" as absolutely nothing has gotten better yet several things have gotten worse. 

What has come of it? Well....

From ZeroHedge: Portugal's Presidential Warning Spikes Yields To 8 Months Highs

UPDATE: 5Y now +126bps (biggest jump in 19 months - snce the record highs) and rest of Europe is catching their systemic risk flu

Bond Spreads...


Of course reasons are given for this spike that come from very smart people who do very impressive things. The fact du jour is that this spike was guaranteed to happen, and it was guaranteed to happen this year. That's right! Guaranteed, and all paying BoomBustBlog subscribers knew this to be a fact TWO and a half (that's 2.5 for the number nerds amongst us) years ago! Did I (or my subscribers) know that the Portuguese government would come close to blowing up this year? NO.

So, exactly how did we know? Well, let's start by acknowledging today's date. July 12, 2013. Next we dig into the BoomBustBlog archives, going back to...

Monday, 06 December 2010 The Truth Behind Portugal's Inevitable Default - Arithmetic Evidence Available Only Through BoomBustBlog

The inevitable truth of the matter is that several European states WILL default, and default they will. If Germany, or any other economy that still has its druthers to it decides to stand in front of said occurrence, it will likely be dragged down as well. The Germans apparently realize this. See this excerpt from our discussion on the topic regarding Ireland's prospects for default:

... from the post  wherein BoomBustBlogger Nick asked:

Reggie-

Do you have any reason as to why they are choosing 2013 as a deadline ? Seems like an arbitrary date.

Well, Nick, just follow the money  or the lack thereof…

So, what debt raising and servicing soveriegn nation that was unsustainable in 2010 was lent even more debt to become even more unsustainable. The chickens come home to roost in 2013, post IMF/EU/Bilateral state le veraged into Ireland loan/Pension fund raiding bailout! What Angela in Germany was alluding to was what all in the know, well… know, and that is that Ireland is already in default and those defaults have been purposely pushed out until 2013. Angela simply (and wisely from a local political perspective, although unwisely from a global geopolitical standpoint) admitted/suggested was that the defaults will be pre-packaged and managed ahead of time. The EU politbureau insists that politics rule the day, and no prepackaged structure be in place for the Irish defaults to be. This means the potential foe even more carnage through the pipelines of uncertainty!

 

Tuesday, 07 December 2010 The Anatomy of a Portugal Default: A Graphical Step by Step Guide to the Beginning of the Largest String of Sovereign Defaults in Recent History

... Let's jump straight into Portugal's situation, and remember that many of these countries have deliberately mislead and misrepresented their fiscal situations for years (see Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest? and Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!).

This is the carnage that would occur if the same restructuring were to be applied to Portugal today.

Yes, it will be nasty. That 35% decline in cash flows will be levered at least 10x, for that is how much of the investors in these bonds purchased them. A 35% drop is nasty enough, 35% x 10 starts to hurt the piggy bank! As a matter of fact, no matter which way you look at it, Portugal is destined to default/restructure. Its just a matter of time, and that time will probably not extend past 2013. Here are a plethora of scenarios to choose from...

This is Portugal's path as of today.

Even if we add in EU/IMF emergency funding, the inevitability of restructuring is not altered. As a matter of fact, the scenario gets worse because the debt is piled on.

Monday, 12 March 2012 Portuguese Liquidity Trap: When You Add Too Much Liquidity To F.I.R.E. It Burns!

 

In this followup to Greece Is Trying To Convince Portugal To Make F.I.R.E. Hot I think we should get straight to the point - Anyone who doesn't believe that Portugal is clearly set up to for a bond route, and that it is seriously considering a default is either lying to themselves, believe human nature has changed, and/or really hasn't bothered to review the math. Here's proof of a Portuguese default presented with logic, numbers and pretty colorful graphs. The full spreadsheet behind all of the calculations, scenarios, bond holdings and calculations can be viewed online here (click this link) by professional level subscribers. Click here to subscribe or upgrade.

