Apr 13

- HFT Purge Begins: SEC Prepares To “Remove” Some High Frequency Trading Firms (ZeroHedge, April 13, 2014):

Ever since Goldman’s anti-HFT Op-Ed less than a month ago, and since the even more recent full-hearted support by Goldman of Michael Lewis’ most recent entry into the anti-HFT crusade (one promoting the Goldman-supported IEX exchange), one thing has been clear: the days of market structure in its current format are numbered. This was further confirmed after Goldman exited both its legacy Spear Leeds & Kellogg designated market making post at the NYSE, and is said to be winding down its market-dominating dark pool, Sigma X.

It also means that our 5 year crusade against HFT – not because we want it replaced with a different, Goldman-backed exchange but because HFTs inherently destabilize the market (see May 2010 and the now daily flash crash in individual stocks and/or exchanges) – and specifically those most profitable but also most parasitic and predatory HFT strategiesContinue reading »

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Apr 08

corruption_0

- Retiring SEC Lawyer Crucifies His Employer: “It’s A Cancer” Working On Behalf Of The “Bankster Turnpike” (ZeroHedge, April 8, 2014):

We wonder: why does the truth about the broken system, as witnessed and experienced by individual employees, always wait until said employee is about to depart their employer or just after? Obviously that is rhetorical. However, it is worth mentioning, because in the latest such revelation, a retiring SEC trail attorney veteran, James Kidney, who had been with the agency since 1986 and retired this month, just crucified his now former employer for doing precisely all those thing that outside critics – notably Zero Hedge – have accused the most co-opted, clueless, corrupt and criminal regulators of doing. Only he said it in a way that not even we could have phrased.

From Bloomberg:

The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.

Wow: another “erudite” former cog in the systemic wheel goes off the reservation and gets all tinfoil bloggy on us. He goes on: Continue reading »

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Feb 12

SEC Lashes Out at Wolves of Wall Street (OilPrice, Feb 10, 2014):

The US Securities and Exchange Commission (SEC) has suspended 255 shell companies from trading until 14 February to prevent “pump and dump” fraud, and stocks will not be relisted if companies fail to prove they are operational.

The suspension took hold at the start of trading on 3 February and will end at 11:50 p.m. on Feb. 14. Suspended stocks can’t be relisted unless the company can prove it is still operational, a requirement that the SEC said was “extremely rare.”

Continue reading »

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Jan 31

- Amazon Drops 10% – Triggers SEC Short Sale Rule (ZeroHedge, Jan 31, 2014):

Despite the best efforts of CNBC to have every bull on Amazon explain how great it really is and how they could enable to magical profit machine any minute if they so choose, the hedge fund hotel stock du jour is now down 10% and Bloomberg headlines blare:

  • *SEC Short Sale Rule 201 is in Effect : AMZN (NASDAQ)

Last night’s algo-ramp to VWAP (on rising Prime prices?) is a long-distant memory now…

Amazon drops 10 percent

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Sep 06
The Thomson Reuters headquarters building in New York City.

- 16 Major Firms May Have Received Early Data From Thomson Reuters (Rolling Stone, Sep 5, 2013):

Readers may recall an ugly story that broke earlier this summer, when New York State Attorney General Eric Schneiderman rebuked the news/business information firm Thomson Reuters for selling access to key economic survey data two seconds early to high-frequency algorithmic traders. The story strongly suggested that some Thomson Reuters customers were using their two-second head start (an eternity in the modern world of computerized trading) to front-run the markets.

“The early release of market-moving survey data undermines fair play in the markets,” Schneiderman said, back in the second week of July. Thomson Reuters suspended the practice of selling two-second head starts after Schneiderman insisted upon a change. Still, the firm defiantly refused to declare the change permanent and insisted that it had the right to “legally distribute non-governmental data” to “fee-paying subscribers.”

It turns out that there’s more to the story.

Continue reading »

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Aug 06

- Big Oil’s Central Asian Mafia (Veterans Today, Aug 6, 2013)

(Excerpted from Big Oil & Their Bankers: Chapter 17: Caspian Sea Oil Grab)

According to Kurt Wulff of the oil investment firm McDep Associates, the Four Horsemen, romping in their new Far East pastures, saw asset increases from 1988-1994 as follows: Exxon Mobil- 54%, Chevron Texaco- 74%, Royal Dutch/Shell- 52% and BP Amoco- 54%.  Big Oil had more than doubled its collective assets in six short years.

This quantum leap in global power had everything to do withthe takeover of the old Soviet oil patch and the subsequent impoverishment of its birthright owners.

