Posts Tagged ‘Rolling Stone’

Goldman: New Reform Law Can Kiss Our Ass

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.

It seems that Goldman executives have been advising analysts from other companies that they don’t expect the new financial regulations to cut into their profits in any meaningful way. A key passage in the story:
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 story is a bit confusing because it also quotes some sources as saying that banks like Goldman are seriously preparing for some major changes, the biggest of those being the reshuffling of personnel that would take those people engaged in proprietary trading (i.e. trading for the bank’s own account) and put them in other departments, most likely trading on behalf of clients.
 
The new rules will bar banks like Goldman from engaging in prop trading – the concept of this rule is that federally-insured depository institutions shouldn’t also be engaging in high-risk speculation – but there are a number of loopholes/exceptions to the rule that will allow the bank to continue gambling as before. Among other things the banks will be allowed to put aside a certain amount of money to sponsor hedge funds and will also be allowed to engage in some prop trading in separately-capitalized subsidiaries.
 
The LAT story suggests that banks like Goldman have either figured out how to compensate for their lost prop trading revenue, or else they’ve figured out a way to keep doing what they have been doing, only in some other form.

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

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

By Matt Taibbi, Rolling Stone 

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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McChrystal’s Balls – Honorable Discharge

H/t Barry Ritholtz 

McChrystal’s Balls – Honorable Discharge

 

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
McChrystal’s Balls – Honorable Discharge
www.thedailyshow.com
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Taibbi On Goldman: Part Deux

Taibbi On Goldman: Part Deux

Matt Taibbi 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.

Taibbi writes:

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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Matt Taibbi: Obama’s Big Sellout

Edward shares thoughts on the Obama administration and Matt Taibbi’s latest article. – Ilene

Matt Taibbi: Obama’s Big Sellout

obama, courtesy of Jesse's Americain CafeCourtesy of Edward Harrison at Credit Writedowns

Matt Taibbi is one of the few commentators in the mainstream media who is not worried about ‘access’ and has, therefore, been free to write much more critically about the economic crisis and reform efforts on Wall Street.

His first piece was a polemic against Goldman Sachs, which triggered a backlash against the venerated Wall Street firm due to its incestuous relationship with Washington.  Afterwards, he took on health care reform. Now, he is taking on the Obama Administration and its status quo bias. I have an excerpt below and a link to the full article. But, first, let me say a few words.

As you probably know, I have been quite disappointed with this Administration’s leadership on financial reform. While I think they ‘get it,’ it is plain they lack either the courage or conviction to put forward a set of ideas that gets at the heart of what caused this crisis. 

It was clear to many by this time last year that the President may not have been serious about reform when he picked Tim Geithner and Larry Summers as the leaders of his economic team.  As smart and qualified as these two are, they are rightfully seen as allied with Wall Street and the anti-regulatory movement. 

At a minimum, the picks of Geithner and Summers were a signal to Wall Street that the Obama Administration would be friendly to their interests. It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests.

I reserved judgment because one has to judge based on actions. But last November I did ask Is Obama really “Change we can believe in?” because his Administration was being stacked with Washington insiders and agents of the status quo.

Since that time it is obvious that two things have occurred as a result of this ‘Washington insider’ bias.  First, there has been no real reform. Insiders are likely to defend the status quo for the simple reason that they…
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Short Sales: The Real Issue

Karl Denninger presents a compelling argument that market makers should not be exempt from rules preventing short-selling shares that cannot be borrowed (naked short selling). Because the quantity of a given stock in "float" is fixed, traders and market makers should not be allowed to create unreal and illogical bets on stocks that result in perversion of market dynamics and wild price swings. That’s my summary, Karl explains in detail. – Ilene

Short Sales: The Real Issue 

Stack of red gambling chips over two numbers on roulette table

Courtesy of Karl Denninger at The Market Ticker

Matt Taibbi once again writes in Rolling Stone, this time on naked short sales, and while he gets a good part of the issue right, he (and many others who have opined on this situation over the years) miss the forest for the trees.

Matt writes:

But the most damning thing the attack on Bear had in common with these earlier manipulations was the employment of a type of counterfeiting scheme called naked short-selling. From the moment the confidential meeting at the Fed ended on March 11th, Bear became the target of this ostensibly illegal practice — and the companies widely rumored to be behind the assault were in that room. Given that the SEC has failed to identify who was behind the raid, Wall Street insiders were left with nothing to trade but gossip. According to the former head of Bear’s mortgage business, Tom Marano, the rumors within Bear itself that week centered around Citadel and Goldman (GS). Both firms were later subpoenaed by the SEC as part of its investigation into market manipulation — and the CEOs of both Bear and Lehman were so suspicious that they reportedly contacted Blankfein to ask whether his firm was involved in the scam. (A Goldman spokesman denied any wrongdoing, telling reporters it was "rigorous about conducting business as usual.")

Matt gets so close, but fails in the closing.

