Thursday, November 5, 2009

Goldman Infiltrates Gov - And Got $54 Billion of Risk Capital!

The Government has shoveled $54 Billion to Goldman, according to Dylan Ratigan, in the form of TARP $ wheeled from AIG, loans from the Fed and $30 Billion from FDIC, all at little or no interest. In September of 08 the Fed allowed Goldman and other Investment Banks to become Bank Holding Companies so that they could receive huge loans from the FDIC and other funding only available to Bank Holding Companies ("BHCs".) And these BHCs who were formerly investment banks are not required to engage in "usual and customary" banking activities like consumer or commercial loans. WHY NOT???
Goldman has used our money as risk capital to continue to generate huge profits from gargantuan risk - similar to the 30 to 40-1 leverage which led to our current financial holocaust. Once again Goldman is using our money not for real investment to provide capital formation which will create jobs, but for contrived innovated financial investment to create swine-bonuses for itself! And "our" pay "Czar" and our-Congress have silently watched or claimed there is nothing they can do - because "Goldman paid back their original TARP dollars" - what a load of crap!
Everyone in Congress, and Obama, talks about the importance of job creation and the importance of "small business" in the process. No one really has addressed the abject failure of the SBA (Small Business Administration) to come to grips with the red tape and untenable barriers to obtaining funding for expansion or for a new, reasonable start up business! The requirements to obtain funding are infinitely more restrictive than the give-aways to Goldman and AIG and CITI and MORGAN and BANK OF AMERICA; and a host of others who sabatoged our economy and devestated the lives of so many millions of their fellow Americans.
It is time for Congress and our President to allocate $54 Billion to fund a special SBA unit to short cut all the bureaurocratic hurdles and provide funds for small business using the business as collateral, not the personal signiture of the entrepreneur who can not obtain a bank loan because of a variety of reasons - (many stemming from the financial holocost (caust) or from health insurance problems.) If taxpayers can give money to the failed financial institutions who caused the great recession with little hope of repayment - THEN WHY NOT PROVIDE FUNDING FOR RATIONAL BUSINESSES WHICH WILL IMMEDIATELY CREATE NEW JOBS!
Today the SBA is more concerned with personal signitures than with job creation. All the platitudes from Congress about their expressed concern for small business (which is resposible for more job creation than big business) is not backed up by empirical evidence that politicians give a shit about anything but being elected and getting along with campaign contributors from Wall Street and the Monopolistic Health Ins. Carriers! This applies to both sides of the aisle. The New Deal worked because Roosevelt appionted strong individuals to responsible positions and let them make independant decisions without committee bureaucratic mind numbing mechanically operative cover your ass inertia. Why not appoint Jack Welch to circumvent all the BS and establish a method to bypass the barrier of the personal signiture to fund deserving businesses with appropriate business plans based on logical executive summaries and appropriate financial projections from suitable accountants?
Right now we are going nowhere fast as unemployment accelerates - while Goldman uses our money for itself! What do we really have to lose - besides time and a more functional capital formation process. If Congress remains crippled by an over-concern for how the SBA gets repaid - then to not realistically, objectively and pragmatically focus on the benefits of non-recourse SBA funding (notwithstanding the fact that all loans will not work) will cause the jobless to continue to tragically suffer as well as our entire country. The entire country suffers as local tax bases continue to go down the toilet along with all other streams of tax revenues from income; and this exacerbates all kinds of societal problems. So the equation between more of the same and doing something new clearly results in concretely favoring small business for a change - lip service just makes the liar feel better. Focus on the awful fact that TRILLIONS HAVE ALREADY BEEN COMMITED TO THE CULPRITS WHO I WROTE ABOUT IN MY NEW BOOK - HOW WE GOT SWINDLED BY WALL STREET GODFATHERS, GREED AND FINANCIAL DARWINISM!
If Congress really cares about a rational way to immediately provide jobs and capital formation it only makes sense to take the $54 billion back from Goldman, or at least make Goldman fund the new SBA section to provide immediate, non-recourse funding for deserving small businesses.

Thursday, October 22, 2009

Wall Street Greed Soars Again - Regulations???

