Posts Tagged ‘Washington’

When Washington Took On Wall Street

When Washington Took On Wall Street

Ferdinand PecoraNearly 80 years ago, on Capitol Hill, Ferdinand Pecora forced J. P. Morgan Jr. and other “banksters” to reveal the corruption that had fueled the Great Depression—bringing shame on the financial industry and resulting in new laws to curb abuses. Today, with Republicans having threatened to block reform and Goldman Sachs fighting fraud charges, the author looks back at the Pecora Commission hearings, which riveted America, and asks why there is no comparable investigation now.

BY ALAN BRINKLEYVanity Fair

J.P. Morgan Jr. was terrified. He was the most famous and arguably the most powerful banker in the United States, and also among the most secretive. But in May 1933, in the aftermath of the greatest financial crisis in the history of the United States, he was being called to testify before the Senate Committee on Banking and Currency to explain how the catastrophe had occurred. Morgan dreaded the prospect, in part because it was a painful reminder of his famous father’s unhappy experience testifying before the 1912 Pujo Committee, which had investigated the “money trust” (and was partly responsible for the creation of the Federal Reserve Board). The elder Morgan, mercilessly interrogated, had died shortly after the hearings. Many of his associates, not least his son, had blamed his death on his public humiliation.

Now it was the younger Morgan’s turn. Known to friends and associates as Jack, he was 65 years old and semi-retired. He feared that he might not be able to answer the committee’s questions, and he was even more afraid that he might lose his temper. His partners rehearsed Jack Morgan for days, peppering him with hostile and insulting questions. In the meantime, the Morgan bank’s powerful lawyer, John W. Davis, tried to keep the committee at bay. A onetime Democratic presidential nominee, Davis had helped pass a New York law barring any investigation of private bankers, and he argued in court that the Morgan bank was therefore entitled to privacy. But the U.S. Senate passed a resolution requiring the bank to open its books. The bank reluctantly complied and agreed to let Morgan testify.

He was to be questioned by Ferdinand Pecora, a former prosecutor who was now the special counsel to the committee. Pecora was known to be tough and unrelenting, and the prospect of his cross-examination attracted enormous publicity… 

Continue reading here.>>


Tags: , , , , ,




Senator Richard Durbin (D-IL): “Frankly, the Banks Own Congress” and You’re Getting Screwed Again

Senator Richard Durbin (D-IL): “Frankly, the Banks Own Congress” and You’re Getting Screwed Again

Courtesy of Larry Doyle at Sense on Cents

I wrote extensively in 2009 as to How Wall Street Bought Washington. Well, it would appear that the purchase and sales agreement between these two entities remains in place.

A recent press release highlights developments on Senator Chris Dodd’s proposed Financial Regulatory Reform along with a recent assessment by Washington insider and Illinois Senator Richard Durbin.

DEMOCRATIC FINANCIAL REFORM BILL EXITED SENATE BANKING COMMITTEE WITHOUT RESTORING KEY INVESTOR LEGAL RIGHT TO HOLD KNOWING AIDERS AND ABETTORS OF FRAUD ACCOUNTABLE 

Senator Durbin Says:  “Frankly, the banks own Congress,” as Investigation of Lehman Brothers Found Its’ Accountants and Lawyers Helped “Cook the Books”

March 24, 2010:   The Senate Banking Committee financial reform bill was voted out of committee on Monday afternoon.  On the previous Friday Senator Jeff Merkley (D-OR) offered an amendment to include the restoration of the legal rights of investors to hold accountable those who knowingly aid and abet fraud, a critical component of financial reform. The first draft of Senator Dodd’s bill, which was on the Committee Web site for months, contained this provision.

Chairman Dodd apparently dropped that important investor protection measure in a failed attempt to gain Republican and Wall Street support and the Democratic bill exited his Committee without it. As a result, Senator Merkley’s amendment was never even considered.  Therefore as it now stands the legislation heading to the floor of the Senate does not restore the lost right of investors to hold knowing aiders and abettors accountable to the investors they help rob.

As Senator Dick Durbin (D-IL) said (prior to Chairman Dodd’s mark-up): “Hard to believe in a time when we are facing a banking crisis, that many of the banks created, that the banks are still the most powerful lobby on Capitol Hill. They frankly own the place.“  Senator Durbin said this in a radio interview on Monday, March 15 (WJJG-AM: “Mornings with Ray Hanania,” a big Chicago area political call in show).

