Video: Talking Wall Street With Democracy Now!
by ilene - February 23rd, 2011 9:54 pm
Via Matt Taibbi at Rolling Stone
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Welcome to Griftopia – with Author Matt Taibbi
by ilene - November 7th, 2010 5:08 pm
Welcome to Griftopia – with Author Matt Taibbi
[Check out Wall St. Cheat Sheet's Premium -- click here. - Ilene]
Courtesy of Damien Hoffman at Wall Street Cheat Sheet
Last year, Matt Taibbi made huge waves when he wrote what were the most circulated articles on Wall Street. Now, he’s crystallized his thoughts into a new book Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
I caught up with Matt to hear what he’s learned while following Wall Street and Washington during these most extraordinary times …
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Damien Hoffman: In your new book Griftopia, you talk about how Wall Street and Washington have ironically got middle class America to support their agenda. How is this happening? Will it last?
Matt Taibbi: The Grifters have been getting people to support Wall Street’s political agenda by seducing them with a [Ayn] Randian and pseudo-libertarian ideology. It’s always been around, but it’s just reaching a fever pitch now. And it’s the only way ordinary people can be convinced to endorse a deregulatory agenda. I think it’s going to last.
Damien: In your experience at the Tea Party events, do they understand the cosmic irony that they basically just got robbed because there were no sheriffs left in the Wild West, yet now they all stand for a movement that prefers to keep it that way?
Matt: No, they don’t see the irony at all. And interestingly, a lot of them are real law-and-order types. I mean, they’re really into Cops and putting people in jail for smoking a joint. But when it comes to a financial crime, they have absolutely no interest in that whatsoever.
Basically, government regulation is the kind of stuff a lot of them see on a day-to-day basis, but in a different form. If they’re a hardware store owner, they see a local health inspector or an ADA inspector coming by to make sure they’re in compliance with something. These are all little annoyances and costs that they see when they interact with government. Unfortunately, that’s what they think is financial regulation. They don’t get that it’s a completely different ball game when you’re talking about JP Morgan Chase (JPM), Goldman Sachs (GS), and that level of power requiring oversight.
Damien: So, can you explain how what you call the grifter class pulled off this magnanimous trick?
Matt:…
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How Pimco Is Holding American Homeowners Hostage
by ilene - August 21st, 2010 3:56 pm
How Pimco Is Holding American Homeowners Hostage
Courtesy of DAVID STOCKMAN, courtesy of Minyanville
Some raids on the US Treasury by America’s crony capitalists are so egregious as to provoke a rant — even if you aren’t Rick Santelli. One such rant-worthy provocation is Pimco’s latest scheme to loot Uncle Sam’s depleted exchequer.
According to Bill Gross, who heads what appears to be the firm’s squad of public policy front runners, the American economy can be saved only through “full nationalization” of the mortgage finance system and a massive “jubilee” of debt forgiveness for millions of underwater homeowners. If nothing else, these blatantly self-serving recommendations demonstrate that Matt Taibbi was slightly off the mark in his famed Rolling Stone diatribe. It turns out that the real vampire squid wrapped around the face of the American taxpayer isn’t Goldman Sachs (GS) after all. Instead, it’s surely the Pacific Investment Management Co.
As overlord of the fixed-income finance market, the latter generates billions annually in effort-free profits from its trove of essentially riskless US Treasury securities and federally guaranteed housing paper. Now Pimco wants to swell Uncle Sam’s supply of this no-brainer paper even further — adding upward of $2 trillion per year of what would be “government-issue” mortgages on top of the existing $1.5 trillion in general fund deficits.
This final transformation of American taxpayers into indentured servants of HIDC (the Housing Investment & Debt Complex) has been underway for a long time, and is now unstoppable because all principled political opposition to Pimco-style crony capitalism has been extinguished. Indeed, the magnitude of the burden already created is staggering. Before Richard Nixon initiated the era of Republican “me-too” Big Government in the early 1970s — including his massive expansion of subsidized housing programs — there was about $475 billion of real estate mortgage debt outstanding, representing a little more than 47% of GDP.
