LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Archive for December, 2009
Why We Believe Propaganda
From a piece I wrote in 2005, “America´s Downing Syndrome,” about why the airwar in Iraq was never represented in media coverage:
“And how does the public conscience square with all this? Simple. The civilians who are fair game are not American civilians. The skies that are threatened are not American skies. It may take a village to raise a child, but given enough air power, we now know also that it only takes a child to raze a village. Our children, their villages. And in return for our invulnerability, we make cultural icons out of bomber pilots, turning a blind eye to their ravages abroad. While the grunt that kills and is killed on the scorched ground bears the burden of public backlash against any horrors of war making that might elude censorship, his mates in the clouds are untouchable. Atrocities are always only committed on earth. So a Lieutenant Calley is court-martialed over My Lai and a Charles Graner is imprisoned for Abu Ghraib, but the bombers who wreak havoc on a magnitude far grander not only walk free, but are feted by a society in which for many reasons the air force is substantially white and the officer corps even whiter.
But there’s more. Strategic bombing directed broadly against a country´s will or morale rather than military targets has nearly always been associated with civilian not military control. Pen-pushers in think tanks and journals, couch-crusaders on Wall Street and Main Street are the most hysterical groupies for total war from the skies. (9) Remote from actual bloodletting, they’re still the quickest to tote up grand calculations of its necessity in bringing about their favorite utopia. It was Lyndon Johnson, not the generals, who first ratcheted up the air war against North Vietnam to genocidal proportions.
And because the civilian leadership unlike the military is always indebted to public opinion for its existence, it´s ultimately public approval rather than military need that drives air war against civilians, which is why the corporate media obligingly does its bit to keep that approval going.
Media and government duplicity, widespread intoxication with technological wizardry, a deadly sense of impunity combined with a deadlier sense of omnipotence, cultural myth making, and socio-economic class are the causes of America’s fundamentally diseased relationship with air power and thus with the raw foundation of imperial might. It is the cognitive disease which periodically manifests itself in redundant “smoking-guns” and “exposes” about memos whose sole purpose apparently is to maintain our illusion of ourselves as eternal naifs duped by an endless procession of charlatans in government.
Clearly, it’s not merely war propaganda so much as the public´s receptivity to war propaganda that’s the problem. The addiction to war-as-Grand Theft Auto reveals an insatiable craving in the bowels of the military-industrial leviathan for physical violence. Air war feeds that craving while disarming us with its technical virtuosity and its remote-controlled, surreal impersonality.
Air war works because it displays naked aggression masked as defense, hard core furtively masquerading as family viewing in the American living room. It’s the secret fix that lets us look like good guys but act like bad guys; it’s the other face of the double-eagle, the predator behind the mask of the protector.
Air war is the white noise of a consumer society so narcotized that only violence makes us feel alive. If we no longer see it, hear it, or talk about it in the heart of empire, it’s ultimately only because for more than fifty years now, we’ve never really done without it.”
Anarchism In the Kibbutz Movement
Haaretz on a study of anarchism in the Kibbutz movement:
“If there is a vision of Israel that can avoid the polarization and mythmaking of much Diaspora and Israeli discourse, it requires an appreciation of the complexities of Israeli society. James Horrox’s “A Living Revolution: Anarchism in the Kibbutz Movement” provides a welcome reminder that Israel wasn’t always seen by radicals as an outpost of Western imperialism. Horrox unearths the utopian, anarchist influences behind the growth of the kibbutz movement in pre-state Israel. Anarchism may be a highly flawed ideology, but at the very least it offered a vision of Zionism that, in not aiming to build a Jewish state, held out the possibility of a land in which Jews and Muslims could coexist peacefully. This was never likely to happen, of course, but at the very least it’s important to remember that Israel didn’t have to be the place that its contemporary detractors and defenders imagine it to be - and it doesn’t have to be that place now.”
My Comment:
Notice the reflexive genuflection to the state. Why is anarchism that promises coexistence a flawed ideology? Isn´t “flawed” a much truer description of the statist ideology rooted in race and faith (Zionism) that guarantees displacement of one people by the other?
Wikipedia Scanner and Deletionpedia
This Wired article by John Borland from August 2007 references a handy tool - the wikipedia scanner - for anyone interested in finding out what sorts of edits are being made at wikipedia. The author argues that while most edits, even from interested parties, seem relatively minor and informational, it´s also true that corporations like Diebold (the maker of the Diebold voting machine), Walmart (among many corporations), and the CIA have all been involved in altering information.
“Wikipedia Scanner — the brainchild of Cal Tech computation and neural-systems graduate student Virgil Griffith — offers users a searchable database that ties millions of anonymous Wikipedia edits to organizations where those edits apparently originated, by cross-referencing the edits with data on who owns the associated block of internet IP addresses……
The online encyclopedia allows anyone to make edits, but keeps detailed logs of all these changes. Users who are logged in are tracked only by their username, but anonymous changes leave a public record of their IP address.”
Though it´s nice to see a mainstream publication like Wired, take up this topic, I wonder if it´s only touching the tip of the iceberg.
It´s not the suppression of so-called “conspiracy theory” type articles or their authors that I worry about. It´s the skewing of mainstream topics and the tarring of perfectly respectable publications that are well-sourced and written by well-educated and informed people, and that have broken or explored important stories, often long before and far better than the mainstream media. By removing those sources and sending researchers to so-called mainstream media sources the establishment keeps a tight control of whose voice gets heard, and more importantly, whose voices are annointed with authority. Since many of the alternative voices are those of foreigners, working class or disenfranchised people, immigrants, or political dissidents, this skewing is both censorship as well as a form of cultural imperialism, with a distinct racial, religious, and linguistic bias, i.e. in effect, the skewing tends to promote Anglo-European, state-centric, non-religious or anti-religious, English-language perspectives over others.
If you want to search for articles that have been deleted that you think should be put back on wikipedia, check out deletionpedia. You need to look in the deletionpedia archive, and even then, not all deleted articles end up there.
More Apparent Wiki Whacking On Naked Short Selling
Deep Capture has more on wiki manipulation in its latest post:
“In the past (as you can read about here), we know Weiss spread misinformation relating to stock fraud via Wikipedia on behalf of the Depository Trust and Clearing Corporation (DTCC), the Wall Street firm considered a key enabler of illegal short selling. Exactly who’s sponsoring Weiss these days is unclear; however, as the evidence that follows will demonstrate, his concerted effort to whitewash DTCC’s Wikipedia article makes that company the prime suspect.
Now that his ruse has been uncovered – yet again – the focus becomes one of identifying and repairing the damage done. A brief review of some of the thousands of changes made by Weiss will give you a sense of both the scope of the problem and the nature of his motives. I’m organizing the following tiny sampling of Weiss’s Wikipedia edits by topic, with the content as it originally appeared on the left, with Weiss’s changes on the right. Words added or removed appear in red.”
My Comment
For now, I am just posting this as an interesting development that I haven´t personally verified. Also, I think any notion that the tide has turned on wiki manipulation is overly optimistic. I doubt, for example, that Weiss´ media bosses don´t know what´s happening. That to me is an incredibly naive position to take.
DTCC Board Stuffed With Kleptocrat Banks/Funds
The DTCC (Depository Trust and Clearing Corporation) is the largest depository in the world, and, along with its subsidiaries, the place where all transactions in equities, money market funds, corporate and muni bonds, MBSs and derivatives are cleared and settled. Activists have been demanding detailed release of trades which haven’t been settled or have failed to deliver (FTD), because of the obvious potential for manipulation, A glance at the board of directors, which consists of leading figures from the banks and funds, many of whom profited hugely from the government bail-out, shows that concern is amply warranted.
From Citizen Economists:
DTCC BOARD OF DIRECTORS
The DTCC’s board includes 20 directors.
Art Certosimo, Senior Executive VP, Bank of New York Mellon
Norman Malo, President and CEO, National Financial Services LLC; Fidelity Investments
Stephen P Casper, Partner, Vastardis Capital
Gerald A. Beeson, Senior Managing Director, COO. Citadel Investment Group
Donald F. Donahue, Chairman and CEO, DTCC
William B. Airnetti, President and COO, DTCC
J. Charles Cardona, CEO Bank of New York Mellon - Cash Investment Strategies, President of the Dreyfus Corporation
Randolph L. Cowen, Co-Chief Administrative Officer, Goldman Sachs Group Inc
Norman Eaker, CAO, Edward Jones
Timothy J. Theriault, President - Corporate & Institutional Services, Northern Trust Company
Neeraj Sahai, Managing Director and Global Business Head, Securities and Fund Services, Citi
Gerard La Rocca, Chief Administrative Officer, Americas Barclays Capital
David A. Weisbrod, Managing Director and Risk Executive, JP Morgan Chase Bank
Stephen Luparellyo, Vice Chairman and Senior Executive Vice President of Regulatory Operations, FINRA
Mark Alexander, Managing Director, Global Wealth and Investment Management - Bank of America, Merrill Lynch, Head of Technology Operations, Broadcort Clearing
Ronald Purpora, ICAP Securities USA LLP
Robert Kaplan, Executive Vice President, State Street Bank and Trust Company
Michele Trogni, Managing Direcotr and Global Head of Operations, UBS Investment Bank
Ian Lowitt, Administrative Officer, Lehman BrotherSteve Cohen, Third Biggest Owner of Sotheby’s In 2009 (Corrected)
Modern Art Obsession has a post from April 2009 (see below) about Steve Cohen exhibiting a collection of his art at Sotheby’s, (where he is the third largest owner). The exhibition ran exactly at the same time as Sotheby´s Spring Modern and Contemporary Auction. The Cohen art was not for sale.
Quote:
“So.. we guess there are other ways to dump an art collection skin a cat.
Hmmm… Maybe the page from the Billionaire Art Opportunist Collector playbook could be :
- Step 1.. Buy lots of Art, push prices way up, and tell everyone who’ll listenin the media you’re a wise long term buyer.
- (Photo #1, Richard Prince, “Graduate Nurse, 2002″,Ink jet print and acrylic on canvas,89 in x 52 in. FYI… A description from Sotheby’s.. “This work is one of the best paintings Prince ever made, particularly because of its monumental scale and the rich, painterly quality of the brushstrokes”)
- Step 2.. Buy an art auction house (or a Whopping controlling interest in one),
- Step 3.. Stage a show of the great works having auction house experts tout your collection..
- Step 4..Tell everyone these art works, on proud display, are not for sale
- Step 5… Wait for someone stupid enough to say.. I wish I could have a collection like the one by this well known art collector, which just happens to be on display in the auction house.
- Step 6.. To be determined…. Hmm.. possibly.. Cash out..??
Note: Cohen’s SAC Capital amassed its position in Sotheby’s in the 6 months upto March 31, 2009, and Sotheby’s shares doubled by June 2009 from a low in February.
Correction (January 7, 1020): Cohen sold his stake in June:
The fund acquired its Sotheby’s stake between September and April, a period in which the auction house’s stock was battered by the financial crisis and a shrinking art market. The share price was below $10 for much of that period, down from a high of $61.40 at the end of the boom. This spring, the stock rebounded somewhat – it was $14.48 a share on June 30, so SAC’s sale of its roughly four million shares was likely to have netted several million dollars
Edward Bernays On Why Conspiracies Work
“In almost every act of our lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons [...] who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind, who harness old social forces and contrive new ways to bind and guide the world.”
– Edward Bernays
GATA Sues Federal Reserve For Records On Gold Manipulation
From the website of the Gold Anti-Trust Action Committee, the leading activist against gold price manipulation in the market:
“GATA today brought suit against the U.S. Federal Reserve Board, seeking a court order for disclosure of the central bank’s records of its surreptitious market intervention to suppress the monetary metal’s price.”
For some of my warnings of gold price manipulation, see the following:
“Was the IMF Involved in Gold Price Manipulation?” Dissident Voice, June, 2006
“Hanky-Panky at the Counting House,” Dissident Voice, June 6, 2006
Establishment Media Hops On Survivalist Bandwagon
Newsweek, getting on the survivalist bandwagon…months late…(see my piece “Getting Off the Grid“).
You read it first here or on some other libertarian site…then it percolates upward to the “elites,” carefully sanitized of its origins. An anthropology of the taboos and totems of the journalistic tribe is in order..
