Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

Tansy_Gold

(17,817 posts)
Thu Jul 19, 2012, 07:30 PM Jul 2012

STOCK MARKET WATCH -- Friday, 20 July 2012

[font size=3]STOCK MARKET WATCH, Friday, 20 July 2012[font color=black][/font]


SMW for 19 July 2012

AT THE CLOSING BELL ON 19 July 2012
[center][font color=green]
Dow Jones 12,943.36 +34.66 (0.27%)
S&P 500 1,376.51 +3.73 (0.27%)
Nasdaq 2,965.90 +23.30 (0.79%)


[font color=green]10 Year 1.51% -0.01 (-0.66%)
30 Year 2.61% -0.01 (-0.38%) (0.78%) [font color=black]


[center]
[/font]


[HR width=85%]


[font size=2]Market Conditions During Trading Hours[/font]
[center]


[/center]



[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

[/center]


[center]

[/center]


[HR width=95%]


[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]





[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
[center]
LegitGov
Open Government
Earmark Database
USA spending.gov
[/center]




[div]
[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."



[HR width=95%]


[center]
[HR width=95%]
[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]


63 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
STOCK MARKET WATCH -- Friday, 20 July 2012 (Original Post) Tansy_Gold Jul 2012 OP
First Rec Is MINE, ALL MINE!!!! Demeter Jul 2012 #1
I learned a valuable lesson today Demeter Jul 2012 #2
Beta-Max. westerebus Jul 2012 #4
But beta-max was reliable, by all accounts I've heard Demeter Jul 2012 #5
The prioritizing in a disposable society. westerebus Jul 2012 #7
The garbage floating in the Pacific isn't likely to smash into a billion dollar spy satellite. tclambert Jul 2012 #16
The garbage in the Pacific is likely to end up in your grocery cart. Po_d Mainiac Jul 2012 #24
I'm not sure the Department of Defense cares very much about that. tclambert Jul 2012 #29
Suck a house into a jet drive Po_d Mainiac Jul 2012 #60
Dell monitors infamous for same problem. dixiegrrrrl Jul 2012 #61
The Feckless Fed by Paul Krugman Demeter Jul 2012 #3
Feeding Frenzy Seen If Wall Street Sues Itself Over Libor Demeter Jul 2012 #6
Beware of the survivor/s. n/t Po_d Mainiac Jul 2012 #25
Latest Bank on the Walk of Shame--HSBC Demeter Jul 2012 #8
Pair hired to clean up Irish banks named in HSBC scandal Demeter Jul 2012 #9
HSBC exposed: Drug money banking, terror dealings Demeter Jul 2012 #10
... Tansy_Gold Jul 2012 #13
LOl! dixiegrrrrl Jul 2012 #62
HBSC went thought this in the 1980's kickysnana Jul 2012 #17
Pardon my paranoia, but all this piling up on HSBC looks like a Vampire Squid Attack Demeter Jul 2012 #19
When are the British going to investigate JPMorgan, Citibank, GoldmanSachs, BoA, etc. DemReadingDU Jul 2012 #27
Above UK pay-grade. Slightest hint from the Brits that they're not entirely on-side Ghost Dog Jul 2012 #33
Too Bad...We could have done each other's dirty work Demeter Jul 2012 #48
The HSBC scandal shows the time for politicians to act on bank reform is now Demeter Jul 2012 #20
How White Collar Crime Became the "Business Model" of Corporate/State America Demeter Jul 2012 #11
PART 2: Organized Financial Crime Is Now the New Normal Demeter Jul 2012 #12
ONE MORE SAMPLE: We've Decoupled, Alright--From Reality Demeter Jul 2012 #14
I like reading Charles Hugh Smith DemReadingDU Jul 2012 #28
NEW GAS LOW: $ 3.40 Demeter Jul 2012 #15
And neither did Europe wake up happy Demeter Jul 2012 #18
Romney’s London fundraisers will take him to heart of scandal-plagued banking industry Demeter Jul 2012 #21
Bain Capital started with help of offshore investors Demeter Jul 2012 #22
The Financial Crisis Was Foreseeable … Thousands of Years Ago Demeter Jul 2012 #23
Global Warming's Terrifying New Math wilsonbooks Jul 2012 #26
Why the Obama Administration Will Hate Neil Barofsky’s Book “Bailout” DemReadingDU Jul 2012 #30
i've been on a dame shirley bassey jag since yesterday{appearance by rod mckuen} xchrom Jul 2012 #31
The Evidence Of A Coming Recession Is Overwhelming xchrom Jul 2012 #32
European Markets Are Going To Shambles xchrom Jul 2012 #34
Compton May Be The Next City To Go; Then Victorville, Montebello, Los Angeles, Oakland xchrom Jul 2012 #35
So will Meredith Whitney be atoned? n/t Po_d Mainiac Jul 2012 #47
America Is Approaching The Export Tipping Point xchrom Jul 2012 #36
Think? He wants American Officials to THINK? To Think About America? Demeter Jul 2012 #50
U.K.’S Widening Deficit Casts Doubt On Fiscal Goals: Economy xchrom Jul 2012 #37
Shirley Bassey - YESTERDAY WHEN I WAS YOUNG {& neil diamond} xchrom Jul 2012 #38
GE 2Q earnings drop 16 pct; reaffirms outlook xchrom Jul 2012 #39
Your Money Market Mutual Fund Could Be Frozen/Denied DemReadingDU Jul 2012 #40
ZeroHedge Conclusion to Your Money Market Account Has Been Denied DemReadingDU Jul 2012 #41
Excellent points, and the overall markets can be shut down at any time. just1voice Jul 2012 #58
spanish banks have "sequestered" retirement funds dixiegrrrrl Jul 2012 #63
US Futures poised to fall at the open Roland99 Jul 2012 #42
US futures slide as crisis in Europe deepens xchrom Jul 2012 #43
Even Counterfeiters Are Giving Up On The Euro xchrom Jul 2012 #44
Spain's woes deepen as region seeks financial aid xchrom Jul 2012 #45
IBEX down nearly 6% now. Roland99 Jul 2012 #46
DJIA down triple digits now Roland99 Jul 2012 #49
Ain't Nobody Happy Today--Except the Realists, who feel a bit vindicated Demeter Jul 2012 #51
A joke is worth a thousand pictures Po_d Mainiac Jul 2012 #56
. . . Tansy_Gold Jul 2012 #57
Nice update on the old Mainer joke Demeter Jul 2012 #59
Morgan Stanley plans further staff cuts on weak outlook Demeter Jul 2012 #52
Libor Scandal Shows Many Flaws in Rate-Setting YA THINK? Demeter Jul 2012 #53
Pathos of the Plutocrat By PAUL KRUGMAN Demeter Jul 2012 #54
American Exceptions By TIMOTHY EGAN Demeter Jul 2012 #55
 

Demeter

(85,373 posts)
1. First Rec Is MINE, ALL MINE!!!!
Thu Jul 19, 2012, 07:33 PM
Jul 2012

Mahahaha! What shall I do with this extraordinary power, this treasure, this prize?

Post a bunch of deplorable news clips, (the news is deplorable...well, the clipping of the news is probably equally deplorable...)

 

Demeter

(85,373 posts)
2. I learned a valuable lesson today
Thu Jul 19, 2012, 07:39 PM
Jul 2012

One of my clients has a fancy, expensive LCD HD TV, a couple of years old.

Today the old man asks me to fix it.

So, I fiddle with it and read the manual, but it's beyond me. I call my local TV repair place (they fix everything the Kid breaks) and describe the symptoms.

Oh, he says, that's bad. It will cost more to fix it than to buy a new one. It's a very common problem. The LCD panel has died.

So, all this high tech gadgetry isn't going to last long enough to become obsolete! I'm keeping my vacuum tube tv. After all, it's over 20 years old and still working just fine.

Shame on you, Sony! Your ancestors would never foist such garbage off on the public.

 

Demeter

(85,373 posts)
5. But beta-max was reliable, by all accounts I've heard
Thu Jul 19, 2012, 08:31 PM
Jul 2012

It wasn't self-destructing, like so much modern video equipment.

I saw a projection TV in a thrift shop, and asked my repair guy...they only last 12 years max. Planned obsolescence. Built to self-destruct.

westerebus

(2,976 posts)
7. The prioritizing in a disposable society.
Thu Jul 19, 2012, 08:47 PM
Jul 2012

The budget for tracking orbiting space junk compared to the budget that tracks the garbage dump in the Pacific Ocean is multiple times larger, yet there are no plans to clean the ocean while the chances of reentry of anything disastrously significant is fairly slim.
Pretty much tells you all you need to know.

tclambert

(11,080 posts)
16. The garbage floating in the Pacific isn't likely to smash into a billion dollar spy satellite.
Thu Jul 19, 2012, 09:55 PM
Jul 2012

NASA will say they want to protect the ISS and communication satellites, but it's actually the DoD that tracks the orbiting wrenches. (I saw a video of an astronaut who momentarily let go of a tool bag, and before she knew it, it floated out of reach. Funny but expensive.

)

The military cares about civilian satellites and astronauts. They just care more about their secret expensive toys.

