TeluGlobe » Business

Frontline: Money Power and Wall Street, Part 2 of 4

Admin — Thu, 03 May 2012 00:07:04 +0000

.Part 2

Watch Money, Power and Wall Street: Part Two on PBS. See more from FRONTLINE.

Frontline: Money Power and Wall Street, Part 1 of 4

Admin — Thu, 03 May 2012 00:02:35 +0000

Frontline -- Part 1 of 4

Watch Money, Power and Wall Street: Part One on PBS. See more from FRONTLINE.

Facinating Infographic About Big Banks’ Derivatives Exposure

Admin — Tue, 24 Apr 2012 12:17:31 +0000

Just have a feel for the scale of the gigantic ‘too-big-to-fail’ derivatives “innovations” from the parasites called investment banks. (click here for infographic)

A Wise Take on Facebook’s Q1-2012 Earnings

Admin — Tue, 24 Apr 2012 11:56:59 +0000

The upshot: declining growth rates and declining ad sales per registered users. An interesting and intelligent take on Facebook growth and earnings (via Minionville).

As you can see, the numbers, particularly in advertising (which accounts for 82% of total revenues), are falling quickly.

Let’s hope that acceleration in payments revenue can start to pick up the slack.

And if we look at total company revenues, we can see that year-over-year growth is rapidly decelerating — it went from 55% in Q4 to 45% in Q1 2012:

I like it.

2007-2012 Financial Story in One Pic

Admin — Tue, 20 Mar 2012 23:16:40 +0000

You won’t hear on the nightly news headline. Enough said.

Matt Taibbi: Bank of America is a “raging hurricane of theft and fraud”

Admin — Tue, 13 Mar 2012 23:55:12 +0000

From fthebanks.com:

There are two things every American needs to know about Bank of America.

The first is that it’s corrupt. This bank has systematically defrauded almost everyone with whom it has a significant business relationship, cheating investors, insurers, homeowners, shareholders, depositors, and the state. It is a giant, raging hurricane of theft and fraud, spinning its way through America and leaving a massive trail of wiped-out retirees and foreclosed-upon families in its wake.

The second is that all of us, as taxpayers, are keeping that hurricane raging. Bank of America is not just a private company that systematically steals from American citizens: it’s a de facto ward of the state that depends heavily upon public support to stay in business. In fact, without the continued generosity of us taxpayers, and the extraordinary indulgence of our regulators and elected officials, this company long ago would have been swallowed up by scandal, mismanagement, prosecution and litigation, and gone out of business. It would have been liquidated and its component parts sold off, perhaps into a series of smaller regional businesses that would have more respect for the law, and be more responsive to their customers.

But Bank of America hasn’t gone out of business, for the simple reason that our government has decided to make it the poster child for the “Too Big To Fail” concept. Because it is considered a “systemically important institution” whose collapse would have a major, Lehman-Brothers-style impact on the economy, two consecutive presidential administrations have taken extraordinary measures to keep Bank of America in business, despite a staggering recent legacy of corruption schemes, many of which were simply overlooked by regulators.

This is why the question of whether or not Bank of America should remain on public life support is so critical to all Americans, and not just those millions who have the misfortune to be customers of the bank, or own shares in the firm, or hold mortgages serviced by the company. This gigantic financial institution is the ultimate symbol of a new kind of corruption at the highest levels of American society: a tendency to marry the near-limitless power of the federal government with increasingly concentrated, increasingly unaccountable private financial interests.

The inevitable result of that new form of corruption is this bank, whose continued, state-supported existence should naturally outrage all Americans, be they conservative or progressive.

Conservatives should be outraged by Bank of America because it is perhaps the biggest welfare dependent in American history, with the $45 billion in bailout money and the $118 billion in state guarantees it’s received since 2008 representing just the crest of a veritable mountain of federal bailout support, most of it doled out by the Obama administration.

For instance, with its own credit rating hovering just above junk status, Bank of America has been allowed to borrow tens of billions of dollars against the government’s credit rating using little-known bailout programs with names like the Temporary Liquidity Guarantee Program. Since the crash of 2008, it’s also borrowed billions if not trillions in emergency, near-zero interest rate loans from the Federal Reserve – it took out $91 million in rolling low-interest financing from the Fed on just one day in January, 2009.