“In the end, what it all boils down to, at least for the preppers, is self-reliance—a concept as old as the human race itself. As survival blogger Joe Solomon pointed out in a recent column, during the Victory Gardens of WWII, Americans managed to grow 40 percent of all the vegetables they needed to survive. “My mother’s parents had a 10-acre garden, and my grandfather worked at the dairy farm next door,” says Hill, the former jet mechanic. “They worked by raising their own food, they had their own chickens, they canned vegetables, and my grandfather fed a family of 12 like that.” But in the modern world, he says, many of those skills are easily forgotten. Today, our food comes from dozens of different sources. Most of us aren’t quite sure how electricity gets from the wires to our stoves. We use debit cards to buy a can of tuna and we wouldn’t have the slightest idea how to filter contaminated water. We are residents of the new millennium; we simply haven’t needed to prepare.
So for the moment, people like Bedford are reteaching themselves lost skills—and in some cases, learning new ones. Bedford has read up on harvesting an urban garden, and is learning to use a solar oven to bake bread. She is ready with a pointed shot in the event she ever needs to hunt for her own food. And until then, she’s got 61 cans of chili, 20 cans of Spam, 24 jars of peanut butter, and much more stocked in her pantry; she estimates she’s spent about $4,000 on food supplies, an amount that should keep her family going for at least three months. Now, even if something simple goes wrong, like a paycheck doesn’t go through, “we don’t need to worry,” she says.”
Gold Bears On The Prowl
Former Chairman of President Reagan´s Economic Council:, Martin Feldstein via 321gold.
“In short, there are better ways than gold to hedge inflation risk and exchange-rate risk. TIPS, or their equivalent from other governments, provide safe inflation hedges, and explicit currency futures can offset exchange-rate risks.
Nevertheless, although gold is not an appropriate hedge against inflation risk or exchange-rate risk, it may be a very good investment. After all, the dollar value of gold has nearly tripled since 2005. And gold is a liquid asset that provides diversification in a portfolio of stocks, bonds and real estate.
But gold is also a high-risk and highly volatile investment. Unlike common stock, bonds, and real estate, the value of gold does not reflect underlying earnings. Gold is a purely speculative investment. Over the next few years, it may fall to $500 an ounce or rise to $2,000 an ounce. There is no way to know which it will be. Caveat emptor. “
My Comment:
My interpretation of that is that there´s going to be a concerted effort to push the gold prices lower, which coincides with a technical need to correct…
American Pot Described By Chinese Kettle
Veteran investigative journalist David Lindorff in 2005 on the Chinese turning the tables on the US on human rights:
” The New York Times was almost apoplectic Sunday over a human rights “report card” issued by China’s Foreign Affairs Department on the United States. That report, a response to the annual report on China’s human rights situation issued by the U.S. State Department, called attention to a number of areas where the U.S. is in violation of universally accepted norms of behavior.
Having lived for two years in China–a fascist-style military dictatorship where the law is simply another tool of repression for those in authority, and where people are routinely locked up, tortured, deprived of their livelihood and even their lives for such transgressions as posting comments on a website, protesting a corrupt boss or conducting prayer services in a private home, and a place where perceptions of America can be pretty bizarre–I was expecting something comic after reading in the Times that the report on the U.S. “approaches caricature.”
In fact, putting aside whom it was doing the talking, the report was pretty damned accurate, and devastating.
American society is characterized by rampant violent crimes, severe infringement of people’s rights by law enforcement departments and lack of guarantee of the right to life, liberty and security, the Chinese report said, noting that in addition to the threats from uniformed law enforcement, some 31,000 Americans were killed by firearms last year. The report also noted America’s record two million prison inmates, and the fact that three times that many are on parole or probation.
Caricature? Hardly. The number of people being jailed in the U.S. is a national scandal, particularly considering the percentage who are black and Latino, and the fact that most are there for non-violent offenses. And no surprise there: Nearly every time I am on the road and see a car pulled over by a trooper, I discover that the driver is black. Unless blacks are uniquely prone to speeding, there is an epidemic of racial profiling, and it’s not limited to highways.
American democracy is manipulated by the rich and malpractice is common, the report continues, noting that elections in the U.S. are “in fact a contest of money.” Really. Can anyone honestly call this a caricature? I remember when I was teaching a group of journalism graduate students in Shanghai, I received my mail ballot from home, which at the time was a small town in upstate New York. I was happy to receive it because I wanted to show it to my class, where the students were anxious to see first-hand how American democracy works. Imagine my chagrin when I opened the envelope and saw that the ballot was composed entirely of single candidates for each post. Republicans so dominated the upstate region that no one bothered to run against them for any town or county post! “These look just like our ballots!” the students said in amazement. Nor in our current red state/blue state polity, are things much different across most of the country, where campaign funding laws, or the lack thereof, make incumbency virtually a guarantee of re-election.
In the area of economic rights, the Chinese report said poverty, hunger and homelessness “haunt the world’s richest country.” Here I’d have to disagree. While the figure they used (from the U.S. Census Bureau—36 million living in poverty—is correct, it is hardly a condition that “haunts” the majority living above the poverty line, since our derelict corporate media don’t cover the poverty beat, and our economically segregated communities make it easy for people to ignore the suffering in the midst of plenty. Still, noting that a sixth of the nation lives in poverty is no caricature. It’s a fact.
Racial discrimination? The report says it permeates every aspect of society, while the new post 9-11 homeland security regulations especially target ethnic minorities, foreigners and immigrants. Does anyone want to challenge the accuracy of that depiction?
As for the rights of women and children, the report called attention to the deplorable rate of rapes and sexual abuse, with some 400,000 children forced into prostitution and sexual abuse. This ugly reality, while also true for China, cannot be brushed aside here.
Finally the Chinese report addressed the abuse of foreigners by U.S. authorities, noting the scandalous violations of the rights of prisoners of war, the history of invasions and unprovoked military assaults on other nations, and the estimated 100,000 civilian deaths in Iraq.
For my part, I was surprised the Chinese report didn’t go further, to mention the failure of the U.S. to abide by international law in allowing foreigners arrested on serious criminal charges in the U.S., including murder, to contact their embassies, the shameful inadequacy of funding for schools in poor communities, the dumping of toxic waste and the siting of pollution-causing power plants in low-income communities, and the theft of private property through improper use of imminent [sic] domain and draconian drug laws, the unconscionably high percentage of minorities on American death rows, as well as other abuses.
China is one of the world’s prime human rights offenders, but that ugly reality should not prevent us from looking honestly into the mirror that it has held up to our own society and government.
If anything is a caricature, it is the article on the Chinese report, in which The Times appears as a caricature of real independent journalism.”Doug Valentine On The Empire of The Lie
Douglas Valentine, author of several masterful books on national security and the CIA, talks to Susan Mazur about Tim Weiner´s new book on the CIA (”Legacy of Ashes”), the nexus of finance and espionage, and the propaganda campaign that lets Americans think the CIA is a force for good.
Here´s a snippet:
“Most of what Weiner writes about the CIA is already known. It’s a history book with a bias, not an expose, at least not for the Vietnam generation. He doesn’t even really get into the current Bush administration. He gives us a predictable treatment of William Casey and the Contras, when there was an incredible revival of the CIA under Casey.”
And that´s precisely what I´d say about exposes that appear in establishment outlets, even if they seem to be literary and anti-establishment (Vanity Fair, New York Times, even, perhaps Rolling Stone, although much less so). They are less about exposing as about controlling the terms of the discourse, that is, the boundaries within which discussion can take place.
Another insight from Valentine:
“Angleton thought William Colby might be a mole. Angleton exposed the divisions within the CIA after 1966, the Colby vs. Helms factions. He also represented the literary sensibility the CIA once had, where finding secrets was like teasing the meaning out of a poem. Now we have sledgehammer spies.”
(Colby, by the way, died in a ‘boating accident’ in Maryland, on the day that a prosecutor got permission to set up a grand jury to probe the death of Frank Olson, who was involved in chemical warfare research and had been one of the subjects of the CIA´s mind control experiments. The CIA claimed Olson jumped to his death from a hotel window, although his injuries, according to the autopsy, could as well have been inflicted by a blunt instrument. I should note that at the time of his death in 1996 Colby´s name was being used on the letter head of Strategic Investments, a publication of Agora Inc. (co-owned by my co-author), according to several reports, although I can´t confirm to my satisfaction the exact status of that association. Several unconfirmed reports also link Colby to knowledge about the death (or killing, according to some) of White House deputy counsel, Vincent Foster, a preoccupation at the time, of Agora co-founder James Davidson)
More from Douglas Valentine:
“The CIA gets oodles of money from the arms business. Most of their income comes from criminal activity.
The Russian Mafia operates with a sort of impunity. And so does the Israeli Mafia. And one of the reasons they have this sort of impunity is that they’re sharing their profits with the CIA.
And I think a lot of CIA money is capital investments. They’re like movie producers. They want to overthrow the Iraqi government, they go to companies like Halliburton and others who are going to profit from the overthrow of Iraq. And like the executive producers of some movie, they get them to ante-up some cash. Telling them, don’t worry about it, the government contracts you get in return will cover your investment. Plus they have the old boy network – which now is so far flung.
Suzan Mazur: Plus some of the military contractors are organized crime and have had contracts since the 50s.
Doug Valentine: Exactly. Which bring us back to Barry Seal (Iran-Contra). Because in 1972, Barry Seal was to fly some arms and some explosives into Mexico. What the Brooklyn Drug Task Force found out is that this guy named Murray Kessler, who was involved with the Gambino family in Brooklyn, had an arms manufacturing company in New Jersey where the guns and the bombs came from.
Suzan Mazur: And some of these arms merchants also had security clearance during the McNamara and Clifford years of heading the Defense Department. They make weapons for the US government and some for whoever they feel like.
Doug Valentine: From my perspective, the spy industry and especially the arms industry, is the foundation on which the American empire is built. The United States has a military budget of I think $300 billion dollars and the CIA budget is like $50 billion – that’s a year. Together that’s bigger than the gross national product of any country in the world. And in the meantime we’re worried about 20 guys in Al-Qaeda.
[Lila: This statement is inaccurate, as both GDP and GNP in most developed countries were near or over a trillion in 2007. See current figures here. I think the author might have been misquoted on this and might have meant “many countries,” for example, in the developing world. However, projections for 2010 place US military spending in excess of 1 trillion, if all military-related expenditures are included).
Continuing with the interview:
“Suzan Mazur: Which exploits of the agency do you consider the most diabolical – aside from the fact that one of its founding fathers molested two of his own children – and a reason why the CIA should have been dismantled years ago?
Doug Valentine: Your readers don’t want to know that answer. The most dastardly thing that the CIA has done is to wage this campaign of psychological warfare against the American people. Where the American people don’t see the CIA for a bunch of basically American KGB agents who are conducting criminal activities around the world. There’s a movie called The Usual Suspects with a much feared criminal named Keyser Soze. And Keyser is talking to a cop and he says the greatest trick that the Devil ever pulled was convincing the world that he doesn’t exist.
And this is what people like Weiner are doing with books about the CIA that don’t explain it for what it really is. They’re part of a propaganda machine that’s making the American people see the CIA in mythological terms as good guys, crusaders, as Lawrence of Arabia – when, in fact, they’re criminals. They’re part of THE GRAND LIE.”
My Comment
The piece is long and, for an intelligence aficionado, packed with illuminating detail. Among other things, Valentine touches on James Jesus Angleton, the most compelling of the spy masters (since he was chief of counter intelligence, I should call him chief spy hunter), the extensive role of private intelligence (which I touched on in my Abu Ghraib book), as well as the manipulation of Wikipedia, which Valentine regards as considerably influenced by the CIA. This confirms my own long-standing observations about Wikipedia. On crucial topics, it stays within the bounds of debate allowed by Western establishment interests and is very far from being an objective or quasi-scholarly affair. (I use the term Western because despite a substantial component of foreigners, the predominant interests served are the interests of the state and the military-industrial and financial industries), the most influential and powerful of which are Western. I do not use the terms capitalist, because I see the establishment as essentially a technocrat or money-managing class, working against capital formation in many respects.
And a final word, from the lips of Bill Colby himself:
“The CIA owns everyone of any significance in the major media.”
Was this tongue-in-cheek, or meant to be taken literally? You decide..
Lazard-Freres Insider Trading Bust
I missed these arrests from back in mid-December:
“U.S. prosecutors filed criminal charges against a former Lazard Freres banker on Wednesday for alleged insider trading that earned him and others $500,000 in illegal profits.
The trading involved some of the highest profile deals during the leveraged buyout boom of 2005 to 2007, including the buyout of TXU Corp, as it was formerly known, for $44 billion, including debt.
The charges were brought against Adnan Zaman, a former vice president at Lazard Freres, in federal court in San Francisco.
Financial regulators also filed civil charges against him and Vinayak Gowrish, a former associate at private equity firm TPG Capital, saying the one-time fraternity brothers stole confidential stock tips and then passed them on to friends. In return, the men received cash kickbacks.
