Dimon Makes His Case
"A five-year deadline is approaching in July for prosecutors to decide whether to file what could be the most serious criminal charges and for regulators to decide whether to file civil charges, related to trading in one case that touches Mr. Cohen."
SAC Capital to Limit Cooperation on Probe
Oil-price manipulation: the next Libor?
Monday, May 20, 2013
Saturday, May 18, 2013
Panic of 2008
In the Panic of 2008, Fed Chair Ben Bernanke, Treasury Secretary Hank Paulson and New York Fed President Tim Geithner were heroes. The economy was falling apart. Events cascaded so quickly no one even knew the true facts. The world's bankers suddenly would not even lend each other money. Even the best borrowers, like General Electric, were frozen out. They could not borrow a dime.
Into that morass--that true panic---those three men strode and made hundreds and hundreds of quick decisions, saved the American economy---and the world economy. (When the world's central banks could not respond, the U.S. Fed lent vast sums to the giant banks of other countries---they had to. There were no other alternatives.)
They staved off the panic and then created a trillion dollar fund to stabilize our huge banks. This was a necessary condition. It was and is controversial. It was those same banks, which through personal greed of the people at their tops, created the crisis in the first place.
Europe, lead by the idiots in Germany, pursued the opposite. It imposed Austerity Economics under the name of Conservatism and Moral Rectitude. The result was devastation. Spain, Portugal, Italy, Greece all have unemployment rates at 25% of above. These rates are at DEPRESSION levels. The men and women who have imposed them are fools.
Now, though, in the United States, the Big Banks, already judged too Big To Fail also have been deemed Too Big To Jail. Eric Holder, the Attorney General of the Unites States, stated in a Senate Hearing that he would not pursue Criminal Prosecution of Big Banks or Big Bankers because---get this---such actions might de-stabilize the World's Economy. This is absorb. It is a sell-out by the Obama Administration, which has shown itself just a corrupted by the Financial Sector as the Bush Administration;
The five Big Banks should be broken up into twenty smaller banks. Each should be reduced to manageable size and allowed to fail. And the worst offenders should be sent to jail, in chains, in public.
Michael Ray
They staved off the panic and then created a trillion dollar fund to stabilize our huge banks. This was a necessary condition. It was and is controversial. It was those same banks, which through personal greed of the people at their tops, created the crisis in the first place.
Europe, lead by the idiots in Germany, pursued the opposite. It imposed Austerity Economics under the name of Conservatism and Moral Rectitude. The result was devastation. Spain, Portugal, Italy, Greece all have unemployment rates at 25% of above. These rates are at DEPRESSION levels. The men and women who have imposed them are fools.
Now, though, in the United States, the Big Banks, already judged too Big To Fail also have been deemed Too Big To Jail. Eric Holder, the Attorney General of the Unites States, stated in a Senate Hearing that he would not pursue Criminal Prosecution of Big Banks or Big Bankers because---get this---such actions might de-stabilize the World's Economy. This is absorb. It is a sell-out by the Obama Administration, which has shown itself just a corrupted by the Financial Sector as the Bush Administration;
The five Big Banks should be broken up into twenty smaller banks. Each should be reduced to manageable size and allowed to fail. And the worst offenders should be sent to jail, in chains, in public.
Michael Ray
Recommended Reading
The following is an interesting article on ending TOO BIG TO FAIL. It's written by Barry Ritholtz who is slowly becoming my favourite blogger. The idea is that TBTF Act is a lot simpler and has rigid capital reserve ratio of 15 percent.
Can two senators end ‘too big to fail’?
Aha!!!!!! This article illustrates how Moody's is still giving out AAA ratings to shoddy securities. One of their main assumption for granting the coveted rating was that the rent would keep increasing at the rate of 35% over the decade.
"Fortunately for the Citigroup bankers, analysts at rival Moody’s Investors Service did not share Fitch’s qualms. On Monday, Moody’s rated a slice of the bonds AAA. Kroll Bond Ratings, another Fitch competitor, had already affixed its AAA rating to a slice of the deal."
