Posts Tagged ‘regulators’

U.K. Medical Journal Questions Avandia License

Followup on "After Avandia: Does the FDA Have a Drug Problem?"Ilene 

U.K. Medical Journal Questions Avandia License

BY JASON DOUGLAS AND STEN STOVALL, WSJ

LONDON—The British Medical Journal on Monday said GlaxoSmithKline PLC’s diabetes drug Avandia should never have been licensed and should be withdrawn from sale, a claim the company rejected.

An investigation by the journal found the U.K. Commission on Human Medicines in July advised the country’s drugs regulator, the Medicines and Healthcare products Regulatory Agency, or MHRA, to withdraw Avandia from sale because its risks outweigh its benefits.

The probe also found members of a European panel that reviewed the drug prior to its European Union-wide approval in 2000 had concerns about the long-term risks and benefits of Avandia, also known as rosiglitazone. The journal raised concerns about the quality of the data GlaxoSmithKline used to show Avandia didn’t lead to increased heart problems compared with other diabetes drugs.

Avandia was once Glaxo’s second-biggest drug, raking in about $3 billion a year. But its sales have plunged since a U.S. study linked it to heart attacks in 2007, and second-quarter revenue was only £152 million ($235 million) as patients defected to alternatives, such as Takeda Pharmaceutical Co.’s Actos.

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Eight Banks Seized, One with Ties to Obama; Regulators Allow “Unusual Bid” for Failed Bank

Eight Banks Seized, One with Ties to Obama; Regulators Allow "Unusual Bid" for Failed Bank

bank closures

Courtesy of Mish 

The bell rings once again on "Foreclosure Friday". The toll this week is 8 banks. One of the banks, Shore Bank, has ties to the Obama administration, Goldman Sachs, and other notables.

Eight Banks Shuttered as 2010 Failures Reach 118 

Bloomberg reports ShoreBank, Seven Others Shuttered as 2010 Failures Reach 118

ShoreBank Corp., the Chicago lender operating under a Federal Deposit Insurance Corp. cease-and- desist order for 13 months, and seven other banks were shut by regulators as 2010 bank failures climbed to 118.

Regulators also closed four banks in California, two in Florida and one in Virginia. All eight closures cost the FDIC’s deposit-insurance fund $473.5 million, the agency said yesterday. This year’s bank failures will surpass last year’s total of 140, FDIC Chairman Sheila Bair said last month in a Bloomberg Television interview.

Regulators Allow "Unusual Bid" for Shore Bank

The Wall Street Journal reports Regulators Seize ShoreBank; Management Takes Over

Regulators seized ShoreBank Corp. on Friday and agreed to sell assets to a team led by the community lender’s executives and backed by several large U.S. financial firms.

The bank closure, among the 118 failures in the U.S. this year, caps months of uncertainty for a $2.16 billion Chicago bank that had ties to the Obama administration and deep roots on Chicago’s South Side. The new institution will be known as Urban Partnership Bank and led by William Farrow, a former First Chicago Corp. executive who was ShoreBank’s president and chief operating officer at the time of its failure.

The decision to sell to management is a rare move by the Federal Deposit Insurance Corp., which generally bars investors who own more than 10% of the failed bank from bidding on its assets. The FDIC also typically wants to know if bidders have "ever been an officer or director of a failed institution" and "participated in a material way in one or more transactions that caused a substantial loss to any such failed institution," according to an FDIC document.

The structure of the deal "is unusual," said Atlanta banking attorney Chip MacDonald.

The holding company will remain intact, according to a person familiar with the deal. Urban Partnership is backed by a consortium of large U.S. financial institutions, including Bank


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Jim Grant on the New Federal Reserve Governor Nominees; Economic Groupthink

(Video’s back in working order.)

Jim Grant on the New Federal Reserve Governor Nominees; Economic Groupthink

Courtesy of JESSE’S CAFÉ AMÉRICAIN

Organizations, whether it be a club or a profession or a department, too often over time develop a sort of intellectual inertia, a bureaucratic mindset that tends to perpetuate and validate a certain view of the world amongst its members, particularly if they share other elements in background and world view.

