"End of Wall Street Boom" - Must-read history

[seemslikeadream]

US Recession Could Last Up to 36 Months: Roubini


http://www.cnbc.com/id/29598949

By: Jane Wells, Correspondent | 09 Mar 2009

The man who predicted the current financial crisis said the US recession could drag on for years without drastic action.

Among his solutions: fix the housing market by breaking "every mortgage contract."

"We are in the 15th month of a recession," said Nouriel Roubini, a professor at New York University's Stern School of Business, told CNBC in a live interview. "Growth is going to be close to zero and unemployment rate well above 10 percent into next year."

Echoing a speech he made earlier in the day, Roubini said he sees "no hope for the recession ending in 2009 and will more than likely last into 2010."

Roubini, who is also known as "Dr. Doom," told CNBC that the risk of a total meltdown has been reversed for now but that the economy is going through "a death by a thousand cuts." He also said that "most of the U.S. financial institutions are entirely insolvent."

"The market friendly view for the banks is nationalization," said Roubini. "Temporarily take over the banks, clean them up and get them working again."



As for the claim that the Treasury Department can't legally take over the banks, Roubini said that most of the banks are already owned by the government and that the government could "put them in receivership" if it had to.

Earlier in the day, Roubini spoke to the CBOE Risk Management Conference and said he believes total losses could peak at $3.6 trillion in the financial system, with half of that being borne by banks and bank dealers and the other half borne by hedge funds and pension funds, among others.

He said that while U.S. GDP next year could be zero, global GDP could dip into negative territory.

"We could end up ... with a 36-month recession, that could be "L-shaped stagnation, or near depression," Roubini said. He puts the chance of a severe U-shaped recession at 66.7 percent, and a more severe L-shaped recession at 33.3 percent.



Roubini listed a litany of negative omens: Capex spending down 20-30 percent for investment grade companies, self-perpetuating deflation, all making a bad situation worse.

"If you expect prices to be lower tomorrow, why would you buy today?", asked Roubini. He says it's easier to break out of am inflationary cycle than a deflationary one, and while a year of deflation "is okay," longer would be "a disaster."

Watch Roubini Video From Today's Speech:

Roubini Part One
Roubini Part Two
Roubini Part Three

[seemslikeadream]

283 US firms at high risk of default: Moody's

http://rawstory.com/news/afp/283_US_fir ... 02009.html




A total of 283 publicly traded US companies including many high-profile firms are at high risk of defaulting on their debt payments, Moody's Investors Service said Tuesday.
.....
The list does not include all firms with a low or speculative credit rating, but indicates those with a higher risk of default on their debt payments.
.....
Among the well-known corporate names on the list are technology firms Palm and Advanced Micro Devices; retailers Barney's New York, Eddie Bauer and Loehmann's; food companies such as Chiquita Brands and Dole Foods; and travel firms including Orbitz, JetBlue and United Airlines parent UAL Corp.

[smiths]

one man, in one office in london, $500 billion in 'losses', at the CIA bank,


... It is somewhat surprising
that while Barney Frank et al have been so focused on the executives of the major banks, Joe has been flying low under the public radar.
After all, if allegations against Cassano prove true, his loss will have the tenfold impact of Madoff's ponzi scheme, however unlike with Bernie, who impacted a small group of people to a high degree, Cassano's $500 billion loss has to be shared equally amongst all taxpayers ...

In an interesting piece out on abcnews, more light is being shed on AIG's small financial products London office which even AIG now acknowledges was ground zero for roughly $500 billion in losses, as well as the person who ran it, Joseph Cassano. Joe, who previously had made waves after the Washington Post first profiled him in October 2008, had "earned" $280 million during his tenure with AIG and who left the company with a $1 million a year consulting contract, and owns houses in London and Connecticut

http://abcnews.go.com/Business/story?id=7045889&page=1

[smiths]

“Gentlemen,
I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.
When you won, you divided the profits amongst you, and when you lost, you charged it to the bank.
You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!
Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.
I intend to rout you out, and by the grace of the Eternal God, will rout you out.”

President Andrew Jackson

for the incompetence theory of banking disasters, you would have to have a very short memory eh?

when they win they keep, when they lose they charge it to the state
if you annul their charters, it would ruin millions

sound familiar ...

[mulebone]

Now-needy FDIC collected little in premiums
With fund going strong, banks didn't pay for decade

By Michael Kranish, Globe Staff | March 11, 2009
WASHINGTON - The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts.

