Talk Talk Talk

Wall Street has made Hillary Clinton a millionaire:

Clinton made $3.15 million in 2013 alone from speaking to firms like Morgan Stanley, Goldman Sachs, Deutsche Bank and UBS, according to the list her campaign released of her speaking fees.

"Her closeness with big banks on Wall Street is sincere, it's heart-felt, long-established and well known," former Maryland Governor Martin O'Malley has said on the campaign trail.

While Clinton has given paid speeches to many groups, Wall Street banks and investment houses made up a third of her speech income.

She even made more money speaking to UBS and Goldman Sachs than her husband Bill did. Goldman Sachs in New York paid Bill $200,000 for a speech in June 2013 and Hillary $225,000 for a speech in October of that year.

I wonder why the headline wasn't Wall Street has made Hillary Clinton a multi-millionaire?

I can't believe that anyone's speech is worth so much money. I think that Wall Street is paying for something else.

Why can't poor people run the country for a change. There are probably plenty of adjunct professors that have plenty of good ideas.

Dow Falls Because Of The Pope

The stock market is down so far today because many Christians have been distracted by the papal visit to the United States and have forgotten to pray for the market to go up.

I Hope You Didn't Sell All Your Stocks

Wall St. logs biggest two-day gain since financial crisis

The Wrecking Crew

We need more journalists like Frank Rich. We need Glass-Steagall to be reinstated. Too big to fail is a myth.

From The Other Plot to Wreck America by Frank Rich:

The reckless Citi executives of our day may not have given themselves interest-free loans, but they often walked away with the short-term, illusionary profits while their employees were left with shredded jobs and 401(k)’s. Among those Citi executives was Robert Rubin, who, as the Clinton Treasury secretary, helped repeal the last vestiges of Glass-Steagall after years of Wall Street assault.

Rubin has never apologized, let alone been held accountable. But he’s hardly alone. Even after all the country has gone through, the titans who fueled the bubble are heedless. In last Sunday’s Times, Sandy Weill, the former chief executive who built Citigroup (and recruited Rubin to its ranks), gave a remarkable interview to Katrina Brooker blaming his own hand-picked successor, Charles Prince, for his bank’s implosion. Weill said he preferred to be remembered for his philanthropy. Good luck with that.

Among his causes is Carnegie Hall, where he is chairman of the board. To see how far American capitalism has fallen, contrast Weill with the giant who built Carnegie Hall. Not only is Andrew Carnegie remembered for far more epic and generous philanthropy than Weill’s — some 1,600 public libraries, just for starters — but also for creating a steel empire that actually helped build America’s industrial infrastructure in the late 19th century. At Citi, Weill built little more than a bloated gambling casino. As Paul Volcker, the regrettably powerless chairman of Obama’s Economic Recovery Advisory Board, said recently, there is not “one shred of neutral evidence” that any financial innovation of the past 20 years has led to economic growth. Citi, that “innovative” banking supermarket, destroyed far more wealth than Weill can or will ever give away.

Read more here.

Unlikely

Unlikely New Year's Resolutions for Wall Street

Surprise Surpise

True democracy is simply not possible when moneyed lobbyists call the shots.

From Banks with political ties got bailouts, study shows by Steve Eder:

U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday.

The system is broken.

The Worst And The Dimmest

From The "best and the brightest"? Spare me by Michael Lind:

"Is President Obama trying to kill Wall Street and drive its talent to London?" asked one blogger, Scott Reeves. Scott Talbott, head of government affairs for the Financial Services Roundtable, has warned that "top salespeople, the lifeblood of any company" could be driven by TARP restrictions to work for overseas banks.

Where will the best and the brightest of the financial sector flee, to get away from regulation and earn obscenely high salaries? Not Canada, where tight regulation of banks prevented the kind of meltdown that has occurred in the U.S. Nor Australia, where similar strict banking regulations also spared that country's financial sector. London, Singapore or Dubai are sometimes mentioned as possible rival financial centers that would be eager to welcome the kind of overpaid financiers who wrecked the U.S. and global economy. Most Americans, I think, would agree that it is worth the risk. The voluntary expatriation of leading Wall Street geniuses might help to restore the U.S. economy and wreck potential rival financial capitals at the same time. The thought brings to mind the observation by a wag on the defection in the 1970s by John Connally from the Democrats to the Republicans: "He raised the IQ of both parties."