The U.S. Securities and Exchange Commission settled the civil case with Zaman, who agreed to return $78,456 in ill-gotten gains and to be permanently barred from associating with any financial broker or dealer.
The SEC said that Gowrish and Zaman, friends since high school, tipped two friends, Pascal Vaghar and Sameer Khoury. Vaghar and Khoury also settled with the SEC.”
More at Reuters.
My Comments
Is it just me, or does there seem to be an awfully high number of desis (Hindi for home-boy).
What´s with these guys?
As a fellow desi, I have to hang my head. World-class education, world-class jobs, better than world-class salaries…and a world-class racket.
War Without End, Amen..
“Bush’s rationale for attacking Afghanistan was spurious. Iranians could have made the same argument to attack the United States after they overthrew the vicious Shah Reza Pahlavi in 1979 and the U.S. gave him safe haven. If the new Iranian government had demanded that the U.S. turn over the Shah and we refused, would it have been lawful for Iran to invade the United States? Of course not.
When he announced his troop “surge” in Afghanistan, Obama invoked the 9/11 attacks. By continuing and escalating Bush’s war in Afghanistan, Obama, too, is violating the UN Charter. In his speech accepting the Nobel Peace Prize, Obama declared that he has the “right” to wage wars “unilaterally.” The unilateral use of military force, however, is illegal unless undertaken in self-defense…….
…In his declaration that he would send 30,000 additional U.S. troops to Afghanistan, Obama made scant reference to Pakistan. But his CIA has used more unmanned Predator drones against Pakistan than Bush. There are estimates that these robots have killed several hundred civilians. Most Pakistanis oppose them. A Gallup poll conducted in Pakistan last summer found 67% opposed and only 9% in favor. Notably, a majority of Pakistanis ranked the United States as a greater threat to Pakistan than the Taliban or Pakistan’s arch-rival India.
Many countries use drones for surveillance, but only the United States and Israel have used them for strikes. Scott Shane wrote in the New York Times, “For the first time in history, a civilian intelligence agency is using robots to carry out a military mission, selecting people for targeted killings in a country where the United States is not officially at war.“
Delingpole On Wiki Manipulation
James Delingpole on Wiki manipulation…
“If you want to know the truth about Climategate, definitely don’t use Wikipedia. “Climatic Research Unit e-mail controversy”, is its preferred, mealy-mouthed euphemism to describe the greatest scientific scandal of the modern age. Not that you’d ever guess it was a scandal from the accompanying article. It reads more like a damage-limitation press release put out by concerned friends and sympathisers of the lying, cheating, data-rigging scientists
Which funnily enough, is pretty much what it is. Even Wikipedia’s own moderators acknowledge that the entry has been hijacked, as this commentary by an “uninvolved editor” makes clear.”
Which is just what we said a while back
You get the scoop here…
Warren Buffett To Promote Paulson Book
Now, we don´t want to read too much into this announcement, but, really, promoting Paulson´s book? What´s Buffett going to say?
I really really like that chapter where Hank had to take over the US government.…you know, after he pushed Bear Stearns and Lehman over with the help of his hedge-fund buddies…and all but nationalized housing.
Or
Gee, Hank´s into that cap-and-trade collectivist boondoggle that just got outed as a total rip-off and a fraud made up by climate change fanatics but hey, give the guy a break, will ya? We´re all capitalists here…..you know, like, state capitalists..wazza big deal?
Or
Yeah, I know. Vanity Fair, that bastion of free markets and free minds, already did its bit for Hank´s place in history when it got down on its knees and..um.. blew…up.. the guy into some kind of I´m-taking-on-the-slings-and-arrows-for-the-greater-good-profile-in-courage long before me, and yeah, Bethany did her bit for Hank too.. but every little effort counts…
I´ve had my doubts about Buffett´s involvement in the bail-out.
This doesn´t make them go away…
Secretive Steve Cohen On Talk Show Discussing Relationship With Ex—
I’d been avoiding mentioning the by-now famous clip of Steve Cohen on a talk show back in 1992, because it seems like a low blow. I mean, hit the guy over the head on insider trading, but don’t worm around in the trash can for dirt on him. Of course, he did put himself on the show…
But, either way, there’s one angle that is relevant.
If you’re billed as the most secretive guy in the hedge world, presumably because you’re a reclusive, crowd-shy financial genius, what does it say that you once got onto a TV show called Cristina of none-too-distinguished caliber to discuss intimate details of your personal life?
Hmm. That’d hardly what I call shrinking violet material.
Here, sans video (because we don’t drag people’s families in the mud on this blog) is the lowdown at New York Magazine:
“Shortly after they were married in 1992, Steve Cohen, the notoriously secretive hedge-fund manager at SAC Capital, and his second wife, Alex, went on the short-lived English-language version of the popular talk show Christina. The episode? “He Acts Like Her Husband!” The subject discussed? Steve’s too-close relationship with his ex-wife, Patricia Cohen, who recently filed a $300 million lawsuit against him.”
Think about that for a moment.
Psychologically, that doesn’t make any sense for a reclusive genius…
But, just suppose, what you have here is not a shy geeky genius (or maybe, I should qualify that - not solely a shy geeky genius) but a guy who was quite at home at a shady broker called Gruntal & Co. in the 1980s - a broker that had ties to the Russian mob and to a whole set of players to whom ‘reclusive’ and ’shy’ are the last words you’d apply. Just suppose what you have here is a guy who was a player in that crowd….making his way any way he could. And just suppose, that past is why he keeps a low profile…
Just suppose.
It’s at least a distinct possibility.
But what’s more like a high probability is that anyone who puts out an article on Steve Cohen like this one or this one by John Carney has lost quite a bit of his credibility on Steven Cohen and on a few things closely related like, say, insider trading…or naked shorting….
Carney’s explanation why Steven Cohen can have done no wrong? A SAC trader told him so. That’s why.
“The trader described the enormous, football field sized trading floor at SAC as “the cleanest in the biz.”
A SAC trader says SAC is 100 percent clean. Because?
Well, that part of it isn’t mentioned in the article, although a lot of other stuff which sure as heck sounds super close to insider trading is.
“When I was there, we put tons of pressure on our brokers to make sure they gave us any information they had fast and first,“
And what was that John Carney was calling Matt Taibbi only a couple of months ago?
Naive?
Prem Watsa On The Uptick Rule
Prem Watsa of Fairfax Financial - one of several targets of short-selling attacks - in an interview with financial editor Diane Francis in the National Post:
“Q What stock market rules contributed to the meltdown?
A Eliminating the uptick rule [can only short on upticks in stock prices] was a mistake and so is short selling without borrowing the stock first. The ban on shorting financial institutions is lifted again and the SEC is debating whether to bring back the uptick rule again. What we need more of is transparency in all markets, including with respect to shorting and derivatives.
Q What of the role of boards of directors?
A In a bubble it’s difficult for boards of directors. Compensation should be long term. It should be stock-based and not cash. Our company’s compensation system is focused on the bottom line, not top line, and is long term. The Romans built strong bridges because their engineers had to stand under them as the army crossed them for the first time. Responsibility brings better results and aligned interest with partners.”
My Comment:
Watsa is an interesting figure to listen to on the financial crisis. Born in Hyderabad and educated in Chemical Engineering at the Indian Institute of Technology, he is the founder, CEO, and chairman of Toronto based Fairfax Financial, as well as a director and member of the risk committee at ICICI Bank in India. He’s been called India’s Warren Buffett and he did handsomely for Fairfax investors, turning shareholder equity from $2 billion in 2006 to $6.5 billion in 2009 by betting against credit default swaps.
Besides specific rules like the uptick rule, he cites the emphasis on ratings (versus due diligence or prudent risk management) and an increasingly short-term bias in the way companies, shareholders, and money managers act.
What does that amount to? A concern with the way things look, rather than the underlying reality.
It was the focus on labels and not reality that did the capital markets in. At least, that’s my generalization
Zerohedge On Banning Credit Default Swaps
Zerohedge has a technical discussion of why hedge fund manager David Einhorn’s call to ban Credit Default Swaps is essentially a call to dismantle the entire fiat money system. Some of the details elude me, as they’re very technical, but the rest seems right to me. There’s no inherent difference between a credit default swap and, say, an interest rate swap, of which there are many more. So Einhorn’s demand is in effect a demand to ban all derivatives…
“Remember the liquidity pyramid?
As the graphic shows, derivatives account for 1,000% of world GDP, in essence allowing the world to believe fiat money is worth something only courtesy of financial sleight of hand which involved derivatives and securitizations. Yet all those calling for an end to CDS also have to realize that due to CDS intertwined nature, the world fiat system would need to do away with all derivatives (not just CDS), and when you do that you basically eliminate the other hybrid asset classes: securitizations being chief among them. What this would leave us with is a liquidity pyramid which ends with bank loans, which are much more manageable and whose risk can be controlled. It would also leave the world with a fiat currency system, which would lose about 10x of its value overnight, thereby leading to an instantaneous and global unwind of fiat money, and rolling waves of domestically denominated hyperinflation. A spectacular race to the bottom of the asset pyramid. And who will rather commit suicide than see that happen: why the Federal Reserve of course.
Which brings us full circle: an attack on CDS is an attack on excess liquidity, which is an attack on the global asset/liability imbalance (as world GDP and otherwise output has no chance of catching up with the liquidity that is currently available), which is an attack on fiat money, which is an attack on the perpetually low price of gold (because if and when derivatives and securitizations are done away with and tangible assets regain their true value, gold would go up by at least the same magnitude that fiat currencies are devalued), which is an attack on the heart of our broken financial system itself, and, an attack on the Federal Reserve, the Fractional and Central Banking System in principle. Well done David.
We hope Einhorn is successful in bringing more people to understand not just what the risk implications of CDS are (while also demonstrating the positive value that they do in fact provide in a rigged and broken capital market), but also what the underlying thematic subject of his attack really is: a busted fiat system. In essence, David believes in a fresh start. So do we, because on a long enough timeline…”
My Comment
Just to make it clear - I am myself not in favor of banning all derivatives. Why? Not because I think they´re profound innovations..or vitally necessary. But I think it´s the wrong way to go about tackling the problem. Banning one set of financial instruments will only prevent the smaller players from using them. The largest and best connected players will game the ban in some way, or make use of other sorts of compensating structures. A better way would be to undo the fiat money system altogether…
So my agreementis with Zerohedge´s assessment of the situation and not necessarily with Einhorn´s recommendation on that point.
Besides, Einhorn, who made his money off of CDS´s, is an odd person to be pushing a ban.
Janet Tavakoli Faces Off With Goldman On AIG CDOs
Janet Tavakoli in Market Watch
“Earlier, Goldman denied it could have known this was a problem, yet acknowledged I had warned about the grave risks at the time. If Goldman wants to stick to its story that it didn’t know the gun was loaded, then it is not in the public interest to rely on Goldman’s opinion about the greater risk it now poses to the global markets.
Goldman excuses its participation by saying its counterparties were sophisticated and had the resources to do their own research. This is a fair point if Goldman were defending itself in a lawsuit with a sophisticated investor trying to recover damages. It is not a valid point when discussing public funds that were used to bail out AIG, Goldman, and Goldman’s “customers.”
Goldman claims the portfolios were fully disclosed to its customers. Yet at the time of the AIG bailout, Goldman did not disclose the nature of its trades with AIG, and Goldman did not disclose these portfolios to the U.S. public. If it had, the public might have balked at the bailout.
The public is an unwilling majority owner in AIG, and public money was funneled directly to Goldman Sachs as a result of suspect activity. The circumstances of AIG’s crisis were extraordinary and without precedent. I maintain that the public is owed reparations, and it would be fair to make all of AIG’s counterparties buy back the CDOs at full price, and they can keep the discounted value themselves.”
Shadow Stats’ Williams Says Hunker Down For Depression
John Williams of Shadow Stats says the gig is up:
“Atlhough the hyperinflation is going to be limited largely to the U.S., the economic downturn will affect things globally. I can’t tell you how things will go with a hyperinflationary Great Depression, which is where I see things going.
It’s the type of thing that will tend to lead to significant political change. People tend to vote their pocketbooks. You could have the rise of a third party. You could even have rioting in the streets. I’m not formally predicting that — anyone can run these different scenarios. For the individual, what you need to do, from an investment standpoint, look to preserve your wealth and assets. Don’t worry about the day-to-day fluctuations in the markets. What I’m talking about here is over the long haul…
[Gold is] going to be highly volatile, as will the dollar, over the near term, but longer term, physical gold I would look at as a primary hedge for preserving the purchasing power of your wealth and assets. Maybe some physical silver. Get some assets outside the U.S. dollar. I might even look to move some assets physically outside the United States. The key here is to look at a longer range survival package, battening down the hatches, and preserving your wealth and assets during a very difficult time. Once you’re through that, you’ll have some extraordinary investment opportunities, and I can’t tell you what it’s going to be like on the other side of this crisis.”
