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

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

Postby anothershamus » Sat Nov 20, 2010 11:39 am

Peak Oil, Credit and Finance, Climate Change, Oh My!

Max it at it again, tying the major themes of the global economic disaster together in one big chewy nugget!

Watch it and run for the hills!


Part 2 here: http://www.youtube.com/watch?v=YYkchp-2riI

Part 3 here: http://www.youtube.com/watch?v=cjBuEsW3wL4

As Max says; Bye Y'all!
)'(
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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Sat Nov 20, 2010 2:11 pm

Thanks to Nordic, assimilating...

The Man Who Shattered Our Economy

http://www.truthdig.com/report/item/the ... _20101117/

By Robert Scheer

Rejoice, the housing market is back. Sandy Weill just picked up a humdinger of a wine vineyard estate in Sonoma, Calif., for a record $31 million, so the foreclosure crisis—which the former CEO of Citigroup did so much to create when he successfully lobbied then-President Bill Clinton to sign off on radical deregulation of the banking industry—must be over.

After all, Weill wasn’t desperate for shelter, already being in possession of a 14-acre estate in über-exclusive Greenwich, Conn., and a 120-acre spread in New York state’s Adirondacks. Let’s also not forget the penthouse that he bought for $42.4 million in New York City in 2007 as the banking collapse he helped engineer was fast developing. Not too shabby for a guy who ran Citigroup into the ground by trafficking in what proved to be toxic mortgage-based securities.

Thanks to legislation that Weill got President Clinton to sign off on, Citigroup was allowed to become too big to fail, and when fail it did, the taxpayers had to bail the humungous bank out—to the tune of $50 billion in a direct subsidy and $306 billion more for the housing mortgage-backed securities Citigroup was holding. The Treasury still owns a good chunk of Citigroup common stock, now trading at a paltry four dollars and change per share.

However, like all of the other top dogs involved in this scandal, Weill has emerged from a housing crisis that has impoverished tens of millions of Americans with his own personal fortune intact. Indeed, as evidenced by his vineyard purchase, he has quite a bit of money to throw around.

Although the value of most housing in Sonoma County, in the heart of the wine country, is down 30 to 50 percent, Weill was willing to pay close to the asking price for his new property. And why not? As the San Francisco Chronicle website quoted one Coldwell Banker real estate agent as saying, the sale “is not an indicator of an emerging real estate recovery, but rather the ability of the world’s wealthiest individuals to buy what they desire.”

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Some guys have all the luck, particularly when they supply the dice. There would be no housing crisis were it not for radical financial deregulation legislation that Weill and other Wall Street hotshots got Clinton to approve. First Weill engineered a merger of the Travelers insurance company, which he headed and which included investment banking in its portfolio, with the commercial banking entity of what was then Citicorp. That merger would have been judged illegal because of the Glass-Steagall legislative barrier to merging investment and commercial banking that President Franklin Roosevelt signed into law to prevent another Great Depression, but Weill got the law changed to accommodate his plans.
Boy, was Weill ever persuasive, not only enlisting the bipartisan support of Washington politicians but the enthusiastic backing of the establishment media. As The New York Times editorialized back in April of 1998 in praising the merger: “In one stroke Mr. Reed [John Reed of Citigroup] and Mr. Weill will have temporarily demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.”

A Times news story that same day also read like a Wall Street lobbyist’s press release: “In a single day, with a bold merger, pending legislation in Congress to sweep away Depression-era restrictions on the financial industry has been given a sudden, and unexpected, new chance of passage. … Indeed, within 24 hours of the deal’s announcement, lobbyists for insurers, banks and Wall Street firms were huddling with Congressional banking committee staff members to fine-tune a measure that would update the 1933 Glass-Steagall Act separating commercial banking from Wall Street and insurance. …” Notice the Times’ use of “update” to mask what was a clear reversal of the law.

It helped that former Goldman Sachs honcho Robert Rubin was Clinton’s treasury secretary, and after the bill was passed, Weill rewarded Rubin with a $15-million-a-year job at the new Citigroup, which was now legal, thanks to the legislation Rubin had helped pass. When Clinton signed the bill reversing Glass-Steagall and making the Citigroup merger legal, he gushed: “Today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority.” Clinton then handed Weill a pen he used in signing the bill, and that pen ended up framed on the wall at the CEO’s office near a plaque that paid tribute to Weill as “The Man Who Shattered Glass-Steagall.” And shattered our economy as well. His are the grapes of wrath.