Conservatives believe that a commitment to free market principles and limited government will lead us out of our economic troubles, but Bank of America represents the opposite dynamic: a company that is kept protected from the judgments of the free market, and forces the state to expand to take on its debts.

Last summer, for instance, the Bank – in order to satisfy creditors who were nervous about the enormous quantity of risky assets on its balance sheet – decided to move some $73 trillion (that’s trillion, with a T) in exotic derivative bets from one end of the company into the federally-insured, depository side of the bank.

This move, encouraged by the Obama administration, put the American taxpayer on the hook for an entire generation of irresponsible gambles made by another failed investment firm that should have gone out of business, but was instead acquired by Bank of America with $25 billion in taxpayer help – Merrill Lynch.

When did we make it the job of the taxpayer to buy failed companies, and rescue companies from their own bad decisions? How is that conservative?

Meanwhile, if you’re a progressive, Bank of America is the ultimate symbol of modern predatory capitalism. This company has knowingly sold hundreds of billions of worthless securities to unions and pension funds (New York state filed two different lawsuits against Bank of America and its subsidiaries on behalf of its pension fund, one of which was settled for $624 million) brazenly overcharged its depositors (it was forced to pay customers $410 million in restitution for bogus overdraft charges), and repeatedly lied to its shareholders (most notoriously, it lied about billions in losses on Merrill Lynch’s books before asking shareholders to approve its merger with the firm).

Moreover, Bank of America has ruthlessly preyed upon millions of homeowners, throwing them out on the street on the strength of doctored, “robosigned” paperwork created through brazenly illegal practices they helped pioneer — the firm sped struggling families to foreclosure court using perjured affidavits produced in factory-like fashion by the hundreds or thousands every day, with full knowledge of management. Through the firm’s improper use of an unaccountable private electronic mortgage registry system called MERS, it also systematically evaded millions of dollars in local fees, forcing some communities to cut services and raise property taxes.

Even when caught and punished for its crimes by the authorities, Bank of America has repeatedly ignored court orders. It was one of five companies identified in two separate investigations earlier this year that were caught continuing the practice of robosigning, even after promising to stop in a legally binding consent decree. Last summer, the state of Nevada sought to terminate a settlement over mortgage abuses it had entered into with Bank of America after it found the company was brazenly violating the agreement, among other things raising payments and interest rates on mortgage customers, despite the fact that the settlement only allowed them to modify loans downward.

Over and over again, we see that leveling fines and punishments at this bank is not enough: it simply ignores them. It is the very definition of an unaccountable corporate villain.

Companies like Bank of America are a direct threat to national security, for many reasons. For one thing, they drive smaller, more honest banks out of business: since the market knows the federal government will never let Bank of America fail, it charges less to lend the bank money. That gives Bank of America, despite its near-junk credit rating, a competitive advantage over a smaller, regional bank that might have a better credit rating, but doesn’t have the implicit support of the federal government.

Worse still, stock market investor dollars that normally would go to more customer-friendly, more creative, and more commercially dependable firms will instead continue to flow to Too-Big-To-Fail behemoths like Bank of America, as buying stock in a company with implicit state support will be considered almost a safe-haven investment, like buying gold or Treasury bills.

This robs more deserving and ingenious entrepreneurs of scarce capital, and also encourages existing companies to pour resources not into better performance and increased productivity, but into lobbying and government influence. The result will be fewer Googles and Apples, more bad banks, and more campaign contributions for politicians.

Moreover, we’ve seen throughout our history that when criminal organizations are not punished, they tend to be encouraged to commit more crimes. Five years from now, our government’s decision to avoid jailing Bank of America executives for their roles in the vast robosigning program may result in a situation where no court document of any kind can be trusted, as companies will realize that it is cheaper and easier to simply invent legal affidavits than to draw them up properly and accurately.

What will your defense be against a future lawsuit for a credit card debt or a foreclosure, when your bank walks into court with a pile of invented documents? Will you wish then that you’d fought harder for Bank of America to be punished now?

And the state’s decision to allow Bank of America to pay a middling, $137 million fine for the rigging of bids for five years of municipal bond issues – a very serious crime that robbed taxpayers of millions in revenue, and incidentally is exactly the sort of thing we used to put mobsters in jail for, when the rigged contracts were for cement instead of bonds – may mean that down the road, all municipal bond issues will be rigged.