My Comment
In response to a reader, I added my comment (Dec 28):
This is the way I see it.
1. There is asset price deflation going on (house prices falling), since the prices reflected unrealistic future projections of housing growth driven by derivatives built on the mortgages.
Now that those projections have been called into question, the derivatives have been repriced as junk, and the underlying securities, the homes, have to return to a more appropriate price leve.2. This means that all artifical economic activity associated with the housing bubble also has to decline. So there´s economic contraction. That has taken down the commodity markets with it (except for gold, which is up as a hedge against the dollar and as a speculative play right now)
3. I don´t pay too much attention to individual figures coming out on the economy that seem to indicate an improvement in things, because
a. Many of the numbers are inaccurate or deliberately misleading.
b. Economics is not a mathematical science. It´s an art. Static numbers cannot tell you about the social mood, political factors and gestalt that drive the market.Now, market prices are bit more reflective of those things because they´re dynamic, so the prices of commodities and stocks can be good indicators. But there again, which prices -the price of gold, the price of money in the US, the price of commercial borrowing?
c. There´s also market manipulation..very severe manipulation. So again, the market indicators have relevance but its upto individual analysis how to tease out the relationships.
4. That said, and despite the fact that we have a credit contraction going on (a decline in the monetary base) that doesn´t mean that at some point the money pumped into the banks won´t find ways of entering the economy….if it hasn´t already, in some disguised fashion. (I realize the word ´money´ is being used in different ways here, as it is through out the debate, which is the reason for so much confusion..but that´s a long story..)
5. It´s highly probable that as the slowdown shows its true face, governments everywhere are going to be simultaneously devaluing..leading to local inflation.
6. Searching for hard assets, funds are again going to drive prices of certain essentials upward..leading eventually to commodity prices soaring even while there is a general economic contraction
Thus you could have simultaneously a high level of inflation - perhaps not hyperinflation, I would guess around 15%’20% - as well as a depression
Reverse Midas: SAC Spin-Offs Fail Even When They Succeed
Reading this report about SAC Capital by Reuters, I was struck by a few things.
But first, here’s the chronology (skip below for my argument):
- 1980s: Steven Cohen allegedly involved in insider trading at Gruntal
- 1999-2004, 2004-2007, 2007-2009: Insider trading at Spherix (ex-SAC trader Richard Lee’s own firm); and possibly at Stratix (founded by Goodman and Grodin in 2004, also ex-SAC traders, with SAC as a sizable investor); and (again, possibly) at SAC itself, by Richard Lee and Ali Far, also an alum of SAC.
- 2006: SEC investigates SAC and two other firms for manipulation of Fairfax Financial stock. Investigation dropped in 2007
- 2007-2009: Agent Kang investigates 20 hedge funds for insider trading
- 2007: SEC investigates SAC over Andrew Tong’s sex charges. Case sealed in 2008. Reopened in Nov. 2009, this time focusing on insider trading. About this time, Richard Grodin’s and Ian Goodman’s firm Stratix (where Lee and Far worked) closes. Grodin then begins Quadrum, which also closes
- Oct-Nov 2009: Galleon Group charged by Kang with insider trading and 14 traders arrested, including former SAC traders, Richard Lee and Ali Far
- Nov-Dec 2009: Cohen’s ex-wife alleges insider trading when Cohen was at Gruntal & Co. in the 1980s
- Dec. 2009: Ex-SAC trader and founder of Stratix Richard Grodin subpoenaed
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Now that you have that in mind, here are the things that struck me:
1. The high number of SAC traders who seem to have gone off into their own businesses.
You’d think with all that money and the fund’s record as the most consistently successful in the business (only one bad year on record), their traders would stay forever. Quite the opposite. People seem to have been leaving all the time to form their own businesses.
But SAC was also said to be a very tough environment. You produced, or you left.
So maybe that’s why Lee and Far, Grodin and Goodman, all left to found their own firms?
Could be. But I’m not convinced.2. None of the spin-off firms seems to have been very successful.
Why not? Why couldn’t these hot-shot traders make money on their own?
The Reuters piece suggests that perhaps the SAC experience didn’t foster business ability. And that perhaps SAC traders flounder without SAC’s huge supporting cast.
But those things are likely to be true of other firms as well, not solely SAC.
Still not convinced.
Furthermore, consider this.
3. A spin-off fund that didn’t get money from Cohen ended up quite successful:
“Healthcor, a healthcare industry focused fund, had raised $3.2 billion by June 2009 since launching four years ago. The fund returned 25 percent in 2006, 18 percent in 2007, and was up 4 percent last year, when the average hedge fund lost 19 percent. In the first 10 months of 2009, Healthcor was up 7 percent.
Healthcor, founded by Arthur Cohen and Joseph Healey, opened without any financial support from SAC. In fact, soon after Cohen and Healey struck out on their own, SAC sued the pair, accusing them of breaching their employment contracts. The matter ultimately was settled. (Healthcor’s Cohen is not related to SAC’s Cohen).”
4. Even spin-offs that were doing well were shut down.
When Stratix started in 2004, it had $60 million given to it by SAC. When it shut down, in 2007, it was up 17% and had $530 million under management. Yet it shut down. Why did it shut down? Those numbers sound pretty good.
Another spin-off, Fontana Capital, started out in 2005 with $50 million of SAC money. It grew to $325 million by 2006. But sometime in 2007, Cohen pulled out all his money. And in 2009, Fontana was down to $16.1 million, despite being down only 7.69%, compared to the average S&P Financial index loss of 57%. Again, that sounds like it wasn’t doing all that bad.
Reuters quotes someone familiar with the record of ex-SAC traders:
“So many of the ex-SAC people seem to have this model where they attract you with fantastic returns in the first year but in year two or three or four you get annihilated,” said a person who is familiar with several former SAC employees’ records.
Shades of Bernie Madoff….
Someone need to look closely at what happened to the money at these firms…
SEC Subpoenas Former SAC Trader Grodin
El Economista carries this Reuters report, dating from yesterday, Dec. 24, on the SEC´s subpoena of a former manager at Steven Cohen´s SAC Capital hedge-fund:
“Federal prosecutors in the Galleon Group case have sent a subpoena to a former employee of Steven A. Cohen’s SAC Capital Advisors, a sign that the scope of the problem into the largest hedge-fund insider trading case in history is expanding, the Wall Street Journal reported, citing people familiar with the matter.
The subpoena seeks trading records from a former SAC hedge fund manager, Richard Grodin, who employed a cooperating witness in the insider trading case announced last week, the Journal said.”
My Comment
It’s all getting pretty tangled, so first let me try to bring some order into the picture.
- I blogged, via Terri Buhl, that hedge-funds are going SAC-remote, deleting their email records and changing their trading positions so they don´t look too similar to Cohen´s, in anticipation of a probe. And now here come the subpoenas.
- The subpoena to Grodin arises out of the two-year FBI investigation of twenty hedge-funds that became public in October 2009 with the Galleon arrests.
- The investigation is headed by FBI agent B. J. Kang.
- Kang also led the probe into the alleged stock manipulation of Fairfax Financial in 2006, in which SAC was one of three hedge-funds involved.
- So far, Kang’s probe has led to a series of arrests of traders involved with Galleon Group in October and November, among them two former SAC traders. (A third, Mark Adams, is also suspected of insider trading).
- The two traders, Richard Choo-Beng Lee, and Ali Far, have admitted that they were involved in insider trading not only at their own fund Spherix, but going back to 1994. This makes it highly probable that they were also trading illegally at SAC, where Lee worked for about five years.
- Specifically, the agreement Far and Lee signed with the US Attorney’s Office charges conspiracies to commit insider trading from 2007-2009, from 2004-2007, and from 1999-2004.
- Galleon chief Raj Rajaratnam’s brother Rengan, who was investigated for insider trading at his firm Sedna, also worked for SAC in 2003.
- Lee is also going to be testifying about any insider trading he might have done at another firm, Stratix, which was founded by former SAC trader Richard Grodin, and yet another SAC alumnus, Ian Goodman.
- Stratix, whose investors include SAC (is your head whirling?), shut down in 2007.
- Then Grodin began another firm, Quadrum, which also shut down (”abruptly”, says Reuters).
- Also, in November, we had the bizarre revelations of Andrew Tong, who claims he was sodomized and forced into oral sex, cross-dressing, and the ingestion of female hormones (to make him the perfect androgynous trader) by his boss, SAC trader Ping Jiang. Investigated in 2007, the case was dismissed as lacking in substance. The records were sealed, leaving many people feeling that the SEC, as a Harvard paper recently confirmed, tends to go after smaller rather than bigger fish.
- But in November ‘09, the Tong case was opened again and given wide attention on the internet, this time with more attention to Tong’s claims that Ping Jiang forced him to into illegal trading that led to a $3 million loss. The loss was the reason SAC gave for Tong’s firing. But Tong himself claims that that was just an excuse and that the sexual harassment was the real reason. He also claims that Cohen knew what was going on and didn’t care, as long as money was being made. In keeping with the firm’s reputation for secrecy, Cohen made everyone sign confidentiality agreements and kept even top officers in the company out of the loop.
- These revelations have been followed by new charges made by Cohen´s ex-wife Patricia that her husband had cheated her out of money in their divorce settlement. Some of that money, she now claims, was hidden from the government and came from illegal insider-trading by Cohen was he was a young trader in the 1980s at Gruntal & Co., a shady brokerage with a history of embezzlement and scandal.
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NOTE:
**If you want to understand the modus operandi of one of these insider trading deals, read Deep Capture´s latest analysis. It displays some of the emails sent by certain hedge-funds that colluded with SAC in the manipulation of the stocks of Fairfax Financial, Jim Chanos´Kynikos and Third Point among them.
The Fairfax investigation (opened in 2006) petered out, but Deep Capture’s email collection nixes any chance that the record can be wiped clean by any of the funds involved (you can also see Bagley´s piece posted at Seeking Alpha).
Oscar Wilde On Incarnation
Oscar Wilde in De Profundis
“Who never ate his bread in sorrow, Who never spent the midnight hours Weeping and waiting for the morrow, - He knows you not, ye heavenly powers.’
They were the lines which that noble Queen of Prussia, whom Napoleon treated with such coarse brutality, used to quote in her humiliation and exile….
Clergymen and people who use phrases without wisdom sometimes talk of suffering as a mystery. It is really a revelation. One discerns things one never discerned before. One approaches the whole of history from a different standpoint. What one had felt dimly, through instinct, about art, is intellectually and emotionally realised with perfect clearness of vision and absolute intensity of apprehension.
A Real Investigative Journalist: Gary Webb
This is a what a really great reporter looks like - Gary Webb, author of “Dark Alliance,” the book that blew open the CIA-crack cocaine connection. (Webb eventually committed “suicide” after the media trashed his career, although he had once been the recipient of a Pulitzer).
Here is Webb explaining media inertia and resentment in a 1997 interview:
“Webb: It’s been incredible, and it’s been amazing, and it’s been disgusting at times.
You’re referring to the media?
Well, first of all, I think the public’s response was fairly amazing, just the public outcry. I mean, it’s not like something you write about and [expect] people start marching in the street. That was a fairly amazing reaction. And I think some of the media follow-up’s been fairly disgusting.
Why do you think the media reacted the way they did?
Well, I think there’s a couple of reasons. One is that the big papers in this country have sort of an institutional history of sitting on this story. You go back and you look at what was written back in the ’80s by the three big papers in this country about this Contra-cocaine topic, and most of it was just a pack of lies. And they have continued that sort of “There’s nothing here” attitude up until now. So I think that one of the reasons is that they had an institutional history of covering this story up, and this [series] sort of exposed that for what it was. I think the other part of the problem is that you have most of the people that wrote these stories for most of the papers are establishment organs, they are mouthpieces a lot of the time for the government. And I think that’s what they’re being used for in this case, is the government’s side of the story.”
Rogue American Agent Key Suspect In Mumbai Bombing
We always suspected that there was something odd about the Mumbai bombings. Something “stagey.” And we have been biting our tongue wondering when some bright-eyed reporter was going to turn over a few stones:
“A key terror suspect who allegedly helped to plan last year’s attacks in Mumbai and plotted to strike Europe was an American secret agent who went rogue, Indian officials believe.
David Headley, 49, who was born in Washington to a Pakistan diplomat father and an American mother, was arrested in Chicago in October. He is accused of reconnoitring targets in India and Europe for Lashkar-e-Taiba (LeT), the Pakistan-based terror group behind the Mumbai attacks and of having links to al-Qaeda. He has denied the charges.