This works to its advantage when they are right, and when the scope of the tasks which they must address are limited to largely operational concerns, without significant risk in the classic sense of the term.

But when the situation becomes different, the environment changes, this organizational mindset not only stifles innovation and adaptation, it can literally reach out and strangle it, well beyond its members, using the entrenched power of its tenure. We see this tendency clearly in organizations that have enjoyed long periods of organizational growth under the leadership of strong personalities, such as the FBI under Hoover, and the Federal Reserve under Greenspan.

We can see this same tendency on a micro level in our daily life on chatboards, in clubs, in our company departments, in civic organizations. It is a tribalistic instinct, that urges the adoption of a consensus view, often influenced and promoted by articulate and single minded individuals, which then musters and focuses the energy and vitality of the group in the execution of its mission.

When it is right, it brings success. But when it goes wrong, when it feeds on itself, becomes defensive and inwardly focused, when perpetuation of the group view overtakes all other considerations, when tribal loyalty and sameness is valued over results, it leads to a cult like behaviour, inbred thinking, that may be inimical to the best intentions of the group, and the sort of behavioural anomalies which we have seen in the tragedies of Watergate, the latter stage Hoover FBI, and even Jonestown.

Economics is in the grips of such a period in its development. One of the primary causes of this problem has been the rise of a few well funded think tanks, universities, and of course the Federal Reserve, that have become powerful influencers, and guardians, dogmatisers of the status quo. The petty sniping among the schools notwithstanding, the current debate of stimulus versus austerity serves to show how anemic, how self…
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As Broken Market Limps Along, SEC And CFTC Conduct Worthless Hearing: Watch It Live Here

As Broken Market Limps Along, SEC And CFTC Conduct Worthless Hearing: Watch It Live Here

Courtesy of Tyler Durden

Watch the highly conflicted trading industry representatives, and the highly corrupt regulators try to convince each other that the May 6th events were totally unique, will never happen again, why there is no need to change anything, and why the joke of that is single stock circuit breakers (another reactive not proactive "solution") is all that is needed to return investor confidence. We wish them all the best as they continue to buy and sell stocks from each other, now that everyone else is out of the market permanently. Readers can watch the "Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues Meeting" here. (click here if stream does not show up).


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George Soros: Financial Crisis Has “Only Entered Act II”

George Soros: Financial Crisis Has "Only Entered Act II"

U.S. billionaire investor George Soros delivers his keynote speech during a Institute of International Finance (IIF) conference in Vienna June 10, 2010. REUTERS/Heinz-Peter Bader (AUSTRIA - Tags: BUSINESS HEADSHOT PROFILE)

Courtesy of TraderMark

Love or hate his politics, there is no doubt George Soros is one of the brightest investment minds of the past few generations. Hence when you have Soros on one side saying we have only begun the 2nd stage of the financial crisis, and on the other hand you have "Unicorns and Butterflies" Bernanke telling us all is well (kumbaya!) [and coming off one of the worst economic forecasting records the past half decade you could put together], you can guess which side one might be better off listening to.

The collapse of the financial system as we know it is real, and the crisis is far from over,” Mr. Soros said at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”

NYTimes DealBook has a full transcript of the speech Soros gave at the Institute of International Finance in Vienna here.  Remember, you can choose to accept the red pill or the blue pill; if you choose the blue pill Ben Bernanke has solved all your ills… if you choose the red, please read on for some excerpts.

  • Soros, 79, said the current situation in the world economy is “eerily” reminiscent of the 1930s with governments under pressure to narrow their budget deficits at a time when the economic recovery is weak.


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SEC staff watched porn as economy crashed

SEC staff watched porn as economy crashed; Senate panel: Ratings agencies rolled over for Wall Street; SEC Ignored Stanford Ponzi Scheme For 12 Years

SEC and Porn, Mary Schapiro Courtesy of Mish 

What was the SEC doing when Bernie Madoff was stealing billions and the economy crashed? Here are a few reports.

