theobannion

Charlie Gasparino: Another Crash 'Has to Happen Again'

"How anyone considering themselves to be a capitalist can support this arrangement is beyond me."

Is he serious? Anyone w/ a bundle of big bucks who doesn't invest them in buying his share of the government can hardly be said to be pursuing his "enlightened self-interest." And, maybe I'm missing something, but isn't that what capitalism is about? Do you think stupid people graduate w/ advanced degrees in economics and finance from Ivy League colleges? That the Savings & Loan crisis of two decades ago was an exercise in stupidity? Reagan tossed out regulation, but kept the taxpayer-backstop. Bankers pursued their enlightened self-interest and maxed out risk-taking because the profits were all theirs, but the risks were picked up by the taxpayers.

It kills me to hear people talking about our "not having learned anything" from all these prior disasters: of COURSE we learned! We learned that it was absolutely painless to screw the American People. We learned that business' top bureaucrats could walk away with labor's share of everything. The American worker has never had it as good as in 1950 because that goose that lays the golden eggs has been laying them in the pockets of the executive suite.

SOB.

Moody's drops Boeing's (BA +0.5%) credit rating outlook to Negative: "A series of negative developments have had the cumulative effect of weakening Boeing's financial flexibility at the A2 level, and led to the revision in the rating outlook to negative," firm says.

Has Moody's downgraded BAC or C recently? Am I missing something? I guess the big banks are in great shape.

(They're not?)

SOB.

The Treasury paid "scant attention" to "explosively controversial" bonuses paid by [[AIG]] after bailing it out, says TARP special inspector Neil Barofsky to Congress. Barofksy's report (.pdf) details hundreds of bonus and retention plans that reached all the way down to the kitchen staff.

Gee, ain't that re-e-eally strange? How come these MA's & PhD's from ivy league schools are so dumb? You'd think it was their government!

SOB.

A judge finds big lenders made fraudulent transfers through secured loans to homebuilder Tousa six months before its bankruptcy. The ruling may cost banks including BofA (BAC), Citigroup (C), CIT Group (CIT) and Wells Fargo (WFC) more than $688M.

Stay tuned & let's see how much they actually pay.

SOB.

Private Equity, Business Flipping and Asymmetrical Outcomes

"They know they are the victims of massive thievery and fraud. They are simply powerless to stop it."

Yes, they are powerless to stop it, because this is not a democracy & the people do NOT have the power, which is what defines a democracy, not the vote. But, no, they do NOT know what's going on. Add all the readers of web sites like Seeking Alpha together, then divide by the number of people who get almost all of their news from the boob tube - the greatest instrument for propagandizing vast numbers of people ever devised - and you get a pitifully small number.

It sucks, but I believe that to be the case.

Best,
SOB.


On Oct 07 10:16 AM optionsgirl wrote:

> You have written a tremendously accurate and astute op ed, TraderMark.
> I do have a couple of bones to pick, though.
> 1. I dispute you calling the actions of these carnivores "American
> free market capitalism". It is a corrupted, perverted system, but
> it barely resembles a capitalist system.
> 2. I would also like to dispute your labeling of the "unwashed masses".
> You think the workers of these companies don't know what is going
> on? Or that the general population doesn't, either? They know they
> are the victims of massive thievery and fraud. They are simply powerless
> to stop it.
>
> With so many "safeguards" put into place, you'd think it wouldn't
> be necessary to give the SEC (and Fed) more powers, which they clamor
> for a crave. They seek more power for its own sake. The SEC already
> has the power to stop the looting, and state attorneys general already
> have the power to prosecute fraud.
> I believe those bond holders and stock holders have been criminally
> defrauded, and so has the public at large.
> We must remember that the purpose of all carnivores is to feast off
> the carcasses of the weaker. They are shooting fish in a barrel.
>
> Again, kudos for a well-crafted cogent article.

