Tag: ek Politics

Sep 25 2013

Doing God’s Work

By rustymancuso581

Forbes Calls Goldman CEO Holier Than Mother Teresa

By Matt Taibbi, Rolling Stone

POSTED: September 20, 2:55 PM ET

It reads like an Onion piece, just hilarious stuff. I mean, Jesus, even Lloyd Blankfein himself didn’t go so far as to take the “God’s work” thing 100% seriously, and here’s this jackass saying, without irony, that the Goldman CEO literally out-God-slaps Mother Teresa.

The thing is, for all its excesses, Mr. Catyanker’s piece does reflect an attitude you see pretty often among Rand devotees and Road To Serfdom acolytes. Five whole years have passed since the crash, and there are still huge pockets of these Fountainhead junkies who genuinely believe that the Blankfeins of the world are reviled because they’re bankers and they’re rich, and not because they’re the heads of unprosecutable organized crime syndicates who make their money through mass fraud, manipulation and the shameless burgling of public treasure. In this case you have a guy who writes for Forbes, a business publication,and apparently he isn’t acquainted even casually with any of the roughly 10,000 corruption cases involving Blankfein’s bank.

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Just for yuks, let’s fill Binswanger in on some of the ways Goldman has made its money over the years. This is just the stuff they’ve been caught for, by the way.

Way back in 1999, several eras of corruption ago, Goldman serially engaged in manipulation of the IPO markets, including illegal tactics like “spinning” and “laddering,” where insiders and top bank clients would be allowed to buy shares in new companies at severely discounted prices, sometimes in return for investment banking business or for promises that those insiders would jump back into the bidding later to jack up the price artificially. In a famous case involving eToys, Goldman paid a $7.5 million settlement for allowing insiders to buy shares at $20, far below the $75 shares the company traded on opening day. The secret discounts might have cost the company hundreds of millions of dollars. The firm went bankrupt in short order, by the way.

In the infamous “Abacus” case, Goldman teamed up with a hedge-fund billionaire named John Paulson to create a born-to-lose portfolio of mortgage derviatives, which were then marketed by Goldman to a pair of sucker European banks, IKB and ABN-Amro. When the instruments crashed, Paulson made bank on bets he made against his own loser portfolio. Goldman’s peculiar role was in “renting the platform,” i.e. allowing IKB and ABN-Amro to think that neutral Goldman, not a hedge funder like Paulson massively betting against the product, had created the portfolio. Goldman only made $15 million in the deal that ended up causing over a billion in losses, meaning this wasn’t even just about money – they were just trying to curry favor with a hedge fund client out to screw a bunch of Euros. They were fined $550 million.

In the even more absurd Hudson deal, Goldman unloaded a billion-plus sized chunk of toxic mortgage-backed crap on Morgan Stanley during a time when Lloyd “Mother Teresa” Blankfein was telling his minions to unload as much of the firm’s ‘cats and dogs’ as possible, ie. its soon-to-explode subprime holdings. In its marketing materials, Goldman represented to Morgan Stanley that its interests were aligned with Morgan, because Goldman owned a $6 million slice of the Hudson deal. It didn’t disclose that it had a $2 billion bet against it. Morgan Stanley, which was subsequently bailed out by taxpayers like Harry Binswanger, lost $960 million.

Goldman bought a series of aluminum warehouses and has apparently been serially delaying the delivery of aluminum in order to artificially inflate the price. Even Binswanger might have heard of this one. The CFTC sent a wave of subpoenas on this score just last month.

Goldman paid a fine to the SEC in 2010 after it was caught breaking rules governing short-selling on at least 385 occasions – it is currently embroiled in numerous lawsuits that similarly allege that Goldman has engaged in widespread “naked” short selling, a kind of stock counterfeiting that artificially depresses the prices of companies by flooding the market with phantom shares.

Earlier this year, Goldman and Chase agreed to pay a combined $557 million to settle government claims that the banks and/or their mortgage servicing arms engaged in wholesale abuses in the real estate markets, including (but not limited to) robosigning, the practice of mass-producing fictitious, perjured affidavits for the courts for the purposes of foreclosing on homeowners.

A VP in Goldman’s Boston office was nabbed making improper contributions to the former state Treasurer in Massachusetts, during a time when Goldman was underwriting $9 billion in state bonds. Goldman paid a $14.4 million fine in the pay-for-play scandal.

In what one former SEC official described to me as “an open-and-shut case of anticompetitive behavior,” Goldman took a $3 million payment from J.P. Morgan Chase to bow out of the bidding for a toxic interest rate swap deal Chase wanted to stick to the citizens of Jefferson County, Alabama. Goldman got the payment, a Chase banker joked, “for taking no risk.” Chase ended up funneling money to the County Commissioner, who signed off on a deadly deal that put the citizens of the Birmingham, Alabama area into billions of debt (and ultimately bankruptcy), in what is still considered the largest regional financial disaster in American history.