 

Published in BoomBustBlog

Free advice is sometimes worth a little more than you paid for it. On that note, Irishmen should take note of how much you paid for this research and then... Take your money and run!

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Earlier this week, I warned the Germans - Angela Merkel Should Talk To Me If She's Truly Enraged By The Anglo Irish Revelation, For That's Just The Beginning! This warning was based on multiple earlier warnings to the Irish, summarized (more or less) in the posts - Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You and The Beginning Of The Great Irish Unwind and  If I Provide Proof That The Entire Irish Banking System Is A Sham, Does It Set Up A Much Needed System Reboot? Let's Go For It.... Today is the day to focus on two of those warnings in particular, .one of which I will focus on specifically:

These posts focus on an explicit and stern warning that AIB is drastically undercapitalized and quite possibly the purveyor of a massive fraud on the Irish people, US investors and regulators and German taxpayers.

First, let's review what the Phoenix had to say. In reading this piece from the Phoenix, please keep in mind that if the Bank of Ireland is the best that Ireland has to offer, than I believe that Ireland is fraudulently fuc2#ed. I clearly warned on the Bank of Ireland, one of the most egregious offenders - 17 April 2013 I queried "What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?"

Second, we anticipated fiscal problems in the Irish state as far back as 2010 when everyone swore that they were the poster child of austerity. Subscribers, see File Icon Ireland public finances projections. Professional and institutional subscribers should email me for a link to a live spreadsheet that can allow you to run your own calculations on toasted Ireland's finances really are. 

aib go boom Page 1 copy copyaib go boom Page 2 copy copyAIB go Bust copy

Now, let's delve in once again, shall we? From Are You About To Get Cyprus'd in Ireland? When A Single Word's Worth Billions Of Euros...

AIB has inccurred significant debt from which the underlying collateral has significantly diminished. This caused the need for even more capital and more borrowing. It also apparently caused it to change the wording in its annual statements regarding repos, potentially allowing it to conceal financial aid in the form of even more debt .from another party. After all, when you borrow something it's a loan right, as in additional debt??? Below, you see a loophole for near unlimited borrowing, and not a peep will show up in the financial reporting!

Of course, theres more...AIB Charge DiscrepencyAIB Charge Discrepency

Definitions: Charge - The document evidencing mortgage security required by Crown Law (law derived from English law). A Frixed Charge refers to a defined set of assets and is usually registered. A Floating Charge refers to other assets which change from time to time (ie. cashinventory, etc.), which become a Fixed Charge after a default.

The charge document below, which was registered with Ireland’s Company Registration Office (CRO), states that the charge is in respect of the Company’s participation in Target 2-Ireland. It is also in respect of ‘all present and future liabilities whatsoever’ of Allied Irish Bank Plc. (to the Central Bank and Financial Services Authority of Ireland or to the European Central Bank). The charge is over ‘Eligible Securities’.

Target2 is a European Union payment system. I believe it is misleading to indicate in the annual accounts that Target 2 has a bearing on the security that has been given.

In the short particulars section of the charge; the property charged to the Central Bank and Financial Services Authority is over ‘all rights, title, interest and benefit, present and future, of AIB Plc. in and to each of the Eligible Securities from time to time, where ‘ Eligible Securities’ means, at any time securities of such a class or description as may from time to time  be designated  by the ECB as ‘Eligible for  Sale and /or Purchase, as the case may be.’ (Refer to actual CRO charge document below)

 

AIB Charge Discrepency1 copyAIB Charge Discrepency1 copy

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In the Irish version of the Bank’s annual Accounts (2008) and the SEC 20F (page 223 - 2) it states that the charge was placed in favour of the Central Bank and Financial Services Authority of Ireland over all of AIB’S ‘right, title, interest and benefit present and future in and to certain segregated securities.’
Using the description ‘certain segregated securities’ is completely different to the description all ‘eligible securities.
 
