Uri Praiss, Law Offices
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May 11, 2011
Dear President Barack Obama
Sec. Timothy Geithner
Dr. Ben Bernanke
Dr. Paul Volcker
Attorney General, Eric T. Schneidermann
Sen. Carl Levin and Tom Coburn,
Rep. Barney Frank and Dan Dodd,
S.E.C. Ch., Mary Schapiro, C.F.T.C. Ch. Gary Gensler
F.D.I.C. Ch., Sheila C. Bair
Prof. Elizabeth Warren, C.F.P.B. (Expected)
Re: Wake Up America –An Urgent Call – Franz Kafka, Rajaratnam and New Brandeis Economic Revolution – Stop "Wall Street "HFT" Robber Barons & Huns"- Frank–Dodd and C.F.P.B. are Cancer's Painkillers -Separate Investments & Trade from Banks!!
Author: Uri Praiss, Attorney at law (since 1990, Israel),
Law & Economics lecturer
- First, I thank you dear President Barack Obama, and all of you, for the admirable salvation and recovery of the U.S. and the World from last 2007 greedy bankers' financial and real disaster as well as horrible risks. Sorry, but we are back there again.
- Second, I want to thank god for this Rajaratnam, who was convicted today, because his pictures and the front pages' reports made me send all of you this call today, without editing.
- My friends warn me that I endanger myself and my 5 kids, after I've sent you my longer article (see below) last week. I hope they are wrong. It is very important and urgent – please read the headline again (the full book would come later).
- So let us start with some "Freedom of Poetry", just to make the point, before law and Economics. I am sure you are busy, so I'll try to make the long story short.
- So let us assume that earlier today I've met Franz Kafka (just kidding. He is not Elvis or Palin's evil Bin Laden) and showed him Rajaratnam's convictions news.
- Kafka burst and couldn't stop laughing. "Damn, what is so funny?" I asked. "It reminds me my unfinished book, "The Trial", and the accused Joseph K." "Yes, yes, but Joseph K. was innocent", I said. "That's why this is even more interesting, this Rajarantam's story. Are you ready?" "Sure".
- "Today was one of the best days lately, for famous CEO, Mr. Lloyd C. Blankfein of the No. 1 "Investment Bank" (and trader) Goldman Sachs (here and after –"Mr. B." or "B."; and "GS"). "How come?"
- First, they've made a fortune today, beating other traders and economy with their Nuclear "HFT", much more than the regular net 100 million dollars profit a day (!!) as the news reported us yesterday."
- I've glimpsed despaired at the Dow Jones, Nasdaq and S&P's charts - "Yes, yes, and last week these "HFT Nuclear" took over easily the commodities markets for good – look at Oil, Silver, etc. Today I was shocked to notice them even at the Bonds' markets daily chart, where I usually don't look!!"
- Kafka jumped like a tiger towards my door, opened it quickly and looked outside. I've never seen him react so strange. "Sh-h-h!!!" he hit me with a heavy affidavit he snatched from my deck, "Are you insane?? You have 5 kids!!!" he screamed at me.
- "Tell them how these HFT Algorithmic traders rob them and manipulate every day." "O.K., but they must glance at those daily or weekly charts. Then they'll jump like you, or like Archimedes from his bath, shouting "Eureka!!", and beat the next "Investment" Banker. No "Investment" – just covered up daily Trade Robbery.
- Neither S.E.C. nor Robber Barons have learned anything from 2007 Crisis yet. Vice Versa, the Huns have already found, use (on a daily basis) and develop their new "nuclear" arms, at least a year. Almost all financial and real markets, firms and households suffer daily doldrums, stagnation, waste and loss of potential growth and employment.
- These are caused mainly by manipulative advanced Hi-Tech and Algorithmic HFT daily trade (by whatever "machines"?!), including Short selling, combined with endless fearful, false and as if professional daily negative economic excuses (Greece's Debts? Portugal?) Not to mention serial scary "Flash Crashes" S.E.C. and Exchanges don't want to see.
- How they do it? As any illegal anti-trust cartel, the leaders are the most technologically advanced and biggest HFT's Algorithmic traders (guess who). They are followed by many smaller traders, as Hedge Funds and other big brokers (remember "Huddles"?) that try their best to follow the leaders as fast as they can on real time trade.
- Of course the leaders sell highest, and buy later at the lowest rates. That is trivial, because they have a constant "First mover Advantage" and they are much faster technologically. That is why GS, JPM, and sometime others, can make easily $ 100 Million net trade daily profit each. It is reported by financial media. The followers can have some nice profit too. Paulson, for example, as much smaller traders. Just follow and be alert.
- The leaders hit down, to the closest 50 or 100 points line of Dow Jones, as 11,950 and so on and Nasdaq as well - 2,650, etc.
