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… 

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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


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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.

 


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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.  

 


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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. 

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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


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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?


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Spitzer Agonistes Redux

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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


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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Zero Hedge

Wall Street's Most Bearish Analyst Asks "What Did I Miss"

Courtesy of ZeroHedge. View original post here.

Authored by Wall Street's most bearish sellside strategist, Morgan Stanley's Michael Wilson

As a macro strategist, my job is to try to make a very complex world easier to understand – something that’s very difficult to do. In an era of financial repression and seemingly elevated political uncertainty, the level of complexity has felt elevated too. This has created great opportunities for the past several years as a macro strategist – first to be more bullish than the consensus in 2016-17 when markets were overly worried about the outcomes, and then last year to b...



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Phil's Favorites

What's going on with Blue Apron?

By Ilene 

The Blue Apron business model appears, perhaps, flawed. While the service is convenient, I think it would appeal mostly to very busy people who don't have time to shop for food -- but enjoy cooking -- and have enough money that the trade off between paying for food delivery vs. spending time shopping is worth it. Here's the unfortunate stock chart and some numbers from Yahoo:

The company has been losing money, and is projected to lose money again next year. Revenue is projected to decrease in 2019 from the 2018 level, but pick up again in 2020, though still below 2018's revenue. Maybe a larger company that could integrate APRN's services into its existing infrastructure should acquire APRN and save it from its apparent...



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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Kimble Charting Solutions

Banks Sending Bearish Message To Stocks, Says Joe Friday

Courtesy of Chris Kimble.

Quality bull markets prefer to see Banks stronger than the broad markets or at least keeping up with it. Concerns often crop up when banks reflect relative weakness compared to the S&P.

This chart looks at the Bank Index (BKX) over the past few years, reflecting a falling channel of lower highs and lower lows has taken place inside of falling channel (1). This falling channel has now been in play for the past 15-months.

The index hit the bottom of the channel in December of 2018 and a counter-trend rally took place. The rally off the December lows saw the index hit the top...



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Insider Scoop

Analyst: US Sanctions 'May Not Kill Huawei'

Courtesy of Benzinga.

President Donald Trump signed an executive order Wednesday that limits how "foreign adversaries" conduct business with U.S. companies.

What Happened

The Department of Commerce said China's Huawei and 70 related companies will be included in the "Entity ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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 ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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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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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.

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