Now with 25 banks having failed last year, 17 so far this year, and many more expected in the coming months, the FDIC has proposed large new premiums for banks at the very time when many can least afford to pay. The agency collected $3 billion in the fees last year and has proposed collecting up to $27 billion this year, prompting an outcry from some banks that say it will force them to raise consumer fees and curtail lending.

To possibly reduce the fee increase, the FDIC has asked Congress for the temporary authority to borrow as much as $500 billion from the US Treasury - up from the current $30 billion limit - in case the number of bank failures increases even more dramatically. If Congress approves the measure, to borrow more than $100 billion, the FDIC would still need permission from the Federal Reserve, the Treasury Department, and the White House.

As of Dec. 31, the FDIC had $18.9 billion in its insurance fund - down from $52.4 billion a year earlier - in addition to $22 billion that it has set aside for pending bank failures. The agency has projected it will need $65 billion to take over failed banks through 2013.

But if the FDIC suddenly had to take over a giant bank such as Citigroup or Bank of America, the fund would be drained "in a flash," said Cornelius Hurley, director of the Boston University law school's Morin Center for Banking and Financial Law.

Last week, FDIC chairwoman Sheila Bair wrote to Senate Banking Committee chairman Christopher Dodd, a Connecticut Democrat, that her agency could need more money because the existing fund "provides a thin margin of error" given the government's responsibility "to cover unforeseen losses." The March 5 letter, provided to the Globe, said the additional borrowing authority is necessary to "leave no doubt" that the FDIC can "fulfill the government's commitment to protect insured depositors against loss."

Bair said yesterday that the agency's failure to collect premiums from most banks "was surprising to me and of concern." As a Treasury Department official in 2001, she said, she testified on Capitol Hill about the need to impose the fees, but nothing happened. Congress did not grant the authority for the fees until 2006, just weeks before Bair took over the FDIC. She then used that authority to impose the fees over the objections of some within the banking industry.

"That is five years of very healthy good times in banking that could have been used to build up the reserve," Bair, a former professor at the University of Massachusetts at Amherst, said in an interview. "That is how we find ourselves where we are today. An important lesson going forward is we need to be building up these funds in good times so you can draw down upon them in bad times."

Hurley agreed with Bair's analysis of the FDIC's dilemma. "Typically you would build up a reserve during the halcyon days to protect yourselves during a recession," he said, calling the decision to stop collecting most premiums "a political one" that was pushed by banks and not based on strict accounting principles.

But James Chessen, chief economist of the American Bankers Association, said that it made sense at the time to stop collecting most premiums because "the fund became so large that interest income on the fund was covering the premiums for almost a decade." There were relatively few bank failures and no projection of the current economic collapse, he said.

"Obviously hindsight is 20-20," Chessen said.

House Financial Services Committee chairman Barney Frank agreed that officials believed at the time that the good times would last and that bank failures would not be a problem.

"We had this period where we had no failures," the Massachusetts Democrat said in an interview yesterday. "The banks were saying, 'Don't charge us anything.' "

Last October, to help restore confidence during the financial meltdown, Congress and then-President Bush agreed to raise the insured amount from $100,000 to $250,000 per depositor until Dec. 31, 2009. A small portion of the new fees on banks will go toward supporting that increase.

The FDIC has never failed to make good on its promise to pay for the insured deposits when a bank fails, and officials said that will not change. The fund ran short of money during the savings and loan crisis of the 1980s, prompting the agency to increase fees to make up for the shortfall.

Then, a booming economy left banks flush with cash, and by 1996 the insurance fund was considered so large that it could grow through interest payments and fees charged only to banks with high credit risk. Congress agreed that premiums didn't need to be collected if the fund was sustained at a level that was considered safe. Thus, about 95 percent of banks paid no premiums from 1996 to 2006, including some new ones that did not have to pay a premium, the FDIC said.

Congress mandates that the insurance fund must stay between 1.15 percent and 1.5 percent of all insured deposits. The reserve ratio on Dec. 31 was 0.40 percent, down from 1.22 percent at the end of 2007. The FDIC has increased premiums to increase the reserve ratio, as well as proposing a one-time emergency assessment that could raise as much as $15 billion.

[seemslikeadream]

Every time SLaD posts something on the economy these days, I feel like murdering someone.

Just not the messenger please

[JackRiddler]

.

Nice kitty.