In recent years, Too-Big-To-Fail banks like Bank of America and Chase and Wells Fargo have been caught rigging the bids for financial services in dozens of municipalities nationwide. Worse, these same banks have repeatedly been let off the hook by regulators, who rarely seek jail sentences for the offenders, and more often simply apply fractional fines to the companies caught. This behavior, if left unchecked, will ultimately mean that we will all have to pay more for our roads, our traffic lights, our sewers, in fact all public services, as the banker’s secret bonus will soon become an institutionalized part of the invoice. And it’ll be our fault, because we didn’t do anything about it now.

The only way to prevent this kind of slide to total lawlessness is to break this unhealthy relationship between bank and government. It would be a great sign of America’s return to healthier capitalism if we could allow one of the worst of public-private monsters, Bank of America, to sink or swim on its own, in the free market.

We don’t want Bank of America to fail. Our position is, it already is insolvent, and already has failed – and only our tax dollars, and our government’s continued protection, is keeping that failure from becoming more common knowledge. There are many opinions about the nature of modern American capitalism. Some think the system is no longer able to meet the needs of ordinary people and needs to be radically overhauled, while others like it just the way it is.

But one thing that everyone on this spectrum of beliefs can agree upon is that our system doesn’t work when corrupt companies, companies that should fail in the free market, are kept alive by the government. When we allow that, what we get is a system that is neither capitalism nor socialist, but somewhere more miserably in between – a bureaucratic state in which profit is not tied to performance, but political power.

We have to break that cycle, and we can. Even with the enormous levels of state support, Bank of America has been teetering on the edge of collapse for years now. In December of 2011, its share price briefly dipped below $5, a near-fatal event in the firm’s history. The market has reacted violently to bad news about the bank on multiple occasions in the last year – after news of layoffs, after hints that the government might not bail the bank out completely in the event of a collapse, and after significant new lawsuits were filed. Each of these corrections nearly sent the company into a tailspin, but it was always rescued in the end by the widespread belief that Uncle Sam would bail it out in the event of a collapse.

We need to put a dent in that belief. We need to convince politicians and investors alike to allow failure to fail.

– Matt Taibbi, February 29th, 2012, Occupy Wall Street

Credit vs. Stocks: Divergence

Admin — Fri, 17 Feb 2012 00:16:49 +0000

I have been following financial markets on and off lately. The size and length of the rally all over the world is a bit of a surprise, but not out of the ordinary. I was looking for some clues as to where things are headed in the short term. Usually credit markets lead stocks. Financials lead the trend. No further explanation needed.

Source of the chart: Zero Hedge.

Updated: Tick, Tock. Tick, Tock.

Admin — Sat, 05 Nov 2011 02:07:00 +0000

Update on Saturday, Nov 5: CME issued a clarification to its Friday’s release. Zero Hedge deciphers again:

The CME, it appears has taken a page right out of the European playbook, and less than a week after an exchange-cum-Primary Dealer collapsed due to excessive risk taking, the CME has followed up its vague press release from yesterday by inviting even more risk in lowering the initial margin. Why is this a cause for even greater concern? As the CME itself says, “Initial margins are set to provide an additional buffer against future losses in the account” -- so going forward that buffer has been reduced by about 30%. But what is the reasoning provided by CME: “The intent and effect of these changes is to decrease the size of any margin calls resulting from the bulk transfer of MF Global customers to new clearing members, not to increase them.” So basically the CME is implicitly putting all of its existing and current clients and customers at further risk by onboarding the accounts of those clients who, like lemmings, held on to their MF Global accounts until after it was too late. Because while the lower Initial margin may apply to MF accounts, it will also apply to any Tom, Dick and Harry beginning Monday, who will suddenly see a 30% reduced gating threshold to put on a position. Any position, no matter how risky.

Naturally, if enough people suddenly jump to put on risk, and the market flips and all new positions end up underwater, who will bail out CME accounts if, like MF, there is just not enough capital on the balance sheet? MF Global?

