LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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The Kleptocrats Behind The Gulf Oil Disaster
30 Facts Evidencing The Rothschild League Of Bankers Planned The Gulf Oil Crisis
Leonard G. Horowitz And Sherri Kane, Rense, 7-7-10
(I understand that Rense.com is labeled a conspiracy site with anti-semitic overtones, but my own research confirms many of the facts in the piece. In fact, there’s even more to this story…)
30 Chilling Facts Proving We The People Are Under Attack, in an Undeclared War, With the Rothschild League of Bankers:
1) The media is grossly censoring the extent of the devastation in the Gulf. The poisons–oil and chemical dispersant (Corexit)–are destined to spread globally, but honest reporting is restricted, and independent investigators are being arrested. This censorship is a sure sign of fascism–not freedom or democracy. In this way, the media, financially directed by leading investment bankers (cited below), accomplices this global poisoning, or omnicide.
2) The news and network “programming” is mind-controlling propaganda issued by the “partners” in the Rothschild League of Banks including Goldman-Sachs, JPMorgan-Chase and UBS that direct BP, Transocean, Halliburton, the clean-up capitalists, Corexit suppliers, even the trailers used by clean-up crews, through co-investors heavily represented in the Partnership for New York City (PFNYC), founded by David Rockefeller and chartered by the Royal Family of England. All together, these partners wield the most formidable economic power in world history.
3) Ongoing worsening environmental pollution has been a primary objective of these Rothschild League financiers since at least the 1960s, according to their leaked economic agenda. Destroying the environment, thus creating new global threats for remediation markets and emergency management is unconscionable, but very real. This has become a viable alternative to traditional warfare securing profitable population control through crisis capitalism.
4) The Gulf oil catastrophe reflects this one of three major financially-sustaining war substitutes. Currently, less urgent than environmental destruction is space-based threats (e.g., solar flares, alien menaces, and colliding asteroids). The third, and least apparent profitable war substitute is petrochemical-pharmaceutical enslavement. All three of these incentives and objectives for global governance, emergency preparedness, and profitable military and Homeland Security responses,”carries the weight of . . . considerable actual sacrifice of life.” (Quote from The Report From Iron Mountain–a scholarly, serious, non-fiction, non-satirical leaked worked claimed by Rothschild League banking cartel propagandists, including media pundits, to be a satire.)
5) The propaganda ploy used most effectively in the Gulf, and in all crises, is to blame illusory villains to create sham debates. When Obama is blamed for the oil crisis, for instance, the “accident” faults Democrats. When Halliburton is blamed, the Republicans feel faulted. This divisive diversion suckers masses of idiots, discredits the media’s intelligence, and shames people who still claim we have a”free” and “responsible” press.
6) The Deepwater Horizon (Mississippi Canyon 252) oil rig that exploded is the property of Transocean, not British Petroleum (BP); and both companies are financially directed by Goldman Sachs, JPMorgan Chase, and UBS investment bankers, all operating in the Rothschild League of banks.
7) Coincidentally, or demonically, the oil rig’s failed cementation job exploded on Hitler’s birthday, just in time to poison Earth Day 2010, thanks to Transocean’s contractor–the infamous Dick Cheney/George Bush officiated Halliburton Company, allied with Homeland Security.
Halliburton officials admit knowing their cementation [sic] job was likely to explode just when it did, according to Congressional testimony.9) Goldman Sachs (GS) officials, likewise, knew the rig was likely to explode when it did. They bet millions of dollars on this event only days before it happened! (Lloyd Blankfein, CEO of GS, directed 44% (4.6 million shares) of BP stock to be dumped three weeks before the explosion.
10) Not surprisingly, Transocean was merged into its current corporate state by Goldman-Sachs (a.k.a., “Government Sachs”) in 2007.
11) David Sidwell, Risk Committee Chairman of UBS, the wealthiest Swiss bank (in the Rothschild League or alliance of so-called”competing” banks) and the world’s largest wealth manager, also dumped BP stocks massively (i.e., 99% of the banks holdings, or 2.1 million shares,) as did Wachovia/Wells Fargo.
12) BP Oil CEO Tony Hayward sold 1/3 of his BP stock (223,288 shares) on March 17–a month before the explosion.
13) Just prior to 9/11, you may recall, Goldman Sachs did the same with airline stocks; and before the Gulf catastrophe, GS shorted mortgage company stocks, fueling the real estate collapse in America.
New Shocking Facts:
14) The Management Boards of the Eurex Stock Exchanges and the Executive Board of Germany’s Eurex Clearing AG decided, on April 14, 2010, to introduce an equity option on shares of Transocean Ltd, effective on the day of the explosion, April 20, 2010. This gave inside traders a full day to dump their “uninsured” stock in Transocean at the highest price possible (before the rest of Wall Street responded to the explosion). Then the crisis capitalists were able to reinvest their funds securing the higher price value. These officials published zero reason for Transocean’s new equity option program that encouraged banking criminals to use”protective puts” to make millions.
In other words, by paying a relatively small premium (compared to the soon-to-be plunging market value of Transocean stock), the Rothschild Leaguers knew no matter how far the stock dropped, it could be sold at the original “strike price” (also called the “put option”) anytime before April 20, 2012.
This additionally evidences premeditated murder, and the financial motives of the Swiss/German banking chiefs influencing Europe’s most active stock exchanges. These inside traitors and industrial saboteurs, financially controlling Transocean, Halliburton, and BP, committed the gravest environmental crime of all time, with obvious plans to profit from the mass murdering of people and destruction of the Gulf.
15) This was how money was made from the obvious sabotage. After UBS sold its 2.1 million shares of BP, prior to the explosion, the “put option” policy on BP stock was similarly exercised when UBS bought back 8.6 million BP shares by June 7.
16) Transocean Vice President of Marketing, Terry Bonno, met UBS officials on May 27, 2010, according to a heavily censored Thompson Reuter’s report and transcript. The “Ultra-Deepwater market will start to pick up longer-term,” Bonno encouraged banking officials.
17) So within weeks of the explosion the Rothschild League of investment bankers were yelling “Buy! Buy! Buy! BP stock,” stating the costs for clean-up were miniscule compared to what their investments and company profits would earn.
18) This quote detailed the BP-banking-stock-jocks’ plot:”Buying shares today while writing $55 calls and “puts” for the January 2012 expiration allows for an outstanding cash-on-cash return if BP merely bounces back by 14% over the next 21 months. In a best case you’ll net 98% total returns on the actual cash outlay (assuming you write the puts against paid-up marginable equity already held in your margin-type account).
(Editor’s Note: Can you imagine the psychopathology, blind ignorance, and murderous greed of investing, or reinvesting, in these companies that are killing us and our planet? 19) Much like the instantly manufactured equity investment option created for Transocean right before the explosion, BP’s stock insurance plan secured the ongoing devastation in the Gulf with this financial promise: “In a worst case scenario you’ll end up with twice the number of BP ADRs at an average cost of $42.64 or less,” stock gurus promoted. “That’s lower than the annual lows for BP during the entire period 2004 right through 2007.”
Proud Profiteers in Media Magic
The wizards of oil, pulling the strings behind the media’s propaganda, are best exemplified by Goldman Sachs’s CEO, Lloyd Blankfein. Lloyd merged, and still largely controls, ABC/Disney and Miramax. Blankfein’s partner, co-chairing the PFNYC, is Rupert Murdoch, controlling FOX News, Time-Warner, Associated Press, News Corp and much more. Another partner in this David Rockefeller-founded PFNYC cabal is Thompson Reuters chairman, Thomas Glocer. The PFNYC was responsible for financial reconciliations from 9-11, and “veering” World Trade Center reconstruction money from New York to Las Vegas through Apollo Management’s MGM private equity investments. (Apollo co-owns Nalco/Corexit with Goldman Sachs.) The PFNYC was chartered by Britain’s Royal family, bringing NBC/Comcast into their stead, as well as the General Electric company. Last but not least, CBS owner, Sumner Murray Rothstein (Redstone), joined the clique through his CBS-Viacom stable of companies.
20) The Halliburton cementation job’s sabotage, and resulting oil hemorrhage in the Gulf, served perfectly, synchronously and financially, to “veer” media attention away from Lloyd Blankfein’s/ Goldman-Sachs’s shorting of the American housing market, accelerating the planned economic collapse of the USA for the forthcoming New World Order’s “New Deal.”
21) And just when we thought the Government Sachs connection to the Gulf oil rigging could not get any deeper, we learn that GS holds controlling interests (with Apollo Management) in the Nalco Company which produces the hideously deadly oil dispersant named Corexit!
22) The Rothschild Leaguers “ruled out all [Corexit] competitors even those that have shown to be far less toxic and, in some cases, nearly twice as effective,” reported Paul Quinlan in the New York Times. The reason being . . .