Po_d Mainiac

(4,183 posts)
24. The garbage in the Pacific is likely to end up in your grocery cart.
Fri Jul 20, 2012, 05:49 AM
Jul 2012

Or cause the price of them edibles to get mighty "glow in the dark pricey."

tclambert

(11,080 posts)
29. I'm not sure the Department of Defense cares very much about that.
Fri Jul 20, 2012, 06:51 AM
Jul 2012

Now, if that garbage posed a threat to nuclear submarines or an aircraft carrier, they'd build some sort of sonar tracking network.

dixiegrrrrl

(60,010 posts)
61. Dell monitors infamous for same problem.
Sun Jul 22, 2012, 10:54 AM
Jul 2012

They just go black in too short of a time and are unfixable.

 

Demeter

(85,373 posts)
3. The Feckless Fed by Paul Krugman
Thu Jul 19, 2012, 07:48 PM
Jul 2012
http://krugman.blogs.nytimes.com/2012/07/18/the-feckless-fed/

Hmm. When I published a critique of Ben Bernanke's recent performance,

Earth to Ben Bernanke: Chairman Bernanke Should Listen to Professor Bernanke

http://www.nytimes.com/2012/04/29/magazine/chairman-bernanke-should-listen-to-professor-bernanke.html?_r=3&pagewanted=1&ref=magazine


suggesting that he should reread his own critiques of the Bank of Japan, there were a fair number of people saying that I was just a big meanie:

The Villain By Roger Lowenstein
The left hates him. The right hates him even more. But Ben Bernanke saved the economy—and has navigated masterfully through the most trying of times....

http://www.theatlantic.com/magazine/archive/2012/04/the-villain/8901/


But my sense is that his latest testimony, in which he declared that the Fed has the power to take action, that the economy is in really bad shape, but declined to, you know, actually take action, has left even his usual defenders more or less speechless.

Bernanke the unready


http://www.economist.com/blogs/freeexchange/2012/07/monetary-policy-5

It really makes no sense -- except in terms of politics. I really believe that we have reached a point where the Fed is afraid to do its job, for fear of being accused of helping Obama.
 

Demeter

(85,373 posts)
6. Feeding Frenzy Seen If Wall Street Sues Itself Over Libor
Thu Jul 19, 2012, 08:41 PM
Jul 2012

I FAIL TO SEE THE DIFFICULTY HERE....

http://www.bloomberg.com/news/2012-07-19/feeding-frenzy-seen-if-wall-street-sues-itself-over-libor.html

Wall Street, grappling with mounting regulatory probes and investor claims over alleged interest-rate manipulation, may face yet another formidable foe: Itself.

Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) are among financial firms that may bring lawsuits against their biggest rivals as regulators on three continents examine whether other banks manipulated the London interbank offered rate, known as Libor, said Bradley Hintz, an analyst with Sanford C. Bernstein & Co. Even if Goldman Sachs and Morgan Stanley forgo claims on their own behalf, they oversee money-market funds that may be required to pursue restitution for injured clients, he said.

Because Libor is based on submissions from only some of the world’s largest banks, the probes threaten to pit firms uninvolved in setting the rate against any implicated in its manipulation, Hintz said. Libor serves as a benchmark for at least $360 trillion in securities.

“This will be a feeding frenzy of sharks,” said Hintz, who has served as treasurer of Morgan Stanley and chief financial officer of Lehman Brothers Holdings Inc. “We’re going to have Wall Street suing Wall Street.”

I HAVE SUSPECTED FOR SOME TIME THAT THEY WOULD HAVE TO EAT EACH OTHER FOR THE REST OF US TO HAVE ANY FREEDOM, FUTURE AND FORTUNE...

 

Demeter

(85,373 posts)
8. Latest Bank on the Walk of Shame--HSBC
Thu Jul 19, 2012, 08:54 PM
Jul 2012

HSBC Holdings plc (commonly known as HSBC) is a British multinational banking and financial services company headquartered in London, United Kingdom. As of 2011 it was the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine.

HSBC is a universal bank and is organised within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Retail Banking and Wealth Management (retail banking and consumer finance); and Global Private Banking. It has around 7,200 offices in 85 countries and territories across Africa, Asia, Europe, North America and South America and around 89 million customers. As of 31 March 2012, it had total assets of $2.637 trillion, of which roughly half were in Europe, a quarter in the Americas and a quarter in Asia.

HSBC Holdings plc was founded in London in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group holding company and to enable the acquisition of UK-based Midland Bank. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. Today, HSBC remains the largest bank in Hong Kong, and recent expansion in mainland China, where it is now the largest international bank, has returned it to that part of its roots.

HSBC has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it had a market capitalisation of £102.7 billion, the second-largest of any company listed on the London Stock Exchange. It has secondary listings on the Hong Kong Stock Exchange (where it is a constituent of the Hang Seng Index), the New York Stock Exchange, Euronext Paris and the Bermuda Stock Exchange.

HSBC (It stands for The Hongkong and Shanghai Banking Corporation Limited) was founded in the former British colony of Hong Kong (on 3 March 1865) and Shanghai (one month later) by Scotsman Sir Thomas Sutherland (1834–1922). HSBC Holdings plc established in 1990 became the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of Midland Bank in the United Kingdom and restructuring of ownership domicile for the impending transfer of sovereignty of Hong Kong to China. HSBC Holdings acquisition of Midland Bank gave HSBC Group a substantial market presence in the United Kingdom which was completed in 1992. As part of the takeover conditions for the purchase of Midland Bank, HSBC Holdings plc was required to relocate its world headquarters from Hong Kong to London in 1993.

Major acquisitions in South America started with the purchase of the Banco Bamerindus of Brazil for $1bn in March 1997 and the acquisition of Roberts SA de Inversiones of Argentina for $600m in May 1997.

In 1980, HSBC acquired a 51% shareholding in Marine Midland Bank, which it extended to full ownership in 1987. In May 1999, HSBC continued its US acquisitions with the purchase of Republic National Bank of New York for $10.3bn.

2000 to 2010

Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit Commercial de France, a large French bank for £6.6bn. In July 2001 HSBC bought Demirbank, an insolvent Turkish bank. In July 2002, Arthur Andersen announced that HSBC USA, Inc., through a new subsidiary, Wealth and Tax Advisory Services USA Inc. (WTAS), would purchase a portion of Andersen's tax practice. The new HSBC Private Client Services Group would serve the wealth and tax advisory needs of high net worth individuals. Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail bank for $1.1bn. In November 2002 HSBC expanded further in the United States. Under the chairmanship of Sir John Bond, it spent £9 billion (US$15.5 billion) to acquire Household Finance Corporation (HFC), a US credit card issuer and subprime lender. In a 2003 cover story, The Banker noted "when banking historians look back, they may conclude that it was the deal of the first decade of the 21st century".Under the new name of HSBC Finance, the division was the second largest subprime lender in the US.

In September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m. In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai. In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings Ltd for £763m in December 2004. Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August and 70.1% of Dar es Salaam Investment Bank of Iraq in October. In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m. In December 2007 HSBC acquired The Chinese Bank in Taiwan. In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm.

In March 2009, HSBC announced that it would shut down the branch network of its HSBC Finance arm in the U.S., leading to nearly 6,000 job losses and leaving only the credit card business to continue operating. Chairman Stephen Green stated, "HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken." According to analyst Colin Morton, "the takeover was an absolute disaster".

Although it was at the centre of the subprime storm, the wider group has weathered the financial crisis of 2007–2010 better than other global banks. According to Bloomberg, "HSBC is one of world’s strongest banks by some measures". When HM Treasury required all UK banks to increase their capital in October 2007, the group transferred £750 million to London within hours, and announced that it had just lent £4 billion to other UK banks. In March 2009, it announced that it had made US$9.3bn of profit in 2008 and announced a £12.5bn (US$17.7bn; HK$138bn) rights issue to enable it to buy other banks that were struggling to survive. However, uncertainty over the rights' issue's implications for institutional investors caused volatility in the Hong Kong stock market: on 9 March 2009 HSBC's share price fell 24.14%, with 12 million shares sold in the last few seconds of trading.

2010 to present

On 11 May 2011 the new chief executive Stuart Gulliver announced that HSBCs would refocus its business strategy and that a large-scale retrenchment of operations, particularly in respect of the retail sector, was planned. HSBC would no longer seek to be 'the world's local bank', as costs associated with this were spiralling and US$3.5bn needed to be saved by 2013, with the aim of bringing overheads down from 55% of revenues to 48%. In 2010, then-chairman Stephen Green planned to depart HSBC to accept a government appointment in the Trade Ministry. Group Chief Executive Michael Geoghegan was expected to become the next chairman. However, while many current and former senior employees supported the tradition of promoting the chief executive to chairman, many shareholders instead pushed for an external candidate. HSBC's board of directors had reportedly been split over the succession planning, and investors were alarmed that this row would damage the company.

On 23 September 2010, Geoghegan announced he would step down as chief executive of HSBC. He was succeeded as chief executive of HSBC by Stuart Gulliver, while Green was succeeded as Chairman by Douglas Flint; Flint was serving as HSBC's finance director (chief financial officer). August 2011: Further to CEO Stuart Gulliver's plan to cut $3.5 billion in costs over the next 2 years, HSBC announced that it will cut 25,000 jobs and exit from 20 countries by 2013 in addition to 5,000 job- cuts announced earlier in the year. The consumer banking division of HSBC will focus on the UK, Hong Kong, high-growth markets such as Mexico, Singapore, Turkey and Brazil, and smaller countries where it has a leading market share. According to Reuters, Chief Executive Stuart Gulliver told the media, "There will be further job cuts. There will be something like 25,000 roles eliminated between now and the end of 2013."

