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Scientists Bust the Top One Percent

March 5th, 2012 Posted in Uncategorized
Mar, 05 2012
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Ever since the Occupy Wall Street movement began last fall, we have been hearing the incessant mantra of:  Don’t blame the rich for wealth inequality.  In fact, Herman Cain’s futile bid for the Presidency was based (in part) on that very theme.  Last January, James Q. Wilson (who passed away on Friday) wrote an opinion piece for The Washington Post entitled, “Angry about inequality?  Don’t blame the rich”.  Paul Buchheit of the Common Dreams blog rebutted Wilson’s essay with this posting:  “So say the rich:  ‘Don’t blame us for having all the money!’ ”.  How often have you read and heard arguments from apologists for the Wall Street banksters, upbraiding those who dared speak ill of those sanctified “job creators” within the top one percent of America’s economic strata?

Finally, a group of scientists has intervened by conducting some research about the ethics of those at the top of America’s socioeconomic food chain.  Stéphane Côté, PhD, Associate Professor of Organizational Behavior at the University of Toronto’s Rotman School of Management, worked with a team of four psychologists from the University of California at Berkeley to conduct seven studies on this subject.  Their paper, “Higher social class predicts increased unethical behavior” was published in the February 27 issue of the Proceedings of the National Academy of Sciences (PNAS).  Here is the abstract:

Seven studies using experimental and naturalistic methods reveal that upper-class individuals behave more unethically than lower-class individuals.  In studies 1 and 2, upper-class individuals were more likely to break the law while driving, relative to lower-class individuals.  In follow-up laboratory studies, upper-class individuals were more likely to exhibit unethical decision-making tendencies (study 3), take valued goods from others (study 4), lie in a negotiation (study 5), cheat to increase their chances of winning a prize (study 6), and endorse unethical behavior at work (study 7) than were lower-class individuals.  Mediator and moderator data demonstrated that upper-class individuals’ unethical tendencies are accounted for, in part, by their more favorable attitudes toward greed.

The impact and the timing of this article, with respect to the current debate over income inequality, have resulted in quite a bit of interesting commentary.  I enjoyed the perspective of Peter Dorman at the Econospeak blog:

The tone of the first wave of commentary, as far as I can tell, is that we knew it all along – rich people are nasty.  I would like to put in a word, however, for the other direction of causality, that dishonesty and putting one’s own interests ahead of others are conducive to wealth.

*   *   *

The reason I bring this up is because there is a constant background murmur in our society that says that greater wealth has to be a reward for more talent, more effort or more contribution to society.

Most of the commentary written about the PNAS article has been relatively non-partisan.  Two-day access for reading the article on-line will cost you ten bucks.  For those of us who can’t afford that (as well as for those who can afford it – but are too greedy to pay for anything) I have assembled a number of excerpts from articles written by those who actually read the entire scientific paper.  The following passages will provide you with some interesting details about the research conducted by this group.

Christopher Shea of The Wall Street Journal gave us a brief peek at some of the specific findings of the studies conducted by this team.

It went so far as to show that higher-class people will literally take candy from the mouths of children.

An excerpt quoted by Shea illustrated how the group expanded on an observation made by French sociologist Émile Durkheim:

 “From the top to the bottom of the ladder, greed is aroused,” Durkheim famously wrote.  Although greed may indeed be a motivation all people have felt at points in their lives, we argue that greed motives are not equally prevalent across all social strata.

Brandon Keim of Wired offered us more research data from the article, while focusing on the observations of team member Paul Piff, a Berkeley psychologist:

“This work is important because it suggests that people often act unethically not because they are desperate and in the dumps, but because they feel entitled and want to get ahead,” said evolutionary psychologist and consumer researcher Vladas Griskevicius of the University of Minnesota, who was not involved in the work.  “I am especially impressed that the findings are consistent across seven different studies with varied methodologies.  This work is not just good science, but it is shows deeper insight into the reasons why people lie, cheat, and steal.”

According to Piff, unethical behavior in the study was driven both by greed, which makes people less empathic, and the nature of wealth in a highly stratified society.  It insulates people from the consequences of their actions, reduces their need for social connections and fuels feelings of entitlement, all of which become self-reinforcing cultural norms.

“When pursuit of self-interest is allowed to run unchecked, it can lead to socially pernicious outcomes,” said Piff, who noted that the findings are not politically partisan.  “The same rules apply to liberals and conservatives.  We always control for political persuasion,” he said.

For Thomas B. Edsall of The New York Times, the research performed by this group helped explain the rationale behind a bit of Republican campaign strategy:

Republicans recognize the political usefulness of objectification, capitalizing on “compassion fatigue,” or the exhaustion of empathy, among large swathes of the electorate who are already stressed by the economic collapse of 2008, high levels of unemployment, an epidemic of foreclosures, stagnant wages and a hyper-competitive business arena.

Compassion fatigue was fully evident in Rick Santelli’s 2009 rant on CNBC denouncing a federal plan to prop up “losers’ mortgages” at taxpayer expense, a rant that helped spark the formation of the Tea Party.  Republican debates provided further evidence of compassion fatigue when audiences cheered the record-setting use of the death penalty in Texas and applauded the prospect of a gravely ill pauper who, unable to pay medical fees, was allowed to die.

Jonathan Gitlin of Ars Technica reported on some of the juicy details from a few experiments.  When reading about my favorite experiment, keep in mind that the term “SES” refers to socioeconomic status.

Study number four involved participants rating themselves on the SES scale to heighten their perception of status; they were then answered a number of questions relating to unethical behavior.  At the end of the experiment, they were presented with a jar of individually wrapped candy and told that, although it was for children in a nearby lab, they could take some if they wanted.  At this point you might be able to guess what the results were.  High SES participants took more candy.

Gitlin concluded his review of the paper with this thought:

The researchers argue that “the pursuit of self-interest is a more fundamental motive among society’s elite, and the increased want associated with greater wealth and status can promote wrongdoing.”  However, they point out that their findings aren’t absolute, and that philanthropic efforts such as those of Bill Gates and Warren Buffet buck the observed trend, as does research which has shown a relationship between poverty and violent crime.

Meanwhile, the debate over economic inequality continues to rage on through the 2012 election cycle.  It will be interesting to observe whether this scientific report is exploited to bolster the argument that most of the one-percenters suffer from a character flaw, which not only got them where they are today – but which is shared by their kleptocratic comrades, who have facilitated a system of legalized predation.