In 2009, a Goldman programmer named Sergey Aleynikov left his office in possession of a code that contained Goldman’s high-frequency trading algorithms. Goldman promptly called the FBI – which up until that point had done exactly zero to prevent crime on Wall Street – to help Mother Teresa’s bank recapture its valuable trading code. In court, a federal prosecutor admitted that the code Aleynikov had in his possession could, “in the wrong hands,” be used to manipulate markets. Aleynikov just pulled an eight-year sentence. Goldman, incidentally, has gone entire quarters without posting a single day of trading loss – in Q1 2010, the bank made at least $25 million every single day, somehow never once betting wrong in 63 trading days. Imagine that! What foresight! What skill! One can see how Mr. Binswanger could believe that the bank’s CEO should be exempt from income taxes.

I could go on – Goldman has been wrapped up in virtually every kind of scandal known to investment banking (and even more that they invented) and was recently at the center of a mysterious and near-catastrophic computer-trading disaster that could have caused massive social damage (more on that in a column coming soon).

The bank is also a truly courageous pioneer in the area of securing completely underserved public bailouts, including the collection of nearly $17 billion in public money for speculative trades with bailed-out AIG and the outrageous receipt of a Commercial Bank Holding Company charter in late September of 2008, allowing it to borrow billions in lifesaving money from the Federal Reserve discount window at a time when Goldman execs were already selling their beach houses for cash in anticipation of the firm’s collapse. Surely even Mr. Binswanger is able to see that Goldman is not, in fact, a commercial bank, and that giving it a commercial bank hat to wear while standing on line to the Fed’s discount window is pure welfare, as inappropriate as LeBron James collecting a federal disability check.

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So even forgetting the fact that this company on a good day makes its money rigging metals prices, stage-managing IPOs to help insiders, falsifying documents, selling phony mortgages to institutional investors while betting against their own product and engaging in highly dubious high-speed proprietary trading programs that mysteriously allow the firm to pick winners every single time (Harry, they’re using cheat-algorithms to trade split-seconds ahead of the market, not “digging” legitimately as “knowledge-seekers” for inside information, which I know you think should be legal) – even all that wasn’t enough, and Goldman still would have gone out of business, had all of us parasites not been pressed into service to rescue the company with our tax dollars.

It’s hilarious that these Rand-worshipping cultist types are still blind to this basic fact a half a decade later. And my God, Mother Teresa? Would she have been a more “valuable” person if she’d managed an Applebee’s? What the hell is wrong with you people?

Sep 24 2013

“I, sitting at my desk, certainly had the authorities”

By rustymancuso581

Sep 23 2013

My college days were just horrible. My professors were dopes. I don’t think I was wrong to go for a liberal arts degree with a dual major in history and political science. I studied Journalism at Boston University too.

Crazy White House Proposal: Rank Colleges Based On How Much Graduates Earn

By Les Leopold, Alternet

September 19, 2013

The Obama administration is transporting Wall Street logic into higher education by proposing to measure the value of a college by the earnings of its graduates. This conceptual coup may be the best news for Wall Street since the abolition of Glass-Steagall.

We need not repeat all that has been written about how this money-making metric misses the point of college; about how students should be studying to become good citizens and leaders, to find and know themselves, to discover which pursuits in life best suit them, to develop an inquiring mind and so on. But such musings, however admirable, miss the main point: Using future earnings as a measuring stick transforms the entire notion of higher education into yet another financial instrument. No doubt some Wall Street hustlers are already dreaming up how to create derivatives they can sell to insure students and their families against less than expected earning outcomes from the college investment. Wow, an entire new casino in the making, right up there with the ethanol market.

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This making-money metric illustrates how far we’ve drifted into a new era of financial hegemony, which I’m calling the billionaire bailout society. A generation or two ago, Obama’s proposal would have met with derision, and not just from obstructionist Republicans. For the WWII and baby boomer generations it was honorable to serve-to help make your community and your country a better place. After so much war and destruction, and after so much poverty and discrimination, it was a badge of honor to join the Peace Corps or help build a cooperative or community organization to serve the disadvantaged. Even wealthy political elites like the Kennedys made it clear that they considered public service a much higher calling than just making money. You didn’t have to be a radical or even a liberal to believe that public service was a good in itself. Going to college gave you special access to develop a deeper humanistic view of the word, to find your calling, and to sharpen the skills needed to help make the world a better place instead of making seven figures. How quaint!

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What we don’t need are more college graduates headed to the financial casinos eager to gamble away our nation’s wealth. You want to rank colleges based on what their graduates do? OK, why not see how many graduates actually contribute directly to the common good? If that were the case we’d be tracking the number who went into the helping professions: How many teach in disadvantaged areas? How many provide healthcare to underserved populations? How many build businesses and cooperatives for the unemployed? How many serve low-wage workers in their struggles for decent wages and working conditions? How many are working to protect the environment or enhance human rights here and abroad?