He came to the attention of the US security services in 1997 when he was arrested in New York for heroin smuggling. He earned a reduced sentence by working for the US Drug Enforcement Agency (DEA) infiltrating Pakistan-linked narcotics gangs.
Indian investigators, who have been denied access to Mr Headley, suspect that he remained on the payroll of the US security services — possibly working for the Central Intelligence Agency (CIA) — but switched his allegiance to LeT.“
My Comment
Rogue he might be, but it´s odd that, once again, when you dig deep enough….you find a CIA link.
How big is that outfit anyway?
At least, the FBI is on the case.
Second Journalistic Dude Who Can Read Correctly
I got my Christmas present early this year, from Graham Rankin, who is now enshrined in my writerly heart:
“For the role of a modern-day Luther and his 95 Theses, we could suggest to the historians Matt Taibbi and his article on Wall Street bankers Goldman Sachs for Rolling Stone magazine, ‘Inside The Great American Bubble Machine,’ which caused such a huge fuss in July, as long as we remember a lot of similar points had already been made in 2006 by Lila Rajiva in a piece that should have won an award for prescience, and hopefully one day still might. No doubt the historians will debate that role for some time to come.”
Thanks Graham, and if you´ll check on my blog for my articles and books, you will find the rest of Taibbi´s thesis there too. Plus some of my language and one-liners, I do believe. You get dinner on me some day, buddy.
The other dude who can both read and tell the truth is Robert Wenzel, who´s also cited me on that.
There is hope.
Merry Christmas, Happy Holidays…
I am off for Christmas…which I hope to spend on the delta of the Parana…an especially pretty spot this time of year..
Best wishes to all.
Den Of Thieves: Hedge-Hogs Go Into SAC-Remote Mode
Update: Deep Capture indicates that they have some emails proving insider trading, so any attempts to delete files/emails by SAC and other firms might not be any good, since the files just happen to implicate said firms in…insider trading.
Ah, the web we weave…etc. etc.
Terry Buhl at Hedge Fund-Implode.com reports that residents of hedgefund land are going into SAC-remote mode:
“Funds like Blue Ridge, Greenlight, Third Point, Glenview, and Maverick are cutting back on any contact with King Stevie. When we asked major players such as Jim Chanos and others if they’ve been pinging Stevie about a trade lately, you’ll get a very defensive `no.’ Why? Because word on the street is they all think FBI special agent BJ Kang, who is now dogging Stevie, has the goods to deliver the hammer soon in the form of an indictment or arrest for insider trading.
Extra measures are being taken to hire data-miners to comb through any and all emails firms and their trading consultants ever sent to anyone at SAC in an attempt to erase them from internet memory. According to traders we talked with, they are even going as far as getting out of trades that might look similar to any of Stevie’s. So it looks like running due diligence on your `SAC risk’ to prove to your investors that you’re clean – like Larry Robbins of Glenview capital just did – is the new `killing it’.”
My Comment:
Just to recap.
*Steven Cohen is the multibillionaire chief of legendary hedge-fund SAC, which sits at the top of the heap among funds. Cohen, famously reclusive, is said to have had only one bad year of trading.
Now he´s having a bad time from the FBI investigation of the insider-trading case against New York-based hedge-fund Galleon Group, which is proving to have teeth in it.
SAC has a history of elbows-and-knees-style trading practices, according to this 2003 Business Week article.
*The head of Galleon (which once managed $7 billion in assets), Sri Lanka-born Raj Rajaratnam was arrested, along with five others, on October 16 in a $17 million dollar insider-trading case brought by federal prosecutors and the FBI.
(The numbers vary: it´s $20.8 million, according to a later WSJ report, and $25 million in a NY Daily report)
*The case was unusual in that FBI agent B. J. Kang used wire-tapping for the investigation (normally used only in drug-related cases).
*The Galleon arrests were quickly followed by other arrests of traders, lawyers and hedge-fund managers on November 5, including one Zvi Goffer, who, as the brains of the insider network, was referred to as “the octopussy.” This brought the total number of arrests in the case to 14 (Correction on 12/29: I read 20 elsewhere) and added another $20 million to the fraud, already the biggest in Wall Street history since the days of Ivan Boeksy in the 1980s.
*On December 16, Steven Cohen´s ex-wife Patricia accused him of hiding millions from her and of insider trading in a 1986 merger when Cohen was a young trader at now-defunct broker, Gruntal.
*Indicted on December 17 (December 15, according to one source) by a Federal grand jury on multiple criminal counts of insider trading and securities fraud, Rajaratnam pleaded not guilty. Many of the charges against him carry upto 20 year prison sentences. The trial is expected to take place in the summer of 2010.
*The broker Gruntal has an interesting history, in that it seems to be the place where several of the biggest names on Wall Street (aka some of the most crooked players) crossed paths:
Bernie Madoff, Ezra Merkel (Madoff fund associate), Ivan Boesky (infamous 1980s trader), Michael Milken (junk bond innovator), Carl Icahn (famed and feared corporate raider), Steven Feinberg, ,…and yes, Steven Cohen:
From Deep Capture:
“Another of Madoff’s most important “feeders” was J. Ezra Merkin, who managed the Ariel Fund, which seems to have been designed specifically to raise money for Madoff’s fraudulent investment business. In this regard, the New York attorney general has described “Merkin’s deceit, recklessness, and breaches of fiduciary duty…”
While Merkin was “deceitfully” feeding the Madoff Ponzi, he was also a co-owner, along with Steve Feinberg, of Cerberus Capital Management, a fund named after the mythological three-headed dog that guards the gates of Hell.
Previously, Feinberg was a top trader for Michael Milken at Drexel Burnham Lambert. After Drexel, Mr. Feinberg moved (on Milken’s recommendation) to a brokerage called Gruntal & Company.”
Gruntal owed its existence to the generous junk bond finance that its parent company, the Home Group, received from Michael Milken. Its options department was founded by Carl Icahn, who later became a “prominent” billionaire owing to the junk bond finance that he received from Michael Milken.
When Icahn left Gruntal, he was replaced by a Milken crony named Ron Aizer, who proceeded, on the recommendation of Milken, to hire two traders.
The first trader hired by Aizer was, according to a reliable source, investigated by the SEC for trading on inside information that he received from Milken’s operation at Drexel Burnham Lambert. This trader is now a “prominent” billionaire and the manager of a well-known hedge fund. The second trader hired by Aizer is now also a “prominent” hedge fund manager, though he is not quite a billionaire. Both of these traders play important roles in the story of Dendreon. Carl Icahn, the founder of Gruntal’s options department, has a cameo role, too.”
There is more, of course, much more to the story, and many more names, including Michael Steinhardt, Marc Rich who was pardoned by Clinton for tax evasion and dealing with Iran against US law, and many others, but that would make this post far too long, so I will send you instead to this page.…and this...for now.
(Of course, we could ask why hedge-funds with an edge get to be prosecuted, while governments with the biggest edge of all don´t - but there, we won´t spoil the fun).
Tepper’s 7 Billion Gain: Luck Or Goldman?
The Wall Street Journalreports:
“Mr. Tepper’s hedge-fund firm has racked up about $7 billion of profit so far this year—with Mr. Tepper on track to earn more than $2.5 billion for himself, according to people familiar with the matter. That is among the largest one-year takes in recent years.
Behind the wins: a bet worth billions of dollars that America would avoid a repeat of the Great Depression.
Through February and March, Mr. Tepper scooped up beaten-down bank shares as many investors were running for the exits. Day after day, Mr. Tepper bought Bank of America Corp. shares, then trading below $3, and Citigroup Inc. preferred shares, when that stock was under $1. One of his investors insisted more carnage loomed. Friends who shared his bullish beliefs were wary of aping his moves amid speculation that the government was about to nationalize the big banks.
“I felt like I was alone,” Mr. Tepper recalls. On some days, he says, “no one was even bidding.”
The bets paid off. A resurgent market has helped Mr. Tepper’s firm, Appaloosa Management, gain about 120% after the firm’s fees, through early December. Thanks to those gains, Mr. Tepper, who specializes in the stocks and bonds of troubled companies, manages about $12 billion, a sum that makes Appaloosa one of the largest hedge funds in the world.”
My Comment:
I’m all for going against the grain and making out like a bandit. But then you look closer, and it turns out that Tepper once worked at …surprise..Goldman’s junk bond trading department in the 1980s…
turns out that all he did was be on the right side of figuring out whether the government would back the banks whose stocks he’d bought at the bottom in February and March..which they did.Viva casino capitalism. Especially, when you’ve worked at the casino..
Wiki Whacking: Green Doctor Of Wikipedia
“Lawrence Solomon at the National Post writes about a topic that WUWT readers have known about for a long time: How Wikipedia’s green doctor rewrote 5,428 climate articles.
We’ve known for some time that Wikipedia can’t be trusted to provide unbiased climate information. Solomon starts off by talking about Climategate emails.The emails also describe how the band plotted to rewrite history as well as science, particularly by eliminating the Medieval Warm Period, a 400 year period that began around 1000 AD.
The Climategate Emails reveal something else, too: the enlistment of the most widely read source of information in the world — Wikipedia — in the wholesale rewriting of this history.
He then focuses on RealClimate.org co-founder William Connolley, who has “touched” 5,428 Wikipedia articles with his unique brand of RC centric editing:
All told, Connolley created or rewrote 5,428 unique Wikipedia articles. His control over Wikipedia was greater still, however, through the role he obtained at Wikipedia as a website administrator, which allowed him to act with virtual impunity. When Connolley didn’t like the subject of a certain article, he removed it — more than 500 articles of various descriptions disappeared at his hand. When he disapproved of the arguments that others were making, he often had them barred — over 2,000 Wikipedia contributors who ran afoul of him found themselves blocked from making further contributions. Acolytes whose writing conformed to Connolley’s global warming views, in contrast, were rewarded with Wikipedia’s blessings. In these ways, Connolley turned Wikipedia into the missionary wing of the global warming movement.
The Medieval Warm Period disappeared, as did criticism of the global warming orthodoxy. With the release of the Climategate Emails, the disappearing trick has been exposed. The glorious Medieval Warm Period will remain in the history books, perhaps with an asterisk to describe how a band of zealots once tried to make it disappear.”
My Comment:
As you know, wiki engineering is one of my recurring obsessions, having had to go through 3 rounds of wikipedia fighting to stay on it, and having nearly had some associates’ wiki pages wiped out because of their connection to me.
And what was I guilty of? Of nothing more dreadful than respectful, fairly carefully modulated writing on such hoary topics as Zionism, media corruption, racism, racialist ideology, banking, and the Federal Reserve. Never have I advocated anything that could remotely be called racist, foul, biased, or misogynist. I have simply been factual and rather indifferent to political codes or the particular form of brainwashing prevalent in the US - which is, if we don’t know about it, it ain’t worth knowing.
Whenever I suggested that wiki was manipulated, I was told I was being conspiratorial, that I was imagining things…and that that isn’t the way the world works.
But now…wiki-whacking has been exposed for all to see. If it’s this bad on climate-gate, think about all the other topics that have been skewed.
But that’s all going to change soon….little by little. Now that the whistle has been blown on these kapos, their come uppance is round the corner.
See this piece, that reports on the canning of errant wiki administrator, climatista Connolley.
“Scientific” Academies Need A Taste Of RICO Too
Alan Caruba , a conservative writer and reviewer:
“Consider a letter dated October 21, 2009 and signed by the presidents of the American Association for the Advancement of Science, the American Geophysical Union, the American Meteorological Society, the American Society of Plant Biologists, the Association of Ecosystem Research Center, the American Chemical Society, the American Institute of Biological Sciences, the American Society of Agronomy, the American Statistical Association,
And the Botanical Society of America, the Crop Science Society of America, the Natural Science Collections Alliance, the Society of Industrial and Applied Mathematics, the Soil Science Society of America, the Ecological Society of America, the Organization of Biological Field Stations, the Society of Systematic Biologists, and the University Corporation for Atmospheric Research.
Together, they asserted that “Observations throughout the world make it clear that climate change is occurring, and rigorous scientific research demonstrates that the greenhouse gases emitted by human activities are the primary driver.” It went on to repeat all the usual scary scenarios of rising sea levels, urban heat weaves, wildfires, and other climate-related events.
In a footnote, the letter to U.S. Senators said, “The conclusions in this paragraph reflect the scientific consensus represented by, for example, the Intergovernmental Panel on Climate Change and the U.S. Global Change Research Program.”