A WWJ headline last week reported that The Wall St. Crises Has Ebbed. Today, 10/22, the NY Times Business Page headline proclaimed - Who Gets Paid What - because of a renewal of soaring compensation as a function of bailouts and free risk capital from taxpayers. Now the compensation crises is over for Wall Street - thank god - while real unemploymen (human financially cancelled lives) climbs to over 15%.
Regulators continue to be the same individuals who failed to curb the sales of financially contrived 40-1 leveraged derivatives that were described as, "Too Complex To Explain." Based on existing SEC and Fed regulations it is a severe violation of the regulations to have sold any complex financial products which could not be fully explained well enough to be properly understood. Important regulations to protect the public and markets have the force of law behind them; therefore, in my opinion after 40 years in the securities business, the law has been broken. Congress has not called for the Attorney General to appoint a special prosecutor; and the SEC has not investigated a terrible breach of their own regualtions; and the Chairman of the Fed as well the the Secretary of the Treasury have refrained from any call for investigation as well! (This is what Swindled is about.)

Elizabeth Warren said today on Morning Joe that regulators were too cozy and too impressed with the success of the people (based on their huge incomes) who ran the Banks and Investment Banks. Elizabeth Warren has demonstrated the guts and insight, as well as a concern for ethics and humanity (that so few seem to have) and should immediately be appointed Secretary of Treasury. She has no conflicts and no ties to Goldman Sachs!Paul Volcker whose track record of prescient good and independant judgement has earned him the right and need to be listened to about Wall Street, and especially the Banks - because they are now one and the same.
Schapiro, Summers, Geithner and Bernanke, (may all be brilliant and nice people) were all there cheerleading deregulation (based the closet greed of the bogus economic theories of Financial Darwinism) or sitting on the sidlines while the barriers against greed were gutted and torn down - AND REGULATIONS WERE CLEARLY BROKEN on their watch!
All have been elevated to new positions of power and influence although it is clear they exercised egregiously poor judgement in the past. In the face of no meaningful new regualations - only Paul Volcker is speaking out in recognition of the need to rebuild Glass Steagall and The 1956 Bank Holding Company Act. The SEC, now led by Schapiro of NASD/FINRA fame; the Treasury, now led by Geithner, former Vice Chairman of the Fed; Summers, Obama's chief economic advisor a fervid devote of the Chicago School Economic Theories based on human rationality; and Bernanke still in the same job as Chairman of the Fed - did nothing from the inception of our financial holocost (caust) and joined the claim offered by Wall Street that they did not recognize all the risk. Remember - this is just like it was claimed that no one even guessed Madoff was a swindler although his contended returns were were worse than implausible, even to the naked eye! Now, retrospectively, the brilliant Greenspan has admitted that he did not understand the "too complex to explain" althought he said it is fair to think he knows alot about math. Greenspan also believed in the bizzare notion that the Market is Rational - where is the historical empirical evidence of man's rationality?
The Rational Market hypothesis is proof of Man's irrationality or is it proof that Man will fabricate any reason to justify allowing self-interested greed to take advantgage of the many for the few swindlers willing to exploit their victims. This exploitation took place globally.

Today it is obvious that size is toxic - Volcker knows. This fact becqme self-evident in the aftermath of the "Great Depression." And once again, lies that size is necessary to compete globally are being advanced by Wall Street to maintain and support their unbridiled and unfettered (unrestricted) self-interested Greed. Think about Billions and Billions of bonuses and cash getting set to be paid out for highly speculative risk supported by taxpayer capital! Support Paul Volcker, write letters to Congress, get new people with historical judgement and ethics, people without ties to Wall Street and Goldman, to frame new legislation to stop all the Greed which is still alive and well. And help me find a way to get the best book about how this really happened and what to do about it into the public domain.

Sunday, September 27, 2009

Did Bankers' Pay Inflame Financial Crises? duh!