Separately, also on March 15, in a Senate speech, Senator Ted Kaufman (D-Del) said:  “Lehman Brothers was cooking the books.  Fraud and potential criminal conduct were at the heart of the financial crisis.”

Senator Kaufman was referring to the 2,200 page report issued last week on the investigation into Lehman Brother’s spectacular failure.  It documents in-detail how Lehman’s banking counterparties, lawyers and accountants knowingly structured faux


continue reading


Tags: , , , , , , , , ,




It Takes a Pillage: Behind the Bonuses, Bailouts, And Backroom Deals From Washington To Wall Street

Nomi Prins, former investment banker, gives an educational summary of the financial crisis in this video.  She’s also written many articles on the topic (see links below). – Ilene

It Takes a Pillage: Behind the Bonuses, Bailouts, And Backroom Deals From Washington To Wall Street

Courtesy of The Daily Bail

Text and Video from Democracy Now

Nomi Prins is a former investment banker turned journalist.  She worked at Goldman Sachs and Bear Stearns.  She is the author of several books; her latest, just out, is called It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street.   She spoke on the themes of the book at the Strand Bookstore in New York on September 29th.

Watch

Meet The Hazzards

Paulson’s Revealing Phone Records

Goldman Sachs Strikes Gold Again

How You Finance Goldman’s Profits

The Big Bank Bailout Payback Bamboozle

Nomi Prins, former Goldman exec, now journalist turncoat.

 


Tags: , , ,




The Treasury Department Endorses Lying to the Public

The Treasury Department Endorses Lying to the Public

Courtesy of Damien Hoffman of Wall St. Cheat Sheet

If you or anyone you know still believes the government (or the media) tell us only the truth, please pass them this direct admission that lying is a primary strategic device for so-called “authority figures”:

[T]he Treasury Department said that any review of [patently misleading and false] announcements last year “must be considered in light of the unprecedented circumstances in which they were made.

Translation: when our elected representatives and their appointed officials believe we need to be manipulated, they rationalize their lies based on whether they think we need them at the time.

I am not naive. I firmly believe we have a problem with ignorance and sheeple in our country. However, the only way to fix the problem is to distribute more accurate information — not the opposite. Further, for those of us who work hard to stay educated, we expect to be treated like adults!

In this specific case, the Treasury Department’s lies (via Hank Paulson) encouraged people to hold their investments. Therefore, if you listened to Paulson et al, you literally lost your hard earned money and life savings. Last time I checked, citizens should not expect to get fiscally hosed by their Treasury Secretary.

To be fair, this is not only a Wall Street and Washington problem. Seemingly, most public discourse these days centers around complete lies, myths, and other rhetorical strategies aiming to put insular interests ahead of what’s best for the nation. It’s time to demand at least our public stewards accurately explain the true state of affairs so we can make informed decisions.

Note: Wall St. Cheat Sheet is offering a FREE 14-day, no risk trial of our Premium Newsletter - just click here.  

 


Tags: , , , , ,




Do Lawmakers Legally Insider Trade?

Do Lawmakers Legally Insider Trade?

Courtesy of Damien Hoffman at Wall St. Cheat Sheet 

Biden_smirk

Lawmakers possess many perks. However, legal insider trading may be the biggest fringe benefit of all.

A study* released by Professor Alan Ziobrowski at Georgia State University concluded legislators in Congress make “significant abnormal returns.” Moreover, active traders outperform corporate executives. “We have every reason to believe they are trading on information that the rest of us don’t have,” reports Ziobrowski.

How the hell is this bullshit going on? Craig Holman at consumer watchdog organization Public Citizen notes, “The Securities and Exchange Act does not apply to members of Congress, congressional staff, or even lobbyists.” Outraged?

If you are a voting citizen, your public representatives can legally trade investment vehicles based on information received at work. And much information is gleaned long before trickling down to the good ‘ole People. Thus, as you already deduced, a major conflict of interest exists when your political representative must choose between your needs and those of his/her portfolio.

This is another example of the cosmic irony in which Wall Street is overseen by Washington yet no one is overseeing DC. During my interview with Congressman Alan Grayson he explained the importance of auditing the Federal Reserve. While we’re making a list and checking it twice, let’s get lawmaker insider trading into the “Must Do Now” column.

* The study used hundreds of personal financial disclosures and more than 6000 stock transactions by members of Congress going back up to 15 years.justice

(Source: American Public Media.)

Note: Wall St. Cheat Sheet is offering a FREE 14-day, no risk trial of our Premium Newsletter - just click here. 

