ethics

Royal Bank’s official response to CFTC’s accusations

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If the following responses are true, the CFTC has mud on its face.  The United States markets are a cesspool of corruption, turning a blind eye to MF Global, Jon Corzine, and the other banktsers, but charging a Canadian bank with trumped up allegations.

RBC Vigorously Rejects CFTC Allegations as Unwarranted

TORONTO, April 2, 2012 – In response to the CFTC’s allegations against RBC for trading activity that the CFTC reviewed and had full knowledge of, RBC has these comments:

  • The CFTC has been aware of these transactions since 2005. These transactions were done in accordance with market terms, regulations and process.
  • This is not a financially material event to RBC but we do take this situation seriously and intend to vigorously defend our reputation.
  • Before we made a single trade, we proactively contacted the exchange to seek its guidance. These trades were fully documented, transparent, and reviewed by both the CFTC and the exchanges, and for the next several years were monitored by them. RBC’s trading was permissible in 2005, was reviewed six months later by the CFTC and encountered no objection, and it is permissible today under the CFTC’s published guidance.
  • Given no objection to the trading activity by either the exchange or the CFTC in 2005, it is absurd to now claim these trades were either fictitious or wash sales. This lawsuit is meritless.
  • The block trades in question were entered into by independent RBC legal entities with the intent to establish genuine, bona fide positions, based on the CFTC’s long-standing regulatory guidance. They were executed at competitive market pricing and no market participants suffered any negative impact, nor has the CFTC alleged any pricing irregularities.

For more information, please contact:

Kevin Foster, RBC, 212-428-6902, kevin.foster@rbc.com
Rina Cortese, RBC 416 974-5506, rina.cortese@rbc.com

How to deflect attention from Jon Corzine and MF Global: Charge a Canadian bank

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My motto is this:  Get the United States out of Canadian banks and get the Canadian banks out of the United States.

The Commodity Futures Trading Commission (CFTC) has figured out how to deflect attention from Jon Corzine’s stealing client’s segregated money to cover MF Global’s proprietary trading:  Charge a Canadian bank with a mischief called “a wash trading scheme”.  Such a scheme, whatever it is, is apparently illegal; but see if anyone can explain to you why it is wrong in less than five minutes.  But stealing your clients’ segregated funds, which is a very clearly wrong, is something to which the CFTC turns a turn a blind eye. In my view, this is similar to the situation with US expats becoming the target of tax collection efforts, all while buying votes with tax credits from Americans still in the homeland.  It stinks of corruption.  So CFTC attacks a Canadian bank, and that makes it look like it’s really doing something–meanwhile it lets its friends steal billions from their clients.  It stinks with a great malodorous corruption and decay of a once great nation that has now died.  It is the straining of a gnat and the swallowing of the camel.

Now that the Chicago Way has become the American way, I say it is time to pull all our investments out of the United States; Canada’s banks did not heed my repeated warnings (e.g., here) and now RBC will pay the price. Gerald Celente told the Daily Bell:

Daily Bell: How about the CFTC? Are they doing their job of protection and prosecution?

Gerald Celente: Well who’s the head of the CFTC, Gary Gensler? He was one of the lieutenants for Jon ‘the Don’ Corzine when Corzine was head of the Goldman Sachs gang, before he became senator of New Jersey. You get it?

Who’s Obama’s Chief of Staff? Bill Daley, from that wonderful Daley machine in Chicago. Where did he come from? Oh, vice chairman of Morgan Chase. Who was Bush’s treasury secretary? Oh, Henry ‘Frankenstein’ Paulson. Where was he from? He began as the CEO of Goldman Sachs after Jon ‘the Don’ Corzine left. This is the guy who created TAARP and came up with the BS line of ‘too big to fail.’ Him? Yeah, that’s right.

[snip] …

The moneychangers are taking over the temple; you don’t have to go very far to look. It’s right there in front of everybody’s eyes and no one will call a spade a spade. The Rothschilds would be jealous to see what the Goldman Sachs gang, the JP Morgan Chase criminal operation, the Citigroup crooks, the Deutsche Bank bandits and the rest have pulled off.

When the system is corrupt, the regulatory commission will search far and wide for “criminals”.  This US financial regulatory system has allowed the banksters to go free, but takes down little guys like Jonathan Lebed and Charlie Engle.  See the following Chris Martenson’s interview with Gretchen Morgenson, in which they ponder the question why no major banker has gone to jail for the 2008 subprime mortgage fraud that caused the collapse of the world’s economy:

How not to fund raise for a Christian project

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I’ve been on both the seeking and the giving side of fundraising. While I don’t know the how to fund raise, I know some things not to do. This is from my perspective as a giver?

What not to do (every one of these has happened to us):

(1) Don’t insult your donor. We invited a recipient of a large scholarship to our house and he began to insult our manner of speaking English. Our church had a vacation bible camp which featured a fictional quest for a “blue-cheeked-bee-eater”. The man didn’t know about this bird, and so he said that if the bird didn’t exist that we were liars. He told us that our sparkling water was a “waste of money” when we could get free water out of the tap. Needless to say, we took offence. Also, if you are a school, don’t unnecessarily berate an alumnus and refuse any action to rectify the situation, as Prof. John Stackhouse did to me, and then later the director of development of Regent College contacted me to ask if my wife and I were planning to give to the school. Hello!