It appears that AIB is stating that they have given ‘certain segregated securities’ as security to the ECB whereas the ECB actually decides which securities will be designated as ‘eligible’. The charge is in favor of the Central Bank and is over ‘all present and future liabilities whatsoever’ of AIB. This charge is a floating charge over repo agreements, aka Eligible Securities - securities that the graphic above demonstrates can go on ad nauseum and way beyond the entities prudent ability to repay, yet not appear on the balance sheet or in its regulatory reporting!!!. These securities have been purchased by the ECB through the repo agreements.
 
Thus, it appears as if this floating charge granted to the ECB is over assets that the ECB already owned. The floating charge was given to the ECB by AIB for emergency funding (emergency liquidity). Do you see a circular argument here? A potential Ponzi even???!!!! I warned my paying subscribers three years ago, Beware of the Potential Irish Ponzi Scheme!

For those who don't get it, AIB is essentially asset/equity broke. All properties considered as marketable/acceptable collateral (in other words anything of real, tangible value) jas already been pledged to the ECB. EVERYTHING!!! To the prudent depositor, this is all that needs to be said, but there's more, much more, Irish men and women, prepare to be CYPRUS'D!!!

Now, hopefully I've answered the question "Are you about to get Cyrpus'd in Ireland?" Many Irish pensioners have been "Cyprus'd" already, but fear not if you missed the opportunity to lose your capital for the sake of your banker's bonuses, there's a lot more to come.

If you believe that the information above actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message

Remember, extreme wealth concentrates, so you don't have to... Coming from a "Cyprus'd" bank near you!

Subscribers, can download ALL documents supporting shenanigans by these banks (click here to subscribe):

Published in BoomBustBlog

A little over two years ago I queried "Is Another Banking Crisis Inevitable?". This post attracted the attention of certain ING executives who apparently were asking themsevles the same question. I was invited as the keynote speaker at their valuation conference in Amsterdam wherein I dropped the negative reality bomb! Interest rates were GUARANTEED to spike and when they do, those banks with fictitious bank sheet values and business models predicated upon credit bubble metrics were GUARANTEED to start collapsing. 

It's not just the European banks either. In 2009 I queried "Why Doesn't the Media Take a Truly Independent, Unbiased Look at the Big Banks in the US?". Then there's real esate in both the US... CNBC's Fast Money Discussing Hopium in Real Estate...

That visual relationship is corroborated by running the statistical correlations...

The relationship is obvious and evident! In addition, we have been in a Goldilocks fantasy land for both interest rates and CRE for about 30 years. CRE culminated in the 2007 bubble pop, but was reblown by .gov policies and machinations. The same with rates. Ever hear of NEGATIVE interest rates where YOU have to PAY someone to LEND THEM MONEY!!!

So, BoomBustBloggers, where do YOU think rates are going to go from here? Up of Down???

and Europe...

 

Those who wish to download the full article in PDF format can do so here: Reggie Middleton on Stagflation, Sovereign Debt and the Potential for bank Failure at the ING ACADEMY-v2.

 

Published in BoomBustBlog


Who Do Your Believe Reggie Middleton or Central Bank of Ireland

Three months ago I posted Global Banking Crisis - How & Why YOU Will Get "Cyprus'd" As This Bank Scrambled For Capital!!! wherein I introduced to the public the extent of the shenanigans at Anglo Irish bank. I subsequently broke it down even more granularly in As Forewarned, The Irish Savers Have Just Been "Cyprus'd", And There's MUCH MORE "Cyprusing" To Come. I even went so far as to assert... If I Provide Proof That The Entire Irish Banking System Is A Sham, Does It Set Up A Much Needed System Reboot? Let's Go For It...

Well, for those who didn't believe me...

As excerpted from The Irish Independent,

Taped telephone recordings (from the bank's own systems) from inside doomed Anglo Irish Bank reveal for the first time how the bank's top executives lied to the Government about the true extent of losses at the institution.