I like the following from former Rep. Tom Davis (R-VA), but how about a sitting Congress critter says it? Or a prosecutor?

http://rawstory.com/news/2008/GOP_Rep._ ... _0312.html

Former GOP Rep. wants Cramer 'looked at' for market manipulation

03/12/2009 @ 9:30 am
Filed by David Edwards and Muriel Kane

Jon Stewart's blasts at the misleading advice offered over the last year by financial network CNBC have been a comedy staple on The Daily Show for over a week. But not everybody is laughing -- and now one former congressman is suggesting that CNBC's Jim Cramer should be investigated for possible stock market manipulation when he was the manager of a large hedge fund.

"I think he's become a poster child for why hedge funds need more regulation and transparency," former Virginia Representative Tom Davis told CNN on Thursday.

Davis's remarks were sparked by a video from 2006, which has now gone viral, in which Mad Money host Cramer explained on his own website how he could influence stock prices [as] a hedge fund manager.

click MUST SEE! click

"You take a bunch of stocks and make sure that they're higher," Cramer suggests in the video. "Maybe commit five billion in capital to it. ... No one else in the world would ever admit that, but I don't care."

When asked, "Is any of this illegal?" Davis replied, "It wasn't, but it should be."

"He may well have crossed the line," Davis continued. "I think that's something somebody ought to be looking at. I think the tragedy is, over the last few years, nobody's been looking at this at all."

With all due respect, former Rep. Tom Davis: Bullshit! You didn't look from 2003-2007, when you ran a House committee, but a few million of us did, and published, and some no doubt wrote to you. But you say you only notice now.

Davis, a moderate Republican, served as chairman of the House Government Reform Committee from 2003 to 2007, when it was known for exercising almost no oversight of the Bush administration.

CNBC declined to comment on Davis's remarks, but CNN obtained a statement from Cramer saying, "No one knows and respects the securities laws more than I do. ... When I was a hedge fund trader in the 1990's, I played fair and I did nothing that violated those laws."

The Daily Show's comedy barrage began last week when CNBC's Rick Santelli cancelled an appearance with Stewart, then switched its focus to Cramer's erratic record of stock tips. Cramer is scheduled to make a guest appearance on The Daily Show tonight.

Tonight on The Daily Show: Cramer's Last Stand?

My personal betting line is 4:3 against him showing.

Slate provides a transcript of Cramer describing his techniques for market manipulation:

http://www.slate.com/id/2162460/sidebar/2162533/

Verbatim transcript (partial) of Jim Cramer on Wall Street Confidential, Dec. 22, 2006:

You know, a lot of times when I was short at my hedge fund—when I was positioned short, meaning I needed it down—I would create a level of activity beforehand that could drive the futures. It doesn't take much money. Similarly, if I were long, and I wanted to make things a little bit rosy, I would go in and take a bunch of stocks and make sure that they're higher. Maybe commit $5 million in capital, and I could affect it. What you're seeing now is maybe it's probably a bigger market. Maybe you need $10 million in capital to knock the stuff down.

But it's a fun game, and it's a lucrative game. You can move it up and then fade it—that often creates a very negative feel. So let's say you take a longer term view intraday, and you say, "Listen, I'm going to boost the futures, and the when the real sellers come in—the real market comes in—they're going to knock it down and that's going to create a negative view." That's a strategy very worth doing when you're valuing on a day-to-day basis. I would encourage anyone who's in the hedge fund game to do it. Because it's legal. And it is a very quick way to make money. And very satisfying.

By the way, no one else in the world would ever admit that. But I don't care. And I'm not going to say it on TV.

Only on video. Which couldn't possibly end up seen by millions of people, right? And THAT was the Tech Bubble Hero, who pimped out all the soon-to-be-doomed Internet stocks in Feb. 2008!

But never mind, in this video he's a Truth teller, capital T. This is an invaluable document he willingly provided. I love how in the next part he talks about what assholes and idiots all of the other players in the market are: The Journal, mutual funds, the SEC...

In the next section of the interview, Cramer is discussing what hedge funds that are struggling do to improve their performance before the end of the year.

It's really vital these next six days because of your payday, you've really got to control the market. You can't let it lift. When you get a Research in Motion, it's really important to use a lot of your firepower to knock that down, because it's the fulcrum of the market today. So, let's say I were short. What I would do is I would hit a lot of guys with RIMM.