While the Four Horsemen gorged on Russian and Central Asian oil, Wall Street investment bankers were facilitating the oil grab and ripping off the Russian Treasury.

Salomon Smith Barney’s Phibro Energy oil trading subsidiary set up shop in Moscow.  Goldman Sachs was hired by Yeltsin to lure foreign capital to Russia.  Heading the Russian Goldman Sachs team was Robert Rubin, later Clinton Secretary of Treasury & Citigroup CEO.  CS First Boston took a 20% stake in Lukoil, in partnership with BP Amoco. Continue reading »

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May 03

Flashback:

- JPMorgan Employee Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade


- Will JPMorgan’s “Enron” Be The End Of Blythe Masters? (ZeroHedge, Mai 3, 2013):

One year after the infamous Jamie Dimon “tempest in a teapot” fiasco, which promptly turned out to be the biggest TBTF prop-trading desk debacle in history, things were going well for JPMorgan.

On one hand, the chairman of the TBAC (and thus US Treasury advisor and policy administrator), and former LTCM trader, Matt Zames, was just recently promoted to the sole second in command post at the biggest US bank (and 2nd biggest in the world) by assets, and first in line to take over from Jamie Dimon. On the other hand, one of Mary Jo White’s former co-workers, and a JPM defense attorney from Debevoise just became head of the SEC’s enforcement division, in theory guaranteeing that the US government would never do more than slap the wrist of JPM in perpetuity. Continue reading »

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May 02

- And For Its Next Trick, JPMorgan Takes Over The SEC (ZeroHedge, Mai 1, 2013):

JPM wasn’t satisfied with demonstrating its implicit control over the US bond issuing authority by promoting Matt Zames to the post of COO, the same Matt Zames who courtesy of his Chairmanship of the TBAC, also effectively runs the US Treasury where he “advises” the brand new Treasury Secretary who has no idea what he is doing. Oh no. Just to cover all its bases, Jamie Dimon’s firm decided to also take over the SEC as well.From a Notice of Withdrawal of appearance of one Andrew J. Ceresney filed in the case of the People of New York versus JPMorgan, in which find that Mr. Ceresney, formerly partner at Debevoise, the same firm that current SEC chief Mary Jo White came from, is no longer with the firm.

So, where is he then?

Cerseney… Cerseney… where have we seen that name…. Oh yes.

From press release 2013-67 by the SEC

George Canellos and Andrew Ceresney Named Co-Directors of Enforcement

FOR IMMEDIATE RELEASE
2013-67

Washington, D.C., April 22, 2013 — The Securities and Exchange Commission today announced that Acting Director George Canellos and former federal prosecutor Andrew Ceresney have been named Co-Directors of the Division of Enforcement. Continue reading »

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Feb 16

- Goldman Implicated In Heinz Insider Trading Probe (ZeroHedge, Feb 15, 2013):

When the news broke of the SEC’s action against the HNZ call option insider traders, and we posted the full SEC charge against the perpetrators whose actions Zero Hedge reported on first, we asked this regarding one of the entities named: “the trade occurred through an “omnibus account located in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS & Co c/o Zurich Office (the “GS Account”).” Does GS stand for Goldman Sachs one wonders?” This followed our prior post, rhetorically titled “Guess Who Was Buying HNZ Stock From Its Clients“, with the answer of course being Goldman Sachs, which had had HNZ stock at a Sell rating for months, and which just days before reiterated its negative sentiment. But for the most part the post was written in jest. Turns out the joke was on everyone else, because just as we feared, or rather knew, Goldman was indeed implicated all along.

From Reuters:

Goldman Sachs Group Inc is cooperating with a U.S. Securities and Exchange Commission probe into insider options trading in H.J. Heinz Co before the food company announced it was being acquired, Goldman said on Friday.

Earlier in the day, the SEC filed suit against unknown traders using an account in Switzerland to buy options in Heinz before the company was purchased. The SEC suit does not explicitly name Goldman Sachs but refers to the account in Switzerland as the “GS Account.”

While none of this is surprising, we do find it curious that from “Vampire Squid”, Goldman Sachs has now metastasized into “he who must not be named.”

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Jan 25

From the article:

“I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth.”

As I’ve said many times before: Prepare for collapse.


- Scam complete: the US government takes a page from Diocletian’s book… (Sovereign Man, Jan 25, 2013):

Early in the 4th century, Emperor Diocletian issued an infamous decree to control spiraling wages and prices in the rapidly deteriorating Roman Empire.

As part of his edict, Diocletian commanded that any merchant or customer caught violating the new price structures would be put to death.

This is an important lesson from history, and a trend that has been repeated numerous times. When nations are in terminal economic decline, governments will stop at nothing to keep the party going just a little bit longer.