In August 2011 "to align our U.S. business with our global network and meet the local and international needs of domestic and overseas clients", HSBC agreed to sell 195 branches in New York and Connecticut to First Niagara Financial Group Inc for around $1 billion and announced the closure of 13 branches in Connecticut and New Jersey. The rest of HSBC's U.S. network will only be about half from a total 470 branches before divestments. On 9 August 2011, Capital One Financial Corp. agreed to acquire HSBC's U.S. credit card business for $2.6 billion, netting HSBC Holdings an estimated after-tax profit of $2.4 billion. In September it was announced that HSBC seeks to sell its general insurance business for around $1 billion.

In July 2012 HSBC came under investigation for allegedly assisting in the money laundering of terrorist money, after a probe by the US Federal Reserve and Office of the Comptroller of the Currency found that there was "significant potential for unreported money laundering or terrorist financing". On 19th July 2012, India assured to get to the bottom and investigate the alleged violation of safety compliance, in which Indian employees are also presumed to be involved. On 24 July the Senate's Permanent Subcommittee on Investigations plans to hold a hearing on the issue. HSBC faces a potential penalty of up to US $1 billion.

 

Demeter

(85,373 posts)
9. Pair hired to clean up Irish banks named in HSBC scandal
Thu Jul 19, 2012, 08:58 PM
Jul 2012
http://www.independent.ie/business/irish/pair-hired-to-clean-up-irish-banks-named-in-hsbc-scandal-3172602.html

THE (UK) Government faces huge embarrassment today after two key figures appointed to help clean up the Irish financial system were named in an explosive US investigation into global banking giant HSBC.


Chairman of state-owned AIB David Hodgkinson, and Michael Noonan's top NAMA adviser Michael Geoghegan, are both named in a 330-page report that follows an investigation into HSBC by a US Senate subcommittee set up in the wake of the 9/11 terrorist attack on New York. HSBC is accused of "playing fast and loose with US banking rules" between 2004 and 2010 by US Senator Carl Levin, a key ally of US President Barack Obama, who chaired the team that published the report. Top NAMA adviser Michael Geoghegan was HSBC's most senior executive for almost the entire period now under investigation. The current AIB chairman was the bank's chief operating officer between 2006 and 2008 and before that ran its Middle East business.

Crucially, the damning report makes clear that both Michael Geoghegan and David Hodgkinson were aware of the major issues at the bank during the period under investigation, including HSBC's processing of billions of dollars worth of hidden deals for Iranian banks. Worryingly, the report puts Mr Hodgkinson at the centre of the controversial practice where Iranian deals were obscured during his term as a senior executive at the banks Middle East unit. Dubbed "U-turns", these deals saw HSBC alter documents so that money moved between Iran and the US did not arouse suspicion from authorities. The Senate Committee said that in all HSBC conducted almost 25,000 US dollar transactions with Iran, amounting to $19.4bn. "The vast majority of the Iranian transactions, ranging from 75-90pc over the years, were sent through HBUS (the bank's US operation) and other US dollar accounts without disclosing any connection to Iran," the report states.

In an extraordinary revelation, the report says that when internal efforts were made to stop the practice, Mr Hodgkinson contacted Michael Geoghegan, now the top advisor on NAMA, asking for his "intervention and support". The report says Mr Hodgkinson got his way, as the Middle East unit was given a free hand or "dispensation" that meant it was free to continue altering Iranian transactions until the end of 2004. A trawl of emails shows that Mr Geoghegan was told by another executive, John Ranaldi, that the policy amounted to a "fudge" by the bank of the true nature of its dealings, "to avoid the US embargo and seizure".
 

Demeter

(85,373 posts)
10. HSBC exposed: Drug money banking, terror dealings
Thu Jul 19, 2012, 09:02 PM
Jul 2012
http://www.rt.com/news/hsbc-us-senate-report-344/print/

International banking giant HSBC may have financed terrorist groups and funneled Mexican drug money into the US economy through its lax policies, a damning Senate report reveals. The bank’s bosses have apologized for the misconduct.

David Bagley, HSBC’s Head of Group Compliance, admitted during a Senate subcommittee hearing that the company had made a number of lapses, adding that he planned to resign. “I recognize that there have been some significant areas of failure,” Bagley told the US Senate Permanent Subcommittee on Investigation. “I have said before and I will say again: despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators.”

Irene Dorner, CEO and President of the bank's American operation (HBUS), told the panel that HSBC deeply regrets the lapses in oversight, apologizing for the company's mistakes.

Senator Carl Levin, the chairman of the subcommittee, gave details of one such intricate scheme to launder cash between 2006 and 2009.
“Because our tough AML (anti-money laundering) laws in the United States have made it hard for drug cartels to find a US bank willing to accept huge unexplained deposits of cash, they now smuggle US dollars across the border into Mexico and look for a Mexican bank, or ‘casa de cambio’ to take the cash.,” Levin noted. “Some of those casas de cambio had accounts at HB Mexico, which, in turn, took all the physical dollars that it got, transported them by armored car or aircraft back across the border to HBUS for deposit in its US Banknotes account, completing the laundering cycle.”
The Senator welcomed HSBC’s apologies, but said it also had to be held accountable. He called on the bank to consider shutting down its Mexican affiliate, as well as other banks suspected of providing funding for terrorists. Earlier, Levin said “the culture at HSBC was pervasively polluted for a long time.”

The findings are the results of a year-long Senate probe into HSBC’s activities, highlighting systemic negligence throughout the bank’s international structure. The probe was published in a 340-page report in Washington on Tuesday.

­

kickysnana

(3,908 posts)
17. HBSC went thought this in the 1980's
Fri Jul 20, 2012, 12:06 AM
Jul 2012

I remember because I had low-low income, poor credit and they offered me a low interest $10,000 credit card as a lark I filled it out and sent it in. They sent it to me. I thought maybe it was some sort of atonement scheme. They were laundering Iranian money, or Iran-contra money I don't recall which. I would have much rather have had a chance at a secure job but I do have to say it helped through some rough spots because I used it as a tool, not as an asset.

Reminds me of the line from "Rosanne". (paraphrased)

Dan: "What kind of crazy do you have to be to give us a $10,000 credit card?"

Rosanne: "Well I may have mixed up your salary and you social security number on accident."

Glad those days are over.

 

Demeter

(85,373 posts)
19. Pardon my paranoia, but all this piling up on HSBC looks like a Vampire Squid Attack
Fri Jul 20, 2012, 03:26 AM
Jul 2012

with governmental instruments.

DemReadingDU

(16,000 posts)
27. When are the British going to investigate JPMorgan, Citibank, GoldmanSachs, BoA, etc.
Fri Jul 20, 2012, 06:43 AM
Jul 2012

The U.S. appears to be the main investigators of the British banks, it should be time for the British to investigate the U.S. banks.

 

Ghost Dog

(16,881 posts)
33. Above UK pay-grade. Slightest hint from the Brits that they're not entirely on-side
Fri Jul 20, 2012, 07:32 AM
Jul 2012

as regards US neocon hegemonic actions and intentions, and the UK gets blown out of the water.

Both sides have the dope on each other. And one side is much bigger and probably even more ruthless.

 

Demeter

(85,373 posts)
20. The HSBC scandal shows the time for politicians to act on bank reform is now
Fri Jul 20, 2012, 03:33 AM
Jul 2012
http://www.guardian.co.uk/commentisfree/joris-luyendijk-banking-blog/2012/jul/18/politics-act-on-banking-reform-now

When the latest financial scandal hit HSBC yesterday, Ed Miliband pulled out his phone and sent a tweet: "HSBC scandal shows why we need a wide, judge-led inquiry on culture and practices of the industry. Cannot bring change we need without it." The Labour leader is right, of course. We badly need an independent public inquiry, so that more people understand the danger of banks that are too big to fail, too big to rescue and too big to manage. But Miliband's tweet also unwittingly brings home the absence of any coherent counternarrative about finance on Labour's part. What exactly is Miliband's "change we need"?

Over the last 10 months I have kept a banking blog on the Guardian website, featuring interviews with people working in finance. The blog has elicited thousands of comments, many of them bristling with anger and despair over a crucial sector that shows every sign of being seriously out of control. Yet in those 10 months not a single reader left a comment along the lines of "if only Labour was in power ..." or "This latest scandal shows once more the need for swift implementation of Labour's plans for ..."

It's one of the defining issues of our time – how to bring the financial sector back under control. But as it stands, all three major parties seem to be in the same camp: implementing the Vickers report which mandates the untested "ringfencing" of investment and retail banking plus more capital reserves – in 2019. If there is a fundamental, paradigmatic difference in approach between the government and the opposition, the public has yet to be told about it.

This is not how democracy is supposed to work, and the consequences can be felt with every new scandal. In the absence of a credible alternative vision about financial reform, we are left with outrage and futile symbolism each time a new scandal breaks. It's always a variation of the following sequence: denials, apologies, hearings, sacrificial sackings or resignations – followed by calls for more sacrificial sackings. Every now and then a knighthood gets stripped, but that's it.

How bad does it have to get before politicians act?

WHEN YOU FIGURE IT OUT, BRITAIN, LET US KNOW...
 

Demeter

(85,373 posts)
11. How White Collar Crime Became the "Business Model" of Corporate/State America
Thu Jul 19, 2012, 09:18 PM
Jul 2012
http://www.oftwominds.com/blogjuly12/white-collar-crime7-12.html

Today and tomorrow we publish an important essay by C.D., a correspondent in law enforcement.