Credit Rating Agencies Loosening Standards Again, In Same Dynamic That Preceded Financial Crisis
“Rating agencies continue to create an even bigger monster — the CDO market ... Let’s hope we are all wealthy and retired by the time this house of card falters.”
In an internal email sent in December of 2006, an S&P employee indicated that he knew how bad collateralized debt obligations were before the heart of the financial crisis, The New York Times reported.
"Junk," "dogs," "big old lemons" and "monstrosities."
By 2006, Goldman Sachs traders were internally describing subprime home mortgages in a very negative light.
"Horrible," a "disaster" and a "POS," or piece of sh**.
Former Merrill Lynch Analyst Henry Blodget encouraged investors to buy stocks that he privately wrote in emails were not good investments, to say the least, Time reported in 2009.
Can two senators end ‘too big to fail’?
Aha!!!!!! This article illustrates how Moody's is still giving out AAA ratings to shoddy securities. One of their main assumption for granting the coveted rating was that the rent would keep increasing at the rate of 35% over the decade.
"Fortunately for the Citigroup bankers, analysts at rival Moody’s Investors Service did not share Fitch’s qualms. On Monday, Moody’s rated a slice of the bonds AAA. Kroll Bond Ratings, another Fitch competitor, had already affixed its AAA rating to a slice of the deal."
Credit Rating Agencies Loosening Standards Again, In Same Dynamic That Preceded Financial Crisis
“Rating agencies continue to create an even bigger monster — the CDO market ... Let’s hope we are all wealthy and retired by the time this house of card falters.”
In an internal email sent in December of 2006, an S&P employee indicated that he knew how bad collateralized debt obligations were before the heart of the financial crisis, The New York Times reported.
"Junk," "dogs," "big old lemons" and "monstrosities."
By 2006, Goldman Sachs traders were internally describing subprime home mortgages in a very negative light.
"Horrible," a "disaster" and a "POS," or piece of sh**.
Former Merrill Lynch Analyst Henry Blodget encouraged investors to buy stocks that he privately wrote in emails were not good investments, to say the least, Time reported in 2009.
Friday, May 17, 2013
Monday, May 13, 2013
Recommended Reading
No Lehman Moments as Biggest Banks Deemed Too Big to Fail
California Homeowner Bill of Rights blocks BofA foreclosure
Anthony Chiasson Learns That $68 Million Gets You 6 1/2 Years
Goldman cuts investment fund pledges in half since Dodd-Frank-filings
Confidential To JP Morgan Shareholders: Jamie Dimon Took His Own Non-Binding Vote And Early Results Indicate You People Might Wanna Be Careful What You Wish For
California Homeowner Bill of Rights blocks BofA foreclosure
Anthony Chiasson Learns That $68 Million Gets You 6 1/2 Years
Goldman cuts investment fund pledges in half since Dodd-Frank-filings
Confidential To JP Morgan Shareholders: Jamie Dimon Took His Own Non-Binding Vote And Early Results Indicate You People Might Wanna Be Careful What You Wish For
Wednesday, May 8, 2013
Recommended Reading
N.Y. to sue Wells Fargo, Bank of America over mortgage practices
Ruling Clears Way for $7 Billion A.I.G. Suit Against Bank of America
Why Bank of America Is Mysteriously Up Today
Hedge Fund Titans’ Pay Stretching to 10 Figures
Ahaa!!!!
"But Mr. Cohen still pocketed $1.4 billion because his firm, which oversees $15 billion, charges investors a 50 percent performance fee. Mr. Cohen has not been accused of any wrongdoing, but SAC agreed to pay $616 million to settle two insider-trading charges. A spokesman for SAC declined to comment."
No admission of guilt, but they agree to settle.
Ahaa!!!!
"But Mr. Cohen still pocketed $1.4 billion because his firm, which oversees $15 billion, charges investors a 50 percent performance fee. Mr. Cohen has not been accused of any wrongdoing, but SAC agreed to pay $616 million to settle two insider-trading charges. A spokesman for SAC declined to comment."