 

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Occupy Movement Gets Some Respect

February 16th, 2012 Posted in Uncategorized
Feb, 16 2012
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Much has changed since the inception of the Occupy Wall Street movement.   When the occupation of Zuccotti Park began on September 17, the initial response from mainstream news outlets was to simply ignore it – with no mention of the event whatsoever.  When that didn’t work, the next tactic involved using the “giggle factor” to characterize the protesters as “hippies” or twenty-something “hippie wanna-bes”, attempting to mimic the protests in which their parents participated during the late-1960s.  When that mischaracterization failed to get any traction, the presstitutes’ condemnation of the occupation events – which had expanded from nationwide to worldwide – became more desperate:  The participants were called everything from “socialists” to “anti-Semites”.  Obviously, some of this prattle continues to emanate from unimaginative bloviators.  Nevertheless, it didn’t take long for respectable news sources to give serious consideration to the OWS effort.

One month after the occupation of Zuccotti Park began, The Economist explained why the movement had so much appeal to a broad spectrum of the population:

So the big banks’ apologies for their role in messing up the world economy have been grudging and late, and Joe Taxpayer has yet to hear a heartfelt “thank you” for bailing them out.  Summoned before Congress, Wall Street bosses have made lawyerised statements that make them sound arrogant, greedy and unrepentant.  A grand gesture or two – such as slashing bonuses or giving away a tonne of money – might have gone some way towards restoring public faith in the industry.  But we will never know because it didn’t happen.

Reports eventually began to surface, revealing that many “Wall Street insiders” actually supported the occupiers.  Writing for the DealBook blog at The New York Times, Jesse Eisinger provided us with the laments of a few Wall Street insiders, whose attitudes have been aligned with those of the OWS movement.

By late December, it became obvious that the counter-insurgency effort had expanded.   At The eXiled blog, Yasha Levine discussed the targeting of journalists by police, hell-bent on squelching coverage of the Occupy movement.  In January, New York Mayor Michael Bloomberg lashed out against the OWS protesters by parroting what has become The Big Lie of our time.  In response to a question about Occupy Wall Street, Mayor Bloomberg said this:

“It was not the banks that created the mortgage crisis.  It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”

The counterpunch to Mayor Bloomberg’s remark was swift and effective.  Barry Ritholtz wrote a piece for The Washington Post entitled “What caused the financial crisis?  The Big Lie goes viral”.  After The Washington Post published the Ritholtz piece, a good deal of supportive commentary emerged – as observed by Ritholtz himself:

Since then, both Bloomberg.com and Reuters each have picked up the Big Lie theme. (Columbia Journalism Review as well).  In today’s NYT, Joe Nocera does too, once again calling out those who are pushing the false narrative for political or ideological reasons in a column simply called “The Big Lie“.

Once the new year began, the Occupy Oakland situation quickly deteriorated.  Chris Hedges of Truthdig took a hard look at the faction responsible for the “feral” behavior, raising the question of whether provocateurs could have been inciting the ugly antics:

The presence of Black Bloc anarchists – so named because they dress in black, obscure their faces, move as a unified mass, seek physical confrontations with police and destroy property – is a gift from heaven to the security and surveillance state.

Chris Hedges gave further consideration to the involvement of provocateurs in the Black Bloc faction on February 13:

Occupy’s most powerful asset is that it articulates this truth.  And this truth is understood by the mainstream, the 99 percent.  If the movement is severed from the mainstream, which I expect is the primary goal of the Department of Homeland Security and the FBI, it will be crippled and easily contained.  Other, more militant groups may rise and even flourish, but if the Occupy movement is to retain the majority it will have to fight within self-imposed limitations of nonviolence.

Despite the negative publicity generated by the puerile pranks of the Black Bloc, the Occupy movement turned a corner on February 13, when Occupy the SEC released its 325-page comment letter concerning the Securities and Exchange Commission’s draft “Volcker Rule”.  (The Volcker Rule contains the provisions in the Dodd-Frank financial reform act which restrict the ability of banks to make risky bets with their own money).  Occupy the SEC took advantage of the “open comment period” which is notoriously exploited by lobbyists and industry groups whenever an administrative agency introduces a new rule.  The K Street payola artists usually see this as their last chance to “un-write” regulations.

The most enthusiastic response to Occupy the SEC’s comment letter came from Felix Salmon of Reuters:

Occupy the SEC is the wonky finreg arm of Occupy Wall Street, and its main authors are worth naming and celebrating:  Akshat Tewary, Alexis Goldstein, Corley Miller, George Bailey, Caitlin Kline, Elizabeth Friedrich, and Eric Taylor.  If you can’t read the whole thing, at least read the introductory comments, on pages 3-6, both for their substance and for the panache of their delivery.  A taster:

During the legislative process, the Volcker Rule was woefully enfeebled by the addition of numerous loopholes and exceptions.  The banking lobby exerted inordinate influence on Congress and succeeded in diluting the statute, despite the catastrophic failures that bank policies have produced and continue to produce…

The Proposed Rule also evinces a remarkable solicitude for the interests of banking corporations over those of investors, consumers, taxpayers and other human beings. 

*   *   *

There’s lots more where that comes from, including the indelible vision of how “the Volcker Rule simply removes the government’s all-too-visible hand from underneath the pampered haunches of banking conglomerates”.  But the real substance is in the following hundreds of pages, where the authors go through the Volcker Rule line by line, explaining where it’s useless and where it can and should be improved.

John Knefel of Salon emphasized how this comment letter exploded the myth that the Occupy movement is simply a group of cynical hippies:

The working group’s detailed policy position gives lie to the common claim that the Occupy Wall Street movement is “well intentioned but misinformed.”  It shows there’s room in the movement both for policy wonks and those chanting “anti-capitalista.”

Even Mayor Bloomberg’s BusinessWeek spoke highly of Occupy the SEC’s efforts.  Karen Weise interviewed Occupy’s Alexis Goldstein, who had previously worked at such Wall Street institutions as Deutsche Bank, where she built IT systems for traders:

Like Goldstein, several members have experience in finance.  Kline says she used to be a derivatives trader.  Tewary is a lawyer who worked on securitization cases at the firm Kaye Scholer, according to his bio on the website of his current firm, Kamlesh Tewary.  Mother Jones, which reported on the group in December, says O’Neil is a former Wall Street quant.

There are parts of the rule that Occupy the SEC would like to see toughened.  For example, Goldstein sees a “big loophole” in the proposed rule that allows banks to make proprietary trades using so-called repurchase agreements, by which one party sells securities to another with the promise to buy back the securities later.  The group wants to make sure other parts aren’t eroded.

Chris Sturr of Dollars & Sense provided this reaction:

From the perspective of someone who’s spent a lot of time in working groups of Occupy Boston, what I love about this story is that it’s early evidence of what Occupy can and will do, beyond “changing the discourse,” which is the best that sympathetic people who haven’t been involved seem to be able to say about Occupy, or just going away and dying off, which is what non-sympathizers think has happened to Occupy.  Many of us have been quietly working away over the winter, and the results will start to be seen in the coming months.