... Anglo itself was within days of complete meltdown – and in the years ahead would eat up €30bn of taxpayer money. Mr Bowe speaks about how the State had been asked for €7bn to bail out Anglo – but Anglo's negotiators knew all along this was not enough to save the bank.

... The plan was that once the State began the flow of money, it would be unable to stop. Mr Bowe is asked by Mr Fitzgerald how they had come up with the figure of €7bn. He laughs as he is taped saying: "Just, as Drummer (then-CEO David Drumm) would say, 'picked it out of my arse'."

... Mr Bowe's comments in the audio recording reveal that Anglo's strategy was to lure the State in, leaving taxpayers with no choice but to continue to provide loans to "support their money".

... "If they (Central Bank) saw the enormity of it up front, they might decide they have a choice. You know what I mean?

"They might say the cost to the taxpayer is too high . . . if it doesn't look too big at the outset . . . if it looks big, big enough to be important, but not too big that it kind of spoils everything, then, then I think you have a chance. So I think it can creep up."

Mr Fitzgerald, the Director of Retail Banking, is heard saying: "Yeah. They've got skin in the game and that is the key."

... The recording also shows Mr Bowe and Mr Fitzgerald laughing as they say how there is no realistic chance of ever repaying the loans.

For the first time, taxpayers get an exclusive insight into the banking shenanigans that cost Ireland our sovereignty.

It doesn't end there...

The Beginning Of The Great Irish Unwind?!?!?!

Allegations of Fraud, 20% Drop In Stock Price, Market Manipulations, Internal Investigations: Nothing To See Here, Move On...

BoomBustBlog Hard Hitting, Bleeding Edge Research Results In 2nd High Level Ouster/Resignation In The UK & Euroland

Taxation Without Representation: UK Taxpayers Learn From The Irish What US School Kids Get Taught In 3rd Grade

Who is RBS? Royal BS... or the Royal Bank of Scotland

 

Published in BoomBustBlog

With rates spiking and equities dropping, all due to the long overdue realization that Bernanke can't goose the markest forever, I take this time to review my many warnings of this moment as it it approaches.

Reggie Middleton Featured in Property EU, one of Europe's leading real estate publications

Those who wish to download the full article in PDF format can do so here: Reggie Middleton on Stagflation, Sovereign Debt and the Potential for bank Failure at the ING ACADEMY-v2.

Here comes that lost decade, albeit three years tardy...

At the ING Valuation Conference in Amsterdam: Inflation + Deflation = Stagflation

Published in BoomBustBlog

Guest post by Mordecai Grun:

In order to invest it's important to understand the economic fundamentals. In the long term it's like gravity, there's no way to escape whatever is really the truth. This holds true in Bearish and Bullish markets.

Economists and investors alike are looking at the GDP number as a way to understand whether the economy is growing and by how much. However not all GDP is created equal. It is important not only to look at the GDP but also to look at where it's coming from to assess its quality. Take, for example, the following two neighbors. One is a hard working immigrant that earns 100,000 in annual income, but lives in a simple home and is saving 40%of his income for retirement, his children's education and to have cash available for any future business opportunity that may come his way. His neighbor is in the public sector also earns 100,000 per year however he just took on a mortgage to purchase a brand new home for 800,000 and between credit cards is living on 135,000 per year (Spain 2000-08). Obviously from a GDP perspective the latter is creating way more GDP, but from a sustainability and quality perspective the reverse is true. In a theoretical world, growth in GDP would come from improved productivity and investment. However, in reality, GDP growth can come from a variety of sources. Increases in consumer debt, public sector debt, asset price inflation (ex. housing or equity markets, Bond Markets), foreign money entering the country to purchase assets, are all sources of GDP.

Under any of the above scenarios simulucrum of what seems like quality GDP will also be created. For example during the housing bubble auto sales and manufacturing were also very high. In short, since lenders and manufacturers increase supply with demand they really don't look at where and how the money is created or where it comes from. The same is true for government. As state taxes, for example, grow during a boom the politicians raise their spending (actually outpacing the growth rate of the boom) and don't question whether it's possible long term to have so many real estate agents during a housing boom or to sustainably have retail sales growth outpace economic growth. When the inevitable blow comes everyone is surprised and acts as if economic depressions are unpredictable, sort of like tornadoes.