We now know that the “science” being cited by these two entities was, at least in the case of the IPCC, totally rigged, but the presidents of these alleged science-based organizations took it on face value despite ample scientific evidence it was false. The revelations of emails exchanged between the perpetrators of the hoax have demonstrated the deceptions…….
In light of this, who can trust these organizations? And who can trust the “science” produced by NASA and other U.S. agencies that have benefited from billions in grants directed at so-called climate, i.e. global warming research?”
Sad SAC: Reuters Spikes Hedge Story On Complaints From Steve Cohen
Via Finalternatives:
“Reuters opted against running a story about alleged insider-trading on the part of SAC Capital Advisors founder Steven Cohen after Cohen himself complained about the news agency’s coverage, a journalism blog reports.
Cohen repeatedly called Devin Wenig, CEO of Thompson Reuters Markets Division and the second-in-command at Reuters parent Thomson Reuters, according to Talking Biz News. The hedge fund boss reportedly complained that the story, which the University of North Carolina blog reports would have been an “incremental” advance in the story of alleged insider-trading more than 20 years ago, was part of a pattern of persecution on the part of Reuters.
Wenig forwarded Cohen’s complaints to Reuters editor-in-chief David Schlesinger, who in turn referred the story to editors. Those editors debated the story, written by Matthew Goldstein, before deciding to kill it after three days.
“We make decisions on whether or not to run stories purely on journalistic grounds,” a Reuters spokesman told Talking Biz News.
Goldstein was the first reporter to cite the unsealed court documents that include explosive allegations against SAC and former SAC portfolio manager Ping Jiang. Cohen’s ex-wife, Patricia, last week sued him for $300 million, accusing him of insider-trading, perjury and hiding assets from her and from the authorities.”
My Comment
Looks like more confirmation of the Deep Capture thesis - that major newspapers are bending over backwards…and forwards….for the big hedge funds.
I notice that Hedge World has picked this story up….as well it should, it’s a big one… and very kindly links this blog, as well as the ever-alert zerohedge - the only MSM-touted blog I truly dig, mainly because I dig the characters on it.
Earlier, I blogged that Steven Cohen was also having problems with a militant ex-missus, who has gone public with allegations that he perjured himself, hid money from the government (here we are on Stevie’s side), and did other sorts of naughty things, like insider trading, that reclusive billionaires really shouldn’t do, not if they want to stay either reclusive or billionaires.
We have much more sympathy for Mr. Cohen, of course, than we do for the self-important twits and petty tyrants who fly their bylines at major newspapers with little respect for the body politic. At least, we understand simple greed. But the weedy vanity of the pen-pushing mob needs to be exposed for what it is.
Now comes Mr. Goldstein, who clearly suffers from the delusion that his job is to break important stories, no matter how exalted the net worth of the subjects. That didn’t sit well with his boss, and now the dirty laundry is out in the open.
Meanwhile, as if irate Sith ladies and spiked stories weren’t enough, there’s also a forced oral sex- cross-dressing- cum- sexual-harassment suit coming back from the past to haunt Sad SAC.
Who knew you could have so much fun without getting naked (shorted)?
Krugman Watch: Some Effigies Are More Equal Than Other Effigies
Matt Welch at Reason:
“Last week, you’ll recall, New York Times columnist Paul Krugman began his column by saying: “A message to progressives: By all means, hang Senator Joe Lieberman in effigy,” which was in seeming contradiction to his alarmed observation four months prior that “congressmen hanged in effigy” by Tea Partiers represented “something new and ugly” in American politics. Well, yesterday, the Krugger issued one of the better non-apology apologies you’ll read this week:
(Management wants me to make it clear that in my last column I wasn’t endorsing inappropriate threats against Mr. Lieberman.)”
P. J. O’Rourke On Santa And God
P. J. O’Rourke via Samizdata:
“I have only one firm belief about the American political system, and that is this: God is a Republican and Santa Claus is a Democrat. God is an elderly or, at any rate, middle-aged male, a stern fellow, patriarchal rather than paternal and a great believer in rules and regulations. He holds men strictly accountable for their actions. He has little apparent concern for the material well-being of the disadvantaged. He is politically connected, socially powerful and holds the mortgage on virtually everything in the world. God is difficult. God is unsentimental. It is very hard to get into God’s heavenly country club. Santa Claus is another matter. He’s cute. His nonthreatening. He’s always cheerful. And he loves animals. He may know who’s been naughty and who’s been nice, but he never does anything about it. He gives everyone everything they want without thought of a quid pro quo. He works hard for charities, and he’s famously generous to the poor. Santa Claus is preferable to God in every way but one: There is no such thing as Santa Claus.”
Military Detention Ruling Legalizes Torture And Non-Person Status
From Chris Floyd
“While we were all out doing our Christmas shopping, the highest court in the land quietly put the kibosh on a few more of the remaining shards of human liberty.
It happened earlier this week, in a discreet ruling that attracted almost no notice and took little time. In fact, our most august defenders of the Constitution did not have to exert themselves in the slightest to eviscerate not merely 220 years of Constitutional jurisprudence but also centuries of agonizing effort to lift civilization a few inches out of the blood-soaked mire that is our common human legacy. They just had to write a single sentence.
Here’s how the bad deal went down. After hearing passionate arguments from the Obama Administration, the Supreme Court acquiesced to the president’s fervent request and, in a one-line ruling, let stand a lower court decision that declared torture an ordinary, expected consequence of military detention, while introducing a shocking new precedent for all future courts to follow: anyone who is arbitrarily declared a “suspected enemy combatant” by the president or his designated minions is no longer a “person.” They will simply cease to exist as a legal entity. They will have no inherent rights, no human rights, no legal standing whatsoever — save whatever modicum of process the government arbitrarily deigns to grant them from time to time, with its ever-shifting tribunals and show trials.”
Honest Environmentalist Contradicts Climatistas
“There is a lot of evidence that the activity often called science, and the scientists who practice this activity (as opposed to those few who have a monk-like dedication to the scientific method), are not trustworthy. Peer review is a bankrupt process, for example. It is lousy at detecting fraud but very good at suppressing innovative thought. Financial conflicts of interest are frequent and rarely disclosed. Scientists often fall into the trap of focusing on their next grant rather than what important questions need to be asked (including questioning their own assumptions and biases). The prejudices of the system are amplified in this way. Those who conform are rewarded with grants which inform the granters that this is a subject of great interest.
“The proof of this is that there have been many scientific errors that have survived for decades – Piltdown Man, Radical Mastectomy, (opposition to) continental drift, irradiation of the thymus, the germ theories of scurvy, pellagra and SMON. We, like all generations before us, falsely believe that all false beliefs lie in the past.
“The ClimateGate scandal illustrated this problem well. Without access to data scientists cannot fully evaluate the work of others. Phil Jones, the head of the CRU, at the center of this scandal, said, Why should I make the data available to you, when your aim is to try and find something wrong with it?” That is exactly why the data should be released. If it can pass scrutiny from a skeptical, critical, cynical scientist then our confidence in the data and interpretations drawn from it will be much higher. It is a waste of time to give data to a scientist whose intention is to prove that previous interpretations are correct.”
Social Media Machinations Of the Financial Press
A piece of Orwellian obfuscation by one Tom Sykes at Daily Kos *(see note at the bottom of this post) goes into the file, rip-roaring propaganda:
“I want to be clear on something up front. I think hedge-funds are a menace and should be outlawed. I think Goldman Sachs is a criminal conspiracy and its whole leadership should be indicted.
There are plenty of commentators, like Paul Krugman in the New York Times today and Matt Taibbi in his article in Rolling Stone, that have done great reporting on Goldman and on hedge funds.
But what we’re seeing is how a really odious character named Patrick Byrne is trying to hijack this issue…”
My Comment:
Byrne hijacked Taibbi? The liberals busted Goldman Sachs and naked short-selling and the hedge funds?
Aren’t Goldman Sachs and the hedge-funds the money men who funded the whole left-establishment..and wasn’t it people on the right libertarian side who busted them, and in fact called the whole financial crisis?
The libs were on the case only in 2008 when everyone was on the case and you’d have to have been blind not to notice.
This kind of revisionism makes me question the impetus behind the Rip Van Winkle awakening of the MSM on the financial crisis.
Either it shows that the MSM can’t see what’s going on in front of its collective nose, which argues that its working hypotheses are wrong (the kinder interpretation), or it shows rank dishonesty (the truer interpretation, likely).
I’d go with the first interpretation, only the hatchet job the press keeps doing on anyone from the other side of the political spectrum suggests that the second interpretation is the right one.
As I’ve repeated ad nauseum, Taibbi seems to have lifted my Goldman Sachs piece of 2006 (Money Week) as well as a bunch of other articles written in 2007-2008 (see ABOUT) . You can read it on the net and then go back and see what Taibbi wrote, only about three years after I did. (He probably pinched stuff from at least one other person as well). You will also see that I wrote more than half-a-dozen articles on Goldman after that in 2006 and 2007 (check this site). In 2008, everyone began writing about Goldman. I figure someone at Rolling Stone got worried that the population was beginning to wake up to which side really had the goods, and decided to co-opt the issue before their intellectual ineptness was too evident.
Otherwise, I’m hard pressed to explain why they don’t think they need to source and attribute correctly. They can’t all be such intellectual charlatans? Right?
As for naked short selling, Byrne has been waging that campaign since 2005.…and some others on the right, even before him. Even people who don’t think there’s an NSS hedge-fund-media conspiracy involved have long ago conceded that NSS is a problem (see this Motley Fool piece from 2005), and that it’s difficult to figure out what’s really going on, because the DTC/SEC, for example, won’t/can’t release the figures needed to assess the situation.
(Now, why would anyone think conspiracy when there’s stone-walling going on…)
Matt Taibbi basically borrowed Byrne’s argument. And having taken the argument, the establishment is now trying to discredit the person who made it first (see Ritholtz here and here, even before the Facebook brouhaha).
It’s not irrelevant that in coming to his conclusions, Ritholtz cites only the very same journalists whose credibility is shot by the evidence of their collusion with hedge-funds. That is certainly a bizarre way to report on a topic.
Mind you, this should not be taken to be an endorsement on my part of Byrne’s business practices or accounting, about which I know only what I have read. And that of course has mostly been written by his critics and critics of the NSS thesis, like Dow Jones reporter, Carol Remond.
But Remond, despite her reputation as a respected reporter on penny-stock scams, is seriously compromised in her reporting on this issue because of alleged collusion with hedge funds.
I say alleged, to be on the safe side, but to my eyes the evidence is convincing.
On the other hand, Overstock has repeated accounting problems that its foes argue are the real reason for its NSS campaign.
How serious these problems are is hard to say.
Of the two accountants who routinely denounce Byrne’s business practices in multiple postings that take up a remarkably (and suggestively) disproportionate space on their blogs, one, Sam Antar, has been convicted of one of the most extensive cases of embezzlement in recent history. Antar also claims the mantle of reformed felon without any evidence that restitution of the embezzled funds took place. He escaped prosecution only by turning in his own family. This is not a confidence-builder. Actually, there’s some evidence of further wrong-doing involving one Barry Minkow that’s also posted on the Deep Capture blog. Antar and Mankiw are practicing greenmail, according to this piece.
(Its author uses the term loosely. Greenmail, in recent US financial history, is what Michael Milken is infamous for - a type of corporate raid. And Milken is one of the central villains in the Deep Capture story of the corruption of Wall Street. Since I researched this period for a book I was planning to write on Goldman Sachs, I’m conversant enough with the subject to say with some confidence that Byrne is on the right track on this).
The other accountant who criticizes Byrne, Tracy Coenan, seems to be another ally of Antar and equally over- concerned with the accounting problems of Overstock, to the neglect of other companies.
Yet these are the only two accounting experts I see cited by Weiss.
Could there be other things wrong with Overstock?
Perhaps.
I have no way of knowing. But what I do know doesn’t so far make me think the problems are related in any way to the thesis of Deep Capture. The accounting errors don’t seem especially egregious, compared to the rest of what is going on in the market that the reform movement that Byrne spearheads is trying to tackle.
So is Deep Capture’s work discredited because of Byrne’s alleged and real problems?
No.
Overstock could very well be mismanaged and Byrne could be guilty of accounting shenanigans. That has nothing whatsoever to do with the extensive, indeed, mind-boggling, ties between supposedly neutral financial reporters and the hedge-funds that Deep Capture report on. The evidence the site has collected is shocking and undercuts any defense of the neutrality of the reporters in question (Bethany McLean, Remond, Weiss, Herb Greenberg, Roddy Boyd, etc).
To return to the media manipulation story.
After Taibbi put the two stories on Rolling Stone, Goldman and Penson came out and shot them down.