****

This issue Damien raises came up here before, back in July, I wrote:

Insider trading is illegal, but the definition of insider trading is not inclusive enough. Government employees, buying and selling on non-public information, clearly violates the spirit of insider trading laws, but till now has been overlooked.

Bill Aims to Prevent Use of Insider Financial Information by Federal Workers

With the federal government increasingly involved in the financial affairs of private companies, a pair of lawmakers has proposed prohibiting members of Congress and other federal employees from trading stocks


continue reading


Tags: , , , ,




Economic No Spin Zone

Economic No Spin Zone

Courtesy of Michael Panzner at Financial Armageddon

According to the experts, things are looking up. Central bankers have expressed "growing confidence…that the worst of the financial crisis [is] over and that a global economic recovery [is] beginning to take shape." A well known strategist asserts that the "recession is ending ‘right now.’" President Obama has said "the economy is ‘pointed in the right direction.’"

However, consumers aren’t so convinced. Homeowners and young job seekers aren’t buying it, either. Nor are those who battle it out each day on Main Street’s front lines, as the Charlotte Business Journal reveals in "Small-Business Owners’ Outlook Dims":

Small-business owners aren’t convinced the recession is ending and their outlooks darkened in July, according to a monthly survey conducted by the National Federation of Independent Business.

NFIB’s index of small-business indicators fell 1.3 points last month to 86.5, the second consecutive monthly decline. The biggest reason was a drop in the number of small-business owners who expect the economy to improve in the next six months.

“The recession is wearing Main Street folks down,” says Bill Dunkelberg, NFIB chief economist. “And unfortunately, lawmakers in Washington are doing more to scare small-business owners than to reassure them of an economic recovery.”

Small-business owners are worried about higher taxes and proposed mandates to provide health insurance, Dunkelberg says. Taxes were cited as the No. 1 business problem by 22 percent of the small-business owners surveyed.

A bigger problem, cited by 32 percent, was poor sales.

Hmmm, I wonder which group -- those who are supposedly in the know or those who are struggling to get by -- is living in the economic no-spin zone?


Tags: , , , , , , ,




Spitzer Agonistes Redux

Click here for a FREE, 90-day trail subscription to our PSW Report! 

Quote: "Power alters the basic neurological processes in the brain and inhibits those parts of the brain that would allow a person to show restraint. It allows them to systematically ignore the consequences of their actions." Adam Galinsky, Kellogg School of Management.

scandal, federal investigation, financial powersSpitzer Agonistes Redux

Courtesy of Jesse’s Café Américain

It is too bad Eliot could not have exercised better judgement, knowing that he would be targeted by the powers on Wall Street and Washington when he took them on. See the quote at the top of this blog for the most likely reason.

That he was exposed in his scandal by an intense Federal investigation speaks to the depth of the corruption of Washington under Bush, and even now, by the financial powers.

He is right of course, and everything that the Obama Administration is doing on the economic front is a sham.

There is a ‘new regulatory spirit’ and the Democrats under the skillful hand of Larry Summers and Barney Frank seek to channel it into irrelevancy.

Spitzer Says Banks Made ‘Bloody Fortune’ on U.S. Aid
By Laura Marcinek

July 14 (Bloomberg) — Eliot Spitzer, the former New York governor and attorney general, said U.S. banks made a “bloody fortune” while receiving taxpayer money without a proven benefit to the wider economy.

Politicians understand the “populist rage” with excesses in the financial industry and in this case the “public is right,” said Spitzer in a Bloomberg Television interview today. “We have saved financial services, we have not created a single job. We are still bleeding jobs.”

As New York attorney general, Spitzer was known as “the sheriff of Wall Street.” He changed business practices and collected billions of dollars in settlements from financial corporations such as Merrill Lynch & Co., American International Group Inc. and Marsh & McLennan Cos. He later became governor, resigning in March 2008 after he was identified as a client of the Emperors Club VIP, a high-priced prostitution ring.

Spitzer said new rules proposed by President Barack Obama’s administration are irrelevant because regulators failed to enforce existing regulations.

“Regulatory agencies already had the power to do everything they needed to do,” he said. “They just affirmatively chose not to do it.”

“You don’t need new regs to do it, you just need the will to do


continue reading


Tags: , , , , ,




 
 
 

Phil's Favorites

Chart o' the Day: Unemployment Plunges

 

Chart o’ the Day: Unemployment Plunges

Courtesy of 

The guys at Bespoke Investment Group ask the question “Is this as good as it gets?” regarding the unemployment rate in this past week’s November Non-Farm Payrolls. It’s the lowest level for the indicator in 9 years.