Emerging Markets and the Global Monetary Merry-Go-Round

I find it stunning that the US is bending over backwards to do business with China, one of the world's worst human rights abusers, while keeping in place a blockade on Cuba because "it's a communist country."

I guess there are communists, and there are COMMUNISTS, some offering bigger markets than others.

SOB.

On Oct 06 09:25 PM derryl wrote:

> "I’m less sanguine than they are about decoupling – in the absence
> of a safety net it is hard to see how domestic consumer spending
> ramps up in China – but the monetary point is a fair one."
>
> The lack of a safety net is certainly a constraint but I would suggest
> that nations like China have time on their side in the effort to
> switch from exports to domestic consumption. About a billion Chinese
> still live like they have for thousands of years, poor but fairly
> self-sufficient. China plans to introduce pensions for these people
> which provides them some money to participate in the consumer economy.
> If the Chinese fund these pensions by taxing those who are currently
> using their recent riches to bid up asset prices, then bubbles can
> be constrained at the same time as the consumer base is massively
> (albeit shallowly) broadened.
>
> Decoupling was never going to be sharp and total, but I believe the
> trend will be supported by fairly intelligent Chinese fiscal policy.
> I don't know how long the monetary merry-go-round can spin either,
> but when it stops China had better be prepared to do some serious
> import buying with its newly valuable currency backed by large fx
> reserves.

Emerging Markets and the Global Monetary Merry-Go-Round

Too many northern investors see the third world (aka "emerging mkts," "develooping nations," etc.) as small USA's when we were just coming out of the depression. They have no idea how different these cultures can be from what North Americans are accustomed to. For example, after 150 years of capitalism, countries amazingly rich in resources like Peru & Argentina remain largely backwaters of poverty, despite the recent gains in their economies & their bolsas. In the former, Alberto Fujimori, a ten year "president," left the country with an estimated $919,000,000 from the national treasury. His predecessor left the country to avoid prosecution for having stolen millions from said treasury. Addicted to documenting everything, Fujimori video-taped his right-hand man, Vladimir Montessinos, shoveling huge stacks of bills out of a bag to the owners of the networks. In the US, in contrast, the networks are happy to go along w/ Washington for nothing more than the privilege and benefits of being one of the partners in the plutocracy. (I will leave you to consult your history books to see who the present president of Peru is. Hint: Discredited ex-presidents can run for office if they can sneak back into the country.)

You can go to jail for life in some of these countries for "political crimes," while men convicted of multiple homicides regularly get out after 2 or 3 years. Hard to believe I know, but it's just a matter of having your lawyer find the right judge. Often enough, the police will let you miraculously escape immediately, for a consideration of course.

I read recently how cheap Russia was at a mere 6x earnings! It had dropped to 3x at the bottom of its decline. LOL.

Russia is run by gangsters, misnamed in the press as "the Russian mafia." I doubt very much that any reputable auditor would find that the managements in these countries aren't cooking the books.

My father in law had a pile of his savings in a local bank, paying a stunning 12% interest! I told him to take it out immediately; he thought I was a very funny guy. When he finally went to make a withdrawal, he was told that he would have to wait for his money. That was almost a year ago. He's still waiting. Has the government closed the bank? Arrested someone for fraud? Is the bank offering much less on your savings?

No. Situation normal - AFU.

Best of lulck,
SOB.


Economists refuse to allow cultural elements into their prognostications, but unfortunately for unwary investors, it's necessary for their survival that they do so.

Jonathan Weil advances the tough-Judge-Jed story, contrasting Rakoff's bold rejection of the BofA/SEC under-the-table deal with Judge Robert Chatigny's blind rubber-stamping of a similar pact between the SEC and GE (GE) over accounting fraud in August. "Just think how much more we deserve to know about this supposed fraud. Who at the company committed it? Why hasn't the SEC sued them?"

Biz owns gov. SEC part of gov. Questions?

SOB.