- They try to cause fastest down drop, adapting to real time volume. It is almost like driving or skiing. The computer calculates easily which are the stocks, on real time, depend by their specific volume and $ price, that manipulate the whole Dow Jones or Nasdaq (sometimes S&P, to drop or maintain the drop to 1,300, 1,250 etc.)
- The regular technical ("natural") rules of resistance and support do not work anymore. Only the Huns' HFT Manipulation counts.
- So check which stocks can be used most effectively for this daily Dow and Nasdaq Manipulation: GOOG, AAPL, INTC, CSCO, BIDU, etc. Sometime they play with agriculture – POT, IPI, MOS, MON, AGU, etc. Sometime with metals or steel – depends on which pessimist news they can use. Lately they took over Oil markets, Gas, you name it. Their profit comes from manipulative sudden drops.
- Even the trading banks' shares themselves might be manipulated, depends on volumes and rates. Baidu is preferred – a "Market Mover" - influence all Chinese Internet giants – SOHU, SINA, DANG, YOKU, RENN, etc.
- Kafka kept beating me - "You didn't explain that in this Law & Economics article you've sent all these American chief officials and media, the article with that long name, I guess they all are, ha-ha-ha."
22. He took my article (see below) and read slowly: –"Robber Barons & Huns (Part 1) – Rearmed by Advanced HFT Speed of Trade, Hi – Tech & Algorithms – Daily Manipulations by Abusing M. Spence's "Signaling" & Games Theory – An Urgent Danger to The Wealth of Nations – Investigate and stop "Short" & Fear Sellers Now!!!"
23. The full article (below) was filed with 2 formal complaints to S.E.C., and N.Y.A.G. But S.E.C. never called back, and Huns' business' better than ever.
- Kafka was excited: "That "Wealth of Nations" - I've heard of. That's your fundamental economic scholar's book, from 1776, Adam Smith, but you promised to explain the other Law & Economics stuff. Even though I must say that it is readable." "Wow, thank you" I said.
- "So why do you think GS and Mr. B. were happy today, except the 150 million net daily profit?" I've asked. "Much more", he said, "but we'll talk about it later. It still bothers me.
26. The financial reports show they hide profit – "not to lead with the chin." Just spin and move on. Throw carefully these Rajaratnam and Torres to the sea, play the victim, cry and complain.
- That's why they rushed to return good old Buffett his rescue 5.5 billions' loan, one day before quarterly reports. Even cutting profits half – they still beat expectations. Not to mention "delayed collection from clients - 6 billion more than ever, ha?!
- So, you showed me that Dow Jones' daily trade is just 4 billions a day, right?
- You say the Huns started last May (the latest) and swallowed all markets' returns from then to 10% a year, instead of 50%, depressing joyful heroic recovery?!"
- "Yes," I answered bitterly, "the volume of trade should've been double or triple at least, if not these Huns, these Robber Barons. Even till July 2010 it was much higher. Horrible damage to U.S.' and the world economy, households, firms, etc. Trillions are wasted by the fence "
- Then I couldn't believe my eyes: Kafka took my calculator and after 5 seconds told me – "Hey, that's 2.5% net daily commission!! For damaging everybody?
- 1O% sounds more "reasonable"(!!). What about their costs, wage, bonuses, fancy rent, clients' returns, expenses, restaurants, hotels, maybe girls like HP, Lady Gaga's "Robin Hood" tax deductable contribution dinner, ha?!! Do you remember how that old lady calls him?"
- "Who?" – "Mr. B., she calls him at the annual shareholders', in front of his executives, whatever – "Mr. Goldmine" and she is right – he rescued his Hun empire today at court again, operating everything and testifying at court (you surely heard about those tapes!? He told the jury that usually he doesn't read or write mails. Brilliant, ha? )
- Now look at the news today – Mr. B. is "Mr. Clean" – "Throw that Indian big thief to the beasts!!"
- Thank god it's not Mediaeval or Roman Justice – they would burn him slowly or crucify him alive and live, ha-ha-ha. Add some K.K.K. national "Pogroms", ha?!"
- "That's too much" I said. "O.K., we'll see. Now read to me your article's last page. I love it. "Wow", I've almost blushed, "Sure. To start with the amazing English ex-banker, Dr. Paul Woolley?"
- "No, I want to hear again about their "Alibi little Colleague", this JPM Demon and the brave and honest judge Louis Brandeis:
"E. TO BE CONTINUED
§ 42. I want to end Part 1 with the "New York Times" report we started with: "From the canyons of Wall Street to the City of London and beyond Hong Kong an intense guessing-game has begun: who will succeed Lloyd C. Blankfein, when he eventually steps aside as chief executive of GS ?"