Now, you can't "foment." That's a violation. You can't create yourself an impression that a stock's down.

(What's priceless and not captured in the transcript is the pause between "create" and "yourself." Like he's catching himself before he flat out says it: well, you have friends who can do that for you, and no one's ever the wiser.)

But you do it anyway, because the SEC doesn't understand it. That's the only sense that I would say this is illegal. But a hedge fund that's not up a lot really has to do a lot now to save itself.

This is different from what I was talking about at the beginning where I was talking about buying the QQQs and stuff. This is actually blatantly illegal. But when you have six days and your company may be in doubt because you're down, I think it's really important to foment—if I were one of these guys—foment an impression that Research in Motion isn't any good. Because Research in Motion is the key today.

Cramer goes on to talk about the actual mechanics of what one would do to knock Research in Motion down. Then he continues:

What I used to do was called— If I wanted it to go higher, I would take and bid, take and bid, take and bid, and if I wanted it to go lower, I'd hit and offer, hit and offer, hit and offer. And I could get a stock like RIM for maybe—that might cost me $15 to $20 million to knock RIM down—but it would be fabulous, because it would beleaguer all the moron longs who are also keying on Research in Motion.

So we're seeing that. Again, when your company is in survival mode, it's really important to defeat Research in Motion, and get the Pisanis of the world and people talking about it as if there's something wrong with RIM. Then you would call the Journal and you would get the bozo reporter on Research in Motion, and you would feed that Palm's got a killer that it's going to give away. These are all the things you must do on a day like today, and if you're not doing it, maybe you shouldn't be in the game.

Cramer talks for a while in considerable detail about how, if he were short Apple's stock today, he would knock Apple's stock down. Then he says:

What's important when you're in that hedge-fund mode is to not do anything remotely truthful. Because the truth is so against your view that it's important to create a new truth to develop a fiction.

A minute later, when talking about how company fundamentals don't matter, Cramer says:

The great thing about the market is it has nothing to do with the actual stocks. Now, maybe two weeks from now, the buyers will come to their senses and realize that everything that they heard was a lie, but then again, Fannie Mae lied about their earnings for $6 billion, so there's just fiction and fiction and fiction.

I think it's important for people to recognize that the way that the market really works is to have that nexus of: Hit the brokerage houses with a series of orders that can push it down, then leak it to the press, and then get it on CNBC—that's also very important. And then you have a kind of a vicious cycle down. It's a pretty good game. It can pay for a percentage or two.

2009 Washington Post.Newsweek Interactive Co. LLC

[JackRiddler]

.

Compendium of AIG stories since September, focusing on Cassano and London, thanks to antiaristo from RI's greatest thread!

.

Daily Mail, September 2008:

The man blamed for bringing the world's biggest insurer AIG to the brink of ruin

By SHARON CHURCHER and IAN GALLAGHER
Last updated at 2:10 AM on 21st September 2008



Lawsuit: Joe Cassano peers into the street from his £6million London home

Peering from the doorway of his £6million London home, this is the financier blamed for taking one of the world’s biggest insurers to the brink of disaster.

Joe Cassano was the president of a subsidiary of AIG that ‘lost’ £5.5billion earlier this year, setting the insurer on a path to bankruptcy.
And today The Mail on Sunday can reveal that the dealings that brought it to the edge of collapse were done in London.

Last week, AIG was effectively nationalised with an £48billion loan from the US Federal Reserve to avert a collapse that would have triggered unimaginable consequences on the world’s financial markets.

In March, when the losses were revealed, Mr Cassano, a 53-year-old New Yorker who had an office in Mayfair, left the company.
Asked by The Mail on Sunday if he felt responsible for the AIG crisis, he smiled and said: ‘I left there six months ago.’
Refusing to answer further questions, he went inside his four-storey townhouse in one of London’s most exclusive streets.

Mr Cassano, who learned his craft on Wall Street, was one of the founding team in 1987 of AIG Financial Products. Effectively the insurer’s banking unit, it sold cover to financial speculators, many involved in the American housing market.

Two decades on, Mr Cassano is one of several AIG executives facing a lawsuit accusing them of deceiving hundreds of thousands of investors who suffered huge losses in the latest crash on Wall Street.

According to papers filed in New York’s federal court, he claimed the policies he marketed were so safe they would never lose as much as ‘one dollar’.

His pitch was so convincing that many small investors sank substantial sums of their life savings into AIG shares.