Let's Disinfect Wall Street

Wall Street needs to have some very bright sunlight shone on it.

From Commentary: Investigate Wall Street by Julian E. Zelizer:

Partisan warfare in the 1990s, including the impeachment proceedings against President Bill Clinton, made many Americans cynical about congressional investigation, as it seemed to be just another tool in the bitter culture of Capitol Hill.

But Congress can help us learn. We need another Pecora Commission, another Fulbright Committee, another Sam Ervin to use the power of Congress to shed light on the causes of our current economic meltdown.

Congress needs to learn more, not only about the kind of criminal activity for which Bernard Madoff is being charged, but also the legal practices -- such as risky home loans -- that created dangerous bubbles and put families at risk.

If voters and politicians are going to be able to evaluate legislation that is being proposed on a weekly basis, citizens must understand what has gone wrong.

This will be the first step toward restoring the confidence that the country needs if it is to start a better day.

Can You Afford Illegal Drugs?

With the way the economy is in the United States, who can afford anything, let alone illegal drugs? I think that the only people who can afford them are the people on Wall Street who “deserve” to make at least $500,000.00 a year because they are so “talented.”

From State Dept. Cites 'Large Firefights' in Travel Alert on Mexico by William Booth:

According to the alert, the threat of bodily harm is part of the ongoing drug war: "Mexican drug cartels are engaged in an increasingly violent conflict -- both among themselves and with Mexican security services -- for control of narcotics trafficking routes along the U.S.-Mexico border. In order to combat violence, the government of Mexico has deployed troops in various parts of the country. U.S. citizens should cooperate fully with official checkpoints when traveling on Mexican highways."

The alerts are a poke in Mexico's eye as well as a source of friction. As Mexican commentators point out, the country is fighting to stop drugs heading to the world's largest consumer nation -- the United States.

The Too-Big-To-Fail Doctrine

From Free Market Myth by Dean Baker:

In the context of a too-big-to-fail principle, the removal of restrictions on leverage (investment banks were allowed to leverage their capital at a ratio of forty-to-one compared to just ten-to-one for commercial banks) and the relaxation of other prudential regulation (the nominal value of credit default swaps, a new class of derivative instruments, grew to more than $70 trillion in a nearly unregulated market) essentially gave the banks a license to wager with taxpayers’ money.

Banks did exactly what economic theory predicts. They took huge risks, leveraging themselves to the hilt with questionable assets, knowing that they would gain as long as the housing bubble held up. And the banks did so with willing accomplices among pension funds, hedge funds, and other investors because these investors knew that the government would rescue them if things went badly.

Deregulation can be a principled position held by true believers in a free market. But Wall Streeters all wanted one-sided regulation that provided them with an enormous government security blanket without any costs or conditions. None of the Citigroup, Goldman Sachs, J.P. Morgan crew ever went to lobby Congress for an explicit repeal of the too-big-to-fail doctrine. And while many on Wall Street lost their jobs when the bubble burst, the tens or hundreds of millions of dollars that banking executives earned during the good times are theirs to keep. Even with the market collapse, the vast majority of them are almost certainly better off than they would have been had they done honest work over the last decade.

I'm With Bernie

From Sen. Bernie Sanders (I-VT): Why Not Fire Failed Tycoons?

At a Senate Budget Committee hearing, Senator Bernie Sanders (I-VT) challenged Treasury Secretary Timothy Geithner on why Wall Street chief executives, such as Goldman Sachs CEO Lloyd Blankfein, have been allowed to keep their jobs.

"You have a person who made hundreds of millions for himself and he led his institution and helped cause a great financial crisis. We have put as taxpayers $10 billion to bail him out and we have no say as to whether or not he will stay on the job?" Sanders asked Geithner.

"We're not going to fire the leadership?" an incredulous Sanders persisted. "We're going to keep these same guys who caused the crisis in power and who made huge sums of money?

"I think the American people -- if they're going to pour hundreds of billions of dollars into these institutions -- want a new slate of leadership."

What a novel idea! Fire people when they screw up! Of course, how many bosses fire themselves?