That the CME has opted for this highly disturbing path is very troubling, and just as in Europe, where three months after the financial short selling ban, financials are trading lower than they have ever been, so the unintended consequences from this action will result in even greater stress to the system, as not a single local will leave any excess money in their account, and likely will force all specs to trade within a hair’s width at the end of the day to cover just maintenance margin, due to fears of what may happen at the CME itself, now that is has implicitly onboarded moral hazard from the otherwise insolvent MF Global accounts.

It also means the systemic liquidity is about to drop to even lower and more depressed levels.

And completing the symmetry with the recent action out of Europe, we learn that said Initial Margin reduction is a “short-term accomation” which will apply until further notice. As an indication, Europe has extended its short selling ban several times and likely will keep it until the bitter end.We expect nothing less from the CME.

Zero Hedge just posted this comment on a late Friday circular from CME.

The most important news announcement of the day was not anything to came out of Cannes (as nothing did), nor from Greece (the merry go round farce there continues unabated). No, it was a brief paragraph distributed by the CME long after everyone had gone home, and was already on their 3rd drink. It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existanet. But what is very disturbing is that this is just as true at the exchange level, where it appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are not found to be margin deficient, and thus receive a margin call. Naturally, since it is very unlikely that this incremental amount of liquidity can be easily procured in one business day, we anticipate the issuance of hundreds of thousands of margin calls Monday, followed by forced liquidations of margin accounts across America… and the world. Just like when Lehman blew up, it took 5 days for Money Markets to break. Is this unprecedented elimination in the distinction between initial and maintenance margin the post-MF equivalent of the first domino to fall this time around?

Simply put -- a lot of data released in the last two weeks shows that market liquidity is drying up. After MF Global blew-up on 40 to 1 leverage, brokerage houses are getting antsy about all levered bets. CME is now requiring all levered (options and futures) players to shell out 100% margin by close of business on Monday, November 7.

It almost feels like CME just announced a date for market crash (may be a mini-crash), doesn’t it?

Tick. Tock. Tick. Tock. So, this is how napalm smells on a Friday night? Well, that could be a ticking time-bomb set to go off on Monday (Nov 7) or Tuesday (Nov of next week.

The other possibility is that it is the sound of a broken clock (that would be me) makes. Wait a minute, broken clock is right twice daily, right?

Bloomberg Interview: Jim Chanos on China and Europe (Oct 28, 2011)

Admin — Sun, 30 Oct 2011 14:48:49 +0000

Jim Chanos is one of the few savvy observers of World economies and a successful hedge fund manager. He weighed in on China and Europen debt. The interview aired after the European leaders’ agreement on 50% haircut for Greek debt.

Jim Cramer Recommended Netflix at $130 (After the Big Drop)

Admin — Mon, 24 Oct 2011 23:28:54 +0000

The bozo recommended Netflix at $1340 with a target of $150. Netflix announced earnings today.

SAN FRANCISCO (AP) — Netflix jolted its already shell-shocked shareholders with a third-quarter financial report that portrayed a company in crisis.

Netflix’s blooper reel, released Monday, included an even larger customer exodus than the company had foreseen after announcing an unpopular price increase in July. What’s worse, the report contained a forecast calling for more defections from the largest U.S. video subscription service.

The backlash will deprive Netflix Inc. of some the revenue that management had been counting on to finance the company’s expansion plans while it pays higher fees for Internet video streaming rights. The result: Netflix expects to post losses next year when it starts selling its steaming service in Britain and Ireland. The company didn’t offer further specifics.

None of the developments pleased Wall Street as Netflix lost more than a quarter of its value after the bad news came out. If that sharp decline holds in Tuesday’s trading, it will mark the first time Netflix’s stock price has fallen below $100 in nearly 14 months.

Netflix shares shed $31.19, or more than 26 percent, to $87.35 in Monday’s extended trading.

It’s the latest setback for a former stock market darling whose shares topped $300 just 4 1/2 months ago. Netflix’s market value had already plunged by about 60 percent, or nearly $9 billion, before Monday’s late sell-off.

If you listened to the buffoon a few days ago and acted on his advice, I feel sorry for you. The stock is trading at $87 after the earnings were reported today.

In case you missed it, here is a priceless revelation. This one liner from the WSJ live blog on NFLX earnings call says it all:

6:31 pm : What? Anyone There?

There’s a deafening silence as Netflix execs solicit further questions. Anybody?

