❝ In the 1640’s the Dutch inhabitants of New Amsterdam built a 12′ wall to keep the bad hombres out. In 1664 the British ignored the wall and took New Amsterdam by sea. It’s now called New York. They took down the wall and built a street. It’s called Wall Street.
Same as it ever was…
Thanks, Ian Bremmer
❝The Federal Reserve’s liftoff day is here, and truth be told, I find almost all of the commentary on the subject to be overwrought speculation and uninformative blather. If that sounds harsh, it is. But at least it’s consistent with my other writings on this and related subjects.
You see, much of what you believe to be important isn’t important at all. Most of the media focuses on items that seem critical day-to-day, but actually amount to little more than interesting, amusing, gossipy filler…
❝The most regular reminder that there is too much focus on all the wrong things is the monthly employment situation report…this is very noisy data subject to revisions and the longer trend matters much more than any single report. I think of the Fed in a similar way.
Today is different in that for the past seven years, every single data point — and that is all each Fed meeting is, a single data point about changes in interest rates — in this series has been a big fat “nothing done.” This makes today feel more momentous than it is…
❝This isn’t me being a curmudgeon, but rather being consistent with our other admonitions that most people spend a lot of time and mental energy worrying about the wrong things…They fear terrorism when they are more likely to die of high cholesterol; they are concerned about market crashes when costs, excessive trading and taxes do more harm to their returns.
And now, they’re worried about a minimal rate increase, when history shows that it shouldn’t be feared. Raising rates from zero with inflation modest, unemployment cut in half and the financial crisis seven years in the past is a positive, not a negative…
❝The passing of time provides much needed context to the daily breathless excitement of, well, everything. After months have passed, in the clear light of day, what seemed important, even earthshaking at the time, actually didn’t amount to much of anything…
One day, there will be another recession and the bull stock market will end. The Fed’s decision to raise rates a quarter point in 2015 won’t be the cause of either.
Barry Ritholtz is forever my favorite Recovering Republican. He is blessed [or cursed] with preferring reality, accurate history, mathematically precise analysis whenever possible.
RTFA if for nothing else his giant list of everything that was going to “kill the economy”.
It’s been nearly seven years since a financial meltdown almost destroyed the global economy. Some of Wall Street’s major players reflect on riding out the maelstrom.
Once upon a time, Jimmy Cayne, now 81, had a lot to say about the sad fate that befell Bear Stearns, the Wall Street investment bank he ran for nearly 15 years before its shocking collapse, in March 2008. In more than 20 hours of interviews with me that summer, portions of which later appeared in my book House of Cards, he blamed Wall Street competitors and an amorphous group of hedge funds for conspiring to take down the 85-year-old firm. He was especially angry about then New York Federal Reserve Bank president Tim Geithner’s decision to allow Bear’s competitors access to crucial Federal Reserve funding, permitting them to fight another day, while his firm was denied such funds and faced the choice of either filing for bankruptcy or being sold to JPMorgan Chase for a pittance (which is what happened). Smoking $150 Cuban cigars, obtained through secret sources in Lebanon, he fumed, “The audacity of that prick in front of the American people announcing he was deciding whether or not a firm of this stature was good enough to get a loan…. It’s just that for some clerk to make a decision based on what, your own personal feeling about whether or not they’re a good credit [risk]? Who the fuck asked you? You’re not an elected officer. You’re a clerk. Believe me, you’re a clerk.”
That was then. These days, Cayne isn’t talking. Neither he nor his attorney Melissa Prober, at Kramer Levin, responded to requests to speak about the financial crisis for this article. But Cayne is still around.
That’s just the beginning of the several sketches of the Masters of the World who went through crushing times at the start of the Great Recession. You know. That economic crash that most politicians – mostly Republicans – still either deny or take no responsibility for.
The article is a solid read. Frankly, I’m astounded whenever anyone on Wall Street does interviews with Bill Cohan. Anyone of the regular crooks, that is. Have nothing to hide then you won’t worry about the interview. But, Cohan will let it all out. Including his own critical analysis.
America’s presidential election is still nearly two years away, and few candidates have formally thrown their hats into the ring. But both Democrats and Republicans are hard at work figuring out what will appeal to voters in their parties’ respective primary elections – and thinking about what will play well to the electorate as a whole in November 2016.
The contrast between the parties at this stage is striking. Potential Republican presidential candidates are arguing among themselves about almost everything, from economics to social issues; it is hard to say which ideas and arguments will end up on top. The Democrats, by contrast, are in agreement on most issues, with one major exception: financial reform and the power of very large banks.
The Democrats’ internal disagreement on this issue is apparent when one compares three major proposals to address income inequality that the party and its allies have presented in recent weeks. There are only small differences between President Barack Obama’s proposals (in his budget and State of the Union address), those made in a high-profile report from the Center for American Progress, and ideas advanced by Chris Van Hollen, an influential member of Congress. (For example, Van Hollen recommends more redistribution from higher-income people to offset a larger tax cut for middle-income groups.)