Continue reading »

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Dec 06


Former CEO of Deutsche Bank Josef Ackermann in 2008

- Bombshell: Deutsche Bank Hid $12 Billion In Losses To Avoid A Government Bail-Out (ZeroHedge, Dec 5, 2012):

Forget the perfectly anticipated Greek (selective) default. This is the real deal. The FT just released a blockbuster that Europe’s most important and significant bank, Deutsche Bank, hid $12 billion in losses during the financial crisis, helping the bank avoid a government bail-out, according to three former bank employees who filed complaints to US regulators. US regulators, whose chief of enforcement currently was none other than the General Counsel of Deutsche Bank at the time!

From the FT:

The three complaints, made to regulators including the US Securities and Exchange Commission, claim that Deutsche misvalued a giant position in derivatives structures known as leveraged super senior trades, according to people familiar with the complaints.

All three allege that if Deutsche had accounted properly for its positions – worth $130bn on a notional level – its capital would have fallen to dangerous levels during the financial crisis and it might have required a government bail-out to survive. Continue reading »

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Sep 28

- Germany Does What The SEC Hasn’t – Prepares To Ban HFT (ZeroHedge, Sep 26, 2012):

The EU assembly just voted affirmatively to impose a spate of rules to control ‘high-frequency-trading that, as the WSJ reports, was advanced by Germany following their concerns that speedy traders have brought instability to markets. It is somehow reassuring that three-years after we first brought HFT to the mainstream’s agenda, at least one nation is taking it seriously, doing something about it, instead of being filibustered into the ‘liquidity-providing’ meme. The rules will initially require registration, collect fees on excessive use of HFT methods, and install circuit breakers with the goals to “limit the risks associated with high-frequency trading” per a senior German FinMin; but the more stringent rules to come will have the greatest impact as they intend to include requirements for orders to rest on the exchange book for at least half-a-second, and potentially order-to-trade ratio caps. Not surprisingly, the HFTs believe a “one-size-fits-all approach would be very harmful.” Indeed – to their profits.
Via WSJ: Germany to Tap Brakes On High-Speed Trading

BERLIN—Germany is set to advance a bill Wednesday imposing a spate of new rules on high-frequency trading, escalating Europe’s sweeping response to concerns that speedy traders have brought instability to the markets.

The measure seeks to require traders to register with Germany’s Federal Financial Supervisory Authority, collect fees from those who use high-speed trading systems excessively, and force stock markets to install circuit breakers that can interrupt trading if a problem is detected.

“The goal of the German law is to limit the risks associated with high-frequency trading,” he said. Continue reading »

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Sep 06

- Bloomberg FOIA Documents How Wall Street Made A Muppet Of The SEC, Mary Schapiro And Dodd Frank (ZeroHedge, Sep 5, 2012):

That the SEC is the most incompetent, corrupt, irrelevant and captured organization “serving” the US public is known by everyone. And while the details of the SEC’s glaring lack of capacity to do anything to restore investor confidence in the capital markets, which has become a casino used exclusively by Wall Street to defraud any retail investor still stupid enough to play (which lately a moot point as there have been no material retail inflows into mutual funds in over three years), are scattered, courtesy of Bloomberg we now have the best summary of just how the utterly clueless SEC is a muppet plaything of Wall Street, and together with it, the “grand regulation” that was supposed to keep Wall Street in check, is nothing but what Wall Street demand it to be, and forced the SEC, way over its head on regulation, to accept every change, that the very banks that are supposed to be regulated, demands as part of Dodd-Frank reforms. In short: everything we know about Wall Street ‘regulation’ has been a farce, and a lie, exclusively thanks to corruption rampant at the now documentedly incompetent Securities And Exchange Commission.Bloomberg has the smoking gun.

It had been two days since U.S. lawmakers negotiated all night to finish rules that would reshape the business of Wall Street. The 20-hour session left legislators, aides, lobbyists and regulators exhausted. Almost no one had a grip on all the details.

Then Annette Nazareth stepped in. That Sunday morning, she e-mailed a dozen Securities and Exchange Commission officials about the bill that would become the 2,300-page Dodd-Frank Act.

Who is Annette Nazareth? Continue reading »

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Aug 17

This is the ‘Greatest Depression’.