Taibbi, strangely, for a supposed target of Goldman and for all his righteous indignation over NSS, vanishes on the latter subject (NSS) and retracts parts of the former.
So what happens?
The entire Goldman argument gets reduced to “Goldman corrupted the regulators,” which works very well if you want more government and more regulators (and we are not fundamentalists on either subject). The good part of that from the point of view of the MSM is that that lets them displace the outrage on one or two figures (Rubin, for example), while using GS as a whipping-boy to funnel off popular rage from any effective overhaul/criminal prosecution, as well as to deflect it from the evidence of conspiratorial criminal activity.
(Yes, there are conspiracies, Virginia, and often the ones protesting loudly that they don’t exist are part of them…unwittingly or not).
Take this piece at Business Insider by Ritholtz, which sets up the boundaries of establishment discourse, with Taibbi and Gasparino at either end. What it does is to come down roughly “midway” between the two in a way that conveniently does nothing to change the centrist liberal establishment discourse.
(At least, that’s my take).
Now, Taibbi comes from a well-established media background, with a father who was an NBC TV man.
It’s hard to believe he doesn’t know the ethics and etiquette of sourcing. In fact, it’s downright impossible.
We’d have to conclude that
1. He was tasked with co-opting the stories for political or national security reasons.
2. Or lacks journalistic integrity, a deficiency fairly rampant these days….
3. Or wants to protect the left-liberal establishment on the issue….
4. Or some combination of the above.
Note:
*Tom Sykes is apparently a sock-puppet created by Gary Weiss, the former Forbes and Business Week reporter, at least, according to the considerable evidence amassed at Deep Capture.
Note: I have sent several mob/corruption-related articles to the Deep Capture team and consider myself a supporter of their research, which I’ve tried to link and forward to others, as well as to more generally publicize. I don’t think that prevents me from assessing the merits of their claims objectively. I don’t, for example, condone any social engineering attacks on social media sites like facebook, no matter what the legal status of such attacks is. Frankly, the work Deep Capture is doing on market/media corruption is too important for its members to get into such unworthy activities. Nor do I think bringing in personalities, family members, or even private networks of journalists is particularly important or even necessary. The point is not whether a journalist talks to or is friendly with another journalist….or even hedge-fund. The point is whether their work is significantly biased by the friendship and whether they disclose the friendship and attempt to correct for it. I appreciate a number of left and liberal writers, even when I disagree with them, because I find them intellectually honest and reasonably objective (complete objectivity being impossible as well as unnecessary). That’s not a very high standard to demand now, is it?
Weapon Of Resistance: The AK-47
C. J. Maloney in Lew Rockwell:
“Who says that God has no sense of humor, if a rather dark one, when He gives for us the ironic fact that of all the forms of political organization that humans herd themselves into there has been none more reactionary, bloodthirsty, or political than Stalinism, and that’s the one which gave us the cheap to produce, lethal, and amazingly low maintenance AK-47. Besides corpses and vodka, the AK-47 was the only thing communist Russia was ever able to mass-produce.
“A guerilla army in today’s world needs little more than an ample supply of AK-47s, something to believe in, and the support of those around them to be unconquerable. That’s all. And Mikhail Kalashnikov, God bless him, has put that ability in the hands of people from one end of the earth to the other.
“Alexander Hamilton wrote in The Federalist No. 29 that should the federal government ever turn despotic it “can never be formidable to the liberties of the people while there is a large body of citizens, little, if at all, inferior to them in discipline and the use of arms.” If every American family had an AK-47 hanging on the wall over the 46″ wide-screen plasma, that’d force enough to give any army pause.
“So next May Day, assuming you remember it at all, take a moment to honor the memory of the millions slaughtered over the lethally stupid idea of communism, but give a nod to God’s great mercy, to His mysterious way that willed that very same idea to birth the AK-47. It gave to the working masses the ability to defend themselves from the more virulent strain of politicians; it is the sword of the common man. Of all the firearms yet dreamed up by mankind, it is the automatic for the people.”
Barack Obama: The Looks That Kill
Insightful piece by Mary Rizzo in The Palestine Chronicle on the triumph of style over substance in the career of Barack Obama:
“In Afghanistan at least one hundred innocent civilians were killed by a few men flying US Air Force planes, and this was not an isolated attack, it is simply one that had been reported. This act, when done by the Republicans, was immediately condemned by those who consider themselves to be “anti-war”. The complaints never seemed to last longer than a few days and they had no practical efficacy whatsoever, but the feeling was that it was wrong, it was putting America in a worse position and that one should protest, not really for the Afghanis or Iraqis, but for the sake of the image of the USA. All of this has simply faded out because their man, the charming and attractive Obama is doing it, and his narrative of the Good War, they believe, is going to be enough to do the trick.
Certainly, there is nothing new about the utilisation of rhetoric and image to make effective propaganda. What would really be sad is if those who identify with Obama because of his attractive image identified with all the hypocrisy he represents, and the lack of awareness that he is as imperialistic and as warmongering as any president before him, none excluded. If looks could kill, they probably will.”
A Million Hits On Gaza
From Ramzy Baroud:
Check out this short film (in English and Arabic) about my latest book: My Father was a Freedom Fighter: Gaza’s Untold Story (Pluto Press; Palgrave Mcmillan, 2010). The book is available at Pluto Press (UK) and Amazon
A Promotional Film about Gaza Launches New Book’s Worldwide Awareness Campaign
FOR IMMEDIATE RELEASE – PLEASE CIRCULATE WIDELY
SEATTLE/TORONTO/LONDON - A promotional short film for a new book on Gaza is being released worldwide today, days before the official book launch in the U.K., to commemorate the first anniversary of the Gaza massacre - Israel’s so-called Operation Cast Lead, which killed and wounded thousands in Gaza a year ago.
Told from the perspectives of the refugees, My Father Was a Freedom Fighter: Gaza’s Untold Story is heralded as an incomparable chronicle of the history of the Gaza Strip, and has been endorsed by leading intellectuals and academics.
The book’s author, Ramzy Baroud, was born and raised in a refugee camp in the Gaza Strip. He was witness to much of Gaza’s tumultuous history. “Gaza’s story is the most fascinating story there is, yet somehow it’s reduced to a few simple, redundant, and misleading clichés that barely grab attention anymore,” Baroud said. “I am determined to challenge and change that. Thanks to courageous publishers like Pluto Press, and the dedicated efforts of many talented individuals out there, we shall together change the ways the Gaza story is told.”
The short film, carrying the name of the book, is being released on YouTube, in both English and Arabic versions. The film will also be broadcast on a number of TV stations around the world. The filmmakers and book author are calling on readers and activists around the world to ensure the widest possible dissemination of Gaza’s untold story, by reading and helping to promote the book, and by encouraging others to watch the film at YouTube, through sharing the film with friends, family, and colleagues – with an aim to reach a million views at YouTube.
The “A Million Hits on Gaza” film-sharing movement at YouTube is just the beginning of a worldwide campaign to raise awareness of the book, and of Gaza’s untold stories and history, a campaign that will also include readings, book tours, the screen adaptation of the book into a feature film, and various educational, grassroots, community, and international film festival screenings of the completed feature film.
The promotional short film was created in a matter of days, with zero budget, by a team of artists in Canada and the U.K. that included filmmakers Paul Lee and Cathy Gulkin, editor and screenwriter George Kaltsounakis, composer and jazz musician Gilad Atzmon, and with the collaboration of writer and journalist Hani Yared (who helped with the translation and the preparation of the Arabic version of the film).
The book is now available through the Pluto Press website (www.plutobooks.com), and also through Amazon.com. Beginning March 2010, the book will be distributed in the United States by Palgrave Macmillan, which is promoting the book as a ‘trade title.”
To view the film in English, click here:
To view the film in Arabic, click here:
To purchase the book from Pluto Press, visit: www.plutobooks.com
Or click here:
http://www.plutobooks.com/display.asp?K=9780745328812&
To purchase the book at Amazon, visit: www.amazon.com
Or click here:
http://www.amazon.com/My-Father-Was-Freedom-Fighter/dp/0745328814/ref=sr_1_1?ie=UTF8&s=books&qid=1260802483&sr=8-1
For more information, reviews, book tours, visit www.ramzybaroud.net, or e-mail: info@ramzybaroud.net
Check out this short film (in English and Arabic) about my latest book: My Father was a Freedom Fighter: Gaza’s Untold Story (Pluto Press; Palgrave Mcmillan, 2010). The book is available at Pluto Press (UK) and Amazon.SEC’s Own Accounting Is Deficient
Apparently, the SEC, top regulator of financial fraud, isn’t up to snuff keeping its own financial books…
We don’t say it’s cooking its books, but it sure looks like if someone wanted, they could cook them quite easily, according to this report at law.com:“The GAO found that the SEC “did not have effective internal control over its financial reporting as of Sept. 30, 2009.”
As part of its mission, the SEC is charged with enforcing strict financial disclosure rules for public companies. Apparently, it is less adept at policing itself.
For example, the GAO reported that SEC’s general ledger system allows unauthorized personnel to view, manipulate or destroy data, and that “serious unauthorized activity” may remain undetected.
Until the SEC fixes these problems, the GAO found, the SEC can’t be sure “1) its financial statements, taken as a whole, are fairly stated; 2) the information the SEC relies on to make decisions on a daily basis is accurate, complete, and timely; and 3) sensitive data and financial information are appropriately safeguarded.”
Nor could the SEC “provide evidence that it monitored controls over its payroll exception reports to ensure payroll transactions were recorded accurately and timely.”
While the GAO did credit the SEC with producing statements that were “fairly stated in all material respects,” it flagged “six significant deficiencies” for FY 2008 and 2009.The six areas are:
• information security;
• financial reporting process;
• fund balance with Treasury;
• registrant deposits;
• budgetary resources;My Comment:
Translated, those six problem areas amount to this:
No one can really be sure if or when1. Someone steals information from the SEC
2. Something is wrong in the SEC’s accounts
3. How much money the SEC has with the Treasury
4. How much money the SEC takes in
5. How the SEC is doing on an ongoing basisChew on that…
It Never Ends
This page shows up with an old error reinstated.
http://www.investmentu.com/IUEL/2007/20070827.html
“As Bill writes, “Thus does the neocortex sputter in fits and starts from dubious assumptions to preposterous conclusions with nary a whisper of doubt in between.”
Trust me, if I could write that well, I would.”
Of course, it wasn’t Bill who wrote those lines…. And in 2007-08, twice, this “error” (the article also drops my name entirely off the book) was corrected..only to reappear, conveniently, despite, having a signed agreement beyond the contract. (Of course, I have no idea, really, who’s responsible for these “mistakes”…the difficulty with large companies).
(No Subject)?From: Sent: Wed 1/16/08 5:22 PM To: Lila Rajiva (E-mail) (lrajiva@hotmail.com) —–Original Message—–
From: DELETED
Sent: Wednesday, January 16, 2008 10:12 AM
To: DELETED
Subject: RE: LILAThe Mobs, Messiahs and Markets review has been updated on the site. Should be good to go…
Have a great day,(I deleted the names and anything but the relevant portion of the mail, to be safe)…
Wow.
That difficult to get things straight?
Especially when the original piece is on the web, Satan and Sex Manias, published under my own name (a fortunate precaution).
This has been the case not just with these lines but with dozens of passages and research. I ask for a change. It’s made. Two weeks later it’s undone. I write again. I’m met with - Oh it was changed. When I look, something else has been tweaked.A year later it goes back to what it was. Then copyright material is used elsewhere. Who knows. In two years time, the entire book may have someone else’s name on it, for all I know.
Of course, I have the screen shots and the emails….
And of course, it sometimes leads to hilarious results: http://www.businessinsider.com/doomsayers-2010-2009-12
Weisenthal’s list of leading doomsdayers has my coauthor on it, but with only one book to his credit…
(at least, the last I looked…possibly, as soon as I write this, it will be air-brushed another way)
Manipulating records and manipulating the markets..they go hand in hand.. as part of the entitlement mentality of the financial industry….and its media shills.