If Chris Sturr’s expectation ultimately proves correct, it will be nice to watch the pro-Wall Street, teevee pundits get challenged by some worthy opponents.


 

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Captive Justice

January 23rd, 2012 Posted in Uncategorized
Jan, 23 2012
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The Obama administration’s failure to prosecute any of the crimes which caused (or resulted from) the financial crisis has been a continuing source of outrage for voters across the country.

Last summer, Gretchen Morgenson of The New York Times earned a great deal of praise for her August 21 report, exposing the Obama administration’s vilification of New York State Attorney General Eric Schneiderman for his refusal to play along with Team Obama’s efforts to insulate the fraud-closure banks from the criminal prosecution they deserve.  The administration has been attempting to pressure each Attorney General from every state to consent to a settlement of any and all claims against the banksters arising from their fraudulent foreclosure practices.  Each state is being asked to release the banks from criminal and civil liability in return for a share of the $25 billion settlement package.  The $25 billion is to be used for loan modifications.

The administration’s effort to push this fraud-closure settlement is ongoing.  On January 21, David Dayen provided an update on this crusade at the Firedoglake website.

The American public is no longer content to sit back and do nothing while the Obama administration sits back and does nothing to prosecute those criminals whose fraudulent conduct devastated the American economy.  On December 22, I discussed the intensifying wave of criticism directed against the President by his former supporters as well as those disgusted by Obama’s subservience to his benefactors on Wall Street.  Since that time, Scot Paltrow wrote a great piece for Reuters, concerning the Justice Department’s failure to intervene against improper foreclosure procedures.  Paltrow’s widely-acclaimed essay inspired several commentators to express their disgust about government permissiveness toward such egregious conduct.  At The Big Picture, Barry Ritholtz shared his reaction to the Reuters article:

The fraud is rampant, self-evident, easy to prosecute.  The only reason it hasn’t been done so far is that this nation is led by corrupt cowards and suffers from a ruinous two-party system.

We were once a great nation that set a shining example for the rest of the world as to what the Rule of Law meant.  That is no more, as we have become a corrupt plutocracy.  Why our prosecutors cower in front of the almighty banking industry is beyond my limited ability to comprehend.

Without any sort of legal denouement, we should expect an angry electorate and an unhappy nation.

Scot Paltrow wrote another great article for Reuters on January 20, which is causing quite a stir.  The opening paragraphs provide us with some insight as to why our Attorney General deserves to be called Mr. Hold-harmless:

U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms.  Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients.

*   *   *

The evidence, including records from federal and state courts and local clerks’ offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.

In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners’ lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients.  So far Justice officials haven’t responded publicly to any of the requests.

The revelations in Scot Paltrow’s most recent report should create quite a scandal requiring significant damage control efforts by the Obama administration.  Given the fact that this is an election year, Republican politicians should be smelling red meat at this point.  After all, Obama’s Attorney General is being accused of conflict of interest.  Nevertheless, will any Republicans (or their Super PACs) seize upon this issue?  To do so could place them in a conflict-of-interest situation – as far as those banks are concerned.  Dare they risk biting the hands that feed them?  It could be quite a high-wire act to undertake.  Will any Republicans rise to this challenge?


 

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Trouble Ahead

January 12th, 2012 Posted in Uncategorized
Jan, 12 2012
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I find it very amusing that we are being bombarded with so many absurd election year “talking points” and none of them concern the risk of a 2012 economic recession.  The entire world seems in denial about a global problem which is about to hit everyone over the head.  I’m reminded of the odd brainstorming session in September of 2008, when Presidential candidates Obama and McCain were seated at the same table with a number of econ-honchos, all of whom were scratching their heads in confusion about the financial crisis.  Something similar is about to happen again.  You might expect our leaders to be smart enough to avoid being blindsided by an adverse economic situation – again – but this is not a perfect world.  It’s not even a mediocre world.

After two rounds of quantitative easing, the Kool-Aid drinkers are sipping away, in anticipation of the “2012 bull market”.  Even the usually-bearish Doug Kass recently enumerated ten reasons why he expects the stock market to rally “in the near term”.  I was more impressed by the reaction posted by a commenter – identified as “Skateman” at the Pragmatic Capitalism blog.  Kass’ reason #4 is particularly questionable:

Mispaced preoccupation with Europe:  The European situation has improved.   .  .  .

Skateman’s reaction to Kass’ reason #4 makes more sense:

The Europe situation has not improved.  There is no escape from ultimate disaster here no matter how the deck chairs are rearranged.  Market’s just whistling past the graveyard.

Of particular importance was this recent posting by Mike Shedlock (a/k/a Mish), wherein he emphasized that “without a doubt Europe is already in recession.”  After presenting his readers with the most recent data supporting his claim, Mish concluded with these thoughts:

Telling banks to lend in the midst of a deepening recession with numerous austerity measures yet to kick in is simply absurd.  If banks did increase loans, it would add to bank losses.  The smart thing for banks to do is exactly what they are doing, parking cash at the ECB.

Austerity measures in Italy, Spain, Portugal, Greece, and France combined with escalating trade wars ensures the recession will be long and nasty.

*   *   *

Don’t expect the US to be immune from a Eurozone recession and a Chinese slowdown.  Unlike 2011, it will not happen again.

Back on October 8, Jeff Sommer wrote an article for The New York Times, discussing the Economic Cycle Research Institute’s forecast of another recession:

“If the United States isn’t already in a recession now it’s about to enter one,” says Lakshman Achuthan, the institute’s chief operations officer.  It’s just a forecast.  But if it’s borne out, the timing will be brutal, and not just for portfolio managers and incumbent politicians.  Millions of people who lost their jobs in the 2008-9 recession are still out of work.  And the unemployment rate in the United States remained at 9.1 percent in September.  More pain is coming, says Mr. Achuthan.  He thinks the unemployment rate will certainly go higher.  “I wouldn’t be surprised if it goes back up into double digits,” he says.

Mr. Achuthan’s outlook was echoed by economist John Hussman of the Hussman Funds, who pointed out in his latest Weekly Market Comment that investors have been too easily influenced by recent positive economic data such as payroll reports and Purchasing Managers Indices:

I can understand this view in the sense that the data points are correct – economic data has come in above expectations for several weeks, the Chinese, European and U.S. PMI’s have all ticked higher in the latest reports, new unemployment claims have declined, and December payrolls grew by 200,000.

Unfortunately, in all of these cases, the inference being drawn from these data points is not supported by the data set of economic evidence that is presently available, which is instead historically associated with a much more difficult outcome.  Specifically, the data set continues to imply a nearly immediate global economic downturn.  Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) has noted if the U.S. gets through the second quarter of this year without falling into recession, “then, we’re wrong.”  Frankly, I’ll be surprised if the U.S. gets through the first quarter without a downturn.