Had sound risk management and financial rectitude, as it had come to be defined under the relatively relaxed standards of post-war America, remained in tact, mortgage debt today would be about $7 trillion at the pre-Nixon GDP ratio. In fact, at $14 trillion or 100% of GDP the current figure is double that, implying that American real estate owners have been induced to shoulder an incremental mortgage burden that amounts to nearly half the nation’s current economic output.
There’s no mystery as to how America got hooked on this…
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Goldman: New Reform Law Can Kiss Our Ass
by ilene - August 12th, 2010 2:20 pm
Here’s an article in Rolling Stone by Matt Taibbi about Goldman Sachs and Financial Reform. Not surprisingly, it’s questionable whether the new financial reform bill will harm GS’s reign of financial terror in any significant way. – Ilene
Goldman: New Reform Law Can Kiss Our Ass
Just a quick note about a very interesting story that appeared in the LA Times.
More recently, however, top Goldman executives privately advised analysts that the bank did not expect the reform measure to cost it any revenue."The statement was perhaps surprising in its level of conviction," Bank of America Merrill Lynch analyst Guy Moszkowski wrote in a note to clients, "but we’ve learned to take such judgments from GS very seriously."
The other part of the new law that was supposedly going to hurt the banks was a new requirement that all derivatives be traded and cleared on open exchanges. Up until now banks like Goldman had a massive advantage in the derivatives market because they…
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Wall Street’s Big Win
by ilene - August 6th, 2010 11:46 pm
Excellent article. I recommend reading the whole thing… Matt tells the story behind the sabotage of real financial reform as reflected in the final bill. – Ilene
Wall Street’s Big Win
Finance reform won’t stop the high-risk gambling that wrecked the economy – and Republicans aren’t the only ones to blame
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By Excerpts:
But Dodd-Frank was neither an FDR-style, paradigm-shifting reform, nor a historic assault on free enterprise. What it was, ultimately, was a cop-out, a Band-Aid on a severed artery. If it marks the end of anything at all, it represents the end of the best opportunity we had to do something real about the criminal hijacking of America’s financial-services industry. During the yearlong legislative battle that forged this bill, Congress took a long, hard look at the shape of the modern American economy – and then decided that it didn’t have the stones to wipe out our country’s one dependably thriving profit center: theft.
[...]
All of this is great, but taken together, these reforms fail to address even a tenth of the real problem. Worse: They fail to even define what the real problem is. Over a long year of feverish lobbying and brutally intense backroom negotiations, a group of D.C. insiders fought over a single question: Just how much of the truth about the financial crisis should we share with the public? Do we admit that control over the economy in the past decade was ceded to a small group of rapacious criminals who to this day are engaged in a mind-numbing campaign of theft on a global scale? Or do we pretend that, minus a few bumps in the road that have mostly been smoothed out, the clean-hands capitalism of Adam Smith still rules the day in America? In other words, do people need to know the real version, in all its majestic whorebotchery, or can we get away with some bullshit cover story?
In passing Dodd-Frank, they went with the cover story.
[...]
Both of these takes were engineered to avoid an uncomfortable political truth: The huge profits that Wall Street earned in the past decade were driven in large part by a single, far-reaching scheme, one in which bankers, home lenders and other players exploited loopholes in the system to magically transform subprime home borrowers into AAA investments, sell them off to unsuspecting pension funds and foreign trade unions…
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Wall Street’s War
by ilene - May 27th, 2010 3:53 pm
Wall Street’s War
Congress looked serious about finance reform – until America’s biggest banks unleashed an army of 2,000 paid lobbyists
By Matt Taibbi, The Rolling Stone
This article originally appeared in RS 1106 from June 10, 2010.
It’s early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act – the massive, year-in-the-making effort to clean up the Wall Street crime swamp – word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once-indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.
The real shocker is a thing known among Senate insiders as "716." This section of an amendment would force America’s banking giants to either forgo their access to the public teat they receive through the Federal Reserve’s discount window, or give up the insanely risky, casino-style bets they’ve been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street’s most lucrative profit centers: Five of America’s biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan’s trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.