Harvard Paper Suggests SEC Favors Big Firms
Now I’m waiting for the Harvard Law paper that says that if you jump off a cliff, you tend to fall downward not up…
August 11, 2009
Harvard Law and Economics Discussion Paper No. 27
Abstract:
Recent financial collapses have focused policymakers’ attention on the financial industry. To date, empirical studies have concentrated on corporate issuer activity, such as securities offerings and class actions. This paper makes a first step in studying SEC enforcement against investment banks and brokerage houses. This study suggests that the SEC favors defendants associated with big firms compared to defendants associated with smaller firms in three ways. First, SEC actions against big firms are more likely to involve exclusively corporate liability, with no individuals subject to any regulatory action. Second, the SEC is more likely to choose administrative rather than court proceedings for big-firm defendants, controlling for types of violation and levels of harm to investors. Third, within administrative proceedings, big-firm employees are likely to receive lower sanctions, notably temporary or permanent bars from the industry. To explain this gap, the paper first investigates whether big-firm violations are qualitatively different from small firms’ violations, but finds no support for this. This paper next explores two hypotheses that could explain a systematic bias in enforcement patterns: that constraints in bureaucratic resources weaken the SEC’s negotiating position towards big firms, and that SEC officials favor prospective employers.”IPCC Chief Pachauri Central To Cap-and-Trade Scam
From Mish Shedlock:
“The crux of the scheme is this: European steelmakers have threatened to leave the EU for India, eliminating the jobs of thousands of workers in the process, unless the EU grants the steelmakers free carbon credits worth hundreds of millions of dollars.
Eurofer, a European trade group, is at the center of the scheme. The web of the plot, however, weaves in not only several companies, but also the United Nations’ climate change chief:* Among its members, Eurofer represents two EU steelmakers, Corus Redcar and ArcelorMittal, each of which has ties to India as well as to Rajendra K. Pachauri, the Indian industrial engineer who has been chairman of the U.N. Intergovernmental Panel on Climate Change, or IPCC, since 2002.
* Eurofer appears to have coordinated a threat to the European Union Greenhouse Gas Emission Trading System that its steelmakers would move their operations from the EU to India unless the EU cap-and-trade exchange issued them – at no cost – carbon emissions permits worth hundreds of millions of dollars.
* Once the bureaucrats in Brussels acquiesced, Corus Redcar and ArcelorMittal maneuvered to cash in windfall profits from the EU carbon permits given them at no cost.
* Additionally, Corus Redcar has now announced a decision to close operations in Great Britain nonetheless and relocate its steelmaking activities to India in order to gain additional U.N. carbon credits.
Ironically, EU and U.N. officials who might have thought requiring cap-and-trade permits would operate as “protection racket” in which EU companies need to buy carbon credits to continue operations, have now found themselves on the losing end of the reverse scheme.
In the final analysis, the winners are the European Union corporations willing to play hardball with the European Union Greenhouse Gas Emission Trading System, and the losers are the EU middle class workers that are held hostage in the scheme.”
Facebook Charged With Violating Federal Laws
As I blogged earlier, Facebook’s policies and settings are themselves a problem, misleading users and indeed, abusers. It’s now being charged with violating federal privacy laws:
“Ten privacy organizations filed a complaint against Facebook Inc. to the Federal Trade Commission Thursday, arguing that recent changes to the social-networking company’s privacy policies and settings violate federal laws.
The complaint, spearheaded by the Electronic Privacy Information Center, or EPIC, was triggered by changes Facebook made in November and December. Those changes included recommending people set more of their information to be public rather than visible only to friends and treating new information, like a person’s gender and lists of friends, as “publicly available information” that Facebook may share with software developers who build services for Facebook users.
The complaint asks the FTC to investigate the practices and to require Facebook to restore previous privacy settings that allowed people to choose whether to disclose personal information.
A Facebook spokesman saidit “discussed the privacy program with many regulators, including the FTC, prior to launch and expect to continue to work with them in the future.”
The complaint is the latest sign of how privacy—or at least consumers’ perceptions about it—remains a problem for Facebook.”
Wall Street: The Crematory Of Capitalism
“Independent traders know as a fact that Humungous Bank & Broker (HB&B) research analysts are biased and unaccountable. We also know they give short-term tips to their firm’s proprietary traders and sales people that are at odds with their longer-term published opinions. These unfair practices are permitted because the fundamental conflict of interest structure of the securities industry is permitted.
Today the Wall St Journal has reported that FINRA (the Financial Industry Regulatory Authority) has launched a broad inquiry into how up to a dozen Wall Street firms disseminate stock ratings and research. Important questions are being asked.
On August 24 this year, WSJ informed the public of how Goldman Sachs analysts were tipping their traders with info that differed from published reports. These regular meetings were called “trading huddles”. At the time, I called it insider trading, which is criminal.”
My Comment:
A reader commented earlier that “insider trading” is a big yawn as a story (for the latest insider trading arrest, see this case, of an ex-banker from Lazard, a relatively small case, admittedly)
Someone might come to that conclusion only if their knowledge of the practice were abstract and based on theoretical debate on the subject. But anyone who knows the history of the capital markets over the last 30 years or so knows that a big part of the story is that investment (merchant) banks turned into traders by the end of the century and that their proprietary trading became more important to them than their retail clients or customers. I’ve written about this in relation to Goldman Sachs, which was the most egregious (because it was the most powerful) of the lot.
Insider trading is essentially a failure of banking as a profession, with professional ethics. There is a fiduciary responsibility to shareholders (in the case of a company) and of clients (in the case of banks). Conflict-of-interest is a problem in every other work place. Why not here?
Besides conflict-of-interest, insider trading involves an explicit fraud on the client.
That’s in addition to the crime of fractional brokering, as someone cleverly puts it. (This is quite different from fractional banking. Due to the confusion of language that lets banks perform both safe holding and investing functions at once, fractional banking is legal). On the other hand, “fractional brokering,” which is what naked shorting and “fails-to-delivered” amount to, is illegal.
Unfortunately, the professional financial reporters seem too myopic to understand the gravity of the problem, our self-involved “gonzo” journalists (yes you, Matt Taibbi) are too politically-driven to explain it correctly, and right now I’m too disgusted by the intellectual dishonesty of the media to take the trouble to make the argument on the web and see it lifted by all and sundry with nary a link or footnote, let alone verbal acknowledgment.
As Cara points out correctly (and safely, since he’s in Canada), Wall Street and the American capital markets have become a joke, and a substantial part of the financial media still doesn’t seem to realize it’s the punchline.
That gives me no pleasure to say. For years, I defended American business to my foreign friends, claiming that Americans at least held to standards, regulations, and transparency requirements higher than theirs (meaning, Indian and non-Western).
Behind all the glitz “America” still operated somewhere, I argued.
The Marxists and communists who called the whole thing a charade and a lie didn’t quite get it, I was sure. The values of the American republic would prevail. Once most money-managers and businessmen were alerted to what was going on in the markets, I fully expected that their outrage would be enough to stem the rot. I saw CEOs stepping up to the plate and doing their duty, when the future of their own (rather than someone else’s) children was at stake.
That was four and a half years ago, when I first began researching the markets.In retrospect, I see I was incredibly naive.The rot goes deep.
Those are somber thoughts to have around Christmas time. But perhaps not inappropriate. If you recall, in the Christmas story, gold (or should I say, gld?) and frankincense were only two-thirds of the offering. The other third was myrrh. Myrrh is a resin whose oil, I read here, is used for embalming and whose incense is used by penitents at funerals and cremations.
That must be the bitter scent I smell rising from the capital markets.
Peterson Gives Away A Billion
Having cast aspersions on Pete Peterson’s Blackstone Group in the pages of this blog, I am obliged to point out this article on his charitable giving. It implies that most of the money earned from Blackstone will be given to the Peterson Foundation, which I’ve blogged about before.
“Ultimately, I decided to commit $1 billion to the Peter G. Peterson foundation—the vast majority of my net proceeds from Blackstone. Why so much? Kurt Vonnegut once told a story about seeing Joseph Heller at a wealthy hedge-fund manager’s party at a beach house in the Hamptons. Casting his eye around the luxurious setting, Vonnegut said, “Joe, doesn’t it bother you that this guy makes more in a day than you ever made from Catch-22?” “No, not really,” Heller said. “I have something that he doesn’t have: I know the meaning of enough.” I have far more than enough.”
Read more at “Why I’m Giving Away More than One Billion Dollars,” Pete Peterson, Newsweek, May 30, 2009
When Did Roubini Call The Collapse
I saw this on Business Insider:
“Nouriel was predicting collapse from as early as 2002, if not before, and his focus was on the current account and the dollar more than the banks. I first raised the spectre of a massive liquidity crisis for highly leveraged U.S. financial institutions in 2006, so I think my timing and focus were a little better. But I was wrong in one respect: I thought a geopolitical event would be the trigger for a massive repricing of risk. Wrong. It happened all by itself, caused by endogenous forces within the financial system.”
So now Roubini is supposed to have called the collapse in 2002?
Maybe. But when I looked through his archives I could only find speeches to that effect in the summer of 2006. That’s all I’ve heard Roubini claim too.
But now here is Niall Ferguson (above) claiming Roubini called it in 2002.
Time for some more research…
We want to give the man his due. Just because he seems to be draped on the arms of beautiful women at parties nearly everywhere we see his mug, it doesn’t mean he wasn’t right on…er…top..of things..
Update: Megan McArdle says Roubini got the magnitude of the crisis right but not the causes.
(Lila: But he got that right only well into 2007, which I don’t consider prediction so much as description, at that point).McArdle points out, however, that Roubini was mostly focusing on the current account deficit and the dollar in 2004…neither of which was central to the crisis.
But then she herself goes onto suggest that it was the mispricing of risk through incorrect statistical modeling, as described by Mandelbrot and Taleb (of Black Swan fame)k, that underlay the crisis. But this too is incorrect. Indeed Taleb himself has denied it and said he was misquoted.
Frankly, even though I say it myself, Mobs beats them all in prescience and apt timing in describing why the system toppled over.
In a word - it got hollowed out. I think that was a theme already described in Empire of Debt (Bonner & Wiggin) in 2005 and Financial Reckoning Day (Wiggin & Bonner) in 2002.
All three were read widely by a large swath of the business community and press and plagiarized.
Ex-Sith Lady Uses RICO On Sith Lord (?)
The ex-wife of Steven A. Cohen, legendary multi-billionaire manager of hedge-fund SAC, whom the ever controversial (and confrontational) Patrick Byrne has for some time been suggesting is the, or perhaps, one of the Sith Lord/s of Wall Street, is using RICO laws to get a bigger settlement from her former husband. That´s turned up some interesting accusations:
“In Ms. Cohen’s version of events, her husband and his brother, Donald Cohen, orchestrated a long-running racketeering scheme. She says her former husband lied under oath about his net worth, conducted mail and wire fraud, and concealed from her and the Supreme Court of New York millions of dollars that he possessed in 1990, thus reducing her divorce settlement.
Even in this post-Madoff era, the accusations might seem outlandish. Mr. Cohen, known as Stevie, is one of the nation’s most successful money managers. With a $13 billion hedge fund and a sumptuous Connecticut estate, he is, at 53, a Wall Street legend.
But all of this comes at an uncomfortable moment for Mr. Cohen and his company, SAC Capital Advisors. Since federal prospectors began making arrests in a major insider trading investigation in October, SAC, which is based in Stamford, Conn., has been linked to the case.
A former SAC analyst has pleaded guilty on charges related to insider trading that occurred years after he left the firm and has agreed to provide any information he might have about insider trading that occurred when he was at SAC. No current SAC employee or manager has been charged with wrongdoing.”
and this:
“She claims in her suit that in 1985, while they were married, Mr. Cohen confessed to her that he received inside information about the takeover of RCA by General Electric, a megadeal of the 1980s that prompted a sweeping insider-trading investigation. The Securities and Exchange Commission dropped its investigation after bringing charges against a G.E. executive and a Houston family with ties to a Wall Street bank.”
and this:
“When the couple divorced, Mr. Cohen stated that, on paper, he had a net worth of $16.9 million. But $8.7 million of that was “worthless,” he said, because of a bad real estate deal with Mr. Lurie.”
Lurie, who later fell out with Cohen, claimed that the money he got from Cohen to put through the deal came from an SAC trading account.…
My Comment
And some substantiation for the charges can be found in this WSJ story on Goldman Sachs analysts tipping off their own traders first and then favored hedge-funds (SAC at the head of them), before their own clients(which I noted in 2006).
See also this Deep Capture post.Apparently, it´s not easy street being a Sith Lord. You never know when your spurned Sith Lady (not to mention various disgruntled Sith Knaves) might spring out from the shadows to expose what´s apparently standard operating procedure in the money business.
(Sigh) Not even a Greenwich mansion seems worth it (for a colorful account of the culture of the hedgies, whom we call the bubble kings, see “The High Way Robbers,” in ¨Mobs, Messiahs and Markets,”(Bonner & Rajiva, Wiley 2007).
I said this a long time ago in “Three Card Capitalists”
The market collapse might have been triggered proximately by failed sub-prime loans, but the deeper sources of it lie in the massive fraud and corruption that go back to the 1980s, and even earlier, to the 1970s.
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