SEC staffers watched porn as economy crashed

CNN is reporting SEC staffers watched porn as economy crashed

"During the past five years, the SEC OIG (Office of Inspector General) substantiated that 33 SEC employees and or contractors violated Commission rules and policies, as well as the government-wide Standards of Ethical Conduct, by viewing pornographic, sexually explicit or sexually suggestive images using government computer resources and official time," said a summary of the investigation by the inspector general’s office.

More than half of the workers made between $99,000 and $223,000. All the cases took place over the past five years.

A regional office staff accountant tried to access pornographic websites nearly 1,800 times, using her SEC laptop during a two-week period. She also had about 600 pornographic images saved on her laptop hard drive.

Separately, a senior attorney at SEC headquarters admitted to downloading pornography up to eight hours a day, according to the investigation.

"In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office," the inspector general’s report said.

SEC Knew About and Ignored Stanford Ponzi Scheme

Please consider IG report: SEC knew of Stanford scheme since 1997.

The Securities and Exchange Commission knew since 1997 that R. Allen Stanford likely was operating a Ponzi scheme but waited 12 years to bring fraud charges against the billionaire, the agency inspector general said Friday.

An SEC enforcement official who helped quash investigations of Stanford’s business later legally represented him, according to a new report by the agency watchdog.

The SEC didn’t bring charges against Stanford until February 2009, when it alleged a $7 billion fraud. SEC Inspector General David Kotz said in the report that "institutional influence" in the enforcement division was a factor in the agency’s repeated decisions not to conduct a full investigation.

The IG’s office did find evidence, however, that "institutional influence" within the enforcement division contributed to the repeated decisions not to conduct a thorough investigation of


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Geithner and the NY Fed Accused of Willfully Ignoring Fraud and Covering Up Lehman’s Bad Assets

Important (i.e. share it) article by Mish on William Black’s account of how Tim Geithner and the NY Fed covered up Lehman’s inflated asset values and lack of liquidity, long before the financial meltdown in 2008. – Ilene 

Geithner and the NY Fed Accused of Willfully Ignoring Fraud and Covering Up Lehman’s Bad Assets, by Senior Regulator During the S&L Crisis

Courtesy of Mish 

Inquiring minds are digging into a 27 page statement made by William Black before the Financial Services committee. Black is an Associate Professor of Economics and Law, at the University of Missouri.

Professor Black’s statements regarding the collapse of Lehman and the role the Fed played in that collapse are refreshingly candid.

Please consider "Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner". Emphasis, highlighting, and subtitles are mine.

I begin with a short description of my background that is relevant to your questions. My primary appointment is in economics. I have a joint appointment in law. I am a white-collar criminologist. My research specialization is financial fraud by elites and financial regulation. I was a senior regulator during the S&L debacle (and had the honor of testifying many times before this Committee).

Valukas Report Documents Three Major Deficiencies In Lehman Governance

The [Valukas] Report documents at least three major deficiencies in Lehman’s corporate governance that need to be addressed globally. First, it points out that Lehman, and many other Delaware corporations, have eliminated the fiduciary duty of “care.”

… Alan Greenspan has admitted that he had a similar view and that events have falsified this naïve account. It is insane to withdraw accountability for negligence. Doing so encourages negligence. Congress should mandate that corporate officers and directors be subject to the fiduciary duties of care and loyalty. They will still, of course, have the very substantial protection of the business judgment rule.

Second, the same individual should not serve as the CEO and Chair of the Board of Directors of a large corporation. The imperial CEO is a consistent problem in this and prior crises.

Third, Lehman ignored its stated risk “limits” and simply increased its limits retroactively to accommodate its violations of its risk limits. In plain English, that means it had no meaningful limits. ….

