Whassss uuuuup?

February 27, 2009

G.E. circling the drain [Independent]

Catastrophe – Obama uses this word on a regular basis to describe what is going to happen if we don’t keep throwing more money at the problem. Little does he realize the word is reality.

[Rant du jour]

Can’t arrest them, that would look bad
Two East Coast investment managers sued for fraud by the University of Pittsburgh and Carnegie Mellon University misappropriated more than $500 million of investors’ money to hide losses and fund a lavish lifestyle that included purchases of $80,000 collectible teddy bears, horses and rare books, federal authorities said yesterday.

As Pitt and Carnegie Mellon were busy trying to learn whether they will be able to recover any of their combined $114 million in investments through Westridge Capital Management, the FBI yesterday arrested the corporations’ managers.

Paul Greenwood, 61, of North Salem, N.Y., and Stephen Walsh, 64, of Sands Point, N.Y., were charged in Manhattan — by the same office prosecuting the Bernard L. Madoff fraud case — with securities fraud, wire fraud and conspiracy.

Both men also were sued in civil court by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, which alleged that the partners misappropriated more than $553 million and “fraudulently solicited” $1.3 billion from investors since 1996.

[Post Gazette]

Socipathic behavior was not merely tolerated by Wall St.; sociopaths were recruited. Quite a few even made CEO’s (but then that’s obvious).

Teddy Bears? Fer chrissakes. Are these grown men, or teenage girls?

Nothing said about Beanie Babies, Cabbage Patch dolls, or Pez dispensers. But you just know what was on their list.

Boomers: 30% underwater [Money]

All the better for sharks, my dears. Soon it will be time to consider the Freegan lifestyle. We’ll be reduced to fighting over scraps; is this what we’re moving toward? Tsk tsk.

Arsonists Torch Berlin Porsches, BMWs on Economic Woe [BB]

The inter-generational battle has begun!

C’mon people, isn’t it obvious? The time for ostentatious display is over. Get in the back of the van!

Will she squeal like a stuck pig?

Laura Pendergest-Holt: the woman who may bring down Stanford empire

US regulators are hoping that Laura Pendergest-Holt, the former chief financial officer within the frozen Stanford investment empire, will lead them to the heart of what appears to be one of the world’s biggest scams.

[London Times][Tupelo Biz Buzz] [Dealbreaker][WSJ]


Any resemblance that 2009 has to 1929 is purely intentional.

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The Black Hole of Wall St.

February 25, 2009

SPIES LIKE US GS has covertly and successfully planted agents in US government bureacracy to guarantee their lord and master gets taken care of… damn the country. (“It was a quaint idea” – Lloyd Blankfein on the Declaration of Independence. Not really, that’s just just an exaggeration. But how much of  a stretch?)

After all, it was GS operatives which were behind the execution “with exterme prejudice” of Lehman Bros. just as much as it is behind the bailout. Especially in the case of AIG- counterparty to many GS Credit Default Swaps. Heads I win, tails you lose.

Perhaps GS will come to be known as ‘the black hole Wall St.’

Obama’s many public speeches (I think in one month he’s already surpassed Clueless Bush) plays to his strength. But the new President is quickly attaining the reputation as all talk, no effective action. Will he become known as the jawbone president?

Perhaps Barry Hussein is more comfortable campaigning than he is in the actual job.

Last night BHO said “We are not quitters.” He is right- his people are going to keep making the same mistakes over and over until the nation has been bankrupted, and the pigs have disgorged the middle class from its modest wealth and no longer exists.

All with the help, and strategic planning from, GS.

Hey, Mr. Obama, you got the job- now do something constructive!

Instead of focusing on bailing out the very institutions that have wiped out half the value of the NY stock market- in an effort to ‘restore confidence’ (it hassn’t, has it?)- how about arresting and prosecuting some of these ‘Masters of the Universe’ (Mozilo, Stanford, Madoff et al)? Where are the clawbacks?(Blankfein, Fuld, Mozilo, Pandit, O’Neal et al) instead? That would restore confidence that the system is healthy, and the guilty are being punished- not running the show. [Why Is Geithner Continuing Paulson’s Policy of Violating the Law?]

Prosecute the guilty. Clawback bogus bonuses and options. YKIMS!

Nobody has any idea just how big that black hole is. But trillions of taxpayer dollars later, it it still appears as if nothing can satisfy the thirst of this beastly thing.

And purge your administration of conflicts of interest. Send any GS and Shittygroup ‘ex-employees’ from the bureacracy. Start with those in positions of influence where they have direct oversight of anything finance related.

Once and for all, get rid of that damnable revolving door!

Bank stress tests are designed with the outcome already in mind. This will be nothing more than a propoganda tool. When the market needs propping up, they’ll conveniently release “positive” info that this or that bank is well-capitalized… Yeah. Right. Then on the Q.T. and very hush-hush quietly funnel them money in the dead of night…

[Hat tip]

Fallout form Madoff: motion picture nursing home forced to close [BB]

Also:

Boomus Interruptus Down and out in Maricopa, AZ

There will be blood Niall Ferguson interview [WARNING: CONTAINS FRANKNESS]


Capitalism is to the USA what communism was to the USSR. Any resemblance to the ‘actual thing’ is pure hyperbole. -Paco Bell


Sinking ships that pass in the night

February 23, 2009

What’s it feel like to lose a Billion Dollars of other people’s money? That would assume an investment banker gives a shit.