White collar crime is now the "business model" of Corporate/State America. The Status Quo does not just incentivize pathological behavior, it is itself a pathological system. CHS


***************************************************************************************

Let's start by identifying the different types of white collar crime (WCC). One is WCC involving individuals against companies (e.g. theft of property from a company) and the government (e.g. Medicare fraud) and the other is WCC of individuals within companies (e.g. MBS debacle) and the government (e.g. taking bribes to favor contractors) against people in our society. The latter is typically punished and prosecuted less frequently or not as severely than the former for different reasons, one of which is the bias to protect the institution and sweep things under the rug. For instance, a person is allowed to resign, but they're not prosecuted, so that bad press doesn't come down on the institution or the supervisors of the criminal actor.

The last type of WCC is person against person (e.g. credit card number thefts) outside of any business or government entity. This last type is usually the domain of organized crime in its typical sense (i.e. the Mob, Mafia, etc.), but organized crime can also be part of the other categories, which is why they are pursued relentlessly by law enforcement agencies. However, some people may not include organized crime in the definition of WCC.

The difference between these types of WCC is who the crimes are committed against. If you commit a crime against the government, a business, especially a big business, or the moneyed classes, you're screwed (typically). For example, Madoff was prosecuted quickly and punished severely, because he largely ripped off rich people. However, many of his victims were not victims in the truest sense, because they knew he was running a scam. They were just hoping that some other sucker was going to take the fall and not them. Many of the investors knew Madoff's returns were impossible in the absence of fraud. Contrast that with the bankers who, via their politically connected banks, ripped off numerous pension funds and homeowners through various scams and none of them have been prosecuted.

White collar crime is prevented first and foremost by adequate controls/procedures/policies within a company that are enforced by management and the board (That's assuming that they are not the origin of the criminal behavior). Companies do not often prioritize risk controls, because their focus is on making money and providing a service/making a good. When an organization becomes extremely large, it is very difficult to adequately manage it to prevent problems (I find it funny that big CEOs often say they need their huge payouts because of all of their responsibility, but when something goes wrong, the come up with all sorts of excuses that remove the blame from themselves). The next thing is implementing a well-thought out regulatory scheme that has an adequate number of competent regulators that are free to do their job with a minimal amount of political interference. The last thing needed is a criminal justice system that prosecutes and punishes white collar criminals as harshly as they do blue collar criminals. In the case of crimes within the government, there are also needs to be adequate controls. Indeed, WCC in government is probably the most pernicious, as the actors can use the power of the government to cover up their crimes and prevent prosecution. The old adage, "Who guards the guardians?", comes to mind.

MUCH MORE AT LINK
 

Demeter

(85,373 posts)
12. PART 2: Organized Financial Crime Is Now the New Normal
Thu Jul 19, 2012, 09:24 PM
Jul 2012
http://www.oftwominds.com/blogjuly12/white-collar-crimeB7-12.html


Today we publish the second half of an important essay by C.D., a correspondent in law enforcement.

It's up to us to refuse to participate in a criminal financial system: we should not be doing business with businesses that are repeat offenders.


***********************************************************************************

How many people would be willing to get rid of all of the drug money in the stock market, if they knew their 401K would decrease by 10%? How many people would get rid of all of the various types of fraud in our system, if they knew their pension fund would lose half or more of its value or the interest rate on their Aadjustable rate mortgage (ARM) skyrocketed? How many politicians are going to refuse bailouts of the banksters or call for their prosecution if the banksters can take down the stock market?

When TARP was being voted on the first time, the overwhelming majority of the population was against it. The day after the first vote, the market tanked. Guess what, the next day it was about 50/50 in who wanted TARP to pass vs. those that didn't.

White collar criminals in our big banks and corporations have turned otherwise legitimate businesses into vehicles to commit numerous crimes. They use the corporation or other business entity as both a sword and a shield. The entity is used to help commit the crime and then used to protect them personally from any criminal or civil liability. In my experience, more often than not, a prosecutor will forego charges against an individual and just charge the business entity, because it's a stronger case.

If CEOs started going to jail for long stints, that would be very helpful in cleaning up things in a hurry. If the only downside to a CEOs behavior is that he may have to leave his job and suffer some temporary embarrassment, that's not much deterrent to him engaging in activity where he can make large sums of money. While fines can have some deterrent effect on a company's behavior, their effect is often muted by the fact that the fines are less than the profit from the activity, the cost of the fines can be passed on to customers, and in the case of the banks, the fines are subsidized by the government itself or the Federal Reserve.

It's important to bring individuals to account for their behavior... CONTINUES AT LINK
 

Demeter

(85,373 posts)
14. ONE MORE SAMPLE: We've Decoupled, Alright--From Reality
Thu Jul 19, 2012, 09:31 PM
Jul 2012
http://www.oftwominds.com/blog.html


Forget decoupling from Europe--we've been decoupled from reality since 2008.

Have we decoupled from the global slowdown? Doubtful. Have we decoupled from reality? Undoubtedly--and have been since 2008. One key attribute of reality is feedback: actions have consequences, and various forces reinforce or resist each other in a dynamic interplay of positive and negative feedback.

Another key attribute of reality is risk. Risk is as ever-present as gravity, and it cannot be eliminated; it can only be shared or transferred. When you overwhelm feedback with massive interventions that mask risk, you decouple from reality. With feedback suppressed and risk hidden, the system's resilience and resourcefulness both atrophy. Participants start making decisions not on risk assessment and feedback from reality but on the results of the intervention...Clearly, complex systems do respond to critical thresholds or "pivot points" that trigger cascading responses. It is wise to identify key metrics and manage the risks they present or elevate. But it is unwise to assume that manipulating one metric will necessarily restore a system that is wobbling out of equilibrium to a dynamic equilibrium.

Slamming down one metric or another does not necessarily reduce the systemic risk. Just as someone who eats junk food, smokes cigarettes and drinks sodas all day while slumped on a sofa will not become "healthy" just because statins have slammed down his LDL cholesterol levels, an unhealthy economy cannot be restored to health by manipulating a handful of inputs such as money supply or key metrics such as unemployment. All these interventions accomplish is to mask risk by transferring it to the system itself, where it builds up behind the apparent "fix" and eventually explodes.

All sustainable systems must be resilient and transparent. Intervening to suppress key inputs and manipulating data points makes the system appear less at risk, but reducing apparent risk is not the same as encouraging resourcefulness and resiliency. What we have as a consequence of four years of intervention, suppression and manipulation of data is a stock market that is now totally dependent on one input: quantitative easing intervention by the Federal Reserve. An unmanipulated market is based on multiple transparent inputs, including corporate earnings, revenues, currency valuations and so on.

Once inputs are gamed or manipulated, transparency is lost and feedback is distorted or suppressed.

Four years of intervention, suppression and manipulation of data have left the U.S. economy dependent on monetary interventions and massive fiscal deficit spending. Imagine a sickly patient in bed who has become totally dependent on several driplines (interventions). To keep the patient alive, the meds are steadily increased.

Are these interventions restoring health, or simply keeping the patient going until some unknown magic restores health? MORE AT LINK

DemReadingDU

(16,000 posts)
28. I like reading Charles Hugh Smith
Fri Jul 20, 2012, 06:47 AM
Jul 2012

among others too. I'm finding I spend most of the day reading all these interesting articles, and I don't get anything else done.


 

Demeter

(85,373 posts)
15. NEW GAS LOW: $ 3.40
Thu Jul 19, 2012, 09:33 PM
Jul 2012

So little time, so much scandal....see you in the morning!

Japan didn't wake up happy....

 

Demeter

(85,373 posts)
18. And neither did Europe wake up happy
Fri Jul 20, 2012, 03:24 AM
Jul 2012

But why? There's nothing I've found in the news to put all these frowns on faces....it must be Reality, checking in again....

 

Demeter

(85,373 posts)
21. Romney’s London fundraisers will take him to heart of scandal-plagued banking industry
Fri Jul 20, 2012, 03:40 AM
Jul 2012

WTF IS ROMNEY RAISING MONEY IN EUROPE FOR A CAMPAIGN FOR PUBLIC OFFICE IN THE USA? SOMEBODY PLEASE EXPLAIN HOW THAT IS EVEN LEGAL.

http://www.washingtonpost.com/politics/romneys-london-fundraisers-will-take-him-to-heart-of-scandal-plagued-banking-industry/2012/07/18/gJQAzKqGuW_story.html?wpisrc=nl_politics

Mitt Romney’s overseas trip next week will take him to the heart of London’s scandal-ridden banking industry, as the presumptive Republican presidential nominee holds two campaign fundraisers hosted by lobbyists and executives from more than two dozen financial institutions. The hosts of Romney’s high-dollar reception and dinner on July 26 overwhelmingly represent banks, hedge funds and other financial institutions, some of which are embroiled in the Libor rate-fixing scandal. By appearing at the fundraisers on the eve of the Olympics’ Opening Ceremonies, Romney risks associating his campaign with the unfolding scandal, which focuses on banks that manipulated the London interbank offered rate, a benchmark for mortgages, auto loans and other financial contracts.