A financial expert told The Mail on Sunday: ‘I’m not going to call Cassano a crook but he was the head of the division that took AIG down. If the US government had not stepped in, and AIG had gone bankrupt, the knock-on effect at institutions around the world would have been disastrous.

‘As it is, Cassano’s exotic financial dealings are the biggest single component of the crisis on Wall Street and in the City.’

Cassano moved to England in 1987 from the US but still owns a house in Westport, Connecticut.

His division AIG FP sold credit default swaps (CDSs), which are, in effect, a type of insurance against an organisation going bust. AIG FP wrote CDS contracts with a range of investment banks and other financial groups.
A CDS is linked to a specific type of asset, typically a company bond or other loan or package of loans. The buyer of the CDS pays a regular sum to the issuer. In return, if there is a default on the asset the issuer pays out a predetermined amount of money.

London has seen a boom in the credit derivatives market over the past ten years because of a combination of the UK’s relaxed regulatory environment and a concentration of people skilled in this type of complicated trading.

During the credit explosion the CDS demand was huge. By 2007 Cassano’s division was providing guarantees mainly through credit default swaps on about $500billion of assets (£285billion).

In effect Cassano’s business was underwriting a huge proportion of the global credit bubble – including the vast American subprime mortgage market. And as house prices in the US fell, the AIG books began to unravel.
In December 2007, Martin Sullivan, chief executive of the whole of AIG, assured shareholders that the chances of the US housing bust leading to losses at AIG was ‘close to zero’.

But he confirmed AIG Financial Products had written off $1.1billion (£600million) because of its credit contracts covering American mortgages.

The bombshell came on February 11. PricewaterhouseCoopers, auditors to AIG, said there had been ‘material weaknesses’ in the standards of financial reporting at Cassano’s division.
Worse was to come. On February 29, AIG announced it was writing off $11.1billion (£5.5billion) on its CDS business.

http://www.dailymail.co.uk/news/article ... -ruin.html


Washington Post, October 2008:

Joe Cassano: The Man Who Brought Down AIG?

Moments ago, members of the House oversight committee concluded their hammering of the two most recent AIG chief executives. Topic: Joe Cassano, the man who some credit with bringing down the insurance giant.

Cassano was president of AIG's financial products division, which trafficked in the credit-default swaps, or CDS, which we learned earlier proved so dangerous.

Rep. Bruce Braley (D-Iowa) angrily recited the tale of Cassano's tape: He earned $280 million in cash -- more than AIG chief executives -- and for every dollar his financial products unit made, 30 cents came back to Cassano and other top execs.

After the unit lost $11 billion, Cassano was fired Feb. 29 of this year, Braley pointed out, and got to keep $34 million in bonuses and was kept on as an AIG consultant at a salary of $1 million per month.

Braley asked the witnesses, former AIG chief executives Michael Sullivan and Robert
Willumstad, if they had exercised their authority to fire Cassano from his consultant's role, given all the damage he had brought to AIG.

"No," both said.

Then oversight committee Chairman Henry Waxman (D-Calif.) really lit into them.

Asked why they didn't fire Cassano, Sullivan said they needed to "retain the 20-year knowledge of the transactions."

Waxman was impressed.

"When I retire I want to come work for you at $1 million a month," he said, The Post's Peter Whoriskey reports.

"What would he have had to have done for you to fire him?" Waxman asked rhetorically.

http://tinyurl.com/44meeb

Zero Hedge, March 10

Is Joseph Cassano Responsible For The Depression?

Posted by Tyler Durden at 1:40 PM


And people thought Jerome Kerviel's blow up was spectacular. In an interesting piece out on abcnews, more light is being shed on AIG's small financial products London office which even AIG now acknowledges was ground zero for roughly $500 billion in losses, as well as the person who ran it, Joseph Cassano. Joe, who previously had made waves after the Washington Post first profiled him in October 2008, had "earned" $280 million during his tenure with AIG and who left the company with a $1 million a year consulting contract, and owns houses in London and Connecticut, was so confident in his huge risky bets that he is quoted as saying "It is hard for us with, and without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions."It is a little easier to see a scenario where Cassano would end up losing $500 billion.

Cassano's nearsighted actions have had staggering repercussions: everyone knows about the secret 21 page mutual assured destruction memo, the billions in cash downstreamed to AIG's counterparties, the systemic impact AIG's collapse has had on both the U.S. and global economy and all the other indirect consequences of the near $200 billion in taxpayer money that AIG's failure has so far cost.