So, let's analyze what current GDP really looks like. Let's assume 1 trillion in Deficit spending (includes all levels of Government) and 1 trillion in QE and assume the banks have increased their lending by the QE amount. Yes, I know these figures are not precise and that the banks may be hoarding liquidity, however from the froth out there it actually seems like the QE maybe having a multiplier effect at this point and while not precise it is ballpark. As such at a 15 trillion dollar economy and a GDP growth of 3% the true GDP would be a negative -10.3%. This does not include the multiplier effect of all the QE and the fiscal deficit. For example, now the auto and retail sales and manufacturing inudstries are very strong. Had there been no QE or public sector debt increase there's no question that services and the manufacturing sector would be doing much worse. Thus making the GDP even more negative than the -10%. SCARY!!

In short had we consumed only what we produced and not printed money, things would be very ugly out here right now. This goes a long way to explaining the angst still felt on main street USA. The fed is very aware of this and therefore very reluctant to take the foot off the gas. The hope is that this will act like a starter to an engine and once it purrs it will go on its own. This has never yet been tried and done successfully, at least to my knowledge. It should work when there's a confidence or liquidity crisis, but won't work when there's a structural mathematical reason the economy is doing poorly.

From this vantage point the US has not been producing real, healthy GDP growth in a long time. Most growth in GDP prior to 2008 was just an increase in household debt and asset inflation spending due to the increased valuation in housing and bonds (and now equities) due to the shift to ultra-low interest rates . Take these factors out and we certainly would be in a significant recession since at least 2001 and perhaps earlier.

What are the structural defects to the economy? As we illustrated earlier policy makers don't know or understand the sources of economic activity and their sustainability or quality. One such example is the tremendous amount of US manufacturing that was shipped overseas pre-2008 . This was barely a political issue, due to the fact the economy was going strong and unemployment was low. In short, who cares about 15 dollar an hour furniture factory jobs when mortgage brokers are making 300 thousand plus? So to the trade deficit does not matter when trillions of foreign money is pouring into US assets. Commodity production? Always a dirty and unneighbourly affair, why go through the mess if everyone is happy and making hay? Import duties to protect domestic production? VAT taxes to balance the budget? Policies that promote more people in the work force? Policies that create low cost electricity and energy? Why go through all this when everything is hunky dory?

At present the policies in place make it extremely difficult to PRODUCE things here or increase productivity. The trade deficit and high fuel prices (even when going to domestic sources) and a government and service sector that is too large for the productive economy are like air being let out of the balloon while it is being pumped.

So how long can this go on for? It's anyone's guess, however since most of the Global Economy is doing, or will be doing fiscal stimulus and QE, combined with the fact that we are the world's reserve currency this may go on for quite a while. Though a bond market where the fed purchases most or all of treasury issues may happen sooner rather than later.

What does this mean for investors? The bull market in equities may still have a long course to run and as in the previous housing or other bubbles the market insanity can go higher and longer than anyone sane can imagine. Especially in this case where as the QE kicks in, government debt will go down and GDP up. Even manufacturing may have a strong run as a spinoff of all this misplaced optimism and debt. It will feel almost as if the economy is healing.

Many market participants are concerned that QE will end. This is having a negative impact on precious metals and commodities and to a much lesser extent equities. However, if this thesis is correct, long term we are in for infinite QE. The Fed may taper down for a short while, but the economic results will be so dire, that the fed will reintroduce QE with a double dose. Even to the extent of buying treasuries at significant percentages below the true inflation rate. This will lead to huge increases in precious metals, real estate, and some inflation resistant equities, while being a big drag on corporate debt, or any bonds that the Fed isn't buying. The Fed will put a floor on treasury prices by promising to purchase at a certain price. Basically the premise of this article is that eventually either massive inflation, or a severe recession/depression or a fundamental productive economic shift needs to take place. Given the choice , QE Fiscal stimulus and eventual inflation are ahead of us.