23) Nalco formed from a joint venture with the David Rockefeller-controlled Exxon Chemical Co. in 1994. Then, . .
24) In 2003, The Blackstone Group, Apollo Management L.P., and Goldman Sachs Capital Partners, bought Ondeo Nalco for $4.3 billon dollars. All three companies are partnered in the Rockefeller-founded, Royal Family-chartered PFNYC.
25) Ironically, according to Nalco’s website, the company is portrayed as a water, energy, and air conservation corporation. They claim to be the world’s leading water treatment company. Their poisonous dispersant, Corexit, is not their main business. It is a “first aid product that they’ve always had and they’ve never really used.”
26) Corexit was found poisoning clean-up workers, causing kidney and liver disorders, following its debut in the 1989 Exxon-Valdez disaster. Nalco blamed these problems on 2-butoxyethanol, now claimed to have been removed.
And that’s not all. . . .
27) The George Bush/Dick Cheney 9/11-linked Halliburton Company purchased the world’s largest oil-spill cleanup entity, Boots & Coots, three weeks before the “natural gas leak.” This was synchronous with the bankers beginning to unload BP and Transocean stocks, and securing equity options to insure their investments. Other major shareholders in Nalco/Corexit include billionaire Warren Buffett and his conglomerate holding company, Berkshire Hathaway; Maurice Strong, Al Gore, George Soros.
28) Historically, Homeland Security has contracted with Halliburton to provide detention camps for political dissidents and displaced populations, through KBR, whose financial underwriters feature the aforementioned war-makers: Credit Suisse Securities (USA) LLC; Goldman, Sachs & Co.; UBS Securities LLC; Citigroup Global Markets Inc.; and Wachovia Capital Markets, LLC–the precise financial institutions shorting BP and Transocean stocks as detailed above.
Furthermore, . . .
29) Homeland Security’s choice of accommodations for Gulf oil clean-up crews are the same toxic trailers banned from use during Hurricane Katrina.
30) Homeland Security medical officials are also now implicated in fraudulently promoting (through Alex Jones) a “decoy product” for infectious disease markets called Silver Sol for profit and probably depopulation as well.
Similar to what we found while investigating the fabricated H1N1-H5N1 Swine Flu fright and fraudulent (and increasingly threatening) vaccination campaign, the devil-doers were those in control of the “PharmaMedia” involving Wall Street’s heaviest hitters, all partners in the PFNYC and the Rothschild League of investment bankers.
We The People urgently need a new banking system that entirely excludes the aforementioned criminals. It must encourage investments in permaculture and sustainable production, not destructive and polluting consumption. It must discourage petrochemical-pharmaceutical toxicity that is killing us and most other species. And it must invest in suppressed alternative energies, including hydrogen fuel and Tesla technologies that have been kept from common use by the financial paradigm makers/enslavers.
The new banking system must value biological sensitivity, and love-based spirituality, more than lust for money, fueling a degenerative economy that is based on usury.
One suggested solution is to form a posse to search and find leaders in this criminal banking cartel (such as Lloyd Blankfein and David Rockefeller) and serve them, and responding law enforcers, with citizens’ arrest complaints, widely publicized, using this article and its links as evidence detailing the criminal conspiracy. This way, attorneys general may be forced to do their jobs in protecting We The People.
Otherwise, we need a miracle to stop the financial industry from doing what is it is doing to us and our planet. This is not a religious statement, just an accurate observation. Jesus put his life on the line by preaching the same thing. He exposed and flogged the lesser humans who were financially enslaving humanity through usury, usurping faith in God and the new true Nation under Him.
In defense of ourselves and Mother Earth, We the People now have no other reasonable choice but to neutralize mass murderers, their lethal intoxications, and environmental destructions.
We pray that LOVE–communicated musically in the secreted528Hz frequency–will help prompt this urgently required miraculous transformation of our economy and society, ending the psychopathology of menacing greed, to secure permacultural sustainability and real enduring happiness.
About the authors:
Dr. Leonard Horowitz is the author of sixteen books including three American best-sellers, Emerging Viruses: “AIDS & Ebola–Nature, Accident or Intentional?”, “Healing Codes for the Biological Apocalypse,” and “Healing Celebrations: Miraculous Recoveries Through Ancient Scripture, Natural Medicine and Modern Science.” Dr. Horowitz, of Healthy World Organization (HWO), is currently advancing as an alternative to the duplicitous World Health Organization (WHO).
Sherri Kane is an investigative journalist who defected from FOX News, Los Angeles, for ethical reasons. She has written extensively on Washington politics including Barack Obama’s history. Most recently, she has exposed the “PharmaMedia,” detailing links between the wealthiest Wall Street investors in mass media and the pharmaceutical industry.
Review from last newsletters . . . .
In case you missed our last shocking newsletter (June 10, 2010), we were the first in the world to expose Peter Sutherland, the man standing with one foot in Goldman-Sachs, and the other on the burning Transocean-Halliburton-BP oil rig, as being the Consultor of the Extraordinary Section of the Administration of the Patrimony of the Apostolic See. In other words, Sutherland is the chief financial adviser to the Pope. Holy Spirit-filled Catholics are encouraged to petition the Vatican to denounce Mr. Sutherland immediately. In 2010, Mr. Sutherland finished a 13-year stint as Chairman of BP, Europe’s largest oil company. A former Attorney General of Ireland, he is President of the Federal Trust for Education and Research, a British think tank whose efforts might better be called corporatist indoctrination than trustworthy “education.” He is Chairman of The Ireland Fund of Great Britain, and a member of the advisory council of Business for New Europe–a pro-New-World-Order European think-tank based in Britain.From 1993-95, Sutherland was the Director-General of the World Trade Organization.
In January 2006, the current Non-executive Chairman of Goldman Sachs International, was appointed by United Nations Secretary General, Kofi Annan, as his Special Representative for Migration.
– From Rense.com.
The Ties That Bind: Behind Obama - UBS, Harken, BCCI….
I see that Lew Rockwell has a podcast today with Russ Baker, the founder of the site, WhoWhatWhy.com, from which this piece is published.
Interesting background here on UBS, the Swiss bank (and leading kleptocrat) involved in the biggest off-shore scandal in recent history (hat-tip to The Daily Bell commenter who posted it):
“It is worth pointing out that one of three Senate co-sponsors of the Stop Tax Haven Abuse Act of 2007, introduced even before the UBS situation was known, was none other than a then-senator named…Barack Obama. The House sponsor was Rahm Emanuel—who would go on to be President Obama’s Chief of Staff. Another, weaker bill was proffered by Sen. Max Baucus of the Finance Committee—parts of which did just quietly become law as part of an employment stimulus bill signed by Obama in March, 2010, with the goal of capturing lost tax income as a way of financing job creation.
BP Oil Spill: Criminal Negligence Or Sabotage?
I couldn’t find any other convenient run-down of the evidence pointing to sabotage or extreme negligence in the BP oil spill, so I’ve linked PrisonPlanet.com’s report. I’ve checked the material and it’s well-sourced and confirms my own research, so I’m comfortable posting it. (more…)
BP Burning Rare, Endangered Sea-Turtle
For people who think passing a law or imposing a fine on some behavior invariably gets you less of the behavior or an improvement of it, try this heart-rending Natural News report:
“By now, almost everyone is aware of the out-of-control oil spill down in the Gulf of Mexico that seems to be getting exponentially worse with each passing day. But what people may not know is that BP’s efforts to control the oil by burning it are actually burning alive a certain rare and endangered species of sea turtle.
Soros Blames Germans For Being Fiscally Responsible
Reuters reports (June 23, 3010) that Soros is wringing his hands over Germany’s savings policy:
“Germany’s budget savings policy risks destroying the European project and a collapse of the euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview released on Wednesday.
Fannie CEO Raines’ Emissions Patent Would Make Millions From Cap-n-Trade
From Jerome Corsi, World Net Daily, June 18, 2010:
“Former Clinton and Obama budget adviser Franklin Raines owns a key carbon-emissions patent he developed as CEO of the government-sponsored mortgage giant Fannie Mae, positioning him and his partners to make millions of dollars if it is used in any carbon-capping scheme implemented by the Obama administration.
Pre 9-11 Put Options Records Destroyed by CBOE
From Bob Wenzel at EconomicPolicyJournal.com:
Explosive new information has broken with regard to destruction of pre-9-11 options trading records.
Just prior to 9-11, someone (or group of people) bought large amounts of put options on various airline stocks. Put options gain in value when a stock goes down. The airline stocks went down after 9-11.