Only one participant asked a question. This stock could drop to teens in no time! I believe the next mo-mo to blow up is Priceline. I name my own price: $50.

————————————-

In case you missed this in Feb, an analyst called out NFLX on their accounting “games.” I believe it is going to catchup with them now. The stock can see 20s, soon. Very soon.

The Telegraph: Eurozone summit – despair and backbiting in the corridors of power

Admin — Mon, 24 Oct 2011 01:25:55 +0000

In case if you were betting that Europe will be fixed over the weekend… the headline says it all. Friday’s “breakout” in stocks could be a head-fake. Via Telegraph.

Just when the eurozone governments thought it could not get worse for Europe’s single currency, it did.

Shell-shocked EU finance ministers meeting in Brussels on Saturday were already reeling from the worst Franco-German rift for over 20 years and a fractious failure to resolve the problems that have brought Greece, and the euro, close to the brink.

But then a new bombshell hit as a joint report by the EU and the International Monetary Fund (IMF) warned that, without a default, the Greek debt crisis alone could swallow the eurozone’s entire €440 billion bailout fund -- leaving nothing to spare to help the affected banks of Italy, Spain or France.

An EU already rocked by divisions between France and Germany over how to increase the “firepower” of the European Financial Stability Facility (EFSF) in order to save the wider eurozone from Greek contagion now faced the prospect of losing it all in one go.

As dark-suited finance ministers contemplated the pains au chocolat laid out on their desks alongside their talking points and position papers, Jan Kees de Jager, the Dutch finance minister, told colleagues: “We’ve got to get real. People are talking about new defences but with one gulp the whole €440 billion could be gone, leaving the eurozone with no protection at all.”

….

Compounding the trauma, Christine Lagarde, the French finance minister turned IMF chief -- and one of the few key players who appeared to be enjoying herself in her new headmistress-like role -- issued a grim warning to her former European peers.

The IMF would no longer be willing to pick up a third of the total bill for rescuing Greece, a contribution worth €73 billion, unless European banks were prepared to write off 50 per cent of Greek debt.

“It was grim. The worst mood I have ever seen, a complete mess,” said one eurozone finance minister.

The Nexus: Belgian Bank Dexia, Greece, The Federal Reserve and the Rest of the Banking Cabal

Admin — Sat, 08 Oct 2011 20:55:48 +0000

It is possible the many people have never heard of this Belgian Bank until recently. Even if you haven’t heard about it until you stumbled upon to this article, you can be forgiven. At the outset, this appears to be a complicated story. Or at least the apologists of the banking crime syndicate will tell you that this is a very complicated case and the average public doesn’t have the IQ necessary to understand all the complexities of international finance. Thus, they argue, that it is best that the story is kept under the rug.

Back in Dec 2008, when the financial world is rattled by the implosion of the banks, the US Federal Reserve Board came to the rescue of the banking cartel by providing unprecedented access to its discount window. The Feds charged a nominal 0.5% (nominal = per year) interest rate for these loans issued to the banks. The Feds served its intended purpose -- that is well and good. However, the size of the loans issued was a jaw dropping

In a legal battle that can be comparable to investigative journalism of Woodward and Bernstein on the Watergate scandal, Bloomberg fought the US Federal Reserve to obtain the list of banks that received this massive $1 trillion loans. After prevailing in the 2+ years of battle with the Feds, on March 31, 2011 -- Bloomberg disclosed the list of the banks that took the assistance who publicly asserted that they didn’t need any help from anybody. At the top of the list was Dexia, a relatively unheard of Belgina bank. (Bloomberg: Dexia Drew Most From Discount Window in Record Week in 2008)

Dexia SA (DEXB), the largest lender to local governments in Belgium, borrowed more than any other bank from the U.S. Federal Reserve’s discount window during the week in October 2008 when use of the program surged to a record.

Dexia borrowed $31.5 billion on Oct. 24 of that year through its New York branch, according to Fed documents released today in response to a Freedom of Information Act request. Total borrowing from all banks using the discount window was $111 billion on Oct. 29, the record weekly total, according to previously released data. Dexia had an outstanding balance of $26.5 billion on that day.