At the annual strategy seminar held by Société Générale, their head of strategy – Albert Edwards – attracted quite a bit of attention with his grim prognostications.  The Economist summarized his remarks this way:

The surprise message for investors is that he feels the US is on the brink of another recession, despite the recent signs of optimism in the data (the non-farm payrolls, for example).  The recent temporary boost to consumption is down to a fall in the household savings ratio, which he thinks is not sustainable.

Larry Elliott of The Guardian focused on what Albert Edwards had to say about China and he provided more detail concerning Edwards’ remarks about the United States:

“There is a likelihood of a China hard landing this year.  It is hard to think 2013 and onwards will be any worse than this year if China hard-lands.”

*   *   *

He added that despite the recent run of more upbeat economic news from the United States, the risk of another recession in the world’s biggest economy was “very high”.  Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the “stall speed” that historically led to recession.  It was unlikely that the economy would muddle through, Edwards said.

So there you have it.  The handwriting is on the wall.  Ignore it at your peril.


 

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Psychopaths Caused The Financial Crisis

January 5th, 2012 Posted in Uncategorized
Jan, 05 2012
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Two months ago, Barry Ritholtz wrote a piece for The Washington Post in rebuttal to New York Mayor Michael Bloomberg’s parroting of what has become The Big Lie of our time.  In response to a question about Occupy Wall Street, Mayor Bloomberg said this:

“It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”

Ritholtz then proceeded to list and discuss the true causes of the financial crisis.  Among those causes were Alan Greenspan’s Federal Reserve monetary policy – wherein interest rates were reduced to 1 percent; the deregulation of derivatives trading by way of the Commodity Futures Modernization Act; the Securities and Exchange Commission’s “Bear Stearns exemption” – allowing Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns to boost their leverage as high as 40-to-1; as well as the “bundling” of sub-prime mortgages with higher-quality mortgages into sleazy “investment” products known as collateralized debt obligations (CDOs).

After The Washington Post published the Ritholtz piece, a good deal of supportive commentary emerged – as observed by Ritholtz himself:

Since then, both Bloomberg.com and Reuters each have picked up the Big Lie theme. (Columbia Journalism Review as well).  In today’s NYT, Joe Nocera does too, once again calling out those who are pushing the false narrative for political or ideological reasons in a column simply called “The Big Lie“.

Purveyors of The Big Lie are also big on advancing the claim that the “too big to fail” beneficiaries of the TARP bailout repaid the money they were loaned, at a profit to the taxpayers.  Immediately after her arrival at CNN, former Goldman Sachs employee, Erin Burnett made a point of interviewing a young, Occupy Wall Street protester, asking him if he was aware that the government actually made a profit on the TARP.  Unfortunately, the fiancée of Citigroup executive David Rubulotta didn’t direct her question to Steve Randy Waldman – who debunked that propaganda at his Interfluidity website:

Substantially all of the TARP funds advanced to banks have been paid back, with interest and sometimes even with a profit from sales of warrants.  Most of the (much larger) extraordinary liquidity facilities advanced by the Fed have also been wound down without credit losses.  So there really was no bailout, right?  The banks took loans and paid them back.

Bullshit.

*   *   *

During the run-up to the financial crisis, bank managers, shareholders, and creditors paid themselves hundreds of billions of dollars in dividends, buybacks, bonuses and interest.  Had the state intervened less generously, a substantial fraction of those payouts might have been recovered (albeit from different cohorts of stakeholders, as many recipients of past payouts had already taken their money and ran).  The market cap of the 19 TARP banks that received more than a billion dollars each in assistance is about 550B dollars today (even after several of those banks’ share prices have collapsed over fears of Eurocontagion).  The uninsured debt of those banks is and was a large multiple of their market caps.  Had the government resolved the weakest of the banks, writing off equity and haircutting creditors, had it insisted on retaining upside commensurate with the fraction of risk it was bearing on behalf of stronger banks, the taxpayer savings would have run from hundreds of billions to a trillion dollars.  We can get into all kinds of arguments over what would have been practical and legal. Regardless of whether the government could or could not have abstained from making the transfers that it made, it did make huge transfers.  Bank stakeholders retain hundreds of billions of dollars against taxpayer losses of the same, relative to any scenario in which the government received remotely adequate compensation first for the risk it assumed, and then for quietly moving Heaven and Earth to obscure and (partially) neutralize that risk.

The banks were bailed out.  Big time.

Another overlooked cause of the financial crisis was the fact that there were too many psychopaths managing the most privileged Wall Street institutions.  Not only had the lunatics taken over the asylum – they had taken control of the world’s largest, government-backed casino, as well.  William D. Cohan of Bloomberg News gave us a peek at the recent work of Clive R. Boddy:

It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along:  The “corporate psychopaths” at the helm of our financial institutions are to blame.

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

As a result, Boddy argues in a recent issue of the Journal of Business Ethics, such people are “extraordinarily cold, much more calculating and ruthless towards others than most people are and therefore a menace to the companies they work for and to society.”

Professor Boddy wrote a book on the subject – entitled, Corporate Psychopaths.  The book’s publisher, Macmillan, provided this description of the $90 opus:

Psychopaths are little understood outside of the criminal image.  However, as the recent global financial crisis highlighted, the behavior of a small group of managers can potentially bring down the entire western system of business.  This book investigates who they are, why they do what they do and what the consequences of their presence are.

Matt Taibbi provided a less-expensive explanation of this mindset in a recent article for Rolling Stone:

Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors.  It’s called having a conscience: even though there are plenty of things most of us could get away with doing, we just don’t do them, because, well, we live here.  Most of us wouldn’t take a million dollars to swindle the local school system, or put our next door neighbors out on the street with a robosigned foreclosure, or steal the life’s savings of some old pensioner down the block by selling him a bunch of worthless securities.

But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India.  They defraud the pension funds of state workers into buying billions of their crap mortgage assets.  They take zero-interest loans from the state and then lend that same money back to us at interest.  Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.

Do you think that Mayor Bloomberg learned his lesson  .  .  .  that spreading pro-bankster propaganda can provoke the infusion of an overwhelming dose of truth into the mainstream news?   Nawwww  .  .  .


 

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2011 Jackass Of The Year

January 2nd, 2012 Posted in Uncategorized
Jan, 02 2012
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There were so many contenders for TheCenterLane.com’s 2011 Jackass Of The Year award, I was ready to give up on making a decision.  Former Congressman Anthony Weiner (who never even “got lucky” with any of the women who received his “Peter Tweets”) was certainly a contender.  Another runner-up was Arnold Schwarzenegger, who chose to have an affair with his unattractive housekeeper – apparently just because she was there.