The Huggable Hedgie: Einhorn, Fairy-Tales, And The “Activist” Gravy Train
Mark Mitchell at Deep Capture on well-known hedge-fund “activist,” David Einhorn:
“In addition, Allied was not, as Einhorn claimed, a massive Ponzi scheme. Einhorn had made the smarmy suggestion that Allied was a Ponzi because it supposedly raised money from the markets to pay its dividends. An SEC official told the inspector general that this claim was patently false – it was perfectly obvious that Allied legitimately paid dividends out of earnings.
Wikileaks’ Role In Julius Baer Case Linked to Soros, Sachs, & Spooks?
From The Wayne Madsen Report (a subscription-based service) comes this analysis (April, 2010) of the attack on the financial privacy of Swiss money manager, Julius Baer Group, exposed by whistle-blower Rudolf Elmer:
“WMR’s financial intelligence sources report that the unauthorized disclosure of a compact disk to Wikileaks that contained financial details of the clients of the secretive and usually highly-secure Zurich-based independent money management Julius Baer Group was designed to destroy the firm’s standing with its customers and make it ripe for a hostile takeover by interests associated with multi-billionaire vulture capitalist George Soros, including Goldman Sachs. Julius Baer was founded in the 19th century.
Rahm Got Free Housing From BP Greenwasher and Democrat Consultant
Conservative author Jerome Corsi suggests that Rahm Emanuel and BP are linked :
“White House Chief of Staff Rahm Emanuel, WND has learned, lived rent-free in Washington, D.C., for years, thanks in part to a friend under contract with oil giant BP.
While the White House approaches “day 50″ of the environmental disaster caused by an explosion on BP’s Deepwater Horizon oil rig, unable yet to stop the flowing crude in the Gulf, several media sources have questioned the administration’s efforts to regulate BP prior to the incident.
Steve Cohen To Leave Trading, Says Vanity Fair
Well, well, well. It looks like Patrick Byrne, Judd Bagley, Mark Mitchell and the rest of the estimable team at Deep Capture are having more than some effect.
Not only have the Germans and Austrians banned naked short- selling, Vanity Fair, our least favorite low-class, high-gloss magazine of the DC twitterati, tells us that Steve Cohen is closing up shop as a trader. Sith Lord Cohen doesn’t like the spotlight, it seems. Maybe he remembers all too well what he was up to in the 1980s……even if Reuters wants to keep it buried.
In the July issue of Vanity Fair, legendary hedge-fund billionaire Steve Cohen tells special correspondent Bryan Burrough that he might be ready to walk away from active trading. How big would that be? Well, says Burrough, it’s “a little like saying that God is ready to walk away from Earth.” In this video, Burrough takes the measure of Cohen’s controversial careeer—and offers his theory on why the reclusive banker granted the second in-depth interview of his 30-year career to Vanity Fair.
Germans Ban Naked Short-Selling/CDS Swaps Of Euro Bonds
Bloomberg reports a surprise move from Germany:
“Germany will temporarily ban naked short selling and naked credit-default swaps of euro-area government bonds at midnight after politicians blamed the practice for exacerbating the European debt crisis.
Barrick Gold Threatens Vancouver Publisher
CBC News in Canada reports that bankster-associated gold miner Barrick Gold is shutting down critical writing on the Canadian mining industry. (Thanks to Chris Cook).
An excerpt:
“The threat of legal action from mining giant Barrick Gold has forced Vancouver-based Talonbooks to postpone publication of a book about the Canadian mining industry.
Publisher Karl Siegler calls it a clear case of “libel chill” by one of Canada’s largest mining companies.
The book, Imperial Canada Inc.: Legal Haven of Choice for the World’s Mining Industries, was to be published in spring 2010, but in February, the publisher and everyone else involved with the book got a threatening letter from Barrick lawyers.
Leveraged Buy-Outs Make Come Back In Private Equity Market
The report I’ve posted below illustrates why most regulatory efforts are completely counterproductive.
By the time enough bureaucrats are convinced there’s a problem, by the time enough of the public has been educated…or miseducated about it..so there’s enough public pressure to call for hearings, by the time the SEC and the DOJ have been able to gather enough evidence to cobble together charges, the swindles move onto some other part of the system, the crooks cover over their tracks, reinvent themselves, put old wine in new bottles and new wine in old, and, in general, outpace the local flatfoots about 100-1, so that they’re nearly always playing catch-up and dissecting history, rather than actually safeguarding the public from the current perils of the market.
Goldman Sachs is the outrage du jour. But much of the really bad stuff Goldman’s been involved in over several decades has nothing to do with the technicality on which it’s being grilled now, a deal that’s no different from hundreds done on Wall Street by every other bank. Meanwhile, what about the dirty laundry of the hedge-funds, of private equity, of sovereign wealth funds - to take just the private sector? And what of the government’s own culpability in financial wrong-doing? And worse yet, its blunders in financial “right-doing”? Don’t count on the SEC to look at all that.
That’s the intrinsic problem of a statist solution…it’s always a day late and a dollar short.
Thus the LA Times reports on where the action is in the financial world, as evidenced in the glee of some participants at the Milken Institute’s Global Conference [that’s Michael Milken, former convicted junk bond financier turned philanthropist and alleged master mind of global market manipulation}:
“Unemployment is high and the housing market remains weak. But in Beverly Hills on Tuesday, private equity players could hardly be more upbeat.
A panel of private equity fund managers at the Milken Institute’s annual Global Conference celebrated the comeback of highly leveraged deals – which had ground almost to a halt during the financial crisis.
“What a difference a year makes,” enthused Leon Black, head of Apollo Management in New York.
Black and the other buyout honchos attributed the return of debt-financed acquisitions to the recovery in the credit markets and the overall economy.
“The high-yield market is probably better today than it ever has been,” said Scott Sperling, co-president of Thomas H. Lee Partners in Boston, referring to the junk bonds that finance many private equity transactions.
A new problem faces private equity investors now: The prices of target companies have shot up faster than fund managers have been able to scoop up bargains.
“A lot of the low-hanging fruit, frankly, is gone,” Black said. “The snapback has been unbelievably dramatic.”
Not surprisingly, the managers bemoaned what Black termed the “populist wave” helping to fuel the Obama administration’s effort to boost oversight of the financial industry.
“You’re seeing some wacky regulation, which makes running our business a lot more difficult,” said Ted Virtue, chief executive of MidOcean Partners, which buys midsize companies.
Still, the private equity business has largely escaped the scrutiny aimed at other areas of Wall Street. “I’m glad I’m not Goldman Sachs today,” Black said with a wide smile.”Massachusetts Moves Millions Out Of Big Banks
The Washington Post reports:
“Massachusetts officials on Wednesday announced plans to move millions of dollars in state investments out of some of the nation’s biggest banks to protest credit card interest rates.
State Treasurer Timothy Cahill said the state has removed Bank of America, Citi and Wells Fargo from a list of institutions approved for new state investments. Massachusetts, which is the only state to make such a move, is also beginning to divest $243 million in funds held at those banks, though the process could take up to six months.
“We want to bring some fairness into the issue,” said Cahill, who is running for governor. “I don’t think what we’re asking is . . . out of line.”
Scoundrel Time…
“Experts have analysed the pensions of a number of former directors of British banks, many of which were only saved from collapse by state bailouts. The biggest beneficiary is former Royal Bank of Scotland director Larry Fish, who has a pension pot of £18m, paying out £1.5m a year. Unlike the former RBS chief executive Sir Fred Goodwin, he has managed to maintain a low profile up to now, as he used to run the bank’s American operations.
Other bankers with pension pots of more than £1m include: Richard Banks, Richard Pym and Chris Rhodes (Alliance & Leicester); Steve Crawshaw and Chris Rodrigues (Bradford & Bingley); Peter Cummings, Colin Matthew and Phil Hodkinson (HBOS); David Baker, Robert Bennett, Keith Currie, David Jones and Andy Kuipers (Northern Rock); and Johnny Cameron and Mark Fisher (RBS).
The analysis also established that the true value of Sir Fred Goodwin’s pension pot could be, in fact, almost double the previously stated figure of £16m. According to pensions expert John Ralfe: “The official numbers that Royal Bank of Scotland has come out with is that his total pension pot from the age of 51 to the expected death is about £16.9m. I think that is a gross understatement. If I wanted to go along to a third-party pension provider and get the sort of pension that Fred Goodwin is on – £700,000 and that goes up in line with inflation, of course, each year – I would have to pay something in the order of £28m.”
The contrast with the pensions given to rank-and-file banking staff could not be greater. Dennis Grainger, who worked at Northern Rock for a decade, is entitled to only £700 a year. “I’m so disgusted with this I’ve turned it down,” said Mr Grainger.
Vince Cable, the Liberal Democrat Treasury spokesman, has attacked the scale of the rewards: “What makes people really, really angry is that these people were exceptionally well paid, got enormous pension pots and other payments, despite the fact that they have failed and they have failed their shareholders, failed their employees and failed the taxpayer, and they are walking away with their millions.”