- Startling Evidence That Central Banks And Wall Street Insiders Are Rapidly Preparing For Something BIG (Economic Collapse, Aug 16, 2012):

If you want to figure out what is going to happen next in the financial markets, carefully watch what the insiders are doing.  Those that are “connected” have access to far better sources of information than the rest of us have, and if they hear that something big is coming up they will often make very significant moves with their money in anticipation of what is about to happen.  Right now, Wall Street insiders and central banks all around the globe are making some very unusual moves.  In fact, they appear to be rapidly preparing for something really big.  So exactly what are they up to?  In a previous article entitled “Are The Government And The Big Banks Quietly Preparing For An Imminent Financial Collapse?“, I speculated that they may be preparing for a financial meltdown of some sort.  As I noted in that article, more than 600 banking executives have resigned from their positions over the past 12 months, and I have been personally told that a substantial number of Wall Street bankers have been shopping for “prepper properties” this summer.  But now even more evidence has emerged that quiet preparations are being made for an imminent financial collapse.  That doesn’t guarantee that something will happen or won’t happen.  Like any good detective, we are gathering clues and trying to figure out what the evidence is telling us.

Why Is George Soros Selling So Much Stock And Buying So Much Gold?

I am certainly not a fan of George Soros.  He has funneled millions upon millions of dollars into organizations that are trying to take America in the exact wrong direction.

Continue reading »

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Aug 17

- What To Do When Every Market Is Manipulated (ZeroHedge, Aug 16, 2012):

Hint: cut the strings

If you don’t know who the sucker at the card table is, it’s you.

~ old gambler’s saying

What do the following have in common?

LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?

The answer is that every single thing in that list is an example of market rigging, fraud, or both.

Continue reading »

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Jul 27

- Barofsky On Geithner: “We Should See People In Handcuffs” (ZeroHedge, July 26, 2012):

There is no point in recapping the ongoing vendetta between former SIGTARP Neil Barofsky and former head of the NY Fed, and current Treasury secretary and resident TurboTax expert Tim Geithner. One need but follow the former on Twitter for a quick and concise sampling of the sentiments harbored vis-a-vis the latter. However, in the following interview Barfosky does touch on some points which in the context of the recent Liborgate, should be brought front and center, especially since the increasingly apathetic US audience seems to not care about one bit (as opposed to their distant cousins across the Atlantic for whom Lieborgate has become a daily distraction). Namely, what Barofsky says is that Geithner and other regulators who allowed Lieborgate to proceed should not only lose their job but we should see [Geithner] in handcuffs.”  Sadly that will never happen as it would actually be a deterrent to future crime among the highest echelons of America: something which is just not allowed to happen in a system whose very survival is increasingly reliant on rampant criminality.

To wit:

While Geithner pushed for broader reforms of LIBOR, he did not explicitly warn of possible rate manipulations and neglected to notify U.S. regulators at the Department of Justice, the Commodity Futures Trading Commission and Securities and Exchange Commission to the wrongdoing, notes Barofsky.

It was a “message to the banks ‘if we commit fraud, we break the rules, don’t worry, we’re too big — they’ll never bring the appropriate steps against us,’” Barofsky says in an interview with The Daily Ticker. “And that is why we’ve had scandal after scandal after scandal.”

This was a “global conspiracy to fix one of the most important interest rates in the world,” Barofsky continues. “[Geithner] heard this information and looked the other way. Geithner and other regulators should be held accountable, they should be fired across the board. If they knew about an ongoing fraud, and they didn’t do anything about it, they don’t deserve to have their jobs. I hope we see people in handcuffs.”

Full clip:

There is no point in recapping the ongoing vendetta between former SIGTARP Neil Barofsky and former head of the NY Fed, and current Treasury secretary and resident TurboTax expert Tim Geithner. One need but follow the former on Twitter for a quick and concise sampling of the sentiments harbored vis-a-vis the latter. However, in the following interview Barfosky does touch on some points which in the context of the recent Liborgate, should be brought front and center, especially since the increasingly apathetic US audience seems to not care about one bit (as opposed to their distant cousins across the Atlantic for whom Lieborgate has become a daily distraction). Namely, what Barofsky says is that Geithner and other regulators who allowed Lieborgate to proceed should not only lose their job but we should see [Geithner] in handcuffs.”  Sadly that will never happen as it would actually be a deterrent to future crime among the highest echelons of America: something which is just not allowed to happen in a system whose very survival is increasingly reliant on rampant criminality.

To wit:

While Geithner pushed for broader reforms of LIBOR, he did not explicitly warn of possible rate manipulations and neglected to notify U.S. regulators at the Department of Justice, the Commodity Futures Trading Commission and Securities and Exchange Commission to the wrongdoing, notes Barofsky.

It was a “message to the banks ‘if we commit fraud, we break the rules, don’t worry, we’re too big — they’ll never bring the appropriate steps against us,’” Barofsky says in an interview with The Daily Ticker. “And that is why we’ve had scandal after scandal after scandal.”