See, there are two area of naked shorting that nobody wants to really deal with, yet both have to be if we are ever to make a difference. Let’s deal with them in turn.

The first, the writing of "naked" swaps, is one that I’ve written about before. The essence of a "credit default swap" is a contract whereby the buyer of protection insures…
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“The ugly essence of capitalism”

"The ugly essence of capitalism"

Courtesy of Tim Iacono’s The Mess That Greenspan Made

This week’s Goldman Sachs bashing comes via a New York Magazine story with the interesting artwork reproduced below. The hands look a bit large, though not menacing, the thighs and torso look seductive, and the big shoes look downright deadly.

IMAGE :  Goldman Sachs

The report itself is equally intriguing, though it seems to give up early on any attempt at the kind of shock-value pulled off by Matt Taibbi’s Rolling Stone piece, citing in the very first paragraph the "great vampire squid wrapped around the face of humanity" characterization of Goldman, made famous by Taibbi a few weeks ago.

How could anyone possibly top that anyway?

A few highlights…

The AIG rescue is the incident from which all other Goldman conspiracy theories spring—the original sin, in a sense, of Goldman’s current public tarring. It’s the act that first made the average man on the street sit up and say, “Hey, wait a minute. The secretary of the Treasury, who used to be the Goldman CEO, just spent $85 billion to buy a failing insurance giant that happened to owe his former firm a lot of money. Does that smell right to you?” It also seems to have the legs of a potential scandal, with Neil Barofsky, the inspector general overseeing the Troubled Asset Relief Program, conducting an audit of the buyout.



The decision that put Goldman’s reputation in play is now almost a year old. On the weekend of September 12, 2008, as the financial system shuddered and appeared to be on the verge of lurching to a halt, two Goldman Sachs men, former CEO Hank Paulson and current CEO Lloyd Blankfein, huddled with other banking heads at the Federal Reserve Bank of New York to consider how to stave off disaster. Bear Stearns was dead. Merrill Lynch, run by another former Goldman man, John Thain, was in desperate need of a savior. And now Lehman Brothers was on the brink. As secretary of the Treasury, Paulson asked the banks to come up with a


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Zero Hedge

FX Volatility Nears All Time Low In "Perfect Storm Of Vol, Skew And Carry"

Courtesy of ZeroHedge View original post here.

While the VIX still has a fair ways to go before it plumbs the all-time single-digits lows that defined the spectacularly serene equity markets in 2017, FX vol is already there: the JPMorgan Global FX volatility index has dropped to 6 year low levels, and is just shy of all time lows.

Of course, most of this stability in the FX realm is due to central banks depressing cross-asset vol; yet the more vol is pushed lower, the higher it will spring back once c...



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Phil's Favorites

Is Inflation Really Under Control?

Courtesy of Patrick Hill via RealInvestmentAdvice.com

Recently, analysts have been discussing the pros and cons of using negative interest rates to keep the U.S. economy growing.  Despite this, Fed Chairman Jerome Powell has said that he does not anticipate the Federal Reserve will implement a policy of negative interest rates as it may be detrimental to the economy.  One argument against negative interest rates is that they would squeeze bank margins and create more financial uncertainty. However, upon examining the actual rate of inflation we are likely already in a ‘de facto’ negative ­­interest rate environment. Multiple inflation data sources show that actual inflation maybe 5%. With the ten year Treasury bond at 1.75%, there is an interest rate gap of – 3.25%. Let’s look at multipl...



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Kimble Charting Solutions

Gold Miners Indicator Attempting Multi-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble

Are Gold Mining stocks about to be sent a bullish signal they haven’t received in years? Possible says Joe Friday.

This chart looks at the Senior Miner/Junior miner (GDXJ/GDX) ratio over the past few years. Historically when the ratio is heading up, miners tend to do very well.

The ratio has created a series of lower highs just below the falling line (1), since the summer of 2016. The ratio is currently testing the strong falling resistance line and the June 2019 highs at (2).

Joe Friday Just The Facts Ma’am; If the ratio succeeds in a double breakout at (2), it sends miners a long-awaited bullish message.

...

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Insider Scoop

Scott Galloway Calls For Twitter's Board To Replace 'Part-Time CEO' Jack Dorsey Amid Africa Move Plans

Courtesy of Benzinga

A shareholder in Twitter Inc. (NASDAQ: TWTR) and New York University business professor wrote an open letter Friday to the company's board calling for the replacement of CEO Jack Dorsey.

What To Know

Scott Galloway, who owns more than 330,000 shares of Twitter stock a...



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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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Digital Currencies

Chinese Crypto Exchange IDAX Locks Cold Wallet As CEO "Goes Missing"

Courtesy of ZeroHedge

By William Suberg via CoinTelegraph.com

Chinese cryptocurrency exchange IDAX has suspended deposits and withdrawals after its CEO allegedly disappeared.

In a blog post on Nov. 29, IDAX, which earlier this week warned it was seeing a run on withdrawals, said the whereabouts of Lei Guorong were currently unkno...



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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

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