Unfortunately the fundamental shift that needs to take place namely that we produce MORE than we consume and SAVE the difference and invest it in productive assets has not taken place. Nor are there any policies being put in place that would encourage this.

Gravity will hit at some point and the later it will be the harder. So enjoy the party as it really is a good one and their handing out free spiked fruit punch. But stand near the exit so that when the floor begins to buckle you step out of the way.

Disclosure: I am long GLDSLV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Reggie's Take

inflation_correlation.pngMordecai said "Basically the premise of this article is that eventually either massive inflation, or a severe recession/depression or a fundamental productive economic shift needs to take place. Given the choice , QE Fiscal stimulus and eventual inflation are ahead of us."

Well, that's given the choice. I reality, many of us really don't have a choice, particularly when someone else is pulling the purse strings. Not given the choise, the prognosis is as I have said throughout 2010 and 2011...

Hmmm... What happens when wages and earning assets go down in value as input prices increase? I have warned of the stagflationary scenario several times in the past as the most likely outcome of the battle between the deflation camp and the inflation camp. See:

On Gold Bug Ducks, Magical Regulators, and Innocent (yet funny .

 

 
Published in BoomBustBlog

On Wednesday, 17 April 2013 I queried "What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors?" In such query, I levied some heavy accusations at the Bank of Ireland. Its worth a read if you haven't done so already. Well, two months later, I read in the Irish Independent the following: Internal probe at Bank of Ireland

AN inquiry is under way within Bank of Ireland's private banking division, as the bank's internal auditors investigate what have been described as "possible irregularities".

The Sunday Independent has learned that Bank of Ireland's auditors have been inside the division, which counts many of Ireland's most wealthy and powerful individuals among its clients, at various stages over the past six weeks, conducting what one source described as a "thorough examination" of its activities.

Hmmmm. Now, that's interesting. Six weeks ago would have been about two weeks after I dropped my bomb of a scorching missive on sheeple who are to this day, much too trusting of the banking system. That two weeks is just about the amount of time it would have taken a big corporation to act on the information that I levied (if it was in a rush). Wholly a coincidence, I'm sure!

The bank's audit team is seeking to establish if any of its private banking clients' affairs have been handled in any way improperly.

The bank's management is understood to be treating the matter "very seriously". Commenting on this, one well-placed source said: "The investigation isn't complete yet. It's difficult to say when it will be complete. We are obliged to follow due process before we come to any conclusions."

Asked if Bank of Ireland had brought in any third parties to assist with the investigation or if it had made contact with gardai even on a preliminary basis, the source said: "No, the matter is being dealt with internally and all appropriate procedures are being followed.

... The source stressed that clients of the division that is under investigation would be notified immediately in the event that the bank uncovered any evidence to show that their affairs had been inappropriately managed.

I have to be honest, I hate it when people ask me for free advice. After all, if my advice/opinion/knowledge was thought to be worth something, then people ought to act like it, no? Well, methinks one should make an exception to the rule this one time and offer some free advice to the "internal audit team" at the Bank of Ireland. I know, I know... Nobody asked me, but since they haven't bothered to bring in any third parties yet, why not invite myself and crash the party?

Let's, once again, reference my post from two months ago - What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors? wherein I will update the ADR performance chart for the bank if Ireland.