Dexia, based in Brussels and Paris, and foreign banks including Dublin-based Depfa Bank Plc and Bank of Scotland Plc dominated the list of borrowers from the U.S. central bank’s last-resort lending program as markets seized up following Lehman Brothers Holdings Inc.’s failure. The discount window, established in 1914, is the Fed’s primary program for providing cash to banks to help them avert a liquidity squeeze.

“When the perfect storm hits, you find out who’s prepared and who wasn’t,” said Vincent Reinhart, the Federal Reserve’s director of monetary affairs from 2001 to 2007. “Borrowing from the Fed is evidence of a lack of preparedness.”

Dexia’s outstanding balance at the Fed has been reduced to zero, Ulrike Pommee, a spokeswoman for Dexia, said in an e-mail.

“This information is backward-looking,” she said. “We experienced a great deal of tension concerning the liquidity of the dollar at the time of the crisis. The Fed played its role as central banker, providing liquidity to banks that needed it.”

The foreign banks took advantage of Fed lending programs even as their host countries moved to prop them up or orchestrate takeovers.

Dexia received billions of euros in capital and funding guarantees from France, Belgium and Luxembourg during the credit crunch.

Note the emphasized text. The bank’s spokeswoman said that in March! Backward looking? OK, then -- let’s fast forward to May 2011. Let us see what other savvy observers found out. On May 25, 2011 -- Tyler Durden of Zero Hedge said this:

About a month ago Belgium’s biggest bank (Dexia), and as is now well known one of the most active borrowers at the Fed’s discount window in the days following the Lehman crisis, issued €3.2 billion in FRNs with a two year maturity that had an odd feature: an ultra short term put feature (as the Bloomberg screen shows below, puttable June 26, 2011 at par) which can be exercised up to 33 days ahead of the put day (underwritten by Barclays, Citi and MS) or in other words, today. Well, as our source has told us, following recent downgrades of virtually all banks with Greek exposure (a topic further pursed by the below IFR article), the two largest investors in the bond: Blackrock, which owns the bulk or about €2.6 billion, and Barclays (among others) have exercised their put option. The speculation is that “either someone knows something or had a very rapid change of heart” and concludes that “this should make the whole funding thing relevant again” especially since banks continue to rely on the ECB exclusively for short-term liquidity needs.

Let’s fast forward to the last two weeks of events (last week of Sept and 1st week of Oct, 2011) on international financial news. Dexia is done. Kaput! The trading in this stock was halted. (Note a irony here. One of “the best and the brightest” analysts at Goldman Sachs removed Dexia from his list of Pan Europen banking stocks soon after the carnage. God bless the clients of Goldman Sachs. We all know that the clients and the public pensions are the prey for Goldman Sachs.)

While I indulge you in the quest for knowing what the hell is happening, may I also alert you to some articles, which qualify to be in the humor category?:

Pretty much after every rat left the sinking ship, Moody’s steps in to lighten the mood -- by downgrading Dexia. Yes, you can’t make this stuff up. You would think that these high paid a***les at the rating agencies should do their job BEFORE such collapse, right? When is the last time it happened that way?
Zero Hedge with a humorous title: S&P Says Dexia Failure May Be A Bad Thing. The first line is priceless: Well, not quite the discovery of aquatic wetness but close enough.
There are more, but what’s the point? The bottomline is, Dexia is done. Stick a fork in it.

Here is my frustration with this whole thing:

How come the self proclaimed “best and the brightest” always appear to get it wrong? Is it Hubris? Or, is it plain old trickery and deception?
Did the US Federal Reserve is an accessory to the banking crime syndicate by extending discount window to non-viable and perhaps criminally negligent banks like Dexia?
In relative term, Dexia is a small bank. If implosion of Dexia can cause this much carnage, what will happen when some of the major European banks, especially French banks begin to implode?
Speaking of French Banks, what will happen when a major US investment bank Morgan Stanley, which has a lot of exposure to the imploding French Banks, begins to implode?

Ladies and gentlemen. We all should be very scared. I strongly believe that this time it is nearly impossible for the US Federal Reserve or the US Treasury to stop the carnage. I sincerely hope that I am wrong. But, if I am right, God help the economy, our jobs etc.

Too Little Regulation of Banks, Too Much Regulation of Democratic Processes

Admin — Wed, 05 Oct 2011 01:12:24 +0000

Remember this Vanity Fair article: Of the 1%, by the 1% for the 1%? Professor Joseph Stiglitz was at the “Occupy Wall Street” rally and appeared on Lawrence O’Donnel’s show.