Weary

I am weary of indignant Congresspeople holding hearings where they “question” those involved in our economic problems. Congress is as much to blame as anyone. In fact, they probably deserve the most blame. They changed the regulations and rules of the money game. They allowed Wall Street to go berserk. They voted for two illegal wars that have consumed huge amounts of taxpayer money. I wish they would stop grandstanding and acting holier-than-thou. If they don’t like the way that the Wall Streeters have behaved then put some of them in jail, stop giving them more money, and shut the hell up.

From What Did the Banks Do With Your Cash? by Matthew Jaffe:

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," Sen. Claire McCaskill, D-Mo., recently said from the Senate floor.

"I'm mad," she said. "Everyone I work for is mad."

Congress is the problem. I’m mad at them. Congress has allowed Wall Street to kick sand in the face of the American taxpayer. Instead of reminding us of what we already know, Congress should stop the sand kicking. If they don’t have the power to do this, who the hell does?

Paying The "Best People" On Wall Street

From Pay curbs a right of ownership by David Weidner:

Maybe the biggest mistake made by the likes of Smith, Thain, Tiger Management's Julian Robertson or former New York Mayor Rudolph Giuliani, when defending bonuses, is they forget that making the rules about pay is part of the right of ownership and an essential part of capitalism and free markets.

After doling out more than $350 billion to acquire stakes in investment banks and commercial banks, the U.S. government -- you and I, as taxpayers -- definitely own the biggest banks on Main Street and Wall Street.

Put it this way: Citigroup Inc. and Bank of America Corp. each received $40 billion in cash and more than $360 billion in guarantees. Yet, Citigroup has a market value of only around $22 billion. Bank of America is valued at about $34 billion. Morgan Stanley is worth about $24 billion.

The list goes on, but you get the picture. The government either has effectively bought majority stakes in these companies or put more cash into them than they are worth. If these companies did not want the government exercising its right of ownership, then they should have not accepted the cash and prepared a bankruptcy filing.

It's true firms that haven't taken government cash will have a competitive pay advantage. That's how it should be. Firms that are run right should have an advantage. Why would we reward banks and bankers who got it wrong?

All this nonsense about Americans not understanding compensation on Wall Street is a bunch of elitist posturing. We understand it perfectly well, thank you. We know that even the most troubled of firms will look for ways around the new pay caps. We know that some people will flee for riches at smaller banks or hedge funds. We can live without the high flyers.

Den Of Thieves?

From Americans think Madoff's behavior is common - poll by David Goldman:

Most Americans believe that investment fraud like the recently revealed Ponzi scheme run by Bernard Madoff happens regularly on Wall Street, according to a recent survey.

Government regulation has been a hot political topic since the credit crisis began in mid-September. Many Democratic lawmakers have accused the Bush administration of allowing institutions and investors to operate with too little oversight, leading to irresponsible bets and illegal activity that spelled disaster for the markets.

Bush appointee Christopher Cox, the SEC's chairman, has been widely criticized for failing to act on information that could have prevented Madoff's scheme. Cox said last week at a Congressional hearing that "credible information" had been brought to the SEC's attention over a period of nearly 10 years about Madoff's activities, but no formal investigation was made.

Barbarians

From 'Barbarians at the Gate' authors reflect by Jon Friedman:

"Barbarians at the Gate," the absorbing tale of the takeover of RJR Nabisco, was a New York Times No. 1 bestseller. It also spawned a well-received movie on HBO. But before they could envision creating a pop-culture icon, co-authors Bryan Burrough and John Helyar had a modest goal.

"Our whole goal was writing a book!" Burrough said.

I'm not the only person who thinks "Barbarians at the Gate" is the best business book ever. But penning a classic that defined the go-go 1980s on Wall Street was the furthest thing from their minds. "We were too stupid and naïve to know what we were doing," Burrough told me when I sat down with the authors at Dow Jones headquarters.

Helyar smiled when he recalled that he and Burrough ultimately created a "part-comic, part-dramatic operetta" that reflected "the human comedy" of Wall Street at the time.

Wall Street is still governed by fear and, especially, greed today in the wake of the collapse of the securities, real estate and automotive industries. "I'll give you my 'Wall Street 101' lecture," Helyar said. "Then, the M&A artists were over-the-top in some cases but were still tethered to real corporate America."

Fast-forward to today: "Wall Street became more of a blue smoke-and mirrors" environment, Helyar said.

Helyar saw the Internet bubble-burst nearly a decade ago as a result of analysts acting as "carnival barkers." He assesses the current crisis as the work of "quants" inventing ways to exploit the financial markets.