This year’s winner is Jon S. Corzine, the former Senator and Governor of New Jersey – in addition to having been the former CEO of Goldman Sachs.  Most infamously, Corzine was named chairman and CEO of MF Global in March of 2010.  It took Corzine only 20 months to drive the firm into bankruptcy.  As Stephen Foley of The Independent reported, Corzine gambled $6 billion of the firm’s money on his belief that Italy would not default on its government bonds.  When that wager was exposed, MF Global’s clients and trading partners stopped doing business with the firm.  Within a few days, MF Global went belly-up, in what became one of the ten biggest bankruptcies in American history.

On Halloween, the Deal Book blog at The New York Times discussed what happened after a discovery by federal regulators that hundreds of millions of dollars (perhaps 950) in MF Global customers’ money had gone missing:

The recognition that money was missing scuttled at the 11th hour an agreement to sell a major part of MF Global to a rival brokerage firm.  MF Global had staked its survival on completing the deal. Instead, the New York-based firm filed for bankruptcy on Monday.

Regulators are examining whether MF Global diverted some customer funds to support its own trades as the firm teetered on the brink of collapse.

One of those customers was a gentleman named Gerald Celente.  On December 17, Mr. Celente appeared on Max Keiser’s television program, On the Edge to describe what happened with his contract (placed through MF Global in April) to purchase an undisclosed quantity of December gold for an amount slightly in excess of $1,400 per ounce.  Celente skewered more individuals than Jon Corzine while describing a travesty which exposed even more of the ways by which the Commodity Futures Modernization Act has been destroying America.  Be sure to watch the interview.

On the same day as the Celente interview, The Washington Post published a piece by Barry Ritholtz, which focused on six astonishing elements of the MF Global story.  Let’s take a look at a few of those elements:

3.  As a result of MF Global’s lobbying, key rules were deregulated.  This allowed the firm to use client money to buy risky sovereign debt.

4.  In 2010, someone from the Commodities Futures Trading Commission recognized these prior deregulations had dramatically ramped clients’ exposure to risk and proposed changing those rules. Jon Corzine, MF Global’s chief executive, successfully prevented the tightening of these regulations.  Had the regulations been tightened, it would have prevented the kind of bets that lost MF Global’s segregated client monies.

5.  None of MF Global’s Canadian clients lost any money thanks to tighter regulations there.

One would think that someone in Jon Corzine’s position would have learned something from the mistakes (such as excessive leveraging and risky bets) which contributed to the financial crisis.  He didn’t.  That’s why Jon S. Corzine is the winner of TheCenterLane.com’s 2011 Jackass Of The Year award.  Congratulations, Jackass!


 

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Congress Under The Microscope

December 29th, 2011 Posted in Uncategorized
Dec, 29 2011
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The November 13 broadcast of 60 Minutes, which featured a piece by Steve Kroft about Congressional insider trading, gave some needed momentum to the effort seeking a ban on the practice.  I originally wrote about this activity in September of 2009:

A recent report by American Public Media’s Steve Henn revealed how the law prohibiting “insider trading” (i.e. acting on confidential corporate information when making a transaction involving that company’s publicly-traded stock) does not apply to members of Congress.  Remember how Martha Stewart went to prison?  Well, if she had been representing Connecticut in Congress, she might have been able to interpose the defense that she was inspired to sell her ImClone stock based on information she acquired in the exercise of her official duties.

*   *   *

Mr. Henn’s report went on to raise concern over the fact that there is nothing to stop members of Congress from acting on such information to the detriment of their constituents in favor of their own portfolios.

In February of 2011, I discussed the subject again, including the history of Congressman Brian Baird’s introduction of  H.R.682, the “Stop Trading on Congressional Knowledge Act” (STOCK Act) in January of 2009.  On November 14, I was pleased to report that a conservative pundit – Peter Schweizer – a research fellow at Stanford University’s Hoover Institution – had joined the battle against Congressional insider trading:

A new book by Peter Schweizer – Throw Them All Out – deals with this very subject.  The book’s subtitle is reminiscent of the point I tried to make in my February posting:  “How politicians and their friends get rich off insider stock tips, land deals and cronyism that would send the rest of us to prison”.

On December 28, J.R. Dunn – consulting editor of the conservative American Thinker, enthusiastically weighed-in with a supportive review of Peter Schweizer’s book.  Beyond that, Dunn’s opening remarks addressed the greater problem:

Crony capitalism is the most serious current danger to the American community, a threat not simply to government or the economy, but to our very way of life.  It is the worst such threat since the trusts and monopolies of the early 20th century, and in much the same way. Cronyism is one of the major forces behind the establishment of the corrupt pseudo-aristocracy that has been taking shape in this country over the past two decades, a synthetic privileged class made up in large part of politicians, hustlers, and hangers-on who have become expert in exploiting the rest of us.

Fortunately, we have now reached a point where greater scrutiny is being used to investigate the manner in which Congress-cretins enrich themselves while in office.  David Richards wrote a great piece for the Daily Mail, which focused on the fact that over the past 25 years, the median net worth of a member of Congress has nearly tripled while the income of an average U.S. family has actually fallen:

Against a backdrop of a vast budget deficit and fears of the fragility of the economy, analysis by the Washington Post shows that the median net worth of a member of Congress has nearly tripled over 25 years while the income of an average U.S. family has actually fallen.

It calculated that their median net worth, between 1984 and 2009 and excluding home equity, rose from $280,000 to $725,000.

Over those same 25 years the wealth of the average U.S. family slipped from $20,500 from $20,600, a University of Michigan study shows.

The Daily Mail article went on to point out that members of Congress are actually doing significantly better than America’s most wealthy citizens – who are so zealously defended by critics of the Occupy Wall Street movement:

The New York Times’ report into the wealth of members of Congress found that they were also getting rich compared with affluent Americans.

It found that the median net worth of members of Congress rose 15 per cent from 2004 to 2010 as the net worth of the richest 10 per cent of the country remained for the most part flat.

This disparity between those they represent also translated into a wider gap in their experiences of the economy, the Post found.

It interviewed Gary Myers, the son of a bricklayer, a Republican who entered Congress in 1975. He said his experience of having worked as a foreman in a steel mill shaped his outlook and led him to vote in favour of raising the minimum wage and helped him to understand the need for workers to have a safety net.

‘It would be hard to argue that the work in the steel mill didn’t give me a different perspective,’ he told the Post. ‘I think everybody’s history has an impact on them.’

The same area is now represented by Republican Mike Kelly who was elected last year. After graduating he married the heiress to an oil fortune and took over his father’s car dealership where he had worked as a youngster.

He told the paper he believed he was overtaxed already and that unemployment benefits made some people less willing to look for employment.