§ 43. Immediately I'd got a bitter smile, recalling what one of our legendary and stormy leadesr and fighters used to say - "No matter what, just stay on the Wheel, don't leave the scene".
§ 43. So I really don't suggest those "Candidates" would buy new suits. Easy does it. Even GS' Spokesman "declined to comment other than to note that Mr. Blankfein "says he has never felt so energetic and has no plans to retire."
§ 44. I must say I was very worried to learn from N.Y.T. Report that Mr. B is very unique, being a very successful Commodities – Trader (!!) Former managers were Bankers, Investment Bankers, etc., but last decade the trade brings the profits, much more than the Investment Banking, whose share dropped sharply, including M & A.
§ 45. Most important, I had learned also that Mr. B. is only 56, "assumed the top job in 2006, (and) is one of only two chief executives of major banks who were at the helm before the financial crisis and remain in charge today. Jamie Dimon of JPMorgan Chase is the other."
§ 46. Surely the most admirable, the One and Only Judge Louis Brandeis –"Other People's Money and How the Bankers Use It"- Roll Over in his big seat at Heaven while reading that – especially this Jpm'S Demon, whatever (He told us at Davos to back off, didn't he?)
§ 47. Back to the Monster of Trade – GS. In the midst of the financial hell that "some" greedy bankers built, they've almost crashed A.I.G., MS, etc and got rid somehow of old Lehman Bros., Bear Sterns, Merrill Lynch and so - an unbelievable "Crowding Out"(!!) to become the International Mega -Monopoly of Trade and Investment Banking.
§ 48. How I wish we would recall Brandeis' social, economic and legal Legacies every day. He fought the first rounds, with the original JPMorgan and the Robber Barons."
- "Indeed", said Kafka. "You need to separate banking completely from trade, shares, investments, etc. and build, you said "A Chinese Wall", between them and separate ownership.
- But first of all – investigate, inspect and regulate this horrible "Nuclear HFT".
- These Frank – Dodd's Reforms, C.F.P.B. and so are, with all the respect and good intentions, used just as a big spin and endless lobbyists' waste of time?
- "Yes, this B. is a magician. See how he used the S.E.C. and JPM to pay this ridiculous fine – 4 trade days' net profit, remember?! See Levin – Coburn's Report – GS fooled everyone again and again."
- "How come nobody talk about it? They cannot see?" "Good question. Too good", I've said.
43. Then Kafka shouted at me: "How can you survive, at least they'll kill you financially with law suits, slander, court orders – and your kids – Give all these respectable people your ex-wife bank account for any contribution, like all politicians, initiatives and movements do.
44. You already starve and you've left everything, to save the world?!!" "O.K., I'm Sorry." I blushed again – please help us to help - bank no. – IL49 0130 7500 0000 2465 782 :(IBAN).
- Kafka laughed that sad laugh again, but his eyes were shining like little devil's eyes. "What now?" I asked.
- "Now read to me the few lines that you wrote, about these Insider Trade Offences and this Rajaratnam, a week ago - and explain:
"D. LAW & ECONOMICS BRIEF
- Of course these are secrets. It's Illegal. In most civilized Securities laws, those are much "heavier" offences than famous and juicy" Insider Trading". The Anti-social and economic damages as well as risks (!!) are much heavier. So is the "Mens Rea" and the punishment is more severe."
- "So "Insider Trade offences", and Rajaratnam wasn't really an insider, were pushed by analysts and traders of the U.S. as a cartelistic lobbying issue. Yes, we love gossip."
- Slowly he said, with this devilish smile: "You know, the other day I've heard some fancy suits' bankers, smoking outside this Lady Gaga's "Robin Hood" tax deductable contribution dinner."
- "They mentioned Mr. B. foreign, Indian, Brazilian, Mr. B.'s young ex -deputy, Fabric, Fabulus Torres, whatever, that was thrown to the S.E.C., smooth, ha?
- Then one of these traders said that he was at some "tea party" and heard they said that Obama's mother re-married an Indonesian and he was raised there as a child.
- Then he said to his colleagues: "Look at Goldman's website – see all these blacks and others – and look at this fat Rajarantnam. He is a billionaire – Palin must talk about it or Newt or Trump. That's what they said."
- Kafka stood up suddenly – "Now I must go. Send them the full article (below) and tell them again it was filed to Ch. Mary with 2 formal complaint to her S.E.C.
- Why would'nt Obama send her to be a judge, and bring some tough and smart guy like Brandeis – to save the world before the Chinese buy all of us, including GS. Is it true they buy Yahoo ? They will own the world, and we are robbed by our Wall Street Huns for decades, and it is getting worse everyday. Tell them also about last week's Bin Laden's day."