I have a different view than Mr. Valukas about the overall state of Lehman’s


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“Never Even a Whisper” at Fed’s Open Market Committee Meetings

Another excellent article by George Washington on regulatory capture and willful blindness displayed by the Fed on an ongoing basis.  - Ilene 

"Never Even a Whisper" at Fed’s Open Market Committee Meetings

May Day Demonstrations

Courtesy of George Washington

Washington’s Blog

Ben Bernanke, William Dudley and Donald L Kohn are on the Fed’s Open Market Committee (FOMC).

They are also on the board of directors of the Bank for International Settlements (BIS) – often called the "central banks’ central bank". And Kohn is an alternate director for BIS.

Alan Greenspan, of course, was a BIS director for many years.

Dudley is also chairman of BIS’ Committee on Payment and Settlement Systems. (Tim Geithner – previously on the FOMC – previously held that post).

So there is clearly quite a bit of overlap between the two groups.

In addition, BIS’ chief economist – William White – and others within BIS – repeatedly warned the Federal Reserve and other central banks that they were setting the world economy up for a fall by blowing bubbles and then using "using gimmicks and palliatives" which "will only make things worse".

As Spiegel wrote last July:

White and his team of experts observed the real estate bubble developing in the United States. They criticized the increasingly impenetrable securitization business, vehemently pointed out the perils of risky loans and provided evidence of the lack of credibility of the rating agencies. In their view, the reason for the lack of restraint in the financial markets was that there was simply too much cheap money available on the market…

As far back as 2003, White implored central bankers to rethink their strategies, noting that instability in the financial markets had triggered inflation, the "villain" in the global economy…

In the restrained world of central bankers, it would have been difficult for White to express himself more clearly…

It was probably the biggest failure of the world’s central bankers since the founding of the BIS in 1930. They knew everything and did nothing. Their gigantic machinery of analysis kept spitting out new scenarios of doom, but they might as well have been transmitted directly into space…

In their report, the BIS experts derisively described the techniques of rating agencies like Moody’s and Standard & Poor’s as "relatively crude" and noted that "some caution is in


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Volcker Rules?

Volcker Rules?

Courtesy of Simon Johnson at Baseline Scenario 

Paul Volcker Testifies Before House Financial Services Committee

Bloomberg reports this morning that Treasury is gently letting the Volcker Rule (limiting proprietary trading for big banks) slip — Secretary Geithner would grant greater discretion to regulators which, in today’s context, most likely means not make the restriction effective.

This step is consistent with the broader assessment of the Volcker Rules that Peter Boone and I have in The New Republic (print and on-line): the underlying principles are sound, but the Rules have not been well-designed, and top people in the administration show little sign of wanting to make them effective.  This dimension of financial reform does not appear to be headed anywhere meaningful – and the main issues (bank size, capital, and derivatives) are not yet seriously on the table.

In the recent Senate Banking hearings on the Volcker Rules, John Reed – former head of Citibank – was adamant that the Volcker Rules made sense and could be made to work.  His point is that the executives know who is taking risk with the bank’s balance sheet – it’s a well-defined group within any bank with its own (speculative) culture – and this should be discontinued for banks that are in any sense too big to fail. 

You really do not want high octane speculators at the heart of this country’s largest banks.   Make banking boring, Reed argues with conviction.  


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AIG Counterparties “Demanded” Full Value, and other perversions

AIG Counterparties “Demanded” Full Value, and other perversions

Courtesy of Joshua M Brown, The Reformed Broker  

Workers Arrive At The Offices Of Troubled Insurance Company AIG

I will never let this go ever.  The fact that both insolvent investment banks and foreign banks had the ability and the audacity to "make demands" of the New York Fed when settling up their damaged AIG-written swap agreements still turns the stomach 15 months later.

Gretchen Morgenson and Louise Story have the scoop, emphasis is mine:

Regulators had to contend with major banks that were A.I.G.’s trading partners and were unwilling to accept a discount from the government when closing out the contracts the banks had struck with the insurance giant.