One of the event’s co-chairs is Patrick Durkin, a Washington-based lobbyist for Barclays, which agreed last month to pay $450 million to settle allegations that it manipulated Libor before and after the financial crisis. Durkin has helped raise $1.1 million for the Romney campaign, according to U.S. disclosure records...The Romney events have sparked anger among some members of the British Parliament, who have called on Barclays executives to halt political fundraising while the scandal plays out. Executives of at least three other banks under investigation in the Libor scandal — Eric Varvel, chief executive of Credit Suisse; Raj Bhattacharyya, a managing director at Deutsche Bank; and Whitfield Hines, a managing director at HSBC — are co-chairs, according to copies of invitations obtained by The Washington Post. At least 15 banks are under investigation by British regulators in connection with the Libor manipulations, according to regulatory filings and statements.

Romney is holding two London fundraisers: a $2,500-per-person receptionand a dinner costing $25,000 to $75,000 per person.

THANKS TO THE DANCING SUPREMES AND THE CITIZENS UNITED SELLOUT

 

Demeter

(85,373 posts)
22. Bain Capital started with help of offshore investors
Fri Jul 20, 2012, 03:48 AM
Jul 2012
http://www.latimes.com/news/nationworld/nation/la-na-bain-creation-20120719,0,192124.story

When Mitt Romney launched Bain Capital in 1984, he struggled at first to raise enough money for the untested venture. Old-money families like the Rothschilds turned down the young Boston consultant. So he and his partners tapped an eclectic roster of investors, raising more than a third of their first $37-million investment fund from wealthy foreigners. Most of the foreign investors' money came through corporations registered in Panama, then known for tax advantages and unusual banking secrecy.

Previously unreported details, documented in Massachusetts corporate filings and other public records, show that Bain Capital was enmeshed in the largely opaque world of international high finance from its very inception. The documents don't indicate any wrongdoing, and experts say that such financial vehicles are common for wealthy foreign investors. But the new details come as President Obama has criticized Romney for profiting from Bain Capital's own offshore investment entities, which are unavailable to most Americans.

...The first outside investor in Bain was a leading London financier, Sir Jack Lyons, who made a $2.5-million investment through a Panama shell company set up by a Swiss money manager, further shielding his identity. Years later, Lyons was convicted in an unrelated stock fraud scandal. About $9 million came from rich Latin Americans, including powerful Salvadoran families living in Miami during their country's brutal civil war.

That first investment fund — used to invest in start-up companies and leveraged buyouts — paid out a stunning 173% in average annual returns over a decade, according to a prospectus prepared by an outside bank. It was the start of the private equity powerhouse that ultimately fueled Romney's political career. He now cites his experience at Bain as a chief qualification for the White House.

MORE.
 

Demeter

(85,373 posts)
23. The Financial Crisis Was Foreseeable … Thousands of Years Ago
Fri Jul 20, 2012, 03:56 AM
Jul 2012
http://www.zerohedge.com/contributed/2012-07-19/financial-crisis-was-foreseeable-%E2%80%A6-thousands-years-ago

  • We’ve known for 4,000 years that debts need to be periodically written down, or the entire economy will collapse.

  • We’ve known for 2,500 years that prolonged war bankrupts an economy.

  • We’ve known for 1,900 years that rampant inequality destroys societies.

  • We’ve known for thousands of years that debasing currencies leads to economic collapse.

  • We’ve known for hundreds of years that the failure to punish financial fraud destroys economies, as it destroys all trust in the financial system.

  • We’ve known for hundreds of years that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.

  • We’ve known for centuries that companies will try to pawn their debts off on governments, and that it is a huge mistake for governments to allow corporate debt to be backstopped by government.

  • We’ve known for 200 years that allowing private banks to control credit creation eventually destroys the nation’s prosperity.

  • We’ve known for 200 years that a fiat money system – where the money supply is not pegged to anything real – is harmful in the long-run.

  • We’ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability.

  • We’ve known for 80 years that inflation is a hidden tax.

  • We’ve known since 1988 that quantitative easing doesn’t work to rescue an ailing economy.

  • We’ve known since 1993 that derivatives such as credit default swaps – if not reined in – could take down the economy.

  • We’ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.

  • We’ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.

  • And we knew before the 2008 financial crash and subsequent bailouts that:


    1. The easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, and “the use of gimmicks and palliatives” by central banks hurt the economy

    2. Anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts “will only make things worse”

    3. Bailouts of big banks harm the economy

    4. The Fed and other central banks were simply transferring risk from private banks to governments, which could lead to a sovereign debt crisis


    Given the insane levels of debt, rampant inequality, currency debasement, failure to punish financial fraud, letting the private banks take over the system of credit creation, de-linking of fiat money from anything real, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, sovereigns taking on banks’ debt, crony capitalism, endless war, and other shenanigans … our financial crisis was entirely foreseeable
  • wilsonbooks

    (972 posts)
    26. Global Warming's Terrifying New Math
    Fri Jul 20, 2012, 06:38 AM
    Jul 2012


    Bill McKibben
    July 19, 2012 9:35 AM ET
    If the pictures of those towering wildfires in Colorado haven't convinced you, or the size of your AC bill this summer, here are some hard numbers about climate change: June broke or tied 3,215 high-temperature records across the United States. That followed the warmest May on record for the Northern Hemisphere – the 327th consecutive month in which the temperature of the entire globe exceeded the 20th-century average, the odds of which occurring by simple chance were 3.7 x 10-99, a number considerably larger than the number of stars in the universe.

    Meteorologists reported that this spring was the warmest ever recorded for our nation – in fact, it crushed the old record by so much that it represented the "largest temperature departure from average of any season on record." The same week, Saudi authorities reported that it had rained in Mecca despite a temperature of 109 degrees, the hottest downpour in the planet's history.

    Not that our leaders seemed to notice. Last month the world's nations, meeting in Rio for the 20th-anniversary reprise of a massive 1992 environmental summit, accomplished nothing. Unlike George H.W. Bush, who flew in for the first conclave, Barack Obama didn't even attend. It was "a ghost of the glad, confident meeting 20 years ago," the British journalist George Monbiot wrote; no one paid it much attention, footsteps echoing through the halls "once thronged by multitudes." Since I wrote one of the first books for a general audience about global warming way back in 1989, and since I've spent the intervening decades working ineffectively to slow that warming, I can say with some confidence that we're losing the fight, badly and quickly – losing it because, most of all, we remain in denial about the peril that human civilization is in.

    When we think about global warming at all, the arguments tend to be ideological, theological and economic. But to grasp the seriousness of our predicament, you just need to do a little math. For the past year, an easy and powerful bit of arithmetical analysis first published by financial analysts in the U.K. has been making the rounds of environmental conferences and journals, but it hasn't yet broken through to the larger public. This analysis upends most of the conventional political thinking about climate change. And it allows us to understand our precarious – our almost-but-not-quite-finally hopeless – position with three simple numbers.



    Read more: http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719#ixzz219peDXNl

    DemReadingDU

    (16,000 posts)
    30. Why the Obama Administration Will Hate Neil Barofsky’s Book “Bailout”
    Fri Jul 20, 2012, 07:10 AM
    Jul 2012

    7/20/12 Why the Obama Administration Will Hate Neil Barofsky’s Book “Bailout”

    Having read an advance copy of former Special Inspector General of the TARP Neil Barofsky’s new book, Bailout, I am pretty confident most NC readers would enjoy it. He got to be what I call a designated asshole in his DC incarnation, not that that was the way it had to turn out. For some unfathomable reason, the Bush White House decided it wanted someone who’d take the SIGTARP role seriously in the job. And they chose a Democrat, perhaps figuring that as much as he’d be a thorn in their side, Obama would be hard pressed not to keep him on, and he’d be even more of a problem for them. Six reasons why the Obama Administration will hate this book:

    6. Barofsky’s description of being “Escobarred” by then assistant secretary of the Treasury Herb Allison has the potential to become a classic

    5. Barofsky defied White House orders and was subjected to frontal attacks and is alive to talk about it

    4. Barofsky makes fun of himself often and recounts his mistakes, so it will be hard to discredit him to those who read the book and aren’t part of the problem

    3. Barofsky recounts quite a few fights with self important people in wonderfully sordid detail

    2. Barofsky says the Paulson Treasury was less awful to work with than the Geithner Treasury. The Paulson crowd would at least go mano a mano on the issues; the Geithner bunch would resort to every kind of petty trick they could find to undermine SIGTARP and discredit Barofsky

    1. Barofsky proves that the Obama Administration didn’t give a damn about protecting taxpayer money or protecting homeowners, only shoveling dough at banks and AIG (the auto companies were treated like unwanted stepchildren). It’s one thing to surmise that, another to deliver the goods

    http://www.nakedcapitalism.com/2012/07/why-the-obama-administration-will-hate-neil-barofskys-book-bailout.html


    Read Thursday's postings...
    7/19/12 Timothy Geithner Peppered TARP Inspector General Barofsky With F-Bombs
    http://www.democraticunderground.com/?com=view_post&forum=1116&pid=18771


    xchrom

    (108,903 posts)
    32. The Evidence Of A Coming Recession Is Overwhelming
    Fri Jul 20, 2012, 07:28 AM
    Jul 2012
    http://www.businessinsider.com/the-evidence-of-a-coming-recession-is-overwhelming-2012-7

    We first noticed the first signs that the economy was beginning to soften about three months ago. Now the evidence of a slowdown has become so overwhelming that it is difficult to avoid the conclusion that we are headed for a recession. We cite the following as evidence.
    Retail sales (both total and non-auto) have dropped for three consecutive months. This has happened only five times since 1967----four times in 2008, and one now. Vehicle sales have tapered off with May and June being the two weakest months of the year. Consumer confidence for both the Conference Board index and the University of Michigan Survey are at their lowest levels of 2012.
    On the labor front, June payroll numbers were weak once again and averaged only 75,000 in the second quarter. The latest weekly new claims for unemployment insurance jumped back up to 386,000 and the last two months have been well above the numbers seen earlier in the year.
    The ISM manufacturing index for June fell 3.8 points to 49.7, its first sub-50 reading in the economic recovery. The ISM non-manufacturing index for June dropped to its lowest level since January 2010. Most recently the Philadelphia Fed Survey for July was negative (below zero) for the third consecutive month.