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As you can see, there was a significant and material loss taken by ADR holders during the time in question at BoI. But, following the auspices of this story in the Independent, yet using our BoomBustBlog investigative resources, there's much more here than meets the eye. A document that I made available to professional/institutional subscribers details how the Bank of Ireland sought and received an exemption from SEC rule 102 of Regulation M (click here to brush up on your US securities law). In short, this exemption allowed the bank to literally trade in its own securities, provided it wouldn't abuse the privilege. See an excerpt below...

bank-of-ireland-060711-1-4 Page 01bank-of-ireland-060711-1-4 Page 02


This letter worked literal wonders for the Bank of Ireland stock within days of being issued. Even more miraculous is the fact that it wasn't public information at the time yet the public somehow knew to bid the shares up by nearly 100%. Hmmmm! Coincidence, eh?

image007

Even more damning is the fact that the alleged historical trading volume in the shares in question (a pertinent fact used as an argument to get the Reg M exemption in the first place) spiked by nearly 5X!!!

image009 

...Bank of Ireland Private Banking is, according to its website, "Ireland's largest and oldest private bank. The country's leading entrepreneurs, business leaders, professionals and families trust us to manage their wealth with discretion and integrity."

 If the private banking client's capital was used to churn these shares, then.... Oh Boy~~~

Per WikipediaMarket manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for a securitycommodity or currency. Market manipulation is prohibited in the United States under Section 9(a)(2)[1] of the Securities Exchange Act of 1934, and in Australia under Section s 1041A of the Corporations Act 2001. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradable security.

Examples

  • Churning: "When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price."

If the stock was churned, the price would have increased temporarily until the performance numbers of the loss making bank would have came to fore. But then again, what would management have to gain by manipulating the stock in such fashion. After all, bankers aren't incentivized or measured by share prices, bonuses, year and reviews, etc., right???

I have released information that has apparently caused quite a bit of high level C-suite types to head for the hills, reference BoomBustBlog Hard Hitting, Bleeding Edge Research Results In 2nd High Level Ouster/Resignation In The UK & Euroland

If you believe that the information above actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message


fraud

Those of you in Ireland who may not want to get "Cyprus'd", ie. have your bank accounts fund another bailout, should contact the Office of the Director of Corporate Enforcement. Click this link, and tell them Reggie from NYC sent 'ya. Seriously! The reason why Irish banks haven't been reformed was because not enough light has been shown on the activities. See a valid attempt at such here. This is the time, for the tea leaves foretell the next bank collapse & bailout will be funded directly out of your bank accounts, reference Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You for those who don't believe me. See Global Banking Crisis - How & Why YOU Will Get "Cyprus'd" for an example of a bank statement of a Cypriot who didn't take the regulation of his bank seriously!!!

Published in BoomBustBlog

For the past two months I have been releasing heretofore unseen documentation, proof-backed allegations and logical assertions throwing light on what I view to be gross misrepresentations, attempts at financial reporting prestidigitation and what I consider to be outright fraud in the Irish and UK banking system. BoomBustBlog has been the only source of such information and except for a few outliers, the MSM has literally refused to run stories on this. 

Alas, even though mainstream editors, producers and reporters are trying to ignore what the BoomBust has done, massive shock waves have shaken loose those at the very top of the power structure. Unfortunately, much of what is going down is beyond the ken of the hoi polloi due to the taboo nature of the most important message that I convey. 

Remember what happened when I initially dropped the Irish bomb on the unsuspecting Irish public? The head of the Irish Central Bank Regulatory Authority unexpectantly resigned...

reggie middleton on irish banks

So, what happens when you bring the Fiery Sword of Economic Truth to the UK and Ireland???

Here's the answer to that question in the form of another surprise (not) to all BoomBustBloggers. After my multiple expose's on RBS...

  1. I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets!
  2. Who is RBS? Royal BS... or the Royal Bank of Scotland
  3. Taxation Without Representation: UK Taxpayers Schooled on What US Students Are Taught In 3rd Grade

We see Reuters reporting: RBS shares slump after shock ousting of CEO Hester. Surprise! Surprise!

 Royal Bank of Scotland shares fell seven percent on Thursday after the surprise ousting of CEO Stephen Hester left investors questioning who would steer the part-nationalized bank through to an eventual privatization.