Against this backdrop of programmatic unity, the difference of opinion among leading Democrats concerning Wall Street – both the specifics of the 2010 Dodd-Frank financial reforms and more broadly – stands out in bold relief.
But a serious challenge to all of these views has now emerged, in proposals by Senator Elizabeth Warren, a rising Democratic star who has become increasingly prominent at the national level. In her view, the authorities need to confront head-on the outsize influence and dangerous structure of America’s largest banks.
Warren’s opponents like to suggest that her ideas are somehow outside the mainstream; in fact, she draws support from across the political spectrum. In last month’s fight against Citigroup’s successful effort to roll back Dodd-Frank, for example, Warren’s allies included the House Democratic leadership, the Independent Community Bankers of America, Republican Senator David Vitter, and Thomas Hoenig (a Republican-appointed vice chair of the Federal Deposit Insurance Corporation).
Warren’s message is simple: remove the implicit government subsidies that support the too-big-to-fail banks. That single move would go a long way toward reducing, if not eliminating, crony capitalism and strengthening market competition in the financial sector. This is a message that plays well across the political spectrum. And growing support for Warren’s ideas helps the Federal Reserve and other responsible regulators in their efforts to prevent big banks from taking on dangerous levels of risk.
RTFA. Consider the possibility that the Democrat Party – unlike Republicans – might challenge subservience to Wall Street or be satisfied with populist lip service to core reforms pressed by Elizabeth Warren, Bernie Sanders and many others?
Two of the “3 men in a room” — NY Governor Andrew Cuomo, State Assembly Speaker, Sheldon Silver
One day after charging one of New York’s leading lawmakers with exploiting his office to obtain millions of dollars in kickbacks and bribes, the United States attorney for the Southern District of New York delivered a stinging condemnation of the culture of corruption in Albany and said the system was set up to breed misdeeds.
The prosecutor, Preet Bharara, speaking at the New York Law School on Friday, castigated how deal-making has long been done in Albany — by “three men in a room” (the governor, the State Assembly speaker and the State Senate majority leader), who work in secret and without accountability to decide most vital issues.
For decades, state government has essentially been controlled by the three leaders. When they emerge from their private meetings, issues are usually settled, with no cause for public debate.
Mr. Bharara said this structure could lead to the kind of corruption outlined in the criminal complaint unveiled on Thursday against Sheldon Silver, a Manhattan Democrat who has been the Assembly speaker for two decades.
If the charges are proved true, he said, then “at least one of the proverbial three men in a room is compromised.”
If that is the case, he said, “then how can we trust that anything that gets decided in Albany is on the level?”
By concentrating power in the hands of so few, he said, good people are discouraged from running for office because they know they will have little influence on important matters…
…Mr. Bharara compared the culture in Albany to Wall Street, where he has aggressively pursued insider trading prosecutions.
Rather than trying to work for a greater good, he said, many people focused on where the line is between legal and illegal, and then steered as close as possible to that border without crossing over.
Such a mentality, he said, is a recipe for trouble…
…He urged voters to get angry, to demand change. “My hope is that in bringing the case,” he said, “there will be reform.”
“That almost happened with the Moreland Commission,” Mr. Bharara said, referring to the anticorruption panel established by Gov. Andrew M. Cuomo that was looking at lawmakers’ behavior when the governor shut it down…
And that governor, Andrew Cuomo was one of those “3 men in a room”. Which just may have provided his reason for shutting down the commission investigating New York State corruption.
I doubt he counted on Preet Bharara getting a court order requiring everything from the Moreland Commission to be turned over to the US Attorney — much less carrying the investigation through to the indictment of the man who has been State Assembly speaker for more than 20 years, Sheldon Silver.
Yup. Wall Street runs our government and the alphabet soup of obedience and fear – NSA, CIA, FBI – stage manage our imperial foreign policy.
That means if Homeland Insecurity deems it possible for some nutball terrorist to knock off our “fearless” leader – he stays home and watches the NFL on the telly instead of marching side-by-side with the leaders of our allies.
So how did House Republicans kick things off when they came back into session this week? Answer: They quickly passed a few noncontroversial bills (the Hire More Heroes Act, etc.), but then came the real top priorities. Something about abortion? Or gun rights? Maybe an immigration bill? Some other tea party hot button?
Nope. First up was a new rule that would speed the bankruptcy of the Social Security disability fund. It passed. Next they tried to sneak through a massive omnibus bill full of goodies for Wall Street…
Democrats rushed in to squash the Republican Frankenbill. H.R. 37 came up for a vote Wednesday under a suspension of the rules, meaning that it needed a two-thirds vote. So Democrats would have to supply several dozen votes for the bill to pass….“It has not yet been 24 hours since members of Congress have been sworn in,” said Democrat Dan Kildee (D-MI) on the House floor, “When Main Street had its needs we couldn’t get a hearing. When Wall Street asks, we suspend the rules without taking a breath.”