    Read more: http://www.businessinsider.com/the-evidence-of-a-coming-recession-is-overwhelming-2012-7#ixzz21A3szHbM

    xchrom

    (108,903 posts)
    35. Compton May Be The Next City To Go; Then Victorville, Montebello, Los Angeles, Oakland
    Fri Jul 20, 2012, 07:52 AM
    Jul 2012
    http://www.businessinsider.com/compton-may-be-the-next-city-to-go-then-victorville-montebello-los-angeles-oakland-2012-7

    As part of a growing trend, Compton California is on the verge of bankruptcy. When it files (and it will eventually), it will become California's 4th city to do so.

    The Huffington Post reports Compton Will Run Out Of Funds By September 1
    Compton, Calif. could be the fourth city in the Golden State to seek bankruptcy protection.
    At a city council meeting Tuesday, officials announced that Compton is set to run out of funds by Sept. 1. Compton, which has only 93,000 residents, faces a deficit of $43 million after having depleted a $22 million reserve, reports Reuters.
    "I have $3 million in the bank and $5 million in warrants due in the next 10 to 12 days," said city treasurer Doug Sanders during the live-streamed city council meeting. "By then, the council will have a decision to make: don't pay the bonds, default on them, or have a serious talk about bankruptcy."


    Read more: http://globaleconomicanalysis.blogspot.com/2012/07/s-revises-pennsylvanias-outlook-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29&utm_content=Google+Reader#ixzz21A9dAX00

    xchrom

    (108,903 posts)
    36. America Is Approaching The Export Tipping Point
    Fri Jul 20, 2012, 08:03 AM
    Jul 2012
    http://www.businessinsider.com/export-nation-does-a-tipping-point-approach-2012-7

    Since 2009, exports from the US have grown at a faster rate than GDP.
    This is reflected in the weak, national recovery in jobs while export-oriented regions and export-sector jobs have fared much better.
    As US exports are nearing 15% of GDP, one wonders that a nation long accustomed to protecting consumption may finally have to think about protection, and enhancement, of production.


    Read more: http://feedproxy.google.com/~r/Gregorus/~3/XiTxKt1YZV8/#ixzz21ACbGIJZ

    xchrom

    (108,903 posts)
    37. U.K.’S Widening Deficit Casts Doubt On Fiscal Goals: Economy
    Fri Jul 20, 2012, 08:13 AM
    Jul 2012
    http://www.bloomberg.com/news/2012-07-20/u-k-budget-deficit-widens-casting-doubt-on-fiscal-targets.html

    Britain had a bigger budget deficit than economists forecast in June, casting fresh doubt on whether Chancellor of the Exchequer George Osborne can meet his full- year fiscal goals.
    The shortfall, which excludes government support for banks, was 14.4 billion pounds ($23 billion) compared with 13.9 billion pounds a year earlier, the Office for National Statistics said in London today. The median forecast of 20 forecasts in a Bloomberg News survey was for a deficit of 13.4 billion pounds

    With the U.K. struggling to climb out of a recession, speculation is growing that Osborne will miss his target of cutting the deficit to 120 billion pounds in the fiscal year that began April 1. The International Monetary Fund said yesterday the government should be ready to introduce temporary tax cuts and increase spending if growth fails to materialize.
    “It is clear that the recession is leading to a worsening of the U.K.’s underlying fiscal position,” said James Knightley, an economist at ING Bank in London. It “raises more question marks over the effectiveness of the government’s austerity measures.”

    xchrom

    (108,903 posts)
    39. GE 2Q earnings drop 16 pct; reaffirms outlook
    Fri Jul 20, 2012, 08:38 AM
    Jul 2012
    http://hosted.ap.org/dynamic/stories/U/US_EARNS_GENERAL_ELECTRIC?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-07-20-07-04-59

    NEW YORK (AP) -- General Electric says its net income fell 16 percent in the second quarter because of losses in businesses it has divested and an increase in pension costs.

    The conglomerate, with businesses ranging from appliances to financial services to wind and gas turbines, posted net income of $3.11 billion, or 29 cents per share, compared with $3.69 billion, or 35 cents per share, a year earlier.

    Excluding pension costs and losses from discontinued businesses, GE earned 38 cents, a penny better than analysts were expecting.

    Revenue rose 2 percent to $36.5 billion, led by strong results in GE's industrial business. Analysts expected slightly higher revenue of $36.77 billion.

    DemReadingDU

    (16,000 posts)
    40. Your Money Market Mutual Fund Could Be Frozen/Denied
    Fri Jul 20, 2012, 08:50 AM
    Jul 2012

    See below for the original links from ZeroHedge in 2010 about MMMF

    7/19/12 This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied - The Sequel

    Two years ago, in January 2010, Zero Hedge wrote "This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied" which became one of our most read stories of the year. The reason? Perhaps something to do with an implicit attempt at capital controls by the government on one of the primary forms of cash aggregation available: $2.7 trillion in US money market funds.

    The proximal catalyst back then were new proposed regulations seeking to pull one of these three core pillars (these being no volatility, instantaneous liquidity, and redeemability) from the foundation of the entire money market industry, by changing the primary assumptions of the key Money Market Rule 2a-7. A key proposal would give money market fund managers the option to "suspend redemptions to allow for the orderly liquidation of fund assets."

    In other words: an attempt to prevent money market runs (the same thing that crushed Lehman when the Reserve Fund broke the buck). This idea, which previously had been implicitly backed by the all important Group of 30 which is basically the shadow central planners of the world (don't believe us? check out the roster of current members), did not get too far, and was quickly forgotten.

    Until today, when the New York Fed decided to bring it back from the dead by publishing "The Minimum Balance At Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market FUnds". Now it is well known that any attempt to prevent a bank runs achieves nothing but merely accelerating just that (as Europe recently learned). But this coming from central planners - who never can accurately predict a rational response - is not surprising.

    What is surprising is that this proposal is reincarnated now. The question becomes: why now? What does the Fed know about market liquidity conditions that it does not want to share, and more importantly, is the Fed seeing a rapid deterioration in liquidity conditions in the future, that may and/or will prompt retail investors to pull their money in another Lehman-like bank run repeat?

    much more!
    http://www.zerohedge.com/news/government-your-legal-right-redeem-your-money-market-account-has-been-denied-sequel



    1/3/10 This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied

    Money Market funds, which account for nearly 40% of all investment company assets. The next time there is a market crash, and you try to withdraw what you thought was "absolutely" safe money, a back office person will get back to you saying, "Sorry - your money is now frozen. Bank runs have become illegal."

    much more...
    http://www.zerohedge.com/article/government-your-legal-right-redeem-your-money-market-account-has-been-denied


    1/27/10 Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote

    Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote.

    much more...
    http://www.zerohedge.com/article/suspending-money-market-redemptions-now-legel-sec-approves-new-money-market-regulation-4-1-v

    DemReadingDU

    (16,000 posts)
    41. ZeroHedge Conclusion to Your Money Market Account Has Been Denied
    Fri Jul 20, 2012, 08:59 AM
    Jul 2012


    Conclusion

    At this point it is without doubt that even the government understands that when things turn sour, and they will, the run on the bank will be unavoidable: their solution - prevent money from being dispensed, when that moment comes. The thing about crises, be they liquidity, solvency, or plain-vanilla, is that "price discovery" occurs all at once, and at the very same time.

    And all too often, investors "discover" they were lied to, as the emperor, in any fiat system, always has no clothes. Just like in September 2008, when the banks were forced to look at each-others' balance sheet and realize that there are no real assets on the left backing up the liabilities on the right, so the moment of enlightenment occurs are the most importune time: just ask Hank Paulson.

    Had he known his action of beefing up Goldman's FICC trading axes would have resulted in the "Ice-Nine'ing" (to borrow a Mark Pittman term) of money markets, who knows- maybe Lehman would have still been alive. Perhaps risking the cash access of 20% of US households and 80% of companies was not worth the few extra zeroes in Goldman's EPS. But we will never know.

    What we will know, is that now
    i) the government is all too aware that the market has become one huge ponzi, and that all investment vehicles, even the safest ones, are subject to bank runs, and
    ii) that said bank runs, will occur. It is only a matter of time.

    And just as the president told everyone directly to buy the market on March 3, so the SEC, the Group of 30, and Barney Frank are telling us all, much less directly, to get the hell out of Dodge. Alternatively, the game of "last fool in", holding the burning hot potato, can continue indefinitely, until such time as the marginal utility of each and every dollar printed by Ben Bernanke is zero.


    http://www.zerohedge.com/news/government-your-legal-right-redeem-your-money-market-account-has-been-denied-sequel

     

    just1voice

    (1,362 posts)
    58. Excellent points, and the overall markets can be shut down at any time.
    Fri Jul 20, 2012, 04:49 PM
    Jul 2012

    like they were after 9/11 or like they are when there are "trading abnormalities" like technical problems. Criminal banks also wait until the end of the week to move your funds so they can find the best price for them, not you, when someone moves money from, say a stock fund to a money market fund.