Sep 22 2013

Daziger Bridge

By rustymancuso581

Transcript

Sep 21 2013

Deja Vu

By rustymancuso581

It’s The Mind-

I can’t believe I voted for this guy.

Guilty! UN Report on Syria Does Not Say What John Kerry Says It Said

By: Peter Van Buren, Firedog Lake

Friday September 20, 2013 5:52 pm

The UN released its report on chemical weapons use in Syria. You can read it here. It’s not that long, just some forty pages including legal appendices. John Kerry says it confirms that the Assad regime fired the gas rockets. Unfortunately, that is not what the actual report says. In a court, Kerry’s case might be seen as circumstantial at best, certainly not enough for a jury to return a guilty verdict in a murder trial.

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The problem is that the report does not confirm anything other than chemical weapons were used. I can’t give you a quote because the report simply does not say- anywhere- that the Syria Army, or the rebels, or anyone by name- used the weapons. But don’t believe me. Unlike Kerry, I provide links, so check the full text of the report. If you don’t care to read it all, skip to page five, “Conclusions.” It just isn’t there. No one is named as the culprit.

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Who shot the gas rockets? Could they have been fired by rogue military elements not acting under Assad’s orders? Could the Syrian army have lost control of some rockets which were picked up by the rebels (Vladimir Putin has made that very claim, that the rebels themselves fired the gas rockets in an attempt to draw the United States into the conflict)? Could a third party have supplied such rockets to the rebels to create a pretext for war? As there is no evidence in the UN report that the trigger was pulled by the Syrian Army under Assad’s orders, there is no evidence that the rebels pulled it and no evidence that someone else did. That’s why the UN report does not draw a conclusion of guilt- there’s no evidence on which to base such a conclusion.

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The U.S. is wholly misrepresenting facts in favor of another Middle East war. Unlike a fictional murder trial where one man’s life is on the line, should the U.S. attack Syria many, many people will lose their lives.

Sep 20 2013

The Cost of Doing Business Duex

By rustymancuso581

I could probably do one of these every day.

Anthony Badalamenti, Former Halliburton Employee, Charged With Destroying Gulf Oil Spill Evidence

By MICHAEL KUNZELMAN, Huffington Post

09/19/13 05:12 PM ET ED

A former Halliburton manager was charged Thursday with destroying evidence following BP’s 2010 oil spill in the Gulf of Mexico, a case that coincides with a guilty plea to a related charge by the Houston-based oilfield services company.

Anthony Badalamenti, who had been the cementing technology director for Halliburton Energy Services Inc., was charged in federal court with instructing two other employees to delete data during a post-spill review of the cement job on BP’s blown-out well.

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Also on Thursday, a federal judge accepted a plea agreement that calls for Halliburton to pay a $200,000 fine for a misdemeanor stemming from Badalamenti’s alleged conduct.

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The plea deal has its critics, however. Allison Fisher, an outreach director for the Public Citizen nonprofit advocacy group, called it a “travesty.”

“Rather than rubber stamp the plea agreement,” she said in a statement, “the court should have rejected the bargain-basement deal because it fails to hold the corporation accountable for its criminal acts and will not deter future corporate crime.”

Unlike BP and rig owner Transocean Ltd., Halliburton was not charged with a crime related to the causes of the disaster. The fine Halliburton agreed to pay is the statutory maximum for the misdemeanor charge of unauthorized destruction of evidence.

The deal announced in July also calls for Halliburton to be on probation for three years and to make a $55 million contribution to the National Fish and Wildlife Foundation, but that payment was not a condition of the deal.

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BP well site leaders Robert Kaluza and Donald Vidrine await a trial next year on manslaughter charges stemming from the rig workers’ deaths. Prosecutors claim they botched a key safety test and disregarded abnormally high pressure readings that were glaring signs of trouble before the well blowout.

Former BP executive David Rainey is charged with concealing information from Congress about the amount of oil that was spewing from the blown-out well in 2010. Former BP engineer Kurt Mix is charged with deleting text messages and voicemails about the company’s response to the spill.

DOJ Gives Halliburton A Pass On Destroying Evidence In BP Oil Spill

By: DSWright, Firedog Lake

Friday September 20, 2013 8:06 am

Halliburton Inc. will not be held accountable for criminal acts committed by its employees under a plea agreement with the Department of Justice now accepted by a judge – the firm will pay a fine for a misdemeanor.

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Weak does not even begin to describe this deal. Not only was Halliburton instrumental in causing the disaster, the firm then destroyed evidence of their involvement in helping cause the spill.

But in a move reminiscent of the Fabrice Tourre and Goldman Sachs case – where a small fish stands in for the big fish that got away – one of Halliburton’s employees will face prosecution.