The large payments are not limited to pensions. Bank bosses have seen their average salaries rise from £800,000 in 2006 to more than £1m in 2008 – 20 per cent more than the average pay packet of chief executives in other sectors. They now earn £255,000 a year more than their FTSE-100 counterparts. Fees paid to non-executive directors of banks have also risen. In the case of the RBS, non-executive directors have seen their fees almost treble in less than a decade, from £25,000 a year in 2000 to £73,000 a year in 2008.
Mr Cable has denounced bankers’ pay and perks as “the kind of things you would associate with absolute monarchies in the days of the Bourbons in France”.
Sir Fred Goodwin
Even after cashing in £2.7m of his pension, he gets £550,000
Sir James Crosby
Will start reaping rewards of £10.4m pension pot in 2011 £572,000
Lawrence Fish
£18m pension fund yields over a million every year £1.5m
Adam Applegarth
In 2022 he will be able to claim his full yearly pension £305,000
Andy Hornby
The former HBOS chief can take his pension at 50 £240,000
Michael Fairey
Opted to take his entire £7m pension pot as a lump sum £280,000″
Did GoldmanTip Off Galleon?
“Wall Street’s most powerful firm is being drawn into the government’s sprawling insider-trading investigation.
Prosecutors are examining whether a Goldman Sachs Group Inc. board member gave inside information about the Wall Street firm to Galleon hedge-fund founder Raj Rajaratnam during the height of the financial crisis, people close to the situation told The Wall Street Journal.”
Hedge Fund Lobby Steps Up The Lobbying..
The hedge fund lobby is stepping up the..er… whining and dining in DC, says, Crain’s:
“With all the political and media focus on healthcare reform over the past few months, the financial industry enjoyed a brief respite from attacks and, as would be expected, spent its time and money wisely.
The hedge fund lobby, called the Managed Funds Association, doubled its spending during the last three months of 2009, according to data recently released by the Federal Election Commission. The MFA strategically sprinkled more than $1 million around Washington in the fourth quarter, compared to just $520,000 spent during the same period in 2008.”
Apparently, the hedgies don’t mind registering. What they’re kicking at are some other things:
1. Treating compensation as regular income (with its higher tax rate) rather than capital gains (with its 15% tax rate)
2. The banning of proprietary trading by banks, until now a lucrative source of income, the so-called Volcker rule.
The part I found really interesting in the Crain’s piece is that industry CEO Richard Baker apparently thinks there is a “growing alignment between hedge funds and millions of Americans.”
Oh yeah.
That would be that trader-activist mystique thing where Loeb, Paulson, and Chanos are really doing it for the little guy…….the money is just a side dish.
Um. Yeah. I get that.
And talking about side dishes, I hear that Rachel Uchitel’s interests are just aligned with Joe Six-pack’s too. She isn’t an extortionist and a gold-digger. Oh no. That’s just what it looks like. She’s a conjugal activist. She trying to get Tiger and all those other rovin’ eyes out there to be better husbands…..
Hanky-Panky At The Counting House
I thought I’d repost a piece that I wrote in Dissident Voice, way back in 2006. It helps give some background to the JP Morgan manipulation story.
And it also adds some background to the ongoing re-valorization of the once discredited IMF. Along with that re-valorization, is the hyping of anyone supporting even further central regulation, although the financial crisis occurred in all sorts of places that have plenty of it.
All this centralization and global government is supposedly for the welfare of the world - but there is no “welfare of the world” that can be safely accepted as gospel from the mouths of the financial industry and its political and media allies.
Note the date of the piece below - back on June 6, 2006, when, dare I say it, most of the financial talking- heads and blogs now being treated as the only legitimate interpreters of reality were doing…well, they weren’t reading GATA or supporting its work, I’m pretty sure. To have done so then would have made them persona non grata in the very same liberal media that is now embracing this research and that GATA, in turn, seems to be endorsing….for its own reasons..
Check it out for yourself.
Here’s an excerpt from the piece: “Hanky-Panky at the Counting House” (June 6, 2006)
Also, at Dissident Voice, you can find “Was The IMF Involved in Gold Price Manipulation” (June 8, 2006) which was also posted at Daily Reckoning and on one of the gold sites. I think it’s been taken off Daily Reckoning since.
“The unofficial theory is naturally a lot juicier, although described by even sworn enemies of paper currency as conspiratorial. Still, it’s managed to rear its head in the Wall Street Journal, so it can’t be all wet. Here is what widely respected libertarian Congressman Ron Paul had to say on Feb 14, 2002:
While the Treasury denies it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, operating through the Exchange-Stabilization Fund and in cooperation with major banks and the International Monetary Fund, have been interfering in the gold market with the goal of lowering the price of gold. The purpose of this policy has been to disguise the true effects of the monetary bubble responsible for the artificial prosperity of the 1990s, and to protect the politically-powerful banks that are heavy invested in gold derivatives. GATA believes federal actions to drive down the price of gold help protect the profits of these banks at the expense of investors, consumers, and taxpayers around the world.
GATA has also produced evidence that American officials are involved in gold transactions. Alan Greenspan himself referred to the federal government’s power to manipulate the price of gold at hearings before the House Banking Committee and the Senate Agricultural Committee in July, 1998: Nor can private counterparts restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise. [Emphasis added] (3)
More specifically:
Gold is borrowed by Morgan Chase from the Bank of England at 1 percent interest and then Morgan Chase sells the gold on the open market, then reinvests the proceeds into interest-bearing vehicles at maybe 6 percent.
At some point, though, Morgan Chase must return the borrowed gold to the Bank of England, and if the price of gold were significantly to increase during any point in this process, it would make it prohibitive and potentially ruinous to repay the gold. (4)
In plain English, the strong dollar policy that put the sizzle in the stock market under Clinton was made possible only by manipulating the gold market to keep prices low. The low interest rates which kept the economy on the boil went hand in hand with low gold prices. Investment banks used the low rates to borrow gold from the central banks and sold them short (short selling being the technique of selling assets you don’t actually own in the hope of buying back at a cheaper price because you anticipate a fall in the price). This allowed the banks to make billions from a market rigged to take the risk out of their shorting. And it kept the dollar pumped up. And who was the architect of this strong dollar policy? Why, none other than Robert Rubin of Goldman Sachs — one of the bullion banks most implicated in the gold fixing scenarios.
So, the appearance of another Gold-man at this critical moment is all the proof the gold cartel theorists need that more manipulation is in store to keep the dollar up, gold down, and the bullion banks from losing their . . . er . . . shorts. (5)
And if this seems conspiratorial, consider what Paul Mylchreest, investment analyst at Cheuvreux, top ranked for its research in Western Europe and part of Credit Agricole, the largest bank in France says today, “Central banks have 10-15,000 tonnes of gold less than their officially reported reserves of 31,000. This gold has been lent to bullion banks and their counterparties and has already been sold for jewellery, etc. Non-gold producers account for most and may be unable to cover shorts without causing a spike in the gold price…” (6)
Or what the Wall Street Journal itself wrote about what took place in the seventies:
Worried the falling dollar was undermining its anti-inflation efforts, the Carter administration announced a multi-part support package on Nov. 1, 1978: The Treasury would use gold sales and foreign borrowing and draw on its reserves with the International Monetary Fund to defend the dollar. At the same time the Federal Reserve raised its discount rate a full point. (7)
And that was in the ’70s, when there was no credible alternative to the dollar, India and China were sleeping giants, Russia was still the Soviet Union, and the United States was not threatening to nuke the Middle East.
How bad is the situation?
[A]s of June 2000, J.P. Morgan reported nearly $30 billion of gold derivatives and Chase Manhattan Corp., although merged with J.P. Morgan, still reported separately in 2000 that it had $35 billion in gold derivatives. Analysts agree that the derivatives have exploded at this bank and that both positions are enormous relative to the capital of the bank and the size of the gold market.
It gets worse. J.P. Morgan’s total derivatives position reportedly now stands at nearly $29 trillion, or three times the U.S. annual gross domestic product. Wall Street insiders speculate that if the gold market were to rise, Morgan Chase could be in serious financial difficulty because of its “short positions” in gold. In other words, if the price of gold were to increase substantially, Morgan Chase and other bullion banks that are highly leveraged in gold would have trouble covering their liabilities. (8)
That was 2000. This is 2006.
So long as gold remains a mere relic . . . a yellow reminder of what used to be money . . . no harm done. Unless something absurd happens, that is. Something absurd like, say, gold doubling to $573 an ounce inside 5 years. If that happened, then the “carry trade” of borrowing gold to invest in paper could become a very expensive way to bankrupt the entire global financial system. (9)
This spring gold hit over $700. And that’s why the hanky-panky is likely to begin in earnest now.