    It becomes more clear everyday that the markets are not a safe place to have money, the elites/powerful decide what price a customer gets, when they get it and when and if the customer ever gets their money back.

    It's a completely corrupt fraud now, pure manipulation for the profits of the banks, hopefully posts like yours will bring that to peoples' attention.

    dixiegrrrrl

    (60,010 posts)
    63. spanish banks have "sequestered" retirement funds
    Sun Jul 22, 2012, 03:32 PM
    Jul 2012

    Reported last week on the keiser report.

    Nothing I can do about what happens to Soc. Sec. funds in near future, tho. Sigh.

    xchrom

    (108,903 posts)
    43. US futures slide as crisis in Europe deepens
    Fri Jul 20, 2012, 09:28 AM
    Jul 2012
    http://hosted.ap.org/dynamic/stories/U/US_WALL_STREET?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-07-20-09-13-37

    NEW YORK (AP) -- Stock futures slid Friday as the economic crisis in Europe overshadowed a surprisingly strong earnings performance by major U.S. corporations.

    Dow Jones industrial average futures fell 65 points to 12,815. Standard & Poor's 500 futures gave up 9.2 points to 1,362.70 and Nasdaq futures fell 8.75 points to 2,643.50.

    Both Britain and Spain are seeing the costs of borrowing rise over doubts about their ability to repay debt. Spain's borrowing rates are nearing unsustainable levels and tens of thousands of protesters have taken to the streets in 80 cities, including Madrid, where they have clashed with riot police.

    On Friday, finance ministers from the 17 countries that use the euro approved the terms of a bailout loan for Spanish banks. The initial price tag is $122.9 billion, but the true cost is not likely to be known until September, after the banks have been assessed in depth.

    xchrom

    (108,903 posts)
    44. Even Counterfeiters Are Giving Up On The Euro
    Fri Jul 20, 2012, 09:33 AM
    Jul 2012
    http://www.businessinsider.com/even-counterfeiters-are-giving-up-on-the-euro-2012-7

    ***SNIP

    The fact that counterfeiters are throwing in the towel—worried perhaps that they’ll get stuck with high-risk but unsalable merchandise—is bad enough for Europhiles. But now we see an increasingly clear demarcation of the Eurozone into two separate parts, though not entirely along the lines of North and South often envisioned.
    On one side of the line are countries whose governments can borrow at negative yields, that is, where investors agree to lend money to them at a guaranteed loss, however absurd that might have seemed not long ago. That club includes Germany, France, the Netherlands, and Belgium (!); in the secondary markets, Finnish and Austrian government debt has seen negative yields. Eurozone neighbors Denmark and Switzerland also dipped into negative yields. Negative Interest Rate Policy (NIRP) at work.
    On the other side are countries whose governments have lost access to the financial markets or are in the process of losing access. The largest two in that group are Spain and Italy.
    Perhaps the Eurozone will perform a miracle and solve the debt crisis (unlikely), or all 17 nations might agree to rewrite the treaties that govern the ECB to allow it to print money and buy sovereign debt with reckless abandon (also unlikely). More likely, the can will be kicked down the road, with one or two countries exiting the Eurozone along the way. When push comes to shove, the Eurozone might break into two parts, possibly along the NIRP line, or it might break into national currencies. So I will hang on to my Starter Pack, that unopened plastic pouch of pristine euros never touched by a human hand—because one day, I’m afraid, it might become a collector’s item.


    Read more: http://www.testosteronepit.com/home/2012/7/19/even-counterfeiters-are-giving-up-on-the-euro.html#ixzz21AZLzPGw

    xchrom

    (108,903 posts)
    45. Spain's woes deepen as region seeks financial aid
    Fri Jul 20, 2012, 10:15 AM
    Jul 2012
    http://hosted.ap.org/dynamic/stories/E/EU_SPAIN_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-07-20-09-35-34

    MADRID (AP) -- Spain's economic woes deepened Friday after a heavily indebted region asked the central government for help to pay creditors, prompting investors to dump Spanish stocks and government bonds.

    Just as European ministers approved a rescue of Spain's troubled banks, the region of Valencia revealed it would become the first to tap a new fund designed to provide liquidity to the country's 17 semi-autonomous regions.

    The yield on Spanish 10-year bonds shot up 0.18 percentage points to 7.15 percent on the news, while the Ibex stock index fell 4.8 percent.

    Many Spanish regions are so heavily in debt - due to the recession and a burst real estate bubble - that they cannot raise money at affordable rates. As a result, they are struggling to repay creditors and settle contract bills.

    Roland99

    (53,342 posts)
    49. DJIA down triple digits now
    Fri Jul 20, 2012, 12:28 PM
    Jul 2012
    [font color="red"] Dow12,836 -108 -0.83%
    Nasdaq 2,933 -33 -1.11%
    S&P 500 1,365 -12 -0.87%
    GlobalDow 1,804 -21 -1.14%
    Oil 90.97 -1.69 -1.82% [/font]
    Gold 1,583 +3 +0.18%


     

    Demeter

    (85,373 posts)
    51. Ain't Nobody Happy Today--Except the Realists, who feel a bit vindicated
    Fri Jul 20, 2012, 12:35 PM
    Jul 2012

    and hopeful that the bottom will come sooner, rather than later, so that we may begin the long climb back to reality.

    Po_d Mainiac

    (4,183 posts)
    56. A joke is worth a thousand pictures
    Fri Jul 20, 2012, 03:05 PM
    Jul 2012

    A man in a hot air balloon realized he was lost. He reduced altitude and spotted a woman below. He descended a bit more and shouted, "Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don't know where I am."

    The woman below replied, "You are in a hot air balloon hovering approximately 30 feet above the ground. You are between 40 and 41 degrees north latitude and between 59 and 60 degrees west longitude."

    "You must be an engineer," said the balloonist.

    "I am," replied the woman. "How did you know?"

    "Well," answered the balloonist, "everything you told me is technically correct, but I have no idea what to make of your information, and the fact is I am still lost. Frankly, you've not been much help so far."

    The woman below responded, "You must be in senior management at a bank."

    "I am," replied the balloonist, "but how did you know?"

    "Well," said the woman, "you don't know where you are or where you are going. You have risen to where you are, due to a large quantity of hot air. You made a promise which you have no idea how to keep, and you expect people beneath you to solve your problems. The fact is you are in exactly the same position you were in before we met, but now, somehow, it's my fault."

     

    Demeter

    (85,373 posts)
    59. Nice update on the old Mainer joke
    Fri Jul 20, 2012, 06:13 PM
    Jul 2012

    Man aloft in hot-air balloon shouts down to old Yankee in a field:

    "Excuse me, sir, but can you tell me where I am?"

    The farmer shouts back:

    "You're in a balloon, yer damn fool!"

     

    Demeter

    (85,373 posts)
    52. Morgan Stanley plans further staff cuts on weak outlook
    Fri Jul 20, 2012, 12:42 PM
    Jul 2012
    http://news.yahoo.com/morgan-stanley-swings-second-quarter-profit-113136848--sector.html

    Morgan Stanley became the latest bank to announce more layoffs to shrink expenses as Wall Street prepares for an extended period of weak global economic growth and low trading and dealmaking volumes. The investment bank, which posted a sharp drop in second-quarter revenue, expects its payroll to decline by about another 1,000 workers this year to meet a broader target of reducing staff levels by 7 percent from December 2011 levels, Chief Executive James Gorman said on Thursday. Morgan Stanley is one of several big banks to outline further belt-tightening measures this week when reporting quarterly results.

    The industry is facing increasing pressure from shareholders to boost profitability as the European debt crisis, companies' reluctance to issue debt and equity, and slow stock and bond trading weigh on revenue. Rivals including Goldman Sachs Group Inc, Bank of America Corp, and Deutsche Bank AG are also embarking on fresh rounds of staff cuts in their trading and underwriting businesses. Goldman expanded its cost-saving target by $500 million as the outlook has dimmed for near-term revenue growth... So far this year, U.S. banks have outlined plans to cut another 17,323 employees, in addition to the 63,624 job cuts detailed last year, according to outsourcing firm Challenger, Gray & Christmas. Morgan Stanley is targeting a workforce reduction of 7 percent from the 61,899 employees it had at the end of 2011, Gorman said on a conference call with analysts. At June 30, Morgan Stanley had 58,627 workers, leaving it with around another 1,000 left to go. The bank will achieve its goal through staff cuts and "applying a very high bar" for replacing workers who leave, Gorman said.

    Times are tough enough that the bank is shrinking its balance sheet, too. Morgan Stanley hopes to cut its risk weighted assets by an eye-popping 30 percent by December 2014 from their September 30, 2011 levels of $346.79 billion. With $317.19 billion worth of risk-weighted assets remaining at June 30, the bank has another $74.44 billion reduction to go...Last year was the first in which banks delivered zero bonuses to some employees in an effort to contain costs, said Johnson, who has tracked industry pay for decades. Boards and shareholders are demanding better results and expect banks to fully downsize by the end of this year, he said.