On the other hand, there is one Congressman’s investment portfolio, which is being criticized for other reasons.  In fact, I’m sure that many investment analysts are having a good laugh as they read Jason Zweig’s recent posting for his new Total Return blog at The Wall Street Journal:

Yes, about 21% of Rep. Paul’s holdings are in real estate and roughly 14% in cash.  But he owns no bonds or bond funds and has only 0.1% in stock funds.  Furthermore, the stock funds that Rep. Paul does own are all “short,” or make bets against, U.S. stocks. One is a “double inverse” fund that, on a daily basis, goes up twice as much as its stock benchmark goes down.

The remainder of Rep. Paul’s portfolio – fully 64% of his assets – is entirely in gold and silver mining stocks.  He owns no Apple, no ExxonMobil, no Procter & Gamble, no General Electric, no Johnson & Johnson, not even a diversified mutual fund that holds a broad basket of stocks.  Rep. Paul doesn’t own stock in any major companies at all except big precious-metals stocks like Barrick Gold, Goldcorp and Newmont Mining.

*   *   *

Rep. Paul appears to be a strict buy-and-hold investor who rarely trades; he has held many of his mining stocks since at least 2002. But, as gold and silver prices have fallen sharply since September, precious-metals equities have also taken a pounding, with many dropping 20% or more.  That exposes the risk in making a big bet on one narrow sector.

At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement.  Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe.  “This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.

There are many possible doomsday scenarios for the U.S. economy and financial markets, explains Mr. Bernstein, and Rep. Paul’s portfolio protects against only one of them:  unexpected inflation accompanied by a collapse in the value of the dollar.  If deflation (to name one other possibility) occurs instead, “this portfolio is at great risk” because of its lack of bonds and high exposure to gold.

At least Congressman Ron Paul is authentic enough to “place his money where his mouth is” when criticizing Federal Reserve monetary policy.

As election year progresses, the current trend of “turning over rocks” to investigate the financial dealings of those in Congress could make things quite interesting.


 

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More Scrutiny For An Organization Called Americans Elect

December 12th, 2011 Posted in Uncategorized
Dec, 12 2011
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On July 25, I explained that the Republi-Cratic Corporatist Party was being threatened by a new, Internet-based effort to nominate a presidential ticket, which would be placed on the 2012 ballot in all fifty states.  Last summer, that organization – Americans Elect – described itself in the following terms:

Americans Elect is the first-ever open nominating process.  We’re using the Internet to give every single voter – Democrat, Republican or independent – the power to nominate a presidential ticket in 2012.  The people will choose the issues. The people will choose the candidates.  And in a secure, online convention next June, the people will make history by putting their choice on the ballot in every state.

*   *   *

We have no ties to any political group – left, right, or center.  We don’t promote any issues, ideology or candidates.  None of our funding comes from special interests or lobbyists.  Our only goal is to put a directly-nominated ticket on the ballot in 2012.

*   *   *

The goal of Americans Elect is to nominate a presidential ticket that answers to the people – not the political system.  Like millions of American voters, we simply want leadership that will work together to tackle the challenges facing our country.  And we believe a direct nominating process will prove that America is ready for a competitive, nonpartisan ticket.

Since that time, there has been a good deal of scrutiny focused on Americans Elect.  Justin Elliott recently wrote a comprehensive piece for Salon, highlighting the numerous sources of criticism targeting Americans Elect.  Mr. Elliott provided this summary of the controversies surrounding the organization:

The group is hoping to raise $30 million for its effort. It has already raised an impressive $22 million as of last month.  So where is all that money coming from?  Americans Elect won’t say. In fact, the group changed how it is organized under the tax code last year in order to shield the identity of donors.  It is now a 501(c)(4) “social welfare” group whose contributors are not reported publicly.

What we do know about the donors, largely through news reports citing anonymous sources, suggests they are a handful of super-rich Americans who made fortunes in the finance industry. (More on this below.)  But it’s impossible to fully assess the donors’ motives and examine their backgrounds and entanglements – important parts of the democratic process – while their identities and the size of their donations remain secret.

*   *   *

Americans Elect officials often tout their “revolutionary” online nominating convention, which will be open to any registered voter. But there’s a big catch.  Any ticket picked by participants will have to be approved by a Candidate Certification Committee, according to the group’s bylaws.

Among other things this committee will need to certify a “balanced ticket obligation”  – that the ticket consists of persons who are “responsive to the vast majority of citizens while remaining independent of special interests and the partisan interests of either major political party,” according to the current draft of Americans Elect rules.  Making these sorts of assessments is, of course, purely subjective.

Jim Cook of Irregular Times has been keeping a steady watch over Americans Elect, with almost-daily postings concerning the strange twists and turns that organization has taken since its inception (and incorporation).  Mr. Cook’s December 11 update provided this revelation:

The 501c4 corporation Americans Elect is arranging for the nation’s first-ever privately-run online nomination of candidates for President and Vice President of the United States in 2012.  As with any other corporation in the United States, it has a set of bylaws.  On November 18, 2011 the Americans Elect corporation held an unannounced meeting at which it amended its previous bylaws.

A month later, Americans Elect has not posted changes to the bylaws, or posted any notice of the changes, on its website for public review.  Furthermore, Americans Elect has generally made it a practice to post its documents as images that cannot be indexed by search engines or searched by keyword.  For these reasons, Irregular Times has retyped the bylaws into an easily searchable text format, based on a pdf file submitted to the Florida Secretary of State on November 22, 2011.  You can read the full text of the amended bylaws here.

Just a day earlier (on December 10) Jim Cook had been highlighting one of the many transparency controversies experienced by the group:

On the Americans Elect’s “Candidates” web page it rolled out last month, various numbers were tossed up without explanation.  A reference to a wildly error-prone slate of candidates’ supposed policies drawn up by Americans Elect contractor “On the Issues” appeared next to various politicians’ names, but the actual calculation by which Americans Elect came up with its “National Match” for each politician has never actually been published.  I’ll repeat that in bold:  Americans Elect’s system for calculating its numerical rankings of politicians was never shared with the public.

Another problem for Americans Elect concerns compliance with its bylaws by individual directors, and the lack of enforcement of those bylaws, as Cook’s December 9 posting demonstrates:

She’s done it five times before; this is the sixth.

The Americans Elect bylaws are very specific, as an Americans Elect Director, Christine Todd Whitman is not supposed to “communicate or act in favor of or in opposition to any candidate for President or Vice President at any time before the adjournment of the online nominating convention of Americans Elect.”

But here she is this week nevertheless, appearing on national television via FOX News to communicate in favor of presidential candidate Jon Huntsman   .   .   .

*   *   *

The bylaws say that when the neutrality provision is violated, there must be some sort of sanction.  But Christine Todd Whitman is getting away with it again and again and again where the whole country can see it.  Is the Americans Elect corporation inclined to follow its own rules?  If not, how much trust should we place in it as it gets ready to run its own private presidential nomination in less than five months’ time?