It is somewhat surprising that while Barney Frank et al have been so focused on the executives of the major banks, Joe has been flying low under the public radar. After all, if allegations against Cassano prove true, his loss will have the tenfold impact of Madoff's ponzi scheme, however unlike with Bernie, who impacted a small group of people to a high degree, Cassano's $500 billion loss has to be shared equally amongst all taxpayers. And while hubris and reckless risk management are not criminal acts, incentives will always exist for traders to take on outsized risk unless there is some regulatory intervention, which really cuts to the heart of the whole problem.

http://zerohedge.blogspot.com/2009/03/i ... e-for.html


AIG, March 12:

Traders at the London office of AIG were responsible for massive losses that brought about the near collapse of the US insurer, the firm has said.

Broadcaster ABC has claimed that the Mayfair-based team, led by American trader Joseph Cassano, risked half a trillion dollars (£359 billion) investing in the toxic US mortgage market.

AIG has said the figure is inaccurate, but did admit in a statement that the unit nearly "brought down" the company.

The struggling insurer has avoided collapse through a massive state bail-out totalling more than 150 billion dollars (£108 billion).

AIG is now 80% owned by the Government as a result of attempts to prop up the struggling firm.

ABC said "ground zero" for the insurer's financial implosion was the London branch.

It suggested that a series of disastrous deals saw billions pumped into risky mortgage debt.

Investigative reporter Peter Koenig told ABC's Good Morning America that the UK capital was the "epicentre" of the financial crisis. He said: "For about a decade it went OK. And then, when the US housing market fell out instead, they suddenly realised they had to come up with a half a trillion dollars and all they had was a couple of million in the bank."

The Serious Fraud Office is currently investigating the losses made at AIG's London office.

In a statement, the insurer added: "It was clear that this small unit engaged in trades that nearly brought down the company and its still sound insurance business."

Copyright (c) Press Association Ltd. 2009, All Rights Reserved.

http://www.guardian.co.uk/uk/feedarticle/8400556


Soooo. Can anybody guess which sovereign has jurisdiction over this matter?

Does this remind anybody of an earlier fraud committed by the institution known as Lloyds of London?

I wonder if it is some coincidence that this man has been in London since 1987? Represents the then biggest insurance company in the world? Has possibly rubbed shoulders with the London insurance market Establishment?

[StarmanSkye]

Below, at end of article, check out Jon Stewart's lampooning of the awful calls Cramer made on CNBC. Precious!

******

http://words-of-power.blogspot.com/

And where was the corporate mainstream press -- which covers the financial industry with countless "reporters" -- while the walls of Wall Street were crumbling? They were pumping up the oligarchy and their own corporate stock with misleading information and dereliction of duty (with, again, some rare exceptions) in reporting the impending debacle.

That's why America needs a new media, one responsive to the public, not the self-interest of the corporate ownership of the press. Mark Karlin, Buzzflash Editorial, In 8 1/2 Minutes, Jon Stewart Devastates CNBC and Its Destructive Boosterism of Failed Wall Street Scams

What happened on Wall Street was not due to poor people over reaching; it was the result of super-rich people gambling with the fate of our economy (as allowed by the systematic "Reagan Revolution" de-regulation), losing it all (as the mainstream financial media -- particularly television -- cheered them on), and then asking for a hundreds of billions of dollars in limousine welfare. Mark Karlin, Buzzflash Editorial, Wall Street on Welfare: The Tax Payers Pick Up the Trillion Dollar Tab for River Boat Gamblers on the Dole, 3-7-09

The Binge is Over. Self-Mugged, Santelli, Kudlow, Cramer, et al, Gibber Away. Meanwhile, Krugman Offers Tough Love & Jon Stewart Offers Hard News

By Richard Power

We have heard all of this before.

"No one could have foreseen terrorists flying planes into buildings," they said. And yet our intelligence professionals warned them in the months preceding 9/11.

"No one could have foreseen the ferocious insurgency in Iraq," they said. And yet our military professionals warned them before they even launched their foolish military adventure.

"No one could have foreseen the levees breaking in New Orleans," they said. And yet our emergency professionals warned them in the days before Katrina made land fall.

They act as if no one saw this crisis coming. They act as if there were no John the Baptists in the Wilderness beyond Wall Street. But they were all Herods who only had eyes and ears for Salome.