This was a “global conspiracy to fix one of the most important interest rates in the world,” Barofsky continues. “[Geithner] heard this information and looked the other way. Geithner and other regulators should be held accountable, they should be fired across the board. If they knew about an ongoing fraud, and they didn’t do anything about it, they don’t deserve to have their jobs. I hope we see people in handcuffs.”

Full clip:

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May 12


CEO Jamie Dimon revealed Thursday that JPMorgan had suffered a $2 billion trading loss.

- Fitch downgrades JPMorgan Chase (CNN Money, May 11, 2012):

NEW YORK (CNNMoney) — The closing bell brought no relief for JPMorgan Chase on Friday, as a major credit rating agency moved to downgrade its debt almost exactly 24 hours after the bank revealed a $2 billion trading loss.

Fitch Ratings downgraded both JPMorgan’s short-term and long-term debt, with the latter falling to A+ from AA-. The bank, the country’s largest by assets, was also placed on ratings watch negative.

Fitch said it views the $2 billion loss as “manageable” but added that “the magnitude of the loss and ongoing nature of these positions implies a lack of liquidity.”

- Fitch Downgrades JPM To A+, Watch Negative (ZeroHedge, May 11, 2012):

Update: now S&P is also one month behind Egan Jones: JPMorgan Chase & Co. Outlook to Negative From Stable by S&P. Only NRSRO in pristinely good standing is Moodys, and then the $2.1 billion margin call will be complete.

So it begins, even as it explains why the Dimon announcement was on Thursday – why to give the rating agencies the benefit of the Friday 5 o’clock bomb of course:

  • JPMorgan Cut by Fitch to A+/F1; L-T IDR on Watch Negative

What was the one notch collateral call again? And when is the Morgan Stanley 3 notch cut coming? Ah yes:

So… another $2.1 billion just got Corzined? Little by little, these are adding up.

Oh and guess who it was that downgraded JPM exactly a month ago. Who else but SEC public enemy number one: Egan-Jones:

Synopsis: Reliance on prop trading and inv bkg income remain. LLR declines (down $1.7B QoQ and $3.87B YoY) offset DVA losses in the investment bank. Wholesale loans were up 23% YoY and 2% QoQ. Middle Mkt, Cmml Term, Corp Client and Cmml Real Estate lending increased by 9%, 2%, 16% and 19% YoY. Middle Mkt and Corp lending was up 2% and 3% QoQ respectively, while Cmml Term, and Cmml Real Estate lending were down 2%, and 9% respectively. Card and consumer loans were down 2% and 5% YoY respectively (down 5% and 1% QoQ respectively). Non accruals are up 14% QoQ due to weakness in JPM’s student loan portfolio. Reserve coverage is good and capital is adequate. We believe JPM will experience further weakness in its retail portfolio due to a softening economy. We are downgrading.

Full Fitch “analysis”: Continue reading »

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Apr 27

- The Truth About Egan-Jones (ZeroHedge, April 27, 2012):

… but not from us: after all we are known for being biased, which in the mainstream media parlance means calling it like it is. No – instead we leave it to none other than Bloomberg’s Jonathan Weil who does as good a job of being “biased” as we ever could: “Egan-Jones, which has been in business since 1992, could have continued operating as an independent publisher of ratings and analysis, not subject to government oversight or control. Instead it chose to play within the Big Three’s system, exposing itself to regulation and the whims of the SEC in exchange for the government’s imprimatur. Now it’s paying the price.” And not only that: as the most recent example of Spain just shows, where Egan Jones downgraded Spain 9 days ago and was ignored, but well ahead of everyone else, only to be piggybacked by S&P, and the whole world flipping out, it has become clear: calling out reality, and the fools that populate it, is becoming not only a dangerous game, but increasingly more illegal. Then again – this is not the first time we have seen just this happen in broad daylight, with nobody daring to say anything about it. In fact, this phenomenon tends to be a rather traditional side-effect of every declining superpower. Such as the case is right now…

From BBG’s Jon Weil:

The first time I wrote about Sean Egan and his small, independent credit-research firm, Egan-Jones Ratings Co., was in December 2007 for a column about the bond insurer MBIA Inc. (MBI) And man, did he nail it.

The three big credit raters — Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings — all had AAA ratings on MBIA’s insurance unit, their highest grade. Egan said it deserved much lower. Anyone reading MBIA’s financial reports could see the company was losing money and needed billions of dollars of fresh capital.

By mid-2008, the Big Three had cut their ratings. Once again, Egan, a lonely voice of reason who saw the financial crisis coming, had shown his larger competitors to be incompetent or compromised. It was one of many great calls to come for Egan-Jones. As for MBIA, which had no revenue last quarter, it’s still struggling.