Lila Rajiva is a freelance writer in Baltimore, and the author of the must-read book The Language of Empire: Abu Ghraib and the US Media (Monthly Review Press, 2005) She can be reached at: lrajiva@hotmail.com. Copyright (c) 2006 by Lila Rajiva
NOTES
(1) “Good as Goldman: Bush drafts Hank to bat third,” Daniel Gross, Slate, Tuesday, May 30, 2006.
(2) “Please, Sir, I Want Some More. How Goldman Sachs is carving up its $11 billion money pie,” Duff Mcdonald, New York Metro, Dec 21, 2005.
(3) Speech of Congressman Ron Paul, U.S. House of Representatives, February 14, 2002, www.house.gov/paul
(4) “All That Glitters Is Not Gold,” Kelly Patricia O’Meara, Insight Magazine, March 4, 2000.
(5) According to GATA, the cartel includes J.P. Morgan Chase, Deutsche Bank, Citigroup, Goldman Sachs, Bank for International Settlements (BIS), the U.S. Treasury, and the Federal Reserve
(6) “How Central Banks Have Kept Gold Down,” Adrian Ash, Money Week, February 9, 2006.
(7) “As Dollar Weakens, Hidden Strengths May Stave off Crisis,” Wall Street Journal, January 17 2005.
(8) See Note 4.
(9) See Note 6.JP Morgan Gets $3.4 Billion For Buying Wa-Mu; Shareholders Get Zip
At Seeking Alpha, Troy Racki writes about the second rape of Washington Mutual stock-holders and US tax-payers by JP Morgan:
“In the settlement offer WaMu will relinquish all claims against JP Morgan and the FDIC. In return WaMu will be allowed to keep a $3.9 billion dollar deposit it held in its own bank. Most of the $3.9 billion deposit was generated from the sale of preferred securities in 2006 and 2007. Additionally WaMu will be allowed to keep $1.8 to $2.0 billion of its own tax return created from huge losses in 2008. The rest of the projected $5.6 billion return will be split between the FDIC and JP Morgan.
According to the settlement terms JP Morgan will receive $5 billion in HELOC backed securities valued on the open market at 60% of par, $193 million in Visa class B securities, $2.1 billion in cash, and a $20 million wind farm, all from WaMu. Given the initial purchase price of WaMu for $1.9 billion in 2008, these additional assets received means that JP Morgan will pay a negative $3.4 billion for their purchase of the bank.
The loss of these assets will heavily impact WaMu’s balance sheet which now stands to make only the bondholders whole, according to the settlement’s disclosure statement. Currently senior WaMu holding company debt trades at 106 cents on the dollar.
Under the terms of the settlement WaMu shareholders will receive nothing.
In the disclosure statement WaMu’s attorneys stated that the proposed settlement will net the most for all creditors and that further legal dispute would only financially harm the estate. This comes in stark contrast to prior statements by WaMu’s equity counsel that a protracted legal battle with JP Morgan and the FDIC may have returned up to $20 billion to the estate.
Currently the settlement is awaiting the approval of the FDIC, Washington Mutual bank bondholders, WaMu unsecured creditors, WaMu preferred shareholders, and the bankruptcy judge. An incomplete plan of reorganization was also filed on Friday along with the disclosure statement. The incomplete POR lacks a balance sheet meaning that WaMu’s unsecured creditors are left only to guess at what they may eventually recover, if anything.
Despite the negative purchase price, Jamie Dimon, CEO of JP Morgan has indicated that the purchase of WaMu could have been closed for less, much less. In July 2009 he stated that JP Morgan “could have bought WaMu for a dollar” because of the projected losses that would have been taken on the deal.
The losses never materialized. In May 2009, JP Morgan wrote up its WaMu loan portfolio by $25 billion.
Had the $1 purchase price gone through JP Morgan would have eventually been paid $5.1 billion by WaMu and the FDIC to assume the bank.
While the deal may be good for JP Morgan, former WaMu customers are not so fortunate. Nationally many WaMu Providian credit card customers have since experienced dramatic rate increases. In Oregon, WaMu checking clients report that deposits are being held for fourteen days prior to being accredited to accounts. This abnormally long waiting period means that many checking customers are now being hit by multiple $35-a-peice overdraft charges for having insufficient funds. In northern California, out-the-door waiting lines for teller service at one branch sparked verbal outrage and multiple client threats to move deposits to a community bank branch. The branch responded after twenty minutes by temporarily adding a teller.
Meanwhile FDIC chairwoman Sheila Bair is continuing to push for additional powers that would allow the FDIC to not only shutter banks but their holding companies. This authority would allow for the FDIC to avoid future conflicts when it closes a bank but is unable to force a holding company to capitulate, as is in the case with WaMu. It has come under scrutiny after internal JP Morgan e-mails and PowerPoint presentations revealed that as early as March 2008 regulators were in negotiations with JP Morgan on the closure of Washington Mutual, termed “Project West”, six months prior to the bank’s seizure.”
More later…
Celente: Report Shows JPMorgan, Citi Helped Push Lehman Under
Gerald Celente: JP Morgan and Citi acted like mobs bosses in torpedoing Lehman.
Note: the bankruptcy examiner’s report shows Lehman cooking its books to look less levered than it was, but the Federal Reserve Bank of New York (FRBNY) (Mr. Geithner, that would be you) abetted it. So did the SEC, and JP Morgan and Citi acted like cannibals (or street gangs…or mob bosses), as they tried to wipe out their rival.
Well, we said so at the time, in a post called“Statistics Don’t Back Panic Mongers” (October 2008).
And even before that.
Except for the fact that the Wall Street gang uses money, ratings, and other “adult” world paraphernalia, they’re not much more than hooligans who didn’t get toilet-trained right.
Let’s see:
Finger-pointing: He did, teacher, I didn’t (Politicians to voters, voters to politicians)
Avoiding responsibility: But you told us we could (Wall Street to Main Street, home-owners to lenders, managers to accountants, lawyers)
Succumbing to peer pressure: Everyone does it ( Book-cooking managers, lazy reporters, colluding speculators)
Blaming the victim: He deserved it (Corporate raiders, naked short-sellers, media shills)
Mexican President Nominated For Citi Director
Robert Wenzel at Economic Policy Journal:
“Citi’s Board of Directors has nominated Ernesto Zedillo as a new non-management director candidate to stand for election at Citi’s annual shareholder meeting on April 20, 2010. He was the President of Mexico from 1994 to 2000 and is now Director of the Yale Center for the Study of Globalization and Professor in the Field of International Economics and Politics at Yale University.
Zedillo (58) worked at Mexico’s Central Bank (Banco de Mexico), serving in various positions, including those of deputy Head of Economic Research and deputy Director. Zedillo is on the boards of Alcoa Inc. and Procter & Gamble Company.
Obviously, despite the fact that it almost blew itself up because of schemes far from traditional banking, Citi continues to take the New World Order approach to banking.
There is nothing wrong with Citi attempting to penetrate into Latin America for business but, putting a former Mexican president on the board smacks of penetration via back door crony government deals versus attempting to serve the serve the consumer in the Latin American countries.
Sure, you have to deal with the crooked governments in these countries, but that’s what you have connected law firms for. They get things done in a very low key efficient manner. Putting Zedillo on the board sends a different signal, that Citi will not only deal with Latino politicians, but that it is part of the crooked club.”
Financiers Used 9-11 Diversion of FBI to Loot American Middle-Class
Great interview at Forbes, between Steve Forbes and Senator Ted Kaufman on the capital markets, naked short selling, the uptick rule, sponsored access, HFT (high frequency trading) and digitalization, dark pools, and fraud…
“Forbes: Finally, Fraud Enforcement Recovery Act.
Kaufman: Yeah, yeah.
Forbes: You’re proud of it.Kaufman: Yeah, I am.
Forbes: What it does, and what will it do?
Kaufman: OK, here’s what it did. After 9/11, we moved a lot of FBI agents over to cover terrorism, which we should have done. But we left only like 250 FBI agents in the country to cover financial fraud. We did more financial fraud cases in 2001 than we did in 2007, can you believe that? So, what we did with this financial and regulatory forum, with Pat Leahy, who is chairman of judiciary committee and Chuck Grassley, an Iowa Republican. It’s a bipartisan bill and we got a bill passed to give us more FBI agents, give us more prosecutors and to go after these folks. And so that’s basic what we passed, and we’re getting organized. Had a really good hearing of the judiciary committee. Rob Khuzami at the Securities Exchange Commission, Lanny Breuer’s head of the criminal division, Kevin [Perkins] from the FBI financial thing.
And we’re really, we’re going after this thing. And I know you agree with me. You know, if you, the folks that committed crimes while this thing was going on, we can all argue about what caused it or not, anybody who took advantage of this situation and lined their own pocket for it should go jail.”