Burrough's view is that the chaos and ruin on Wall Street is emblematic of history repeating itself. "It's exactly the same every time," Burrough said animatedly. "Wall Street produces a product that makes money. Then it is overused -- and by the wrong people."

Read the rest here.

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Henry Paulson - Bush Appointee

Political Animal on April 1, 2008:

No surprise there. After all, Paulson created his plan a year ago, well before the current crisis exploded last summer. Far from being a way to rein in banking industry excesses, it was originally a conservative wish list designed to "streamline" the federal bureaucracy and lighten the regulatory burden on Wall Street, which was, um, slowing down the growth of sophisticated new financial instruments that — that, er, were needed to keep the American financial industry in its place as the leader of the world.

But just for once, would it kill the Bush administration to address an actual problem, instead of merely using it as an excuse to jam some long-wished-for piece of money-con flim-flam through Congress?

From 'Paulson's new 'Global Banking Corp.' IPO 2009 by Paul B. Farrell:

1. Opening scene: Paulson and Goldman Sachs, 1974-2006

Harvard M.B.A., 1970. Then a staffer at the Pentagon and with Nixon. Joins Goldman in 1974. CEO in 1999. Paid $38 million in 2005. Federal ethics laws let him sell $484 million in Goldman stock tax-free when he left. Net worth, about $700 million.

And I have to pay taxes every time I sell any stocks, even if it is only a fraction of a share.

From A Loophole For Poor Mr. Paulson by Jessica Holzer:

But don't shed too many tears for Paulson. He has amassed quite a fortune--a roughly $700 million equity stake in Wall Street's premier investment banking house. And soon, he will have the chance to diversify a good chunk of those holdings without paying a dime to the Internal Revenue Service.

By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.

Technically, the tax kicks in once these replacement assets are sold, using the purchase price of the original assets as the cost basis, says Tom Ochsenschlager of the American Institute of Certified Public Accountants. But why sell when you can avoid the tax altogether?

"The idea is never to sell," says Robert Willens, the top tax and accounting analyst at Lehman Brothers. "If you're able to hold onto the replacement assets until your demise, you never have to pay it."

The tax break was designed to ensure that the wealthy are not deterred from taking posts in government because they fear a big tax hit. But it amounts to a significant perk of public office.

From Can you trust a Wall Street veteran with a Wall Street bailout? by Kevin G. Hall:

Back then, Bush saw Paulson's Wall Street experience as a plus. "Hank will follow in the footsteps of Alexander Hamilton and other distinguished Treasury secretaries who used their talents and wisdom to strengthen our financial markets and expand the reach of the American Dream," Bush said at the time.

Nothing like the wisdom and foresight of George W. Bush.

Has George W. Bush ever done anything positive for this country?

Marcy Kaptur For President!

Screw Obama! Screw McCain! I want Marcy Kaptur to be president.

THE LATEST REALITY GAME--WALL STREET BAILOUT -- (House of Representatives - September 22, 2008):

Mr. Speaker, here is the latest reality game. Let's play Wall Street Bailout.

Rule one: Rush the decision. Time the game to fall in the week before Congress is set to adjourn and just 6 weeks before an historic election so your opponents will be preoccupied, pressured, distracted, and in a hurry.

Rule two: Disarm the public through fear. Warn that the entire global financial system will collapse and the world will fall into another Great Depression. Control the media enough to ensure that the public will not notice this.

Bailout will indebt them for generations, taking from them trillions of dollars they earned and deserve to keep.

Rule three: Control the playing field and set the rules. Hide from the public and most of the Congress just who is arranging this deal. Communicate with the public through leaks to media insiders. Limit any open congressional hearings. Communicate with Congress via private teleconferencing calls. Heighten political anxiety by contacting each political party separately. Treat Members of Congress condescendingly, telling them that the matter is so complex that they must rely on those few insiders who really do know what's going on.

Rule four: Divert attention and keep people confused. Manage the news cycle so Congress and the public have no time to examine who destroyed the prudent banking system that served America so well for 60 years after the financial meltdown of the 1920s.

Rule five: Always keep in mind the goal is to privatize gains to a few and socialize loss to the many. For 30 years in one financial scandal after another, Wall Street game masters have kept billions of dollars of their gain and shifted their losses to American taxpayers. Once this bailout is in place, the greed game will begin again.