Richard Hansen, a professor at the University of California at Irvine Law School, wrote an essay for Politico, which was harshly critical of Americans Elect.  He concluded the piece with these observations:

But the biggest problem with Americans Elect is neither its secrecy nor the security of its election.  It is the problems with internal fairness and democracy.  To begin with, according to its draft rules, only those who can provide sufficient voter identification that will satisfy the organization – and, of course, who have Internet access – will be allowed to choose the candidate.  These will hardly be a cross section of American voters.

In addition, an unelected committee appointed by the board, the Candidates Certification Committee, will be able to veto a presidential/vice presidential ticket deemed not “balanced” – subject only to a two-thirds override by delegates.

It gets worse.  Under the group’s bylaws, that committee, along with the three other standing committees, serves at the pleasure of the board – and committee members can be removed without cause by the board.  The board members were not elected by delegates; they chose themselves in the organization’s articles of incorporation.

The bottom line:  If Americans Elect is successful, millions of people will have united to provide ballot access not for a candidate they necessarily believe in – like a Ross Perot or Ralph Nader – but for a candidate whose choice could be shaped largely by a handful of self-appointed leaders.

Despite the veneer of democracy created by having “delegates” choose a presidential candidate through a series of Internet votes, the unelected, unaccountable board of Americans Elect, funded by secret money, will control the process for choosing a presidential and vice presidential candidate – who could well appear on the ballot in all 50 states.

Forget about Tom Friedman’s breathlessly-enthusiastic New York Times commentary from last summer, gushing praise on Americans Elect.  It’s beginning to appear as though this movement is about to go off the rails, following the Cain Train into oblivion.


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Wall Streeters Who Support The Occupy Movement

December 8th, 2011 Posted in Uncategorized
Dec, 08 2011
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Forget about what you have been hearing from those idiotic, mainstream blovaitors – who rose to prominence solely because of corporate politics.  Those bigmouths want you to believe that the Occupy Wall Street movement is anti-capitalist.  Nevertheless, the dogma spouted by those dunder-headed pundits is contradicted by the reality that there are quite a number of prominent individuals who voice support for the Occupy Wall Street movement, despite the fact that they are professionally employed in the investment business.  I will provide you with some examples.

On October 31, I discussed the propaganda war waged against the Occupy Wall Street movement, concluding the piece with my expectation that Jeremy Grantham’s upcoming third quarter newsletter would provide some sorely-needed, astute commentary on the situation.  Jeremy Grantham, rated by Bloomberg BusinessWeek as one of the Fifty Most Influential Money Managers, finally released an abbreviated edition of that newsletter one month later than usual, due to a busy schedule.  In addition to expressing some supportive comments about the OWS movement, Grantham noted that he will be providing a special supplement, based specifically on that subject:

Meriting a separate, special point are the drastic declines in both U.S. income equality – the U.S. has become quite quickly one of the least equal societies – and in the stickiness of economic position from one generation to another.  We have gone from having been notably upwardly mobile during the Eisenhower era to having fallen behind other developed countries today, even the U.K.!  The net result of these factors is a growing feeling of social injustice, a weakening of social cohesiveness, and, possibly, a decrease in work ethic.  A healthy growth rate becomes more difficult.

*   *   *

Sitting on planes over the last several weeks with nothing to do but read and think, I found myself worrying increasingly about the 1% and the 99% and the appearance we give of having become a plutocracy, and a rather mean-spirited one at that.  And, one backed by a similarly mean-spirited majority on the Supreme Court.  (I will try to post a letter addressed to the “Occupy … Everywhere” folks shortly.)

Hedge fund manager Barry Ritholtz is the author of Bailout Nation and the publisher of one of the most widely-read financial blogs, The Big Picture.  Among the many pro-OWS postings which have appeared on that site was this recent piece, offering the movement advice similar to what can be expected from Jeremy Grantham:

To become as focused and influential as the Tea Party, what Occupy Wall Street needs a simple set of goals. Not a top 10 list — that’s too unwieldy, and too unfocused.  Instead, a simple 3 part agenda, that responds to some very basic problems regardless of political party.  It must address the key issues, have a specific legislative agenda, and finally, effect lasting change.  By keeping it focused on the foibles of Wall Street, and on issues that actually matter, it can become a rallying cry for an angry nation.

I suggest the following three as achievable goals that will have a lasting impact:

1. No more bailouts: Bring back real capitalism
2. End TBTF banks
3. Get Wall Street Money out of legislative process

*   *   *

You will note that these three goals are issues that both the Left and the Right — Libertarians and Liberals — should be able to agree upon. These are all doable measurable goals, that can have a real impact on legislation, the economy and taxes.

But amending the Constitution to eliminate dirty money from politics is an essential task. Failing to do that means backsliding from whatever gains are made. Whatever is accomplished will be temporary without campaign finance reform . . .

Writing for the DealBook blog at The New York Times, Jesse Eisinger provided us with the laments of a few Wall Street insiders, whose attitudes are aligned with those of the OWS movement:

Last week, I had a conversation with a man who runs his own trading firm.  In the process of fuming about competition from Goldman Sachs, he said with resignation and exasperation:  “The fact that they were bailed out and can borrow for free – it’s pretty sickening.”

*   *   *

Sadly, almost none of these closeted occupier-sympathizers go public.  But Mike Mayo, a bank analyst with the brokerage firm CLSA, which is majority-owned by the French bank Crédit Agricole, has done just that.  In his book “Exile on Wall Street” (Wiley), Mr. Mayo offers an unvarnished account of the punishments he experienced after denouncing bank excesses.  Talking to him, it’s hard to tell you aren’t interviewing Michael Moore.

*   *   *

I asked Richard Kramer, who used to work as a technology analyst at Goldman Sachs until he got fed up with how it did business and now runs his own firm, Arete Research, what was going wrong.  He sees it as part of the business model.

“There have been repeated fines and malfeasance at literally all the investment banks, but it doesn’t seem to affect their behavior much,” he said.  “So I have to conclude it is part of strategy as simple cost/benefit analysis, that fines and legal costs are a small price to pay for the profits.”

Mr. Kramer’s contention was supported by a recent analysis of Securities and Exchange Commission documents by The New York Times, which revealed “that since 1996, there have been at least 51 repeat violations by those firms. Bank of America and Citigroup have each had six repeat violations, while Merrill Lynch and UBS have each had five.”