Did Bethany McLean Even Break The Enron Story?
n “Enronathon,” Seth Mnookin of The Wall Street Journal suggests Bethany McLean wasn’t quite the first person to break the story of Enron…and that she had a good bit of unacknowledged help:
“If journalism were in the Olympics, the Enron story might well be pairs figure skating. Bethany McLean, the young Fortune writer who first wrote about Enron’s shady finances a year ago, has, of course, already been awarded the gold.
And with that have come the requisite endorsements: In the past two months, she was hired as a consultant by NBC News and shared in a $1.4 million deal to co-author a book on the scandal. But another team is also vying for top honors — amid complaints about shoddy judging.
Reporters and editors at the Wall Street Journal believe their work has been unjustly ignored, with some wondering whether Pulitzer rivals like the Washington Post and the New York Times have gone out of their way to praise McLean.
Enron did not collapse under its own weight,” says Jonathan Friedland, the Journal editor who’s been in charge of much of the paper’s Enron coverage. “Without our reporting, I don’t think any of this would have happened.”
In response, McLean’s former editor at Fortune and current Time Inc. editorial director John Huey says, “Bethany was the first journalist in a widely respected national publication to suggest that the emperor at Enron had no clothes.” (Not that her own publication took much note: Fortune had to airbrush out Kenneth Lay from a November SMARTEST PEOPLE WE KNOW cover photo.) Let’s recap: In September 2000, Jonathan Weil wrote a long story for the now-defunct Texas edition of the Journal about odd accounting at various Texas-based energy traders; it included four paragraphs on Enron.
James Chanos, a well-known short-seller who was one of the first to start unloading Enron stock, says he got interested in the company after reading Weil’s piece.
Almost six months later, in March 2001, the then 30-year-old McLean (who Times columnist Maureen Dowd has suggested will be played by Alicia Silverstone in the inevitable movie) wrote her little-noticed 2,400-word story, “Is Enron Overpriced?”
Then, in October, the Journal ran a three-day series by Rebecca Smith and John Emshwiller detailing Enron’s unorthodox partnerships. Their articles are seen by many on Wall Street as ultimately sinking the company. Weil’s partisans think he should get credit for crossing the finish line first (an item, “Credit Due,” ran in “Page Six” recently).
But even Chanos says that “Bethany’s piece was the first one to raise really specific questions.”
Most of the Journal’s brain trust, though, are plugging Smith and Emshwiller, who, of course, wrote their stories in 2001 and are thus eligible for this year’s Pulitzers. “The Fortune story basically said this is a company that nobody understands,” says Journal deputy managing editor Daniel Hertzberg. “It didn’t show what was wrong with the company. It took Becky and John to do that.” That’s the competition.
Now for the judging. In January, Howard Kurtz, the Washington Post’s media writer, highlighted McLean as the first journalist to ask questions about Enron. Ten days later, the Times‘ Felicity Barringer wrote her profile of “the financial reporter everyone loves to lionize.” While McLean was being anointed as a journalistic sex symbol in a story hitherto dominated by a balding Kenneth Lay, folks at the Journal felt they were being robbed:
“People are trying to queer the Pulitzer pitch for the Journal,” says one editor there. That’s sour grapes, counters Kurtz: “In this case, a 31-year-old reporter beat them and the rest of the world by a considerable margin.”
In a bit of circular logic endemic to media reporters, Kurtz adds, “I must have been onto something, since after my piece appeared, she was profiled in the Times, given a contract by NBC, and offered a book deal.” As for McLean, she seems slightly embarrassed by all the attention. “I’ve told people I’ve gotten too much credit,” she says. “I did raise alarm bells, but I didn’t know the half of it.” “Read more: Enronathon http://nymag.com/nymetro/news/media/features/5756/#ixzz0dvvQZvUI
My Comment:
Please note also that the book was co-authored with Peter Elkind, who isn’t attributed in many of the stories.
Not that I’m all that sympathetic to the Wall Street Journal on the Enron story, since they don’t give credit to the alternative press either, and what goes around comes around. (My own experiences of plagiarism from articles and books can be found at the tab, ABOUT - half-way down the page).
If liberal columnists steal without attribution even from liberal bloggers, can you imagine the cone of silence that descends when the victim isn’t liberal? Libertarians and conservatives get stripped clean by the vultures of the “free” (of all ethics) press.
With them, it’s never about public welfare or the good of the nation, even though that’s the standard that they like to foist on other people. Even with the global economy melting down under their noses, they’re jealous of sharing the information that activists, bloggers, and ordinary citizens give out generously for the common good.
(Again, there are honorable exceptions).
In short, they make up credit - just like the Federal Reserve.
Or they steal it - like their banker friends.
Or they collude with each other to “take-down” anyone not part of their game - just like their hedge-fund allies.
And no matter what, they always cover for each other.
Notice how other people’s personal lives are fair game for stalking, extortion, and exposes, but never theirs, as this piece on Maria Bartiromo suggests.
(Ms. McLean figures in that piece too. In fact, a brief google tells us that McLean´s had plagiarism problems and conflicts of interest more than a couple of times).
Item One. Here’s an earlier complaint about Fortune magazine plagiarism. A Fortune writer apparently used material from interviews and articles by an outfit called Annex Research, without attributing or acknowledging it. An email to Fortune got no response, either. The Fortune writer? Bethany McLean…
Item Two: McLean at it again, swiping material from the Orange County Register Weekly
Item Three: Libertarian economist, Bill Anderson, in a piece called “The Most Dishonest ´Journalists´ In the Room,” describes how McLean was having a romantic relationship with the lead prosecutor in the Enron trial, Sean Berkowitz, before the sentencing, while she was covering the trial and getting out the government´s side of the story. Omitted in that story as well was the disturbing fact that the prosecutor had suborned perjury in order to get a full conviction of Jeffrey Skilling.
And that´s besides Item Four….
That fetching stock-manipulation thing she had going with hedge buddies Marc Cohodes and Jim Chanos.
No wonder none of them can get the story right.
And no wonder they still won’t get it straight, not until after activists, or bloggers, or less-known writers at their own outfits or elsewhere do the hard work. Then they’ll slide in to take the credit.
Nice work.
Just as cushy and exploitative as anything on Wall Street, in its way.
Business men and real capitalists do the hard work of producing. Then the faux capitalist money-men and their shills in government rush in to cream the money off and cover themselves with glory via their mouthpieces in the shill media.
No wonder the media doesn’t understand capitalism. No wonder they love the crony capitalist bordello they call home. It’s the only one they know, the poor things.
[Again, they really ARE a minority of journalists, just a powerful minority. There are hundreds of honorable hard-working journalists who write their own stories rather than steal them off the net, whose names never get into headlines, and who wouldn't be caught dead behaving like this].
And don’t miss the other telling details:
Enron’s Ken Lay was a Republican.
Goldman Sachs is a Democrat cash-cow, for the most part.
Jim Chanos, hedge-fund master mind, used to work at Deutsch Bank.
And Bethany McLean was once a Goldman Sachs banker….. (Maybe that explains her kid-glove treatment of Hank at Vanity Fair).….
….And her equally interesting white-washing of Spyro Contogouris, who colluded with hedge funds to attack Prem Watsa’s Fairfax Financial.
Honestly. Rielle Hunter has nothing on any of these gold-diggers.
Sith-Lord Sweep: AG’s Pending Indictments Cover Major Hedgies, Journalists, and Regulators
Corporate finance generalist, investment banker and expert in derivatives, Austin Burrell, sums up last week’s announcement by Attorney-General Eric Holder that there are 5000 pending indictments [sic] arising out of the investigation of fraud in the capital markets:
[Note: the DOJ is involved in some 5000 odd cases of fraud related to the financial industry… (more…)
Financial Crisis Inquiry Commission Chair Berates Lloyd Blankfein
“It sounds like selling a car with faulty brakes and then buying an insurance policy” on the driver,”
– Financial Crisis Inquiry Commission Chairman Phil Angelides (D) to Goldman Sachs CEO Lloyd Blankfein.
Well, well, well,
Doesn’t sound too different from what we said in September 2008, does it? (more…)
Hedge Funds: Top Ten Earners in 2007/2008
New York Magazine had a piece in 2007 that sorted the hedge-fund elites into categories like “brainiacs” (like James Simon and Jim Chanos) and “bad boys” (like Daniel Loeb).
The category “Top dogs” (that is, the very best hedgies) includes SAC Capital Advisers/Steven Cohen ($12 b); Cerberus Capital/Stephen Feinberg ($19.5 b); Appaloosa Mgt/David Tepper ($5.3 b); ESL/Eddie Lampert ($18 b); Citadel Investment Group/Kenneth Griffin ($13.5 b); Manhattan/Michael Novogratz ($4.6b).