So if you had told me back then that the Securities and Exchange Commission’s enforcement division more than four years later would be accusing Egan, and his firm, of securities-law violations — but not any of the big rating companies — there’s no way I would have believed you. That’s what happened this week, though. Continue reading »

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Apr 13

- Goldman to pay $22 million to settle ‘huddles’ case (Reuters, April 12, 2012):

Goldman Sachs (GS.N) agreed to pay $22 million to settle civil charges arising from company procedures that created the risk select clients would receive market-sensitive information, such as changes to Goldman’s recommendation lists and its ratings of stocks.

The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority said the charges stemmed from Goldman’s weekly “huddles,” at which the bank encouraged its stock research analysts to share trading ideas with the company’s traders.

Those traders then passed tips to a select group of top clients, the SEC said, but the agency’s charges did not include any allegations of insider trading.

Continue reading »

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Apr 09

Next train ‘Ausschwitz’:

- No.1 Trend Forecaster Gerald Celente: The Entire Financial System Is Collapsing! – This Is FASCISM! (Video, March 26, 2012 )

Flashback:

- Former governor  Jesse Ventura Conspiracy Theory: Police State (And FEMA Concentration Camps) – Full Length Video

The videos down below are a MUST-SEE!


- America: A Government Out Of Control (ZeroHedge, April 8, 2012):

“A government big enough to give you everything you want, is strong enough to take everything you have”
- Thomas Jefferson

Something odd and not quite as planned happened as America grew from its “City on a Hill” origins, on its way to becoming the world’s superpower: government grew. A lot. In fact, the government, which by definition does not create any wealth but merely reallocates it based on the whims of a select few, has transformed from a virtually invisible bystander in the economy, to the largest single employer, and a spending behemoth whose annual cash needs alone are nearly $4 trillion a year, and where tax revenues no longer cover even half the outflows. One can debate why this happened until one is blue in the face: the allures of encroaching central planning, the law of large numbers, and the corollary of corruption, inefficiency and greed, cheap credit, the transition to a welfare nanny state as America’s population grew older, sicker and lazier, you name it. The reality is that the reasons for government’s growth do not matter as much as realizing where we are, and deciding what has to be done: will America’s central planners be afforded ever more power to decide the fates of not only America’s population, but that of the world, or will the people reclaim the ideals that the founders of this once great country had when they set off on an experiment, which is now failing with every passing year?

As the following video created by New America Now, using content by Brandon Smith whose work has been featured extensively on the pages of Zero Hedge, notes, “we tend to view government as an inevitability of life, but the fact is government is not a force of nature. It is an imperfect creation of man and it can be dismantled by man just as easily as it can be established.” Unfortunately, the realization that absolute power corrupts absolutely, and absolute central planning leads to epic catastrophes without fail, seems a long way away: most seem content with their lot in life, with lies that their welfare money is safe, even as the future is plundered with greater fury and aggression every passing year, until one day the ability to transfer wealth (benefiting primarily the uber rich, to the detriment of the middle class which is pillaged on an hourly basis), from the future to the present is gone, manifesting in either a failed bond auction or hyperinflation. The timing or shape of the transition itself is irrelevant, what is certain is that America is now on collision course with certain collapse unless something changes. And one of the things that has to change for hope in the great American dream to be restored, is the role, composition and motivations of government, all of which have mutated to far beyond what anyone envisioned back in 1776. Because America is now saddled with a Government Out Of Control.

Watch the two clips below to understand just how and why we have gotten to where we are. Also watch it to, as rhetorically asked by the narrator, prompt us to question whether the government we now have is still useful to us and what kind of powers it should be allowed to wield.


YouTube


YouTube

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Mar 18

See also:

- ‘We Are This Far From A Turnkey Totalitarian State’ – Big Brother Goes Live September 2013 … And Nobody Cares

- 70% Of All Ground Beef Contains ‘Pink Slime’ … And USDA Bought 7 Million Pounds Of The Stuff For School Lunches


- Obama agency rules Pepsi’s use of aborted fetal cells in soft drinks constitutes ‘ordinary business operations’ (Natural News, Mar 17, 2012)

The Obama Administration has given its blessing to PepsiCo to continue utilizing the services of a company that produces flavor chemicals for the beverage giant using aborted human fetal tissue. LifeSiteNews.com reports that the Obama Security and Exchange Commission (SEC) has decided that PepsiCo’s arrangement with San Diego, Cal.-based Senomyx, which produces flavor enhancing chemicals for Pepsi using human embryonic kidney tissue, simply constitutes “ordinary business operations.”