They note that what went on economically, immediately following that August 2007 print, was not especially fun.

One dimension worth considering is the fact that Labor Force Participation is still much lower than is typical at this stage in an expansion. Wage growth, while good, is...



more from Ilene

Zero Hedge

All Eyes On Monte Paschi, Whose Bailout Is Now In Doubt, And Italian Bank Sector Contagion

Courtesy of ZeroHedge. View original post here.

As we noted last night, when we previewed the virtually assured "No" vote, we said that "a strong “No” vote will cause Prime Minister Renzi to resign, leading to political instability in Italy. Furthermore, a "No" vote is expected to kill a long-running attempt to rescue Italy's third largest and oldest bank, Monte dei Paschi, which has been desperate for a private sector bailout ever since it failed this summer's ECB stress test to...



more from Tyler

ValueWalk

Myth 5.4: Negative Growth Rates Forever? Impossible!

By Aswath Damodaran. Originally published at ValueWalk.

As you peruse discounted cash flow valuations, it is striking how infrequently you see projections of negative growth into the future, even for companies where the trend lines in revenues and earnings have been anything but positive. Furthermore, you almost never see a terminal value calculation, where the analyst assumes a negative growth rate in perpetuity. In fact, when you bring up the possibility, the first reaction that you get is that it is impossible to estimate terminal value with a negative growth rate. In this post, I will present evidence that negative growth is neither uncommon nor unnatural and that the best course, from a value perspective, for some firms is to shrink rather than grow.

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part s...



more from ValueWalk

Market News

Breaking News And Best Of The Web

Courtesy of John Rubino.

OPEC agrees to cut output. Oil jumps, stocks rise, gold falls. The political focus shifts to upcoming Italian, French and Austrian elections, all of which could go against the establishment. India’s war on cash may turn into war on gold. Political class still searching for an explanation (see “Best of the Web”). Trump’s cabinet takes shape, with mostly old and a few new faces.  

Best Of The Web

Trump, bonds, peripheries, China and Italy – Credit Bubble Bulletin

A new look – NYSE margin debt and the market – Financial ...



more from Paul

Kimble Charting Solutions

Stock/Bond Ratio back at 2007 highs, different results this time?

Courtesy of Chris Kimble.

Below looks at the S&P 500/Govt Bond (TLT) Ratio over the past 12-years

CLICK ON CHART TO ENLARGE

The S&P 500/TLT ratio is now back at 2007 levels. Double Top or Breakout Time.

Do find this interesting at this time, bullish sentiment on $TLT now stand around the 10% level, which happens to be the same level it was in mid 2007!

Different this time???  Always fun friends!!!

...

more from Kimble C.S.

Members' Corner

ItalExit? A Catch 22?

Courtesy of Nattering Naybob.

Over at Philstockworld... High Finance for Real People - Fun and Profits... 

Pharm - There is an Italian Referendum on staying in the EU in 2 weeks. Wonder how that will work out?

The referendum has nothing to do with leaving the EU, that's what the MSM wants everyone to think. The ubiquitous "they" are trying to confuse and scare the Italians with a line of BS.

StJL - Probably not well Pharm! Although the procedure to get out of Europe would be a lot more complicated for Italy because they are also using the Euro. At this point, probably nothing more than leverag...

more from Our Members

Chart School

Semiconductors Hit Hard

Courtesy of Declan.

Internet troubles have limited me tonight, but the one chart I want to show is the near 5% loss in the Semiconductor Index.  Having escaped relatively unscathed from recent day's selling it was a whirlwind of action for the index today.


This had obvious consequences on the Nasdaq. The Nasdaq did relatively well to suffer just over a 1% loss.  However, there were 'sell' triggers for On-Balance-Volume and Directional Index. There was also an acceleration in the relative underperformance of the index to the S&P. ...

more from Chart School

OpTrader

Swing trading portfolio - week of November 28th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Digital Currencies

Largest US Bitcoin Exchange Is "Extremely Concerned" With IRS Crackdown Targeting Its Users

Courtesy of ZeroHedge. View original post here.

Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.

The government’s request is part of a bitcoin tax-evasion probe, and se...



more from Bitcoin

Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...



more from M.T.M.

Biotech

Epizyme - A Waiting Game

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



more from Biotech

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David

Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



more from Promotions



FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>