The global financial meltdown and the economic depression it has resulted in constitute a powerful rebuke not only of the laissez-faire cult of Ayn Rand and Alan Greenspan, but also of the business news media that shilled for it over the last three decades.

I am not an economist, nor am I a businessman, but Words of Power, and others in the progressive blogosphere and on progressive talk radio, have done a better job of warning you about what was coming than the financial news channels on cable, and we did it simply by tracking the commentary of Krugman, Stiglitz, Galbraith, David Walker and others. (For corroboration, browse the Words of Power Economic Security Archive.)

And in this ongoing effort, I commend two vital communications to you:

First, Paul Krugman's latest tough love missive on the Obama administration's so far seemingly ineffectual approach to the banking crisis.

Second, Jon Stewart's shocking 8 and a half minute expose revealing the fraud that is the US business news media.

Yes, I am offering you a Nobel Prize winner in one hand, and brilliant, diamond-hard journalism from Comedy Central in the other. That is the best there is to offer, that is where we are in the USA today.

The reality is that when it comes to dealing with the banks, the Obama administration is dithering. Policy is stuck in a holding pattern. ...

The truth is that the Bernanke-Geithner plan - the plan the administration keeps floating, in slightly different versions - isn't going to fly. ...
So why has this zombie idea - it keeps being killed, but it keeps coming back - taken such a powerful grip?

The answer, I fear, is that officials still aren't willing to face the facts. They don't want to face up to the dire state of major financial institutions because it's very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable. Paul Krugman, International Herald Tribune, 3-6-09
http://www.iht.com/articles/2009/03/06/ ... rugman.php


Jon Stewart Eviscerates CNBC and Rick Santelli
http://videocafe.crooksandliars.com/hea ... k-santelli


Jim Cramer: King of the shills
http://www.youtube.com/watch?v=XyQIWGWG ... re=related

[bks]

never the messenger

[jingofever]

Moody’s Says Don’t Inhale the Smoke It’s Puffing:

Commentary by Jonathan Weil

March 12 (Bloomberg) -- Just as the cover-up often is worse than the crime, sometimes the defense is even worse than the allegation.

So it is with Moody’s Corp. Over the years, the credit- rating company’s constant refrain has been it’s an independent body that publishes its opinions accurately and impartially. Never mind that it gets paid by the same companies it rates. Moody’s says it can manage that conflict of interest.

“The market’s trust in and reliance upon Moody’s” are part of the “raw materials that support our business,” the company said in its 2005 annual report. “Independence. Performance. Transparency,” it went on. “These are the watchwords by which stakeholders judge Moody’s.” Moody’s also cites its code of professional conduct, through which it seeks “to protect the quality, integrity and independence of the rating process.”

Now compare that with what Moody’s told a federal judge in New York last September in response to accusations made in a shareholder lawsuit, which said Moody’s claims of independence were false.

“Generalizations regarding integrity, independence and risk management amount to no more than puffery,” Moody’s said in court papers. As such, alleged “misstatements of this nature are insufficient to sustain a claim under the securities laws.”

Puffery, huh?

Making Sense

Finally, Moody’s has delivered a sensible explanation for how its ratings became so unreliable: It didn’t believe its own platitudes, or at least it didn’t think they would be binding in court. The defense hasn’t worked, though. On Feb. 18, the judge in the case rejected Moody’s puffery argument, and ordered that the lawsuit proceed.

In legalese, puffery refers to an expression of opinion by a seller that isn’t made as a representation of fact. It may be a salesperson’s exaggeration about a product’s quality that isn’t a legally enforceable promise. Or it might be an ad that claims a company’s product is superior, as Black’s Law Dictionary explains it. Think of a dealer who says a car “drives great,” or a beer commercial with the slogan “less filling.”

For all the toxic mortgage-backed securities and structured- finance garbage that Moody’s rated as AAA, I never imagined Moody’s would use the word puffery to characterize the principles it brought to the job of grading investments that wind up in the portfolios of retirement funds and money-market accounts. It would be like the pope revealing that his belief in God was just fluff, or Mister Rogers complaining that small children were awful to be around.

‘Legal Term’

Even worse was the way a Moody’s P.R. man, Anthony Mirenda, tried to talk his way out of the company’s doublespeak.

“To clarify, the word ‘puffery’ is a legal term that was used to describe a category of statements that cannot be the basis of a lawsuit,” Mirenda told me. “Our legal team’s use of that term does not suggest that these statements are in any way false and does not in any way diminish Moody’s long-standing commitment to the integrity and independence of our ratings.”