“Too little regulation of banks and too much regulation of the democratic processes.”

Well said, professor!

(I don’t agree with everything he said). Watch the interview.

Visit msnbc.com for breaking news, world news, and news about the economy

This is Absolutely Scary!

Admin — Tue, 04 Oct 2011 20:28:42 +0000

——————— Update ————--

Senator Dick Durbin said something very very irresponsible on the Senate floor. He encouraged a run on Bank of America!

video platform video management video solutions video player

Does he even understand the consequence of his idiocy? Back in Spring of 2008, Senator Chuck Shumer encouraged a run on the Indy Mac bank and within days the bank collapsed.

Folks, it is one thing for ordinary people to say to move your deposits from one back to the other, and quite another for an elected official like a US Senator to say it. It is utterly irresponsible on Durbin’s part.

———————- End update———-

If you are a Bank of America customer and used their online services, you would have seen this screen for the last 3 days.

Oct 4, 2011: Bank of America website is down for 3 days in a row

It didn’t matter much to people if B of A’s mortgage division, or brokerage division is accused of committing fraud to the tune of 100s of billions of dollars. But, ever since BoA announced a $5/month debit card charge, customers are very unhappy. I talked to a few people who have their account with B of A. They are so unhappy that they want to move their account to a local bank. I don’t blame them. But, I did not anticipate this much anger over this fee. How mad are people about this fee? Mad enough to cause a run on the bank? For God sake, I hope this report is just an isolated incident.

From what we can gather, according to eye witness testimony, St. Louis PD has barricaded the Bank of America building and is refusing customer access to deposits.

Just pray that this is an isolated incident and not the beginning of a bank run. If it is the beginning of a bank run, God help the USA and the world’s financial system.

Go-Go-90s: Crackpot! (2 of 3 – Great Video)

Admin — Tue, 04 Oct 2011 00:40:02 +0000

** Oct 3, 2011: I am re-posting this Feb 2010 post for more light **

Yes, the former Federal Reserve Board Chairman, Greenspan is a crackpot! For over a dozen years, I was passionately making this case to anybody who cared to listen. Even today at lunch, my colleagues were joking with me about how much I loved Greenspan.

In part 1 of this three-part article, I have cued you in for a great (PBS) Frontline Video. Before you watch the video, I want to give you some intro to Greenspan’s crackpot theories:

This video features the go-go-90s during which the follies of Greenspan, Rubin, Summers, Phil Grahm and the US Congress have contributed to the build up of housing bubble; and proliferation of totally unregulated derivatives and the. Not until the financial system of the western economies were brought to their knees due to the popping of the bubble and the implosion of derivatives, has anybody paid any attention to people with common sense or regulators with vision. This Frontline video mainly features an unsung hero, Ms. Brooksley Born with such vision and her fight against Wall Street corruption and the crony capitalism of the “powers that be” at that time.

Here are some (loose) quotes from the video:

At her first meeting with Greenspan, he said something to the effect “You probably think that there should be rules against fraud….. The market will figure it out.

“Greenspan didn’t believe that fraud is something that should be regulated.”

Larry Summers: “You don’t get it. You are going to cause the worst financial crisis since World War 2.” [Editorial insert: She didn't, he did.]

“In Washington, the financial sector has 5 lobbyists for every congressman” [May be even more now]

“Rubin, Greenspan and Summers have a great deal of faith in their intellect.”

“The market is God, it will punish the fraudsters.”

Bankers Trust brokers, “We set’em up.” “Ha Haa. These idiots really think that this is all in their best interest. huh huh. It is not. It is probably going to clean their clock.” [About P&G]

I voted for Obama and I loved the fact that Volker and Buffet advised him during the campaign. The moment I saw Summers on Obama’s economic team, Obama lost me. Now, a year into Obama’s administration -- with Summers, Giethner and Bernanke at the helm of the economic team, I now say, “God help the US economy! The next disaster will be absolutely horrendous.”

How much of a crackpot Greenspan really is? The video speaks for itself. (It is 55 minutes and every minute of your watching this video is worth it.) Educate yourself!!!

Watch the full episode. See more FRONTLINE.