No admission of guilt, but they agree to settle.
This was an amazing interview. Dr. Sachs provides very compelling arguments for the the wickedness on the Wall Street.
Couple of points from the interview:
1. Both parties are equally responsible for the crisis.
2. Lawbreakers: Everyone
Monday, May 6, 2013
Oliver Budde
According to me, what happened at Lehman Brothers was gross negligence and greed. Negligence was clearly displayed in the book by Lawrence McDonald: Colossal Failure. Greed is displayed in the way Dick Fuld was paid. What was more surprising for me was the fact that he lied under oath at the Senate Hearing. The following graph is from a paper The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008 in the Yale Journal Regulation.
How Much Did Lehman CEO Dick Fuld Really Make?
In direct contradiction to Fuld's claim to Waxman that he had not sold the majority of his shares, Budde estimates that Fuld earned $469 million from stock sales between 2000 and 2008.
Mr. Budde was a whistleblower for Lehman Brothers. He wrote to SEC regarding Lehman's disregard for SEC rule on executive compensation. But, SEC on the other hand sent him a standardized form thanking him for his letter. He never heard back from them.
Fuld claimed that he was paid less than $310 million over the years in question, and lost nearly all of it. In fact, according to Budde, he was paid $529 million, and kept $469 million — more than he said he was paid in total.
How Much Did Lehman CEO Dick Fuld Really Make?
In direct contradiction to Fuld's claim to Waxman that he had not sold the majority of his shares, Budde estimates that Fuld earned $469 million from stock sales between 2000 and 2008.
Mr. Budde was a whistleblower for Lehman Brothers. He wrote to SEC regarding Lehman's disregard for SEC rule on executive compensation. But, SEC on the other hand sent him a standardized form thanking him for his letter. He never heard back from them.
Wednesday, May 1, 2013
Recommended Reading
How Wall Street Defanged Dodd-Frank
An excellent explanation of the financial crisis.
Crisis of Credit
An excellent explanation of the financial crisis.
Crisis of Credit
Monday, April 29, 2013
Recommened Reading
This is what we have been saying for the past few years.
Influential economist says Wall Street's full of 'crooks'
* Hedge fund titan John Paulson: “He worked together with Goldman Sachs to defraud, massively, many European banks which bought the toxic mortgages that Paulson put together.”
* Goldman Sachs: Paid out a “small fine” [$550 million in 2010] to settle charges with the SEC in the controversial Abacus deal linked to John Paulson’s hedge fund, but Paulson wasn’t mentioned once in the proceedings.
* Former US Treasury Secretary Larry Summers: “He continued to really institute moral-hazard policies, right and left, by fighting against any limits on [bankers’] compensation” as America grappled with the financial crisis.
Big Banks’ Tall Tales
Goldman CFO: Still 'very close' to crisis
While Wronged Homeowners Got $300 Apiece in Foreclosure Settlement, Consultants Who Helped Protect Banks Got $2 Billion
Error claims cast doubt on Bank of America foreclosures in Bay Area
* Hedge fund titan John Paulson: “He worked together with Goldman Sachs to defraud, massively, many European banks which bought the toxic mortgages that Paulson put together.”
* Goldman Sachs: Paid out a “small fine” [$550 million in 2010] to settle charges with the SEC in the controversial Abacus deal linked to John Paulson’s hedge fund, but Paulson wasn’t mentioned once in the proceedings.
* Former US Treasury Secretary Larry Summers: “He continued to really institute moral-hazard policies, right and left, by fighting against any limits on [bankers’] compensation” as America grappled with the financial crisis.
Big Banks’ Tall Tales
Goldman CFO: Still 'very close' to crisis
While Wronged Homeowners Got $300 Apiece in Foreclosure Settlement, Consultants Who Helped Protect Banks Got $2 Billion
Error claims cast doubt on Bank of America foreclosures in Bay Area
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