[Note: the figures were as of 2007].
This is the short list of the managers whom the industry thinks are top dogs, and of these six, one (Feinberg) is directly connected to Drexel Burnham Lambert, convicted junk bond financier Michael Milken’s bank; another (Cohen) is connected indirectly to Milken through Gruntal & Co.; and three are alumni of Goldman Sachs(Tepper, Lampert, Novogratz).
Five out of six and that’s just a cursory examination. I didn’t do anything more than google to get that.
And the financial press thinks there are no Sith Lords?
A more conventional ranking is found below: (more…)
Too Big To Fail And Too Big-Headed To Admit Failing
In the Times of India, Abheek Barman reviews Andrew Sorkin’s “Too Big to Fail,” a blow-by-blow account of the bail-out and makes a couple of insightful observations:
“It’s a tribute to his writing that despite his ball-by-ball narrative Sorkin manages to hold your attention for nearly 550 pages. His character sketches are lean and unjudgemental. Yet, though he doesn’t pass judgement, by the end most of the characters - with the possible exception of Buffet and some of the regulators - come across as distinctly unsavoury.”
Xmarks’ Top 20 Corruption Sites List Includes Deep Capture
I just happened to notice this ranking of the most popular corruption sites and thought I’d post it as more evidence that the campaign against naked short selling isn’t some marginal “freak” show, as some of the financial blogs have tried to claim it is. (more…)
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
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.
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…
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.”
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).
Death Penalty for Chinese Embezzler
“China on Tuesday executed a former securities trader for embezzlement, the first person in the industry to be put to death, but millions of yuan are still missing, a state newspaper said.
Yang Yanming was sentenced to death in late 2005 and took the secret of the whereabouts of 65 million yuan ($9.52 million) of the misappropriated funds to his grave, the Beijing Evening News said.The report added that Yang was the first person working in China’s securities sector to be executed.”
More here at News Daily.
Stories like these should alert us to the possibility that there may very well be mini-Madoffs (mini in absolute money terms only) all over the world, on which this recovery rests flimsily.
Feds Suspected Rajaratnam Ten Years Ago
Forbes has a report on an Intel engineer, Roomi Khan who cooperated with the Fed´s to avoid charges in a wire fraud case back in 2001- 2002. Apparently Rajaratnam was making money from inside information even then.
“According to a June 2002 sentencing memorandum for Khan, the earlier case arose after Intel suspected Rajaratnam was getting tips from an Intel insider because he was predicting Intel’s revenue “with extreme accuracy.”
Intel set up a hidden video camera that on March 6, 1998, recorded Khan, employed as a product marketing engineer at the company, faxing an important report concerning Intel’s three main Pentium processors to Rajaratnam.
The memo said Khan on March 24 then faxed handwritten pages that contained pricing information and sales data for Intel chips. “By multiplying those numbers, one can determine Intel’s total revenue for the quarter,” it said.”
DTCC Conflicts Of Interest Include Ties With Penson, Goldman
More digging about Penson turns up a number of ties with regulators (this is probably par for the course, and not surprising). Penson Worldwide’s board of directors includes one David Kelly, who until 2000 was President of the National Securities Clearing Corporation, as well as Vice Chairman of DTCC.
More on DTCC here at Financial Wire, May 11, 2004
cited at Deep Capture.(Lila : The DTCC is the Depository Trust and Clearing Corporation, not the Depository Trust Company, as indicated in the article)
“The Depository Trust Company (DTC) is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the SEC. The depository supposedly brings efficiency to the securities industry by retaining custody of some 2 million securities issues, effectively “dematerializing” most of them so that they exist only as electronic files rather than as countless pieces of paper. The depository also provides the services necessary for the maintenance of the securities it has in “custody.”
The largely unregulated DTC has become something of a defacto Czar presiding over the entire U.S. markets system, wielding more day-to-day influence and control than the SEC, the NASD and NASDAQ combined. And, as the SEC’s June 4 ruling indicates, its monopoly over the electronic trading system appears even to be protected.
How entrenched is the Depository Trust and Clearing Corp.? It’s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the NASDAQ (OTCBB: NDAQ) and the embattled American Stock Exchange! Regulators, regulate thyself?
In an era when corporate governance is the primary interest for the SEC and state regulators, the DTCC is hardly a role model. Its 21 directors represent a virtual litany of conflict:
They include Bradley Abelow, Managing Director, Goldman Sachs (NYSE: GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney’s Corporate Investment Bank (NYSE: C); Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (NYSE: UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (NYSE: WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (NYSE: STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (NYSE: MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (NYSE: BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (NYSE: JPM).”
Billionaire Nabbed In Largest Hedge Insider Scheme
In the news (:http://www.bloomberg.com/apps/news?pid=20601087&sid=asliefsvW5Zc)
“Oct. 16 (Bloomberg) — Raj Rajaratnam, the billionaire founder of Galleon Group, and ex-directors at a Bear Stearns Cos. hedge fund were among six people charged in a $20 million insider trading scheme federal prosecutors called the biggest ever involving hedge funds.
Also accused were Rajiv Goel, who worked at Intel Capital as a director in strategic investments, Anil Kumar, who worked as a director at McKinsey & Co., and IBM Corp. executive Robert Moffat. The former officials at Bear Stearns Asset Management are Danielle Chiesi and Mark Kurland, who were affiliated with the firm’s New Castle Partners, which managed about $1 billion.
“The defendants operated in a world of, you scratch my back, I’ll scratch your back,” U.S. Attorney Preet Bharara in Manhattan said at a press conference today. “Greed, sometimes, is not good.”
My Comment
The biggest hedge scam - there you go. Anything Westerners can do, Easterners can do better. We’re not going to settle for any penny-ante crime anymore. Now you know how at least one South Asian billionaire got rich so fast. Nothing like having an edge…
What’s interesting is that this is the first time that the Fed’s used wire-tapping to target insider trading on Wall Street. Until now that tool has been the reserve of organized crime and drug cases.
Fraud On the Run: Goldman Cop On SEC Beat (ROTFLOL)
In the news, to be filed under - What parallel universe does New York live in?:
“Oct. 16 (Bloomberg) — The U.S. Securities and Exchange Commission named Adam Storch, a 29-year-old from Goldman Sachs Group Inc.’s business intelligence unit, as the enforcement division’s first chief operating officer.
Storch, who joined the SEC Oct. 13, was named to the newly created post of managing executive in the enforcement unit, charged with making the division more efficient, the SEC said today in a statement. At New York-based Goldman Sachs, he had worked since 2004 in a unit at that reviewed contracts and transactions for signs of fraud.”
My Comment:
Personally, I’ve come to nurse a kind of contemptuous respect for, an appalled amusement at Goldman Sachs. It’s the contrarian in me.
In-your-face-corrupt, shameless, self-promoting, out-of-touch, sanctimonious, and bottomlessly greedy - It’s a firm made for our times…
If Goldman Sachs didn’t exist, we’d have to invent it.
Taibbi’s Penson Video..(Correction)
Correction:
(10/12/09, Monday)I should have said “allegedly faked” video. I stand corrected. No weasel words, Mr. Byrne (see Byrne’s comment below).
I often post stories on which I have no comment or opinion one way or other, because I haven’t followed them, but think readers might like to. In my last several posts, in fact, I defended Deepcapture’s, Taibbi’s, and Zerohedge’s work, in spite of occasional alleged or real errors.
But the reason I linked to Wenzel’s blog is because Wenzel’s post is pretty funnily written, and I don’t follow Taibbi, except occasionally. I didn’t like his attacks on David Griffin, where he exposed himself as somewhat ignorant. Taibbi also doesn’t attribute people (apparently others have that complaint too). But arrogance and ignorance in one area don’t equate to being incorrect in another.
I’ll add a separate post with the rather long back and forth between Taibbi and his various critics and defenders. I went by Penson’s dismissal of the video, but I’ve since noted that Penson has some history that is troubling and tends to makes its dismissal less credible.
So what else might be construed as “weasel-worded” in my recent blogging?
Perhaps my rather neutral approach to the Byrne vs. Weiss feud, still going strong. Well, I’m neutral about it - who stalked whom, etc. etc. - because I don’t know the ins and outs of it. I had my own experience of being harassed, and can barely keep up with the details of that, let alone someone else’s stalking experience.
I also don’t know which of the two abuses of the market - “stock pumping and money laundering” (criticized by the Wall Street “captured” media) or “naked-shorting” (criticized by Byrne, Davidson “ “Bob O’Brien,” and many others, including Taibbi) - is the more momentous.
As a libertarian, I think naked-shorting is, but that’s only my opinion. Which is why I’ve been neutral. My sense is both abuses are real and extensive.
Likewise, I really don’t know enough about what the SEC’s investigation of Overstock is about. Could it be punitive?