Isn't this just one helluva string of coincidences that as I uncover dirt and grime, we get these "unexpected" and "unforeseen" ousters and resignations days and weeks afterward. If I didn't know better, I'd think someone busted these guys doing something naughty... Nahh! Couldn't be!

I know more than a couple of UK taxpayers who'd much not rather pay Irish bad debts. I decided to rub a little salt in the UK wound by throwing some arithmetic illumination on the situation via an embedded Irish bad bank tax calculator...

The app below allows the UK Taxpayer to calculate for themselves exactly what their individual contribution (pro rata) is to the government bailout of RBS.

I've taken the liberty of pre-populating the input fields for you, but if you don't agree with the numbers then by all means insert your own!

Then there's still that Cyprus'd thingy... 

While the inclusion of large savers in future bank bailouts is now widely accepted, significant differences still remain between member states.

While the new rules governing bank resolution were first intended to come into place in 2018, since the Cypriot bailout there have been calls from senior EU figures such as European Central Bank president Mario Draghi and EU economics affairs commissioner Olli Rehn to introduce the new regime as early as 2015.

The Irish presidency of the European Council is hoping to reach a common position by the end of next month.

The little app below calculates what return you should expect to receive to take on the risk of a potential 40% haircut. The second tab offers what recent Cyprus bank rates were. Do you see a disparity???

Other hard hitting pieces on the resurgent EU banking crisis

 

Published in BoomBustBlog

Yesterday I opined extensively on transparency (actually, the lack thereof) in the European banking system - Transparency In The European Banking? Madness, I say! Sheet, Utter Madness!!! I tore into the Irish banks as well as reminding all of the 2011 research that found the French banks to be the weakest link in pan-European banking contagion. Of course, you'd never here that from the sell side. Well, as luck would have it, look what I found on Euromoney.com today (Hat tip @StaceyHerbert)...

French banks most systemically risky in Europe – HEC Lausanne study:

According to systemic risk measures for European financial institutions, developed by the Centre for Risk Management at Lausanne (CRML), French regulators would need to provide €300 billion, as of mid-May, to fulfil regulatory requirements in the event of a global financial crisis, defined as a 40% semi-annualized fall in global stock markets.
Using methodology developed in collaboration with the well-known and influential New York University Stern’s Volatility Institute, run by NYU professor Leonard Stern and Nobel laureate Robert Engle, the index gauges large European banks’ systemic risk by measuring size, leverage and exposure to global equity market shocks. The dynamic index, updated on a monthly basis, reveals that, as of mid-May, Crédit Agricole has the greatest risk exposure of any bank in Europe, followed by Deutsche Bank and BNP Paribas.

Hmmm... Now, where have we heard this before? 

French Banks Can Set Off Contagion That Will Make Central Bankers Long For The Good 'Ole Lehman Collapse Days!

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This Is Why BoomBustBlog Is THE Place To Go For Hard Hitting Research: BoomBust BNP Paribas?

The WSJ article excerpted above quotes BNP management as saying: "The bank has €135 billion in "unencumbered assets after haircuts" that are eligible to central banks."

OK, I'll bite. Excactly how did BNP get to this €135 billion figure? Was it by using Lehman math? Methinks so, as clearly delineated in my resarch report on the very first page:

BNP_Paribus_First_Thoughts_4_Page_01BNP_Paribus_First_Thoughts_4_Page_01

 

 The Beginning Of The Great French Unwind?!?!?!...

Another BIG Reason Why BNP Paribas Is Still Ripe For Implosion!

As excerpted from our professional series File Icon Bank Run Liquidity Candidate Forensic Opinion:

... Now, if you were to employ the free BNP bank run models that I made available in the post "The BoomBustBlog BNP Paribas "Run On The Bank" Model Available for Download"" (click the link to download your own copy of the bank run model, whether your a simple BoomBustBlog follower or a paid subscriber) you would know that the odds are that BNP's bond portfolio would probably take a much bigger hit than that conservatively quoted above.  Here I demonstrated what more realistic numbers would look like in said model... 

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Published in BoomBustBlog