The issue began in 2011 when the non-profit group Children of God for Life (CGL) first broke the news about Pepsi’s alliance with Senomyx, which led to massive outcry and a worldwide boycott of Pepsi products. At that time, it was revealed that Pepsi had many other options at its disposal to produce flavor chemicals, which is what its competitors do, but had instead chosen to continue using aborted fetal cells — or as Senomyx deceptively puts it, “isolated human taste receptors” (http://www.naturalnews.com). Continue reading »

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Aug 19

- Exclusive: Goldman Sachs VP Changed His Name, Now Advances Goldman Lobbying Interests As Top Staffer To Darrell Issa (ThinkProgress, Aug 18, 2011):

Has Rep. Darrell Issa (R-CA) turned the House Oversight Committee into a bank lobbying firm with the power to subpoena and pressure government regulators? ThinkProgress has found that a Goldman Sachs vice president changed his name, then later went to work for Issa to coordinate his effort to thwart regulations that affect Goldman Sachs’ bottom line.

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Aug 18

Flashback:

- Former Assistant Secretary of Housing: The U.S. is the Global Leader in Illegal Money Laundering

See also:

- Matt Taibbi On RT: ‘Nothing Stops Big Banks From Ripping Off People AGAIN’

- Matt Taibbi: The People vs. Goldman Sachs (Rolling Stone)


- S.E.C. Files Were Illegally Destroyed, Lawyer Says (New York Times, August 17, 2011):

WASHINGTON — An enforcement lawyer at the Securities and Exchange Commission says that the agency illegally destroyed files and documents related to thousands of early-stage investigations over the last 20 years, according to information released Wednesday by Congressional investigators.

The destroyed files comprise records of at least 9,000 preliminary inquiries into matters involving notorious individuals like Bernard L. Madoff, as well as several major Wall Street firms that later were the subject of scrutiny after the 2008 financial crisis, including Goldman Sachs, Lehman Brothers, Citigroup and Bank of America.

The S.E.C. is the very agency that is charged with making sure that Wall Street firms retain records of their own activities, and has brought numerous enforcement cases against firms for failing to do so.

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Aug 18

Flashback:

- Former Assistant Secretary of Housing: The U.S. is the Global Leader in Illegal Money Laundering

See also:

- Matt Taibbi On RT: ‘Nothing Stops Big Banks From Ripping Off People AGAIN’

- Matt Taibbi: The People vs. Goldman Sachs (Rolling Stone)


- Is the SEC Covering Up Wall Street Crimes? (Rolling Stone, August 17, 2011):

A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation’s worst financial criminals.

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

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Jun 22

- JPMorgan Will Pay The SEC $153.6 Million To Settle The Magnetar Charges (Business Insider, June 21, 2011):

The SEC just announced that JPMorgan will pay over $150 million to settle charges that it misled investors in “CDO Squared.”

The charges were that JPMorgan let Magnetar, a hedge fund, select the assets in CDO Squared, and then sold those assets to investors.

The problem was that JPMorgan didn’t disclose to investors that Magnetar had selected the assets in CDO Squared, and then bet that those assets would fail.

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Mar 04


Rajat Gupta

Moments after hanging up, U.S. authorities claim, one Goldman director called a friend who headed a hedge fund. Within minutes, the hedge fund manager had snapped up thousands of Goldman shares, which soared after the news became public.

The episode is at the centre of explosive allegations revealed on Tuesday by the U.S. Securities and Exchange Commission accusing Rajat Gupta, a former Goldman director who previously led consulting firm McKinsey & Co., of participating in a vast illegal insider trading scheme.

Mr. Gupta allegedly passed confidential information gleaned from two board memberships – at Goldman and Procter & Gamble Co. (PG-N62.550.140.22%) – to Raj Rajaratnam, the founder of hedge fund Galleon Group, whose trial on criminal insider-trading charges is scheduled to begin next week in New York.

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Feb 20

Allen Stanford, the Texan financier who bankrolled English cricket before being arrested on fraud charges in 2009, has launched a $7.2bn (£4.5bn) lawsuit against officials of the US government, saying they wrecked his business empire and left him with only the suit he was wearing – all before he had even had a chance to defend himself in court.

Mr Stanford’s trial had been due to start last month in Houston, but he was ruled medically unfit to face justice after a prison beating and drug problems.

And now, in a dramatic attempt to turn the tables, his lawyer served civil proceedings against two FBI officers, four officials from the US Department of Justice, and five regulators from the US financial watchdog, the Securities and Exchange Commission (SEC).