But I have a counter-game. It's called Wall Street Reckoning. Congress shouldn't go home to campaign. It should put America's accounts in order.

To Wall Street insiders, it says ``no'' on behalf of the American people. You have perpetrated the greatest financial crimes ever on this American republic. You think you can get by with it because you are extraordinarily wealthy and the largest contributors to both Presidential and congressional campaigns in both major parties, but you are about to be brought under firm control.

First, America doesn't need to bail you out, it needs to secure the real assets and property, not your paper, that means the homes and properties of hardworking Americans who are about to lose their homes because of your mortgage greed. There should be a new job for regional Federal Reserve Banks. We want no home foreclosed if a serious work-out agreement can be put into place. And if you don't do it, we want a notarized statement by a Federal Reserve official that they tried and failed.

Second, taxpayers should directly gain any equity benefits that may flow from this historic bailout. We want the American people to get first priority in taking ownership of the institutions that want to pass their toxic paper onto the taxpayers.

Third, before any bailouts for Wall Street, America needs major job creation to rebuild our major infrastructure. America needs assets, not paper. We need working assets.

Fourth, the time for real financial regulatory change is now, not next year. A modernized Glass Eagle Act must be put in place. We need to reestablish locally-owned community savings banks across this country and create within the Justice Department a fully funded unit to prosecute every single high-flying thief whose fraud and criminal acts created this debacle and then forced their disgorgement of assets going back 15 years.

Fifth, any refinancing must return a major share of profits to a new Social Security and Medicare lockbox, where the monies can go to pay for a dignified and assured retirement for every American. This Member isn't voting for a penny of it. Those who created and profited from this game of games must be brought to justice. The assets they stole must be returned to the American taxpayers, right down to the tires on their Mercedes.

Mr. Speaker, I ask my colleagues to join me in cosponsoring my bill to create an independent commission to investigate these well-heeled wrongdoers. Real reform now, or nothing.

Update:
She’s On Fire:

Where Did It Go Wrong?

From Risk is gone on Wall Street by David Weidner:

Dick Fuld, the soon-to-be former chairman and chief executive of Lehman, and Jimmy Cayne, the former CEO of Bear Stearns, tried to outdo each other with compensation.

The "hard-charging" Fuld took home about $45 million last year. But that was OK because he was a lifer at the firm who had helped rebuild it a couple of times when it neared collapse. No one ever thought that maybe the executive people liked to call the gorilla was one of the reasons the firm kept running into trouble.

Cayne's net worth soared to $1 billion at the end of 2006, but we're supposed to feel sorry for him because he lost a fortune in the collapse and has to live in a $26 million apartment in the Plaza Hotel.

The employees of these firms aren't much better. They can't figure out why the market has lost confidence in their eggshell companies built on mountains of combustible derivatives. They scowl at journalists, pay coffee vendors not to serve reporters who make a fraction of what brokers do. They blame the media for their woes, not their banking counterparts who have cold feet.

Wall Street tells investors to buy and hold and then goes on a bank run against two of its own.

Read more here.

The Greatest Financial Scandal In History?

From Bringing Down Bear Stearns by Bryan Burrough:

On Monday, March 10, the rumor started: Bear Stearns was having liquidity problems. In fact, the maverick investment bank had around $18 billion in cash reserves. But soon the speculation created its own reality, and the race was on to keep Bear’s crisis from ravaging Wall Street. With the blow-by-blow from insiders, Bryan Burrough follows the players—Bear’s stunned executives, trigger-happy reporters at CNBC, a nervous Fed, a shadowy group of short-sellers—in what some believe was the greatest financial scandal in history.

Read the rest here.

Stop That

From Food for thought by Thomas Kostigen:

When the costs of food, energy and water as well as other commodities are soaring because of prices in the futures markets we have a problem on our hands. This is exactly what is playing out before us now.

There is another agent at work in the commodities markets, one that is setting the prices of our natural resources and in turn the food on our table and the price of the gas at the pump. This agent isn't a farmer or an oil producer. This agent wears a suit and tie and sits in front of a trading screen. His or her job isn't to produce anything, it's to exploit anything. And it's time we curbed this profession.

Speculation in the commodities futures markets needs to be limited.

Read the rest here.