At the ever-popular Zero Hedge website, Tyler Durden provided us with the observations of a disillusioned, first-year hedge fund analyst.  Durden’s introductory comments in support of that essay, provide us with a comprehensive delineation of the tactics used by Wall Street to crush individual “retail” investors:

Regular readers know that ever since 2009, well before the confidence destroying flash crash of May 2010, Zero Hedge had been advocating that regular retail investors shun the equity market in its entirety as it is anything but “fair and efficient” in which frontrunning for a select few is legal, in which insider trading is permitted for politicians and is masked as “expert networks” for others, in which the government itself leaks information to a hand-picked elite of the wealthiest investors, in which investment banks send out their “huddle” top picks to “whale” accounts before everyone else gets access, in which hedge funds form “clubs” and collude in moving the market, in which millisecond algorithms make instantaneous decisions which regular investors can never hope to beat, in which daily record volatility triggers sell limits virtually assuring daytrading losses, and where the bid/ask spreads for all but the choicest few make the prospect of breaking even, let alone winning, quite daunting.  In short:  a rigged casino.  What is gratifying is to see that this warning is permeating an ever broader cross-section of the retail population with hundreds of billions in equity fund outflows in the past two years. And yet, some pathological gamblers still return day after day, in hope of striking it rich, despite odds which make a slot machine seem like the proverbial pot of gold at the end of the rainbow.  In that regard, we are happy to present another perspective:  this time from a hedge fund insider who while advocating his support for the OWS movement, explains, in no uncertain terms, and in a somewhat more detailed and lucid fashion, both how and why the market is not only broken, but rigged, and why it is nothing but a wealth extraction mechanism in which the richest slowly but surely steal the money from everyone else who still trades any public stock equity.

The anonymous hedge fund analyst concluded his discourse with this point:

In other words, if you aren’t in the .1%, you have no access to the derivatives markets, you have no access to the special deals that hedge funds and other wealthy investors get, and you have no access to the resources, information, strategic services, tax exemptions, and capital that the top .1% is getting.

If you have any questions about what some of the concepts above mean, ask and I will try my best to answer.  I’m a first-year analyst on Wall Street, and based on what I see day in and day out, I support the OWS movement 100%.

You are now informed beyond the influence of those presstitutes, who regularly attempt to convince the public that an important goal of the Occupy Movement is to destroy the livelihoods of those who work on Wall Street.


 

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Here Comes Huntsman

December 1st, 2011 Posted in Uncategorized
Dec, 01 2011
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The bombastic non-Romney Republican Presidential hopeful, Herman Cain, has been providing us with a very entertaining meltdown.  He has attempted to silence the handful of women, who came forward to accuse him of sexual harassment, with threatened defamation suits.  Nevertheless, a woman who claimed to have been his paramour for thirteen years – Ginger White – possessed something the other women lacked:  documentation to back up her claim.  She has produced phone records, revealing that Cain was in contact with her at all hours of the day and night.  Cain’s humorously disingenuous response:  He was providing advice to Ms. White concerning her financial problems.  When I first heard about Ginger White’s allegations, I assumed that she was motivated to tell her story because she felt outraged that Cain had been trying to cheat on her by making inappropriate advances toward those other women.

The next non-Romney candidate to steal the Republican spotlight was Newt Gingrich.  Aside from the fact that Newt exudes less charisma than a cockroach, he has a “baggage” problem.  Maureen Dowd provided us with an entertaining analysis of the history professor’s own history.  The candidate and his backers must be counting on that famously short memory of the voting public.  The biggest problem for Gingrich is that even if he could win the Republican nomination, he will never get elected President.

Meanwhile, Romney’s fellow Mormon, Jon Huntsman, is gaining momentum in New Hampshire.  Huntsman has something the other Republicans lack:  the ability to win support from Independent and Democratic voters.  The unchallenged iron fists of Rush Limbaugh and Fox News, currently in control of the Republican party, have dictated to the masses that the very traits which give Huntsman a viable chance at the Presidency – are negative, undesirable characteristics.

Conservative commentator Ross Douthat of The New York Times, took a hard look at the mismanaged Huntsman campaign:

Huntsman is branded as the Republican field’s lonely moderate, of course, which is one reason why he’s currently languishing at around 3 percent in the polls.

*   *   *

Huntsman has none of Romney’s health care baggage, and unlike the former Massachusetts governor, he didn’t spend the last decade flip-flopping on gun rights, immigration and abortion.

*   *   *

At the same time, because Huntsman is perceived as less partisan than his rivals, he has better general election prospects.  The gears and tumblers of my colleague Nate Silver’s predictive models give Huntsman a 55 percent chance of knocking off the incumbent even if the economy grows at a robust 4 percent, compared to Romney’s 40 percent.

*   *   *

On issues ranging from foreign affairs to financial reform, Huntsman’s proposals have been an honorable exception to the pattern of gimmickry and timidity that has characterized the Republican field’s policy forays.

But his salesmanship has been staggeringly inept.  Huntsman’s campaign was always destined to be hobbled by the two years he spent as President Obama’s ambassador to China.  But he compounded the handicap by introducing himself to the Republican electorate with a series of symbolic jabs at the party’s base.

As Ross Douthat pointed out, New Hampshire will be Huntsman’s “make-or-break” state.  The candidate is currently polling at 11 percent in New Hampshire and he has momentum on his side.  Rachelle Cohen of the Boston Herald focused on Huntsman’s latest moves, which are providing his campaign with some traction:

Monday Huntsman introduced a financial plan aimed at cutting the nation’s biggest banks and financial institutions down to size so that they are no longer “too big to fail” and, therefore, would never again become a burden on the American taxpayer.

“There will be no more bailouts in this country,” he said, because taxpayers won’t put up with that kind of strategy again.  “I would impose a fee [on the banks] to protect the taxpayers until the banks right-size themselves.”

The strategy, of course, is likely to be music to the ears of anyone who despised not just the bailouts but those proposed Bank of America debit card fees.  And, of course, it gives Huntsman a good opening to make a punching bag of Mitt Romney.

“If you’re raising money from the big banks and financial institutions, you’re never going to get it done,” he said, adding, “Mitt Romney is in the hip pocket of Wall Street.”  Lest there be any doubt about his meaning.

That issue also happens to be the Achilles heel for President Obama.  Immediately after he was elected, Obama smugly assumed that Democratic voters would have to put up with his sellout to Wall Street because the Republican party would never offer an alternative.  Huntsman’s theme of cracking down on Wall Street will redefine the Huntsman candidacy and it could pose a serious threat to Obama’s reelection hopes.  Beyond that, as Ms. Cohen noted, Huntsman brings a unique skill set, which distinguishes him from his Republican competitors:

But it’s on foreign policy that Huntsman – who served not only in China and Singapore but as a deputy U.S. trade representative with a special role in Asia – excels, and not just because he’s fluent in Mandarin.

This is the guy anyone would feel comfortable having answer that proverbial 3 a.m. phone call Hillary Clinton once talked about.

If that phone call is coming from China – Huntsman won’t have to wake up an interpreter to conduct the conversation in Chinese.

Any other Republican candidate will serve as nothing more than a doormat for Obama.  On the other hand, if Jon Huntsman wins the Republican nomination, there will be a serious possibility that the Democrats could lose control of the White House.


 

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