Quite likely, given all we know about the SEC. But does that mean everything else the SEC does is incorrect? Unlikely.
Does that mean what Byrne wrote about “naked short selling” is incorrect? No.
Final point. I tend not to like shrill personal attacks.
That’s a deferral to civility and complexity, not weasel-wordedness.
ORIGINAL POST:
On Matt Taibbi getting suckered by a “faked” (quotes added for now) naked shorting video:
“Carney is a sharp guy, and he has Taibbi nailed on this one, but, I repeat, naked short selling, like a lot of Wall Street, is a very complex game. Carney in some of his other posts suggests there is nothing wrong with naked short-selling, he is off on that one. Some of it can be justified as simple market maker operations, but some of it is major league abuse by very clever insiders, which is the point Taibbi is taking, but doesn’t have the knowledge to back up properly.
Anyway, once you sit down an analyze the entire naked short selling thing, you realize that the bad naked short selling would go away if the SEC would stop issuing regulations that protect the bad guys. Basic common sense and commercial law would put an end to the bad naked short selling, real fast.
Bad naked short selling exists because there is a power source to manipulate, in this case the SEC, and the bad guys are running circles around the SEC.
What you want to understand naked short sales for yourself? Well pull up a chair, give yourself five hours and read this. It’s a great first step.
But, I tell you, it will be much more fun watching Taibbi attempt to pull the bayonet out of his brain.”
More by Robert Wenzel, at Economic Policy Journal.
Berlusconi Immunity Thrown Out by Constitutional Court
Italy’s top court, the Constitutional Court, has thrown out a law granting immunity from prosecution to the president, Silvio Berlusconi:
“The law overturned Wednesday was pushed through by Berlusconi’s conservative coalition in 2008 when he faced separate trials in Milan for corruption and tax fraud tied to his Mediaset broadcasting empire. It granted immunity from prosecution while in office to the country’s four top office holders — the premier, the president of the republic and the two parliament speakers.
The proceedings against Berlusconi were suspended as a result of the law, drawing accusations that it was tailor-made for the premier.
The corruption trial is particularly threatening because, in the meantime, the premier’s co-defendant has been convicted of accepting a bribe to lie in court to protect Berlusconi in another case.
Still, even if convicted, the premier would not be obliged to resign and could simply appeal, as sentences in Italy are usually not served until all avenues of appeal are exhausted.”
How the Pathocracy Stays In Power
The question is often asked how a society that in its day-to-day workings exhibits culture and lawfulness can also support behavior at high levels that’s criminal. The question was asked of German society in the 1930s and could well be asked of the US today.
A good answer is given by Carolyn Baker
“One of the main factors to consider in terms of how a society can be taken over by a group of pathological deviants is that the psychopaths’ only limitation is the participation of susceptible individuals within that given society. Lobaczewski gives an average figure for the most active deviants of approximately 6% of a given population. (1% essential psychopaths and up to 5% other psychopathies and characteropathies.) The essential psychopath is at the center of the web. The others form the first tier of the psychopath’s control system.
The next tier of such a system is composed of individuals who were born normal, but are either already warped by long-term exposure to psychopathic material via familial or social influences, or who, through psychic weakness have chosen to meet the demands of psychopathy for their own selfish ends. Numerically, according to Lobaczewski, this group is about 12% of a given population under normal conditions.
So approximately 18% of any given population is active in the creation and imposition of a Pathocracy. The 6% group constitutes the Pathocratic nobility and the 12% group forms the new bourgeoisie, whose economic situation is the most advantageous.
When you understand the true nature of psychopathic influence, that it is conscienceless, emotionless, selfish, cold and calculating, and devoid of any moral or ethical standards, you are horrified, but at the same time everything suddenly begins to makes sense. Our society is ever more soulless because the people who lead it and who set the example are soulless - they literally have no conscience.
My Comment:
To this I will add that the pathocracy also exhibits and encourages the exhibition of sentiments that mimic and substitute for emotion. Various kinds of false sentimentalities and emotionalism mimic authentic emotion to create a facade that deceives the onlooker. One could go further and say that this distortion extends from the affective life to the cognitive, where a false and superficial “logic” takes the place of genuine reasoning….
Duvall ‘Fesses Up To Bark, Not Bite
Now Mike Duvall admits to “inappropriate story-telling” but denies having had an affair with either of the two lobbyists. That denial is seconded by Ms. Barsuglia. The man to whom he told the story now denies hearing it. He wasn’t paying attention, he says. Duvall talks a lot.
We were wondering ourselves…..
If the denials are accurate, it looks like Ms. Barsuglia and her family might have a case for defamation.
We’re all agog.
And we have another question: Just what level of IQ does it take to be a California assemblyman?
We’re all agog about that too.
Many’s the time we’ve seen a female employee slandered for no more than being more personable and competent than the males around her. Her career is then almost sure to be attributed to her sexual wiles.
If Duvall is any indication, there seem to be married men whose rich imaginations don’t come equipped with the ethical compass that tells them that dragging your associates into your adolescent fantasies does irreparable damage to their professional credibility and personal reputation.
If the denials hold water, Ms. Barsuglia should be paid substantially for the damage done to her career and her family’s sensibilities.
Of course, the denials may not hold water.
Major Market Move in Offing
Looks like there’ll be a good deal of volatility ahead in the markets this coming week and through the fall:
*From Monday last week onward, New York has been riled up by the news out of China that Chinese SOEs (State Owned Enterprises) might walk away on derivative contracts that they think have been deeply manipulated. (They’re right on that). The SOEs involved are Air China, China Eastern, and Cosco.
*The derivatives are not mortgage-backed securities (the cause of the 2008 melt-down) but - likely- hedged oil futures in the OTC (over the counter) market, which is unregulated (that is, the SEOs hold synthetic longs).
*The threat - if it is that - has forced gold out of its summer trading range to within points of the $1000 mark, before falling back..and it pushed up the Chinese market by about 5%.(Sept 3)
*The counter-parties are 6 foreign banks, said to include Goldman Sachs, UBS, and JP Morgan. Goldman could take a hit on the contracts for around $15 billion, it’s rumored.
Note: The Chinese have been buying IMF bonds (50 billion) and watching the US meltdown and “stimulus” hocus-pocus with a good deal of warranted alarm, because all it means is their investments are being manipulated and driven down.
Obama’s reappointment of Bernanke was also taken as a bad sign by the Chinese. (correctly).
*Rumors have been swirling of further defaults of major US banks.
*The G20 has a preliminary meeting this weekend and the Chinese are said to have put the purchase of off-market gold on the table.
*The Chinese are pushing gold and silver on their populations, probably in anticipation of a currency meltdown.
*Meanwhile, Hong Kong has asked for all its gold to be returned from London.
*Last week, Germany asked for all its gold to be returned from London.
*Meanwhile, Abu Dhabi Commercial Bank and King County, Washington State have brought suit against Moody’s, S&P, and Morgan Stanley on fraud charges for the contracts they wrote, a case that would have massive implications for how other contracts are treated.
*[Oddly (?), Washington State is also where the earliest swine flu cases in the US were detected and where one of the largest outbreaks on campus just surfaced today - with some 2000 students at Washington State University coming down with the virus. Washington State had previously received large grants from Homeland Security for emergency preparations for pandemics, had TV Public Service Ads in place, had written up plans and practiced exercises].
SEC Shuckin’ and Jivin’ on Madoff Report…
“U.S. District Court Judge Jed Rakoff smelled something fishy in the August 3rd deal the SEC cooked up with Bank of America…….
That was the same view held by the Congressional questioners in the Madoff matter at the February 4, 2009 dust up with top SEC officials. After many rounds of pointed questions produced unresponsive answers, round tripper Andrew Vollmer, then Acting General Counsel of the SEC, explained why. He and his fellow SEC panelists were claiming executive privilege. This position elicited the following outburst from Congressman Ackerman: “Your value to us is useless…Our economy is in crisis, Mr. Vollmer. We thought the enemy was Mr. Madoff. I think it’s you…you were the shield…You come here and fumble through make believe answers that you concoct and attribute it to executive privilege….”
On April 2, 2009, another of Wall Street’s favorite law firms, WilmerHale, announced that Andrew Vollmer would be returning to the firm as a partner. According to the press release, before joining the SEC, Vollmer was a vice-chair of WilmerHale’s Securities Department…….
…And just what does the Madoff fraud have to do with the big firms on Wall Street? The multi billion dollar proceeds of the fraud were wired in and out of JPMorgan Chase where Madoff maintained his firm’s account. Also, Madoff partnered with Citigroup’s Smith Barney, Morgan Stanley, Merrill Lynch and Goldman Sachs to compete head on with the New York Stock Exchange in a venture called Primex Trading as reported here at CounterPunch on January 15, 2009.
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