"When I first heard about 716, I thought, ‘This is never gonna fly,’" says Adam White, a derivatives expert who has been among the most vocal advocates for reform. When I speak to him early in May, he sounds slightly befuddled, like he can’t believe his good fortune. "It’s funny," he says. "We keep waiting for the watering-down to take place – but we keep getting to the next…
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Taibbi On Goldman: Part Deux
by ilene - May 2nd, 2010 2:06 pm
Taibbi On Goldman: Part Deux
Courtesy of Tyler Durden
The man who started it all, by boldly going where nobody else dared go before (with a few exceptions) and to singlehandedly rewrite the financial dictionary by introducing the concept of the bloodthirsty mollusc, by throwing out Goldman where it belongs, i.e, front and center, writes his follow-up narrative. What can we say: the man was right, to the chagrin of his numerous critics, and what’s worse (or better), may have started an avalanche, which with the prodding of Senators like Ted Kaufman, could well destroy the Too Big To Fail concept once and for all. Now if only someone in the political blogosphere would do to Congress what Taibbi did to mainstream Wall Street, there actually may be hope for America yet.
Just under a year ago, when we published "The Great American Bubble Machine" [RS 1082/1083], accusing Goldman of betting against its clients at the end of the housing boom, virtually the entire smugtocracy of sneering Wall Street cognoscenti scoffed at the notion that the Street’s leading investment bank could be guilty of such a thing. Attracting particular derision were the comments of one of my sources, a prominent hedge-fund chief, who said that when Goldman shorted the subprime-mortgage market at the same time it was selling subprime-backed products to its customers, the bait-and-switch maneuver constituted "the heart of securities fraud."
CNBC’s house blowhard, Charlie Gasparino, laughed at the "securities fraud" line, saying, "Try proving that one." The Atlantic’s online Randian cyber-shill, Megan McArdle, said Rolling Stone had "absurdly" accused Goldman of committing a crime, arguing that "Goldman’s customers for CDOs are not little grannies who think a bond coupon is what you use to buy denture glue." Former Wall Street Journal reporter Heidi Moore hilariously pointed out that Goldman wasn’t the only one betting against the housing market, citing the short-selling success of – you guessed it – John Paulson as evidence that Goldman shouldn’t be singled out.
The truth is that what Goldman is alleged to have done in this SEC case is even worse than what all these assholes laughed at us for talking about last year.
Did we mention Matt has a way with words? And he goes on:
Prior to the "Bubble Machine" piece, I had heard rumors that Goldman had gone out and
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Goldman Sucks
by ilene - March 8th, 2010 12:30 pm
Goldman Sachs
Courtesy of Prieur du Plessis
This video is a visualization of Matt Taibbi’s article “Inside the great American bubble machine” on how Goldman Sachs has engineered every major market manipulation since the Great Depression. Click here for Taibbi’s article.
Source: Lebed.biz (via YouTube), March 3, 2010.
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Goldman Says Matt Taibbi, Zero Hedge, Louise Story, And Janet Tavakoli Have Become Risks To Its Business
by ilene - March 1st, 2010 9:37 pm
Goldman Says Matt Taibbi, Zero Hedge, Louise Story, And Janet Tavakoli Have Become Risks To Its Business
Courtesy of Joe Weisenthal of Clusterstock/Business Insider
In its latest latest 10-K (via Dealbook) Goldman Sachs (GS) writes:
“The financial crisis and the current political and public sentiment regarding financial institutions has resulted in a significant amount of adverse press coverage, as well as adverse statements or charges by regulators or elected officials.
“Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, often results in some type of investigation by regulators, legislators and law enforcement officials, or in lawsuits."
In other words, pesky gadflies like anonymous bloggers, Rolling Stone critics, and New York Times journalists are hurting the company.
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Wall Street’s Bailout Hustle
by ilene - February 19th, 2010 10:15 am
Wall Street’s Bailout Hustle
Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash
By MATT TAIBBI
On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.
The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a "bailout tax" on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.
Not to worry, Blankfein reassured employees. "In a year that proved to have no shortage of story lines," he said, "I believe very strongly that performance is the ultimate narrative."
Translation: We made a shitload of money last year because we’re so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.
Goldman wasn’t alone. The nation’s six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. "What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every…
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site