Tuesday, June 25, 2013

Did The U.S. Federal Reserve Chairman Ben Bernanke Send The Stock Market On A Wild Ride?

Given the 48-hour long global stock sell-off hitherto unseen since the September 2008 global credit crunch, did FED Chairman Bernanke’s announcement to ease off the US economic stimulus caused it?

By: Ringo Bones 

The only thing that’s being proved by the 48-hour over 500-point plunge in the global stock prices is that the global stock market hates uncertainty. Sure, it can handsomely make profits in either wartime or peace, but the rather uncertain announcement of U.S. Federal Reserve Chairman Ben Bernanke back in Wednesday, June 19, 2013 of “taking the foot off the gas” on the U.S. economy’s 85-billion US dollar a month stimulus package if signs show that the U.S. economy shows signs of improvement near the end of 2013 had sent the global stock marketplace in a 48-hour sell-off – a global stock market plunge if you will. Not until did Friday came that the global markets started to stabilize after a two-day freefall. Given the market being spooked by such “economic stimulus ending announcement”, one wonders if our global economy is currently heavily dependent on the Obama administration’s rather liberal economic stimulus program. But doesn’t it, really? 

Every hedge fund manager who had either profited or had drastically minimized their loses during the September 2008 global credit crunch via the use of complex derivatives in hedging their investment portfolios have been since the start of 2013 started to advise their clients to be careful on their stock market investments since it is very likely that the Dow Jones Industrial Average could return to the 10,000 point mark around the end of 2013. Though despite such “scare mongering” the DJIA did manage to cruise well a little above the 15,000 point mark for much of May 2013 before it was sent on a volatile wild ride by June. 

While the June 19 announcement of FED Chairman Bernanke caused a global bond market sell-off that made the S&P 500 the worse it had been since 2011, many experienced and institutional investors had been quite busy snapping up safe haven commodities investments like gold and other precious metals that has since become “cheaper” since the 48-hour wild ride. But given the still high unemployment rates in the United States and the recent economic data showing the recent slowing down of the Mainland Chinese manufacturing sector, may now wonder if the rather artificially high stock market prices are just probably due to the Obama administration’s rather quite liberal 85-billion US dollar a month economic stimulus package / quantitative easing program. 

Saturday, June 1, 2013

Liberty Reserve: The Criminal Underworld’s Online Bank of Choice?

As probably one of this year’s biggest money laundering cases, has the online digital currency and money transfer firm Liberty Reserve now became the criminal underworld’s online bank of choice? 

By: Ringo Bones 

With the arrest of the firm’s Ukrainian born founder, Arthur Budovsky - who was en route to his digital currency and money transfer firm’s base of operation in Costa Rica, by the U.S. Department of Justice authorities, Liberty Reserve was shut down by the U.S. D.O.J., the U.S. Secret Service as the ongoing investigation by federal prosecutors in New York proceeds. With a massive 6-billion US dollar money laundering scheme that could be the biggest uncovered for this year, does Liberty Reserve made an error of corporate due diligence for the firm to be embroiled in criminal money laundering? Or is the firm actually has outright complicity in such a criminal act? 

Though the outcome of the investigation is still pending, the U.S. Department of Justice in conjunction with the US Secret Service made arrests of Liberty Reserve’s upper echelon personnel in 17 countries over the weekend of May 25, 2013 while freezing its online domain name and 45 bank accounts used by the digital currency and money transfer firm elsewhere in the world. Based on the preliminary investigation uncovered by the New York Federal Prosecutor’s office, it was found out that Liberty Reserve became during the past few months as the money laundering destination of choice for the world’s criminal groups currently engaged in identity theft, illegal arms trading and running illegal online pornography sites, and transnational narcotics smuggling  just to name a few of the criminal enterprise uncovered whose profits were allegedly laundered by Liberty Reserve.  

Even though digital currency schemes like Bitcoin had been actively used by transnational illegal arms traders and narcotics traffickers since it was introduced, police authorities around the world has had a rather Quixotic task in their hand when it comes to arresting “online enablers” of such criminal activity due to a lack of established brick and mortar institutions. Given that Liberty Reserve has a real bricks and mortar office located in a rather “infamous” tax-haven destination called Costa Rica in which authorities could conduct raids and make arrests, this could be the primary reason that over the years this is the first time that such criminal activity has finally been “tangibly” clamped down.