House Democratic leader Nancy Pelosi termed it a “brazen attempt” to “sneak through a New Year’s present to big banks.” Ultimately, enough Democrats shied away from the bill for it to fail by a vote of 276 to 146. Only 35 Democrats voted with all but 1 Republican in favor. The lack of two-thirds support means that the bill would not survive a Presidential veto either.
There you have it. All the tea-party stuff will come eventually, but the very first actions of the Republican House were ones to hurt disabled workers and give a huge gift to Wall Street. Actions speak louder than words, and these were their first actions. Welcome to 2015.
Meanwhile, mainstream media – which conservative fools say is guided by the Left – sits quietly and obedient, rewriting excerpts from press releases by Mitch McConnell, John Boehner and Joseph Goebbels.
OK, I made up the last name.
Point being, there is no criticism or comparison with years of unproductive stonewalling by today’s version of Republican conservatism. Our Free Press tiptoes away from any acknowledgement of the class basis of Congressional folderol. Of course. They are owned by the same pimps.
The completion of the Republican transition into the Christian Confederacy Party is left at the feet of the Tea Party nutballs. They aren’t yet allowed total control of the Republican Party. But, they get to stand and chant dirges from the Dark Ages as counterpoint to Smiling Mitch-and-Serious John’s sophistry lessons.
Creep of the week
A former Jefferies & Co. managing director convicted of fraud for lying to customers about the price of mortgage-backed securities sued the AllianceBernstein Holding LP (AB) executive who reported him.
Jesse C. Litvak sued Michael Canter, head of the securitized assets group at New York-based AllianceBernstein, in New York State Supreme Court in Manhattan yesterday, accusing him of using “wrongful, unfair or improper means” to interfere with his employment, directly resulting in his termination.
Litvak was accused of defrauding investors of $2 million by misrepresenting how much sellers were asking for the securities, or what customers would pay, and keeping the difference for Jefferies…
Canter testified for the prosecution during the case, saying the spreadsheet showed that Litvak had misled him about how much Jefferies had paid for bonds, including one instance when Canter agreed to raise a bid, yet the firm still paid the original price.
Litvak was found guilty in March of securities fraud and making false statements, as well as fraud connected to the Troubled Asset Relief Program. Along with his prison sentence, he was ordered to pay a $1.75 million fine.
Throw away the key!
This sleazy bastard and the lawyers representing him are perfect examples of how low legal processes have sunk in the United States. From kissing butt for every fundamentalist nutball who doesn’t want to pay taxes – to the open buying and selling of Congress and lesser members of the mutant species we have for elected officials – corruption is justified by every crook in the country.
They act as if the only birthright in the country that doesn’t need validation is that the powerful have every right to steal.
The judge should call him back for re-sentencing – and double the time, triple the fine!
Sen. Elizabeth Warren kicked off a firestorm last month when she said that she would not support Antonio Weiss, President Barack Obama’s nominee to be undersecretary of the treasury. Her reason was that Weiss had made his career at Lazard, an asset management company that has taken the lead in structuring corporate inversions, the practice of relocating a corporation’s headquarters to escape U.S. taxes.
In addition, Lazard planned to give Weiss $20 million in deferred compensation, that he was not actually owed, as a parting gift. This practice of promoting public service with large payments of deferred compensation to those taking on government positions is apparently common among Wall Street banks. But Warren, the AFL-CIO and others have criticized it: Being awarded large amounts of money before becoming public servants could make these bankers more positively disposed towards their former employers in the same way as an outright bribe…
Is there any question that we have a very serious problem of financial regulators who serve Wall Street and not the general public? Our financial regulators sat on their hands as a housing bubble grew ever more out of line with the fundamentals of the market, as anyone with open eyes could see.
And the bad loans that were driving this explosion in house prices were also not a secret. The National Association of Realtors reported that 43 percent of first-time homebuyers in 2005 had down payments of zero or less. The term NINJA loan — meaning no income, no job or assets — became common in the real estate and banking industry.
The warning signs were everywhere, but where were the regulators? Timothy Geithner, who was president of the New York Fed from 2003 until he became treasury secretary in 2009, told the Senate Banking Committee during his confirmation hearings that he had never been a regulator. This is in spite of the fact that one of the main responsibilities of the New York Fed is to regulate the Wall Street banks.
Unfortunately Geithner’s attitude is typical among the regulators in Treasury and elsewhere. They appear to hold the view that their job is serving the big banks and that in doing so they are somehow serving the larger public.
RTFA for a bit more depth and detail. That control of our economy is dependent upon Wall Street Wizards is almost unavoidable given how the American version of capitalism is skewed and screwed-up. That certainly shouldn’t diminish the role of watchdogs – and where their loyalties should lie.