With all the news over the weekend concerning health care reform and the continuing collapse of employment, production and the world’s “true” phyiscal economy (for those of us who still recall what that represents) it’s difficult to zero in on one single topic. But in keeping with the theme of this blog, I prefer this international version of “too big to fail” as a fitting compliment to prior posts.

We already covered the UBS fraud case, but I wanted readers to actually see the words quoted in this updated Bloomberg snippet:

The U.S. Internal Revenue Service is suing UBS in federal court in Miami to get the names of 52,000 American account holders who may have broken U.S. tax laws.

UBS is fighting back. The bank said in April 30 court filings that the U.S. efforts would force bank employees to violate Swiss criminal laws barring disclosure of secret account information. The Swiss government says the U.S. is trampling on its sovereignty. An indictment of a bank can be lethal if customers doubt its stability.

“That could be the most dangerous thing of all for UBS,” says Robert Fink, whose firm represents 200 UBS clients. “UBS is on the road to destruction in the U.S. They’re totally whipsawed. If they’re indicted, they will be convicted. Eventually, they will lose their banking license.”

Fink says the global financial meltdown of the past 18 months may save UBS. “The U.S. government may say we can’t put a major bank out of business,” he says.

There it is folks. You can launder money, evade taxes – basically all the RICO violations in the book. But if you’re “too big to fail” you’re exonerated. You can’t be touched by local law enforcement, not by federal law enforcement, and not by international law. At best, you pay a small fine, and some government “officials” endure a few sideways glances.

This is where Obama’s rubber hits the road:

“Most Americans meet their responsibilities because they understand it’s an obligation of citizenship,” Obama said on May 4. “Yet there are others who are shirking theirs. We shouldn’t let some citizens dodge their responsibilities, while ordinary Americans pick up the slack. Unfortunately, that’s exactly what we’re doing.”

Well, that’s not quite the case Barack. What we’re doing is attempting to hold these millionaires and international corporations accountable to fraud–but what about the multi-trillion dollar banks that launder their money and help them evade the tax obligation? Well, as usual, they are just too big to take down, and “ordinary Americans” pick up their slack.

When will Barack stand up to the global Mega-Bank crime syndicate and lecture them about their mismanagement, greed and fraud? When pigs fly? (and I’m not talking about “swine flew”)

On May 13th, we reported some 17,000 US accounts were under suspicion of tax evasion–this has now grown to 52,000 in less than 30 days. And UBS plays the “sovereignty” card (as if sovereignty holds any sway in today’s Orwellian Oligarchy). Still…a neat trick. You make it a national law to hide fraud, them claim it’s a violation of that law to expose it. Take note America–here’s something you can learn from the Swiss.

But the bottom line is that this is just another extension of the bailout mentality of the present and past U.S. administrations. Banks engage in criminal swindles which cost innocent people TRILLIONS, but their “too big to failness” is a free pass to cover up the evidence, draw the curtains and get real about hiding their fraudulent activities more effectively so that governments aren’t further embarassed by the exposure of their complicity.

It is in fact, a form of government sponsored fraud, when providing taxpayer extorted bail-out money to help fund the current stock upswing and commodity rally (in collusion with banks like Goldman Sachs) to attempt to re-inflate the derivatives bubble, which by the way keeps being misquoted as something like 500-640 Trillion worldwide. This is a 1.2 QUADRILLION DOLLAR bubble and growing. The collapse of the real value of the underlying assets of the bubble does not reduce the value of the contractual obligations, but instead only increases the spread between reality and fantasy.

Just one more bail-out and we'll all be transported safely back to KansasUnfortunately, in the fantasy world of derivatives where “wealth without basis” precedes a “recovery without basis”  the “too big to fail bailouts” must carry on behind the drawn curtain of the great and powerful OZ.

But even OZ cannot control ”behaviorist economics”, as the phenom has gone international. You see, with Russia and China just TALKING about dumping the dollar as a reserve currency, so it shall be done, faster than your greenshoots sprout, because in the new BEHAVIORIST world, where perception dictates reality, all you need is a rumor to topple an empire.

And when the dollar gets dumped, and IMF special drawing rights become the new global reserve currency, that’s when the real fun begins.

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