Uh, right. Just to be sure, I asked Mirenda if what he told me was puffery. “No, that statement is not puffery,” he said. Somehow, Moody’s statements about integrity and independence are puffery when the company is writing to a judge, yet not when its spokesman is talking to a nosy journalist.

The plaintiffs in the suit, led by a Teamsters union pension fund, cited newspaper articles chronicling occasions when Moody’s changed its rating in response to a customer’s complaint to keep the client’s business, replaced analysts seen as too cautious, or reassigned others after complaints by bankers.

Inevitable Complacency

In one instance, reported last year by the Financial Times, when Moody’s employees found a computer error had caused some debt ratings to be inflated, the company responded by changing the methodology it used rather than cutting the ratings.

In an October 2007 presentation to Moody’s directors, released last year by congressional investigators, Moody’s Chief Executive Officer Raymond McDaniel said adding more safeguards “does NOT solve the problem” of erosions in ratings integrity, and that “a certain complacency about ratings quality is inevitable.”

Taken together, U.S. District Judge Shirley Wohl Kram wrote in her order, the facts as alleged by the plaintiffs “belie defendants’ claims of independence and ratings integrity.” Similarly, she wrote, “the revelations that it altered ratings at the request of issuers called into question Moody’s claim that it ‘maintains independence in its relationship with issuers and other interested entities.’”

Speaking Truth

Since February 2007, Moody’s share price has fallen about 75 percent. And at its core, the plaintiffs say their case is about Moody’s disclosures. Had investors known that “Moody’s fastest growing and most lucrative business segment was operating in contravention of defendants’ representations,” their evaluation of the stock would have been different, the plaintiffs said in their June 2008 amended suit.

As bad as Moody’s missteps have been, though, it’s hard to think of anything potentially more damaging to the company’s reputation than its own claim that its talk of independence and integrity was just smoke.

The problem for Moody’s is that, this time, the public might believe it was speaking the truth.

[Hugh Manatee Wins]

...tip of the iceberg...
The Mainstream Military Media has been run by Jim Cramers since WWII.

"What's important when you're in that [psyops] mode is to not do anything remotely truthful. Because the truth is so against your view that it's important to create a new truth to develop a fiction."

[Fixx]

...tip of the iceberg...
The Mainstream Military Media has been run by Jim Cramers since WWII.

"What's important when you're in that [psyops] mode is to not do anything remotely truthful. Because the truth is so against your view that it's important to create a new truth to develop a fiction."

That's it, possibly one of the most informative and interesting threads on RI and Hugh has the audacity to bring his psyops keyword hijacking shit in here...that's enough for me, I'm out of here, cheers Hugh you fucking arsehole.

[smiths]

What confuses me, is how Cassano had a job in the first place.
Taking a look at his Finra brokercheck report reveals that way before the hoopla of 2007-2008, Cassano already was in deep water with the regulators. 2004 allegations filed against Cassano, which were subsequently swept under the rug via an $80 million settlement between AIG and the SEC/DOJ, contained some serious charges:

The complaint alleged that AIG-FP PAGIC [Cassano's group] violated federal securities laws by aiding and abetting securities law violations by a public company, PNC Financial Services Group Inc. ("PNC"), in connection with a transaction entered into in 2001 with PNC that was intended to enable PNC to remove certain assets from its balance sheet. The complaint alleged that AIG-FP PAGIC knew, or was deliberately ignorant in not knowing, that the PNC transaction did not satisfy the requirements of GAAP for non-consolidation of special purpose entities.

After the $80 million settlement, the complaint was dismissed "with prejudice after the DOJ and SEC agreed not to prosecute AIG or AIG-FP in connection with the PNC transactions." Hillariously, again like in the Madoff debacle, the ultimate guilty party may again end up being the SEC. And while the Madoff fallout impacted a bunch of high net worth individuals, the SEC's light treatment of Cassano's infraction resulted in the collapse of the financial system. Yet somehow, none of the individuals who are responsible for Madoff's and Cassano's $600 billion in combined losses (and the financial system's utter collapse) are behind bars...

http://zerohedge.blogspot.com/2009/03/a ... ds-or.html

[smiths]

and following the cramer/stewart bandwagon

new interviews here

http://zerohedge.blogspot.com/2009/03/u ... ircus.html