- "O.K. I will. I'll miss you, take care" "I'LL BE BACK" Kafka smiled and vanished.
- May 2nd, 2011 – Dow's, Nasdaq and S&P's Futures were very green all night, even before Bin Laden's celebrations. But the Huns of Wall Street couldn't care less. Vice Versa, that was a very good opportunity to start the "Sell in May" short & fears selling carnival (for them, or a long funeral for us)
- As trade started – all green futures were smashed at once by the Huns. Take the daily (or last week's) charts in front of you, please.
- Dow Jones was beaten at once by a "concerted selling effort" (or "Stiff selling pressure", etc.) – below the 12,850 line. Obviously (Bin Laden !! - many expected even 2 – 3 % rise), the volume pushed up a little, but then surrendered to the Huns' 2 brutal efforts down, after 11:00 am – you cannot miss them on the chart - and the last manipulated pressure was to 12,800's line.
- On Nasdaq's field, the "selling pressure" dropped down all along, almost to the 2,850 line, that was passed easily only the next day's manipulated drop, May 3rd.
- I must emphasize - Killing Bin Laden, by itself, is like winning a very important war, smooth and sharp, without any casualties, showing Pakistan's true and important friendship – just beautiful. Worth Trillions by itself. Ask Teva's CEO, (General) Shlomo Yanai. I am just a Major, even though I've served a few years, including the 1st Lebanese War, and then reserves' 20 years' service.
- Bin Laden was the founder, master and leader of the most horrible International Terrorist Cancer, El Qaeda. Never take hostages but to cut their heads on line. The sole responsible for the most Satanic Terror Operation in history.
- Huns were not disturbed even by more than ever "beating expectations" reports. I hear so many false excuses and rationalizations, I can't believe my ears. The most damaging are the most superstitious – like this "Sell in May and go". See how expectations build reality. That's Economics.
- This "Sell in May" slogan is the Huns biggest gold mine – reminds me how 1600 years ago they robbed and burned almost all Asia and Europe, riding their horses. It reminds me of Bin – Laden's Terror too. So simple.
- Look at the damage our Huns caused the whole economy from last year's May till now. That's when they started, with these advanced speedy hi - tech & math tools. What's next?
- Someone even called it (May 2nd's stock markets) "Ugly Reversal of the stock markets". Indeed. Please, read my full article for a much wider explanation. Part 2 of the article would deal with the false pessimist fearful AS IF "learned" excuses – Inflation, Deficit, Debts, Deflation, Stagflation, etc., but the best are simple – "Sell in May and go away" – sounds like Broadway, or some effective commercial.
- Lately, even when Oil "drops" from 113 (!!) – I read about (whose?) fears as if it indicates a drop in the U.S. growth and production (!!)
67. Monday was just the beginning of the Huns' May riots. "Tuesday's even worse" - May 3rd. Fear blinded everybody from celebrating the amazing GM's resurrection and recovery reports. Both May 2nd and 3rd should be national holidays!!!
- May 3rd. Please follow the charts. First, a "stiff selling effort" pushed the Dow below 12,800, and then the main target of the day – dropping Nasdaq from 2,850 – watch on the chart the aggressive push from 10:30, while a lighter effort dropped the Dow then back to 12,800.
- The main sharp efforts were between 13:00 to 15:00. Then started the "short" buy back. You can easily see on the daily (or weekly) charts, that the Huns effort and "returns" were much higher at Nasdaq than Dow.
70. How they do it? Watch the daily extraordinary quick selling effort and drop in Google's share chart, Cisco and especially Baidu, the Chinese Google, with all the other Internet giants (all traded at Nasdaq) – Sohu, Sina, Yoku, Dang, Qihu (The Chinese equivalents of Twitter, YouTube, Amazon, etc. On May 4th came Renren's (NYSE:RENN) 1st IPO – evaluated as 3 times Facebook – Huns spoiled the show. Watch also May 4th - how the efforts to drop S&P from 1,350 succeeded. They just push buttons. I wish we could watch them at market hours. So simple.
- Adam Smith's 1776 "The Wealth of Nations", indeed. I am sure he meant that "The Invisible Hand" of markets does not belong to a pick pocket trader or banker or both, robbing our faith, hope and strength, in this amazing recovery from the last 2007 bankers and traders' greed disaster.
- Please let us help and be of service, in this new scandal we suffer at least from last year's horrible May. For any contribution – bank account IL49 0130 7500 0000 2465 782 :(IBAN). Don't "sell in May and go away". Trillions of households and firms are waiting frustrated, fearful and confused by the fence. Give the Huns a lesson and let the economy bloom. To be continued.
Uri Praiss, Attorney at law
Law & Economics Lecturer
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.