Today Mark Hulbert - STRATEGIES - NYTIMES - writes about how 2 Swiss finance professors have concluded that CEO pay has not been a major factor in our great recession. Their study, the Stutz-Fahlenbrach study, provides the specious contention that there is no empirical evidence that compensation incentatives which encouraged excessive risk taking (40-1 leveraged backed by outright lies of collaterialization) played a large role in the credit crises. Hulbert reports that, Stultz says there is little evidence that comp reform would have helped head off the crises. Further he quotes Stultz, "neither bank CEOs nor regulators thought banks were taking excessive risks." Maybe CEOs and regulators (like Greenspan) also thought the planet was flat and that creationism made sense - if they honestly thought 40-1 leverage was a small risk! Hulbert went on to say Stultz pointed out that in 2006 a collaterialized-debt obligation with a triple-A rating didn't look like a huge risk; and quoted Stultz who said, "On the contrary, it looked like an extremely low risk asset, yet banks incurred extremely large losses on such CDOs." Not to denigrate all Swiss, but the Swiss history of bankers who have protected tax cheaters, and dictators who took money from their destitute populations to secrete it away for themselves, Bankers who fought to have kept Nazi gold for decades after Germany became a responsible and concerned member of democratic nations - makes it hard for me to accept Swiss financial objectivity.
The apparently slanted "study" from the Swiss finance professors, considering their irrelevant reasoning leading to fallacious conclusions, is a ludicrous logical absurdity. As finance professors should they not have mentioned, or known that bankers and regulators had a fiduciary obligation as well as an ability to have analyzed the substance beneath the surface of what "looked like low risk" to conclude that the high risk was fraudulently backed (contrived) to appear to be low risk so that it would appeal to investors searching for safety. No bank would have accepted the collateral Bankers fabricated to sell the geometrically leveraged financial innovated products contrived to appeal to risk averse investors so it could be easily sold!
Bank CEOs and finance professors - along with regulators need to become more familiar with the existing regulations which prohibit selling securities which cannot be fully explained! This knowledge would also be helpful to economists, rating agencies and the financial media. Congress could also use a remedial course in SEC and Fed regs. (This is what Swindled vehemently exposes and fully explains.)
A paper by two Harvard law professors, Lucian Bebchulk and Holger Spammann reached an entirely different posture toward compensation and risk taking, a posture which makes sense based on the realities of what has really taken place. Their position is that bank executives generally have an incentive for "excessive risk-taking." And this is self-evident, but a huge understatement. Incentive is far less than accurate, it is similar to observing that cancer generally contributed to the cause of death; when there was a pandemic of virulent malignant metasticised melanomas which brought a nation to its knees. The truth of reality makes it obvious that the only objective of bank CEOs was to maximize profits no matter what the cost to anyone else. Clearly there was no concern for the stability of financial markets, and no concern for investors or the fabric of our society!
There has been so much irrational, circumspect reasoning circulated to obscure the fact that Financial Darwinism has been at the core of how we all got swindled. So self-serving studies should provide no more reasurance at this time than the empty promises of collaterialized securities did in the past. The argument - I did not, they did not know there was so much risk in so much leverage, and that no one knew the promise of the holy land of collateral was a grotesque misrepresentation is nuts- and in the final analysis must be regarded as flaming BULL SHIT. It's time for plain, honest talk not more of the same delusional reasoning to excuse the rape and pillage of our economy. The financial crises is really a human tradegy. (try -