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Another pathetic prosecution under Eric Holder’s Justice Department where no matter how horrendous the crime the big players get to walk away unscathed. But if the PR is bad enough a small time fall guy can be found. Which of course means there is no disincentive for further criminal conduct by the big players who know they will never be held accountable.

This is what happens when you make a corporate lackey Attorney General. PR prosecutions and no justice.

It’s good to be the King. No Justice? No Peace!

Sep 19 2013

The Cost of Doing Business

By rustymancuso581

JPMorgan Agrees to Pay $920 Million in Fines Over Trading Loss

By BEN PROTESS and JESSICA SILVER-GREENBERG, The New York Times

September 19, 2013, 9:23 am

Extracting the fines and a rare admission of wrongdoing from JPMorgan Chase, the nation’s largest bank, regulators in Washington and London took aim at a pervasive breakdown in controls and leadership at the bank. The deal resolves investigations from four regulators: the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Conduct Authority in London.

But the bank has struggled to settle with another regulator, the Commodity Futures Trading Commission, which is investigating whether the bank’s trading manipulated the market for financial contracts known as derivatives. JPMorgan Chase disclosed on Thursday that the agency’s enforcement staff had recommended the filing of an enforcement action.

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Under the deal with the S.E.C., which also brought civil cases against the traders, JPMorgan took the unusual step of acknowledging that it violated federal securities laws. That concession reverses a decade-long policy at the S.E.C. to allow banks to “neither admit nor deny” wrongdoing. It may also expose JPMorgan to private litigation from investors who will seize on the bank’s admissions.

For now, the bank agreed to pay $300 million to the comptroller’s office, and about $200 million to the S.E.C. and each of the other agencies. The comptroller’s office also cited the bank on Thursday for separate failings in the way it collected overdue bills from consumers and military members.

The fines, while collectively steep, fall in between what other banks have paid when settling with multiple regulators. And the fines can be seen as a reasonable trade-off for a bank seeking to move past the trading losses.

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Even with the settlement on Thursday, JPMorgan’s regulatory headaches are far from over. On Thursday, both the comptroller’s office and the Consumer Financial Protection Bureau levied fines against the bank for its credit-card practices, including how the bank pursues customers who have fallen behind on their bills.

JPMorgan agreed to pay $80 million in fines to regulators over accusations that the bank duped its credit card customers into buying products pitched as a way to shield them from identity theft. Those products, regulators said, never materialized.

“Put simply, Chase was charging consumers for services that they did not receive,” said Richard Cordray, the director of the Consumer Financial Protection Bureau.

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The regulators also faulted JPMorgan for how the bank collects debt from its customers. The federal actions stem from an investigation into debt-collection lawsuits the bank filed against its credit card customers from 2009 to 2011. As JPMorgan churned through a glut of overdue credit card bills and other loans, authorities said, the bank relied on faulty documentation to substantiate the amount owed by consumers. Often, the bank relied on outside law firms without double-checking their work.

The questionable debt-collection practices evoked some of the same tactics banks used to foreclose on homes during the mortgage crisis. Those problems – like robo-signing, where bank employees and outside lawyers churned through mountains of foreclosure documents without vetting them for errors – were at the center of a sweeping deal between the nation’s biggest banks and the comptroller’s office.

On Thursday, the regulators took aim at the lawsuits JPMorgan filed to recover money on unpaid bills. According to the comptroller’s office, JPMorgan relied on sworn legal documents that had not been reviewed for accuracy. The bank also flouted a federal law that governs how lenders collect overdue bills from military members, the comptroller’s office said.

JPMorgan Pays Small Fine For Lying To Regulators And Manipulating Market

By: DSWright, Firedog Lake

Thursday September 19, 2013 8:58 am

You had to see this coming. After lying to regulators, manipulating the market, and putting out fraudulent documents JPMorgan will pay a relatively small fine and move on. Because when the powerful repeatedly break the law the consequences are never very severe. If we stopped these Wall Street banksters from making criminal profits they might stop making criminal profits – then where would our economy be?

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Well, as long as they learned their lesson. Never mind that JPMorgan reported $6.5 billion in profits last quarter. So of course a fine significantly less than 3 months profit will really make them shudder. It’s all about incentives people.

The one regulator that hasn’t taken a dive so far is the CFTC which has refused to settle unless JPMorgan admits market manipulation. Lets hope they don’t cave. Though it seems their regulatory colleagues just left them alone in the desert.

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(W)hat is the penalty for that crime for 99% of Americans? Someone audits you or your business and you “fail to turn over significant information” to an auditor? I’ll give you a hint, it wouldn’t be a relatively small fine. Actually it would be a very large fine and possibly a government mandated visit to a correctional facility. But that’s what you get for not being rich enough to bribe Congress.