Ultimately, the government decided to make the banks whole on the contracts, a decision that the documents say was approved by Timothy F. Geithner, the Treasury secretary who, at the time, was president of the Federal Reserve Bank of New York.

The Fed’s decision to pay A.I.G.’s trading partners in full on tens of billions of dollars in contracts has been controversial because many analysts say they believe the government could have negotiated a price for a fraction of that amount, reducing taxpayer funds used in the rescue. Similar contracts were being settled at heavy discounts in other deals where the government was not involved.

The above is from a New York Times article up today about the hundreds of thousands of documents that were turned over to the House Committee on Oversight and Government Reform in preparation for next week’s bludgeoning.

If I were Tim Geithner, I would resign ahead of time.  He either knowingly made these counterparties whole with an eye toward future employment at Goldman or he just plain got taken advantage of in the heat of the moment.  Either way, its completely unacceptable.

Source:

A Rift at the Fed Over the Bailout of AIG (NYT)

 


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Phil's Favorites

So You Wanna Be a Stock Picker

 

So You Wanna Be a Stock Picker

Courtesy of 

The stock market has been a treacherous place for the last few months. You wouldn’t know it by looking at the indexes.

I wrote this opening salvo earlier in the week when the S&P 500 was hovering near all-time highs. This morning, due to a new variant in South Africa, stocks are selling off sharply. The Dow Jones Industrial Average, the people’s index, is down over 1,000 points, sitting 5% below the all-time highs from earlier this month.

It’s been a while since we’ve seen these names on the leader and laggard board and I was hoping to never...



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Zero Hedge

"The Omicron Variant" - Magic Pills, Or Solving The Africa Problem?

Courtesy of ZeroHedge View original post here.

Authored by Kit Knightly via Off-Guardian.org,

Yesterday the WHO labelled the sars-cov-2 variant B.1.1.529 as a “variant of concern” and officially named it “Omicron”.

This was as entirely predictable as it is completely meaningless. The “variants” are just tools to stretch the story out and keep people on their toes.

...



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Biotech/COVID-19

The hunt for coronavirus variants: how the new one was found and what we know so far

 

The hunt for coronavirus variants: how the new one was found and what we know so far Scientists find variants by sequencing samples from people that have tested positive for the virus. Lightspring/Shutterstock

Courtesy of Prof. Wolfgang Preiser, Stellenbosch University; Cathrine Scheepers, University of the Witwatersrand; Jinal Bhiman, National Institute for Communicable Diseases; ...



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Politics

The first Thanksgiving is a key chapter in America's origin story - but what happened in Virginia four months later mattered much more

 

The first Thanksgiving is a key chapter in America’s origin story – but what happened in Virginia four months later mattered much more

In the 19th century, there was a campaign to link the Thanksgiving holiday to the Pilgrims. Bettman/Getty Images

Courtesy of Peter C. Mancall, USC Dornsife College of Letters, Arts and Sciences

This year marks the 400th anniversary of the first Thanksgiving in New England. Remembered and retold as an allegory for perseverance and cooper...



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Chart School

Gold and Silver still working higher

Courtesy of Read the Ticker

Using Gann Angles from zero we can time the next run up, and it is near.

The last two days gold and silver are down on the back of central bankers talking the US Dollar higher in a attempt to off set inflation. A rising dollar is a form of tightening. Also the talk of a faster 'taper' has sent interest rates higher. But Luke Gromen knows this cant not last.

@LukeGromen Externally-financed twin deficit nations with insufficient external financing (ie the US, not Japan) cannot abide rising real rates for long.


RTT Comments: What this means a higher US Dollar makes it harder for those outside the US to buy the vast quantity of US Treasuries. 


U...

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Digital Currencies

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

 

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

Safe as houses? iQoncept

Courtesy of Jean-Philippe Serbera, Sheffield Hallam University

Cryptocurrencies have had an exceptional year, reaching a combined value of more than US$3 trillion (£2.2 trillion) for the first time in November. The market seems to have benefited from the public having tim...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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...

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