His treatment has breached four amendments to the US Constitution, including prohibitions on the seizure of property and on cruel and unusual punishment, the suit says.

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Feb 18

Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them


Illustration by Victor Juhasz

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. “If the allegations in these settlements are true,” says Jed Rakoff, a federal judge in the Southern District of New York, “it’s management buying its way off cheap, from the pockets of their victims.”

To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. “You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street,” says a former congressional aide. “That’s all it would take. Just once.”

But that hasn’t happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.

Just ask the people who tried to do the right thing.

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Jan 26

The Financial Crisis Inquiry Commission is releasing its report Thursday.

The New York Times has a preview of the report, which shows that the Commission will slam the right people for causing the financial crisis.

Barry Ritholtz gives a good summary of the Times’ article:

The many causal factors highlighted in the FCIC report:

• Alan Greenspan’s malfeasance — his refusal to perform his regulatory duties because he did not believe in them — allowed the credit bubble to expand, driving housing prices to dangerously unsustainable levels; Greenspan’s advocacy for financial deregulation was a “pivotal failure to stem the flow of toxic mortgages” and “the prime example” of government negligence;

• Ben S. Bernanke failed to foresee the crisis;

• The Bush administration’s “inconsistent response” — saving Bear, but allowing Lehman to crater — “added to the uncertainty and panic in the financial markets.”

• Bush Treasury secretary Henry M. Paulson Jr. wrongly predicted in 2007 that subprime meltdown would be contained.

• The Clinton White House, including then Treasury Secretary Lawrence Summers, made a crucial error in “shielding over-the-counter derivatives from regulation [CFMA]. This was “a key turning point in the march toward the financial crisis.”

• Then NY Fed President, now Treasury secretary Timothy F. Geithner failed to “clamp down on excesses by Citigroup in the lead-up to the crisis;” Further, a month before Lehman’s collapse, Geithner was still in the dark about Lehman’s derivative exposure;

• Low interest rates brought about by the Fed after the 2001 recession “created increased risks” but were not chiefly to blame, according to the FCIC (I place some more weight on Ultra-low rates than they do);

• The financial sector spent $2.7 billion on lobbying from 1999 to 2008, while individuals and committees affiliated with the industry made more than $1 billion in campaign contributions. The impact of which an incestuous relationship between bankers and regulators, Congress and bankers, and classic regulatory capture by the industry.

• The credit-rating agencies “cogs in the wheel of financial destruction.”

• The Securities and Exchange Commission allowed the 5 biggest banks to ramp up their leverage, hold insufficient capital, and engage in risky practices.

• Leverage at the nation’s five largest investment banks was wildly excessive: They kept only $1 in capital to cover losses for about every $40 in assets;

• The Office of the Comptroller of the Currency along with the Office of Thrift Supervision, “federally pre-empted” (blocked) state regulators from reining in lending abuses;

• The report documents “questionable practices by mortgage lenders and careless betting by banks;”

• The report portrays the “bumbling incompetence among corporate chieftains” as to the risk and operations of their own firms:

-Citigroup executives admitting that they paid little attention to the risks associated with mortgage securities.
-AIG executives were blind to its $79 billion exposure to credit default swaps;
-Merrill Lynch top managers were surprised when mortgage investments suddenly resulted in billions of dollars in losses;

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Jan 19

Just go over the headlines of the related articles at the end of the following article.


DUBLIN (AP) — A 1997 letter from the Vatican warned Ireland’s Catholic bishops not to report all suspected child-abuse cases to police — a disclosure that victims’ groups described as “the smoking gun” needed to show that the church enforced a worldwide culture of covering up crimes by pedophile priests.

The newly revealed letter, obtained by Irish broadcasters RTE and provided to The Associated Press, documents the Vatican’s rejection of a 1996 Irish church initiative to begin helping police identify pedophile priests following Ireland’s first wave of publicly disclosed lawsuits.

The letter undermines persistent Vatican claims, particularly when seeking to defend itself in U.S. lawsuits, that Rome never instructed local bishops to withhold evidence or suspicion of crimes from police. It instead emphasizes the church’s right to handle all child-abuse allegations and determine punishments in house rather than give that power to civil authorities.

Signed by the late Archbishop Luciano Storero, Pope John Paul II’s diplomat to Ireland, the letter instructs Irish bishops that their new policy of making the reporting of suspected crimes mandatory “gives rise to serious reservations of both a moral and canonical nature.”

Storero wrote that canon law, which required abuse allegations and punishments to be handled within the church, “must be meticulously followed.” Any bishops who tried to impose punishments outside the confines of canon law would face the “highly embarrassing” position of having their actions overturned on appeal in Rome, he wrote.

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