(2) Don’t casually break an appointment with a donor or break off part of the appointment. Yesterday, the director of a Canadian branch of an international mission organization came to a church after accepting an invitation to speak with lunch following. Apparently he forgot the lunch and booked a trip to Ethiopia. He couldn’t stay for the lunch because he left his luggage in Waterloo and his flight left at 4:00 pm. Why not re-schedule so that those who prepared the lunch would be standing there looking like idiots for having spent money on the food? Or why not bring the luggage along, saving a minimum of two hours driving time? The mission group wanted to expose the rest of the church to this mission, so some of us spent our own money to prepare this lunch. It is bad form, and unfortunately, this mission will likely not be the recipient of too much more from our church.

(3) Don’t fail to live up to your end of the bargain. A few of the recipients of scholarships, for which we’ve helped pay, have failed explicit agreements to return to Africa after their studies. If you say you are going to go back to Africa, then go back to Africa. And just for the benefit of the sending churches in Africa and elsewhere: don’t send someone who isn’t going to return because the funding for such ventures will dry up fast. You are sending liars and scoundrels.

(4) Don’t start promoting communism, socialism, global warming, leftist politics, statism, or relativistic moral standards. If you do, then don’t be surprised if your donors, who are generally hard-working business people with conservative values, become upset and shut down the funds. Consider that we pay sufficient in taxes already, and we don’t need more government regulation and taxes. That will only make our generosity dry up. Instead, lobby against statism.  Then your generous donors will have more still to give to you. Don’t be idiots. We worship an all-powerful god not an all-benevolent government.  We are theists not statists.  If a socialist comes begging me for charitable money, I just say, “I gave at the office”–which is literally true because of withholding taxes.  Also, a school we’ve given to has a adjunct professor who says that Jack Layton knew Jesus because he helped a lesbien couple find an apartment.  Time to get rid of that professor or lose donors, don’t you think?

(5) Don’t negotiate in bad faith. This means don’t tell your donor that you are going to break your previous agreement if he doesn’t fork over even more money and better arrangements for you.

Well, these are some of the “don’t”s that I’ve personally encountered.  Perhaps you could add some more.  Or perhaps you disagree.  The comments are open.

The taxman says, “Heads I win, tails you lose”: On the unfairness of capital gains tax

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The following video shows why capital gains taxes are unfair.  The taxman measures capital gains in nominal inflatable dollars.  Inflation robs the investor of gains, but it still looks like a gain. Thus, the investor gets killed by inflation then by capital gains tax and could be left with less than what he had before.  Thus, government robs the investor through inflation or through capital gains taxes: pick your poison.

I notice that the government has its hands out in the good times like 2009-10 when my stocks were going up. But this year, when things are going down, what help or reimbursement do they plan to give me?  Actually nothing.  And you wonder why I hate government?

Efficiency or Property Rights: Thomas Woods’ comments on the Chicago School of Economics

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This was originally posted at City of God.

Thomas Woods, in his book The Church and the Market, spends a little time in the first chapter distinguishing the Austrian and Chicago schools of economics. One major difference between the schools is on the issue of central banking and monetary policy. We’ve had occasion to discuss this on the blog in the past, and I’m not particularly interested in raising it again here. However, Woods brought to my attention another difference which is of much greater concern to me, and this is over a moral issue. The difference is this:

The classic case in Chicago law and economics, famously described by Ronald Coase, is the example of the train that emits sparks that set fire to a farmer’s crops. (The example occurs prior to the introduction of diesel engines.) Either the farmer or the train will have to bear the cost of this damage. On the basis of strict liability, of course, the farmer has the right to the property in question and therefore the right to enjoy its fruits unmolested. The train should compensate him for his loss or install some kind of spark retarding device. But Chicago decides this case in such a way that overall wealth is maximized. (25)

Thus economic efficiency becomes an ethical value that is weighed against the property rights of people. The Austrians vehemently disagree with this point. They argue

that the rights of property should not be compromised in order to satisfy any wealth maximization calculus, and that as a rule strict liability should be observed. (They offer these critiques in their capacities as moral philosophers rather than qua economists, a point to which we shall return in our discussion of economics as a value-free science.) Walter Block has described it as “evil and vicious to violate our most cherished and precious property rights in an ill-conceived attempt to maximize the monetary value of production.” (26)

Woods provides one quote from a defender of Coase to make clear that the Chicago school explicitly teaches what he says they teach:

In defense of Coase, Chicago economic Harold Demsetz argues that “[e]fficiency seems to be not merely one of the many criteria underlying our notions of ethically correct definitions of private property rights, but an extremely important one. It is difficult even to describe unambiguously any other criterion for determining what is ethical.” Here is efficiency analysis with a vengeance. (26)

Now, I’m not sure any other way to describe this theory besides the words Block used: evil. Quite clearly, this is a form of coarse utlilitarianism, and one which will undoubtedly help the well-connected over against those who have little wealth. And I think this point is something where those on the left and those who support a view of property rights as natural rights (be they conservative or libertarian) can find agreement.