California AG Jerry Brown investigates ratings agencies for working "behind the scenes with the same Wall Street firms that created [securities]," and then earning "billions of dollars in revenue, at a rate double what they earned for rating other financial products." (see also)

This won't stop until the executive suite are held PERSONALLY LIABLE for fraud & deceptive practices and their assets can be seized. Fining a corporation is fining stockholders who know nothing of what the executives are doing.

And I got an especially big kick out of Obama's "non-binding" vote on executive compensation. What good is a non-binding vote? How about a non-binding vote on presidential elections? Bush lost - ask him if he would like to step down so Obama can take office.

SOB

Tuesday Outlook: Commodities, Global Markets

More "rats" in DC.

SOB.


On Sep 15 08:33 AM David Fry wrote:

> ur2smart4me: Good point about the rat droppings but most seem to
> be occurring in and around Washington DC, no? Besides each state
> has Dept of Health officials counting those droppings.........those
> dirty rats!!!! And, our new Regulatory Czar thinks those rats should
> have legal representation since these counts are no doubt an invasion
> of their privacy.
>
> 86999: good point! my staff has been urging me to do this but I'm
> just a creature of habit but will now yield to what's seems the popular
> way.
>
> Re Ryu Mei: yes HAL is doing that doo-doo that he does so well.

Tuesday Outlook: Commodities, Global Markets

Sorry to keep butting in, but I should add that a lot of the presidents in these "democracies" can change the constitution with virtually the stroke of a pen. Pinochet, Washington's boy in Chile, made himself a senator for life before he "retired" from office (for disappearing thousands of his political enemies). Ain't "democracy" grand?

SOB.

Tuesday Outlook: Commodities, Global Markets

You should live in South America, David, & the US will look great w/ regard to patronage. The average public employee (related to a politician, which is how he got his job) earns 10 times what his "civilian" counterpart earns for the same job. Which is one half the reasons why pols became pols. The other half is to pocket millions in bribes and steal millions from the treasury. (Okay, so that's thirds, but you get the idea.)

LOL
SOB.

Separate from a judge's rejection of the Bank of America (BAC)-SEC settlement, New York AG Andrew Cuomo is readying civil charges against high-ranking BofA execs over Merrill Lynch acquisition details.

I gave your comment a thumbs up, but I would disagree w/ "incompetent." They're very competetent, but they're part of a government-business partnership that no one in the media will admit.

Jefferson is probably rolling over in his grave. The following is from this morning's post from Colin Twiggs: "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

~ Thomas Jefferson (1743 - 1826)

Best,
SOB.


On Sep 14 03:39 PM Neil459 wrote:

> NY AG makes the SEC look incompetent again. When will we have had
> enough and fire the Top 50 SEC administrators. Now the truth be
> told, that is not my best idea. But they are probably never going
> to jail so I'll settle for what is remotely possible but not impossible.

Bank of America / SEC: Rakoff Throws Down the Gauntlet

"Throws down the gauntlet"?

Clearly, the SEC was in collusion w/ BAC to begin with, or this phoney settlement would never have come to pass. And who now gets to prosecute BAC, should the case go to trial? The SEC!

I would say the judge threw down the gauntlet had he demanded a special prosecutor to prosecute both BAC and the SEC. But I doubt that this could happen under our present constitution. Reconstitute the SEC? THAT would be nice. But Obama's a go-along-to-get-along kinda guy. And he and the SEC all know whom they belong to. Who's going to reconstitute Obama?

SOB.

Is Buffett Backing Away from Stocks?

The government's main goal is making money for the plutocrats for whom they work.

SOB.

On Sep 09 10:55 AM Ricard wrote:

> Agree with most of the article and the conclusion.
>
> Regarding the GS discussion, the author stated it best - Buffett
> is a businessman. The government is not bailing out financials so
> that it can make a profit. Any profit earned by the government is
> tertiary to its main goal - stabilizing the financial system.