    MUCH MORE
     

    Demeter

    (85,373 posts)
    53. Libor Scandal Shows Many Flaws in Rate-Setting YA THINK?
    Fri Jul 20, 2012, 12:58 PM
    Jul 2012
    http://dealbook.nytimes.com/2012/07/19/libor-scandal-shows-many-flaws-in-rate-setting/

    It is an open secret in the banking world: the interest rates for many mortgages and loans are based on a benchmark that is largely guesswork...But even if banks do not deliberately manipulate the rates, the benchmark remains vulnerable. Banks derive the rates from estimates rather than real market data. So the benchmark, a measure of how much banks charge each other for loans, does not necessarily represent actual borrowing costs. This weakness has only been exacerbated in recent years, as banks have mostly stopped lending to each other... Since the crisis, many banks have been content to park their cash with central banks, rather than lending it out to other institutions. That means there are few interbank transactions on which to base their Libors, according to bankers who operate in this market. "Libor was intended for an international lending market that has long since past," said Pete Hahn, a finance professor at the Cass Business School in London. "The whole concept of interbank lending died after Lehman Brothers collapsed." Now, regulators and investors are questioning whether the benchmark should play any role in determining borrowing costs. Top central bankers will meet in September to discuss potential reforms...The benchmark was supposed to solve a problem for bankers. For years, institutions haggled over the rates charged for different types of loans. To create consistency, the British Bankers' Association developed the Libor standard. At the time, the interbank market functioned relatively well. As the financial sector ballooned in the last two decades, Libor became increasingly more important. The rates currently cover 10 different currencies, and underpin more than $360 trillion of financial products worldwide...Since interbank lending has stagnated, institutions are largely looking to other types of borrowing to come up with Libors, including certificates of deposits and loans from money market funds. But this is an inexact science that can distort the Libor market. For example, banks often submit the same rates several days in a row, despite changing market and economic conditions. In June, JPMorgan Chase reported the same one-year Libor every single day, according to data from Thomson Reuters, which is responsible for collecting the benchmark information. The bank's rate: 1 percent. By contrast, UBS calculated the figure to three decimal places and regularly changed its rates. At the beginning of June, the Swiss bank reported a one-year rate of 1.037 percent. It dropped to 0.972 percent at the end of the month.

    Neither bank responded to a request for comment.

    There can also be wide discrepancies among similar benchmarks, which may reflect the artificial nature of the process. While the recent three-month Libor stood at 0.4531 percent, the parallel euro interbank offered rate in American dollars amounted to 0.91643 percent. During periods of turmoil, the process gets murkier. Some traders indicate that banks at times of stress report rates that would be almost impossible to achieve. When the European debt crisis heated up this summer, French banks were viewed as vulnerable, meaning they would have had a hard time borrowing at reasonable rates. But the country's banks continued to report Libors, and they remained largely flat. "When the French banks saw their stock price going down 10 percent a day, could they have borrowed at Libor? There isn't a chance," said a senior executive at a large Wall Street firm who spoke on the condition of anonymity because of the ongoing investigations.

    In some ways, the flaws with Libor make it a convenient tool for Wall Street. If banks had to carefully reference a real, sometimes volatile, market, they might find it harder to set rates regularly. Allowing banks to submit guesstimates makes it relatively simple to come up with a daily number. The practices suits the vast derivatives markets, which need a daily rate to price products like interest-rate swaps. "It is true that current Libor methodology is very convenient for the derivatives world," said Darrell Duffie, professor of finance at Stanford. "Convenience should not trump accuracy."

    .............................................................................................................

    The race to replace Libor has also heated up. One suggestion is to use rates from another market that banks frequently use to lend to each other. These loans are backed with high-quality financial assets that lenders can keep if borrowers fail to repay. The limited volume of Libor-related loans do not have such collateral. The Wall Street firm Cantor Fitzgerald is also developing an index of different short-term lending markets. The idea is that the benchmark, a more diversified reflection of borrowing, could be used as a substitute for Libor. "To be reliable, indices have to be transaction-based and transparent," said Gary S. Gensler, the chairman of the Commodity Futures Trading Commission, the regulator that led the inquiry into Barclays.
     

    Demeter

    (85,373 posts)
    54. Pathos of the Plutocrat By PAUL KRUGMAN
    Fri Jul 20, 2012, 01:12 PM
    Jul 2012
    http://www.nytimes.com/2012/07/20/opinion/krugman-pathos-of-the-plutocrat.html



    “Let me tell you about the very rich. They are different from you and me.” So wrote F. Scott Fitzgerald — and he didn’t just mean that they have more money. What he meant instead, at least in part, was that many of the very rich expect a level of deference that the rest of us never experience and are deeply distressed when they don’t get the special treatment they consider their birthright; their wealth “makes them soft where we are hard.” And because money talks, this softness — call it the pathos of the plutocrats — has become a major factor in America’s political life. It’s no secret that, at this point, many of America’s richest men — including some former Obama supporters — hate, just hate, President Obama. Why? Well, according to them, it’s because he “demonizes” business — or as Mitt Romney put it earlier this week, he “attacks success.” Listening to them, you’d think that the president was the second coming of Huey Long, preaching class hatred and the need to soak the rich. Needless to say, this is crazy. In fact, Mr. Obama always bends over backward to declare his support for free enterprise and his belief that getting rich is perfectly fine. All that he has done is to suggest that sometimes businesses behave badly, and that this is one reason we need things like financial regulation. No matter: even this hint that sometimes the rich aren’t completely praiseworthy has been enough to drive plutocrats wild. For two years or more, Wall Street in particular has been crying: “Ma! He’s looking at me funny!” Wait, there’s more. Not only do many of the superrich feel deeply aggrieved at the notion that anyone in their class might face criticism, they also insist that their perception that Mr. Obama doesn’t like them is at the root of our economic problems. Businesses aren’t investing, they say, because business leaders don’t feel valued. Mr. Romney repeated this line, too, arguing that because the president attacks success “we have less success.”



    But never mind. Because the rich are different from you and me, many of them are incredibly self-centered. They don’t even see how funny it is — how ridiculous they look — when they attribute the weakness of a $15 trillion economy to their own hurt feelings. After all, who’s going to tell them? They’re safely ensconced in a bubble of deference and flattery. Unless, that is, they run for public office. Like everyone else following the news, I’ve been awe-struck by the way questions about Mr. Romney’s career at Bain Capital, the private-equity firm he founded, and his refusal to release tax returns have so obviously caught the Romney campaign off guard. Shouldn’t a very wealthy man running for president — and running specifically on the premise that his business success makes him qualified for office — have expected the nature of that success to become an issue? Shouldn’t it have been obvious that refusing to release tax returns from before 2010 would raise all kinds of suspicions?

    By the way, while we don’t know what Mr. Romney is hiding in earlier returns, the fact that he is still stonewalling despite calls by Republicans as well as Democrats to come clean suggests that it could be something seriously damaging....Clearly, Mr. Romney believed that he could run for president while remaining safe inside the plutocratic bubble and is both shocked and angry at the discovery that the rules that apply to others also apply to people like him. Fitzgerald again, about the very rich: “They think, deep down, that they are better than we are.”

    O.K., let’s take a deep breath. The truth is that many, and probably most, of the very rich don’t fit Fitzgerald’s description. There are plenty of very rich Americans who have a sense of perspective, who take pride in their achievements without believing that their success entitles them to live by different rules. But Mitt Romney, it seems, isn’t one of those people. And that discovery may be an even bigger issue than whatever is hidden in those tax returns he won’t release.
     

    Demeter

    (85,373 posts)
    55. American Exceptions By TIMOTHY EGAN
    Fri Jul 20, 2012, 01:16 PM
    Jul 2012
    http://opinionator.blogs.nytimes.com/2012/07/19/american-exceptions/



    The two great bottom-line phrases of modern life are: "Put your money where your mouth is" and, regarding fact-checking and getting to the meat of any operation, "Follow the money." Mitt Romney's mouth is certainly in this country. "Believe in America" is his campaign mantra, as ubiquitous as a pop-up flag on his Web site, and bannered at every rally. The president's policies, he said this week by way of comparison, "are extraordinarily foreign."

    But Romney's own money is somewhere else, showing that he's willing to bet against America - its currency, its tax system, its safety as a place for capital. Anyone who wants to lead this nation, and stashes millions of dollars in foreign banks, overseas financial havens and byzantine accounts in countries without tax or regulation, had better be prepared to defend that financial betrayal.

    Yet Romney will not defend it, even though there's a decent free-market argument for how his fortune found a refuge offshore. That's the crux of one of the biggest obstacles standing between Romney and the White House. The "Swiss-yachting" of Romney is about whether you put your chips on your own country or on other nations. Romney has shown the same instincts as Eduardo Saverin, a co-founder of Facebook with a net worth of about $2 billion, who chose to renounce his United States citizenship and park his money elsewhere rather than pay American capital gains taxes. This despite the fact that the richest 1 percent in the United States are paying the lowest tax rate in 80 years.

    Romney walked into this trap, and could explain his way out of it. But that would require intellectual honesty, as challenging for him as it is for Michele Bachmann to get through a day without making something up. Romney could say that in the globalized era, money goes where it wants to go, to paraphrase Woody Allen's line about the heart. Hey, those Ralph Lauren uniforms of our American athletes - made in China! Get used to it. Instead, he has chosen to make his campaign about "American exceptionalism," a U.S.A. uber alles slogan that applies, apparently, to Olympic sports and diplomacy but not to his massive wealth. He looks the very definition of an empty suit whenever he utters a riff on this platitude.

    MORE DELICIOUS IRONY
    Latest Discussions»Issue Forums»Economy»STOCK MARKET WATCH -- Fri...