Wednesday, September 2, 2009

NYTimes Sept 1st Sheila Bair OP-ED, reality check

"The Case Against a Super-Regulator" OP-ED by Sheila Bair, chairman of FDIC is a strange view of reality because Bair has argued that, "the creation of a single regulator...would endanger a thriving 150-year old banking system..." With the number of failing banks climbing and the trillions spent on bailout her thriving contention is ludicrous. She did say she was for reform, and pointed out that, "The principal enablers of our current difficulties were institutions that took on enormous risk by exploiting regulatory gaps between banks and the non-bank shadow financial system, and by using unregulated over-the -counter derivative contracts to develop volatile and potentially dangerous products." Which is another way to say that it was not really the fault of regualtors. And worse overlooks the fact that although Glass-Steagall and the 1956 Bank Holding Company Act were overturned at the end of 1999 - which was a tear down of the firewalls between greed and most of my fellow Americans (who may be regarded as victims) - there were still regulations which if the Fed and the SEC had enforced would still have prevented the sale of so many securities that were "too complex to explain." Furthermore these securities did not have any collateral that would have satisfied any of the banks flipping all the so-called Complex Collateralized Debt - actually there was no real collateral, which constitutes fraud in the opinion of 2 prominent Cleveland securities attorneys!
So gaps were not the problem - except gaps in the attention spans of the regulators. And my book makes all of this crystal clear; which could lead to the conclusion, based on existing regulations which have the force of law behind them, that it was a tragic violation of law to have sold these "complex innovative" financial instruments. Bair did conclude that, "We may never have a better opportunity to address root causes of this crises - and prevent it from happening again." And she is right about now is the time to address root causes, however it is essential to go far deeper into all the significant underlying factors to understand the real truth of what happened. It is necessary to understand the key role of Financial Darwinism. It is critical to reject her excuse about gaps, which sounds like denial and aviodance to me. In my opinion - based on 40 years of personal experience and 7 months of research to verify the accuracy of the observations and conclusions I share with readers in my new book - her OP-ED is self-serving and designed to protect her turf, notwithstanding her protestation to the contrary.
A Super-Regulator, or any regulator without wisdom, common sense and a great detective's concern for right and wrong is as worthless as all the regulators who failed to stop all the violations of the regs years before there was a crisis. Regulators have praised themselves for how they have performed in this crisis, but isn't it so much more important to examine what was done to prevent the crisis? No regulators cried out against tearing down the barriers against greed which worked for 50 years in the aftermath of the Great Depression. And it ought to be apparent that our regulators failed miserably to enforce existing regs. Greenspan, leader of the FED was a cheerleader for "deregulation" and did nothing to enforce existing regs; there are 1500 pages of FED bank holding company regs!The best way to understand how to plug regulatory gaps and stop this from happening again would be to read How We Got Swindled as well as to stop asking culprits for their opinions and stop listening to all the excuses and false conclusions.
Finally - ask yourself if you saw a stealth bomber sneaking across the sky at an altitude of 500 feet would you see it - just like the absolute lack of collateral was easily visable to bankers who expect infinitely better collateral from us than what they claimed was in place behind the complex financial debt instruments they were the issuers of and sold to the public - us. Banks and their regulators had to know that CDOs and CMOs were "collaterialized" by worse than junk bond debt, or absolutely worthless credit default swaps. Every banker I have known would have laughed at me if I had tried to use a trench of crappy debt or worthless swaps as collateral to obtain a loan. If my financial statement, when applying for a loan, had the speculative and imprudent leverage of so many banks, (which Bair was responsible to control) I would have been kicked out, all of us would have been. And now Bair is concerned about banks having more capital - duh. For the real truth help me get out Swindled. 216-831-6388

Friday, August 14, 2009

New book

I have just completed writing my new book, after almost seven months of research to sharpen my focus - in addition to 40 years of successful experience in the securities business. I did not want to write an opinion book without including the substance of impirical evidence which leads to objective conclusions. My goal was not to write an easy read or leave out the history underlying the tear down of firewalls ("deregulation") - which were barriers established in the aftermath of the Great Depression to protect the public from unbridled greed. My book starts with Herbert Spencer's "survival of the fittest" Social Darwinism of the 1880's - and makes the case for why Financial Darwinism is the root cause of our financial tragedy. It is not a simple snapshot of one or two causal factors. Swindled provides readers with an insider's evaluation and view of the context and substance of all the culprits and fundamental issues necessary to consider to acheive a functional understanding of the greatest swindle of American taxpayors since the 30"s.
My first book, which The Miami Herald said was a "Zen Guide To Aviod Getting Hosed," is now available again at B&N on line - because B&N believed what I said to protect investors in 1990 is equally valid today. Visit my website,, to find out what Invest for Success, How to Avoid Getting Ripped Off by Real Estate Partnerships, the Stock Market and Diversification was about. Today we are alive in a time that has devalued ethics and deregulated greed. In the future I will share additional (insider) insights from my new book, insights which have been hidden from the public; for example, how can anyone sell a security which is described as "too complex to explain" when, based on SEC and FED regulations, it is illegal to sell a security which cannot be fully explained? Swindled cites pertinent regs. When you see this you will be outraged! Think about how the Market is Rational postulate underlies the failed economic theories from the Chicago School of free and effective self-correction - the Market is comprised of human beings, and in fact, is an Emotional Bandwagon.
I have had trouble obtaining a publisher for a vehement accurate book, by an outraged author, which objectively blows the whistle on all the culprits. So I am open to help. In the future I will share with you more of why Swindled provides the most objective and profound overview of what has gone so wrong and how to proceed forward on a more certain and symbiotic path to participate in a more stable and fair financial world. I will also discuss what is strangely missing from health insurance considerations, and other political failings.
My blog will be about unvarnished, even politically incorrect, objective truth, because I believe many of my fellow Americans are hungry for the truth - but probably not the "birthers," or those who prefer standing up for the best interests of monpolistic health carriers instead of their fellow Americans.