High finance had been decided by what amounted to playground politics. Shareholders lost everywhere. Bonuses were paid everywhere.

In the early days, two big banks had been dealing with each other on a regular basis in very large volumes. After a while they each inquired what the other was up to. Both thought they were making money on the trades – bank A was selling something to bank B, yet both banks recorded they were making a profit on these trades.

Both banks booked a profit in their accounts, and both sets of traders got bonuses. You don’t need to be a genius to see the problem here.

[Sunday Times]

Welcome to 1997

Ten years of gains wiped clean.

Next stop: DOW 6000! Aaaaaaaaaaaaaall aboard!

Where is Stanford? [Wiki]

Enjoying the good life with Ken Lay, no doubt.

“We didn’t need terrorists to destroy our nation. We’re doing it to ourselves, and the guilty parties are found within the boundaries of Washington DC.” -Karl Denninger


Accidental, Unintentional Deaths, Annualized

February 23, 2009

Automobile…………………….. 41,200 

Falls………………………………… 16,600

Poisoning…………………………. 9,000

Pedestrian……………………….. 5,165

Drowning…………………………. 4,100

Burns………………………………… 3,700

Ingestion/ Suffocation……. 3,200

Firearms……………………………… 900

Other (ex-firearms)………… 13,500

[Source 1998 NHSC] [NSC]


Citi Scammed By Nigerians. Seriously. You cannot make this shit up.

February 23, 2009

Nigerian 419 Double-reverse:

Swindles in which someone overseas seeks access to a person’s bank account are so well known that most potential victims can spot them in seconds.

But one man found success by tweaking the formula, prosecutors say: Rather than trying to dupe an account holder into giving up information, he duped the bank. And instead of swindling a person, he tried to rob a country — of $27 million.

To carry out the elaborate scheme, prosecutors in New York said on Friday, the man, identified as Paul Gabriel Amos, 37, a Nigerian citizen who lived in Singapore, worked with others to create official-looking documents that instructed Citibank to wire the money in two dozen transactions to accounts that Mr. Amos and the others controlled around the world.

The money came from a Citibank account in New York held by the National Bank of Ethiopia, that country’s central bank. Prosecutors said the conspirators, contacted by Citibank to verify the transactions, posed as Ethiopian bank officials and approved the transfers.

[NYT]


Welcome to H-E-Double Hockey Sticks

February 23, 2009

Mish-mash-up

February 23, 2009

Citigroup Begs To Be 40% Nationalized

Citigroup is a black hole, sucking in every dollar thrown at it and it still wants more. No amount seems enough to save it. Taxpayers have already guaranteed a whopping $300 billion dollars worth of Citigroup debt. Now, two months later, Citigroup is begging for still more capital, pretending that will save it.

Black Hole

Black Hole

Not only is Citigroup a black hole from which no taxpayer dollars can escape, but Geithner’s brain is a black hole from which no intelligent thought can escape.

Geithner is attempting to bail out his banking buddies, no more, no less, and he does not give a damn what it costs taxpayers to do so. And while everyone and their brother has hopped on the Nationalization Train.

Citigroup is struggling to remain independent even as it knows full well, that without still more government intervention, it is worthless. In fact, Citigroup is less than worthless because without more taxpayer cash infusions it cannot survive.

To hell with Citigroup. Bust it up and sell it. It’s the best possible outcome for everyone involved. [Mish]

Nukes are ialways/i an option

The Relunctant Option

Treasury Soliciting Bankruptcy Funding for GM, Chrysler

Let’s see. Citigroup has gotten $45 billion of TARP funds, and backstops on a net of roughly $250 billion of crappy loans after Ciit’s first loss and allowing for the split between Uncle Sam and Citi on the balance. And it is pretty unlikely that we have seen the end of Citi’s funding needs.

GM and Chrysler, by contrast, have borrowed (un, loans are higher in priority than TARP-y equity) $17.4 billion and are seeking an additional $21.6 billion. So the total they want is less than that already handed to Citi, well less than what AIG received.

The Treasury is threatening to put the two car manufacturers into bankruptcy, and is moving forward in exploring feasibility. This may merely be high stakes poker, but the bluff looks pretty serious.

Do we see anywhere near as rough treatment for companies that not only drove themselves off the cliff, but are taking the economy with them? Ah, but of course. Who has given more to pols in DC, Wall Street or Detroit? Case solved. [naked capitalism]

Now It’s Official: Stress Test Results Pre-Determined

We have been skeptical that the pending Treasury stress tests on banks, designed to ascertain their state of health, were inadequately staffed and therefore could not do the job properly. Our big concerns were that they had too few bodies to test financial data versus underlying documentation adequately (usually done on a sampling basis) and they lacked the expertise (and perhaps the mandate) to vet risk models (which we all know have performed impeccably over the last two years.

Is it a test if the results are pre-determined? Apparently Team Obama thinks so. [naked capitalism]


“There’s reason to believe that transforming of debt into securities creates incentives for fraudulent loans and mortgages since they can be dumped on Wall Street and sold to gullible investors. ” -Mike Whitney