Nordic wrote:And always remember, this man NEEDS his Bush era tax cut!

Somehow, this seems fitting (thanks to Montag for posting it in the other thread:)


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

Postby seemslikeadream » Sat Nov 20, 2010 6:56 pm

U.S. in Vast Insider Trading Probe

By SUSAN PULLIAM, MICHAEL ROTHFELD,JENNY STRASBURG and GREGORY ZUCKERMAN

Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter.

The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.

The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.

One focus of the criminal investigation is examining whether nonpublic information was passed along by independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge.

Among the expert networks whose consultants are being examined, the people say, is Primary Global Research LLC, a Mountain View, Calif., firm that connects experts with investors seeking information in the technology, health-care and other industries. "I have no comment on that," said Phani Kumar Saripella, Primary Global's chief operating officer. Primary's chief executive and chief operating officers previously worked at Intel Corp., according to its website.

In another aspect of the probes, prosecutors and regulators are examining whether Goldman Sachs Group Inc. bankers leaked information about transactions, including health-care mergers, in ways that benefited certain investors, the people say. Goldman declined to comment.

Independent analysts and research boutiques also are being examined. John Kinnucan, a principal at Broadband Research LLC in Portland, Ore., sent an email on Oct. 26 to roughly 20 hedge-fund and mutual-fund clients telling of a visit by the Federal Bureau of Investigation.

"Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information," the email said. "(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no idea.) We obviously beg to differ, so have therefore declined the young gentleman's gracious offer to wear a wire and therefore ensnare you in their devious web."


The email, which Mr. Kinnucan confirms writing, was addressed to traders at, among others: hedge-fund firms SAC Capital Advisors LP and Citadel Asset Management, and mutual-fund firms Janus Capital Group, Wellington Management Co. and MFS Investment Management. SAC, Wellington and MFS declined to comment; Janus and Citadel didn't immediately comment. It isn't known whether clients are under investigation for their business with Mr. Kinnucan.

The investigations have been conducted by federal prosecutors in New York, the FBI and the Securities and Exchange Commission. Representatives of the Manhattan U.S. Attorney's office, the FBI and the SEC declined to comment.

Another aspect of the probe is an examination of whether traders at a number of hedge funds and trading firms, including First New York Securities LLC, improperly gained nonpublic information about pending health-care, technology and other merger deals, according to the people familiar with the matter.

Some traders at First New York, a 250-person trading firm, profited by anticipating health-care and other mergers unveiled in 2009, people familiar with the firm say.

A First New York spokesman said: "We are one of more than three dozen firms that have been asked by regulators to provide general information in a widespread inquiry; we have cooperated fully." He added: "We stand behind our traders and our systems and policies in place that ensure full regulatory compliance."

Key parts of the probes are at a late stage. A federal grand jury in New York has heard evidence, say people familiar with the matter. But as with all investigations that aren't completed, it's unclear what specific charges, if any, might be brought.


The action is an outgrowth of a focus on insider trading by Preet Bharara, the Manhattan U.S. Attorney. In an October speech, Mr. Bharara said the area is a "top criminal priority" for his office, adding: "Illegal insider trading is rampant and may even be on the rise." Mr. Bharara declined to comment.

Expert-network firms hire current or former company employees, as well as doctors and other specialists, to be consultants to funds making investment decisions. More than a third of institutional investment-management firms use expert networks, according to a late-2009 survey by Integrity Research Associates LLC in New York.

The consultants typically earn several hundred dollars an hour for their services, which can include meetings or phone calls with traders to discuss developments in their company or industry. The expert-network companies say internal policies bar their consultants from disclosing confidential information.

Generally, inside traders profit by buying stocks of acquisition targets before deals are announced and selling after the targets' shares rise in value.

The SEC has been investigating potential leaks on takeover deals going back to at least 2007 amid an explosion of deals leading up to the financial crisis. The SEC sent subpoenas last fall to more than 30 hedge funds and other investors.

“Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information.... We obviously beg to differ, so have therefore declined the young gentleman's gracious offer to wear a wire and therefore ensnare you in their devious web.”
John Kinnucan, of Broadband Research, in an Oct. 26 email to clients
Some subpoenas were related to trading in Schering-Plough Corp. stock before its takeover by Merck & Co. in 2009, say people familiar with the matter. Schering-Plough stock rose 8% the trading day before the deal plan was announced and 14% the day of the announcement. Merck said it "has a long-standing practice of fully cooperating with any regulatory inquiries and has explicit policies prohibiting the sharing of confidential information about the company and its potential partners."

Transactions being focused on include MedImmune Inc.'s takeover by AstraZeneca Plc in 2007, the people say. MedImmune shares jumped 18% on Apr. 23, 2007, the day the deal was announced. A spokesman for AstraZeneca and its MedImmune unit declined to comment.

Investigators are also examining the role of Goldman bankers in trading in shares of Advanced Medical Optics Inc., which was taken over by Abbott Laboratories in 2009, according to the people familiar with the matter. Advanced Medical Optics's shares jumped 143% on Jan. 12, 2009, the day the deal was announced. Goldman advised MedImmune and Advanced Medical Optics on the deals.

A spokesman for AstraZeneca and its MedImmune unit declined to comment.

In subpoenas, the SEC has sought information about communications—related to Schering-Plough and other deals—with Ziff Brothers, Jana Partners LLC, TPG-Axon Capital Management, Prudential Financial Inc.'s Jennison Associates asset-management unit, UBS AG's UBS Financial Services Inc. unit, and Deutsche Bank AG, according to subpoenas and the people familiar with the matter.

Representatives of Ziff Brothers, Jana, TPG-Axon, Jennison, UBS and Deutsche Bank declined to comment.

Among hedge-fund managers whose trading in takeovers is a focus of the criminal probe is Todd Deutsch, a top Wall Street trader who left Galleon Group in 2008 to go out on his own, the people close to the situation say. A spokesman for Mr. Deutsch, who has specialized in health-care and technology stocks, declined to comment.

Prosecutors also are investigating whether some hedge-fund traders received inside information about Advanced Micro Devices Inc., which figured prominently in the government's insider-trading case last year against Galleon Group hedge fund founder Raj Rajaratnam and 22 other defendants.

Fourteen defendants have pleaded guilty in the Galleon case; Mr. Rajaratnam has pleaded not guilty and is expected to go to trial in early 2011.

Among those whose AMD transactions have been scrutinized is hedge-fund manager Richard Grodin. Mr. Grodin, who received a subpoena last fall, didn't return calls. An AMD spokesman declined to comment.



Feds Ready To File Charges in Huge Insider-Trading Probe

Federal authorities have been investigating a wide range of insider-trading charges for three years and are getting ready to file charges that "could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation," reports the Wall Street Journal before noting that the probes "could eclipse the impact on the financial industry of any previous such investigation." Although it's still not clear what charges will be filed, they could end up making public a number of ways insider trading has become a common practice among large groups of traders. The investigations seemed to take a particular focus on the pervasive practice of hiring "expert network" services that provide access to insiders and former insiders at companies for traders who want to obtain the scoop on an industry. Investigators are also looking into whether Goldman Sachs disclosed transactions, including health-care mergers, in a way that benefited certain investors. Some charges could be filed before the end of the year, the paper reports.
Mazars and Deutsche Bank could have ended this nightmare before it started.
They could still get him out of office.
But instead, they want mass death.
Don’t forget that.
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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Sat Nov 20, 2010 11:56 pm

.

Johann Hari catches up with Taibbi and Harper's, and that's a good thing.

Thanks to vanlose kid:

Johann Hari on 2. juli 2010

By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You're wrong. There's more. It turns out the most destructive of all their recent acts has barely been discussed at all. Here's the rest. This is the story of how some of the richest people in the world - Goldman, Deutsche Bank, the traders at Merrill Lynch, and more - have caused the starvation of some of the poorest people in the world, just so they could make a fatter profit.

It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 percent, maize by 90 percent, and rice by 320 percent. In a global jolt of hunger, 200 million people - mostly children - couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in over 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, called it "a silent mass murder", entirely due to "man-made actions."

Earlier this year I was in Ethiopia, one of the worst-hit countries, and people there remember the food crisis like they were hit by a tsunami. "It was very painful," a woman my age called Abeba Getaneh, told me. "My children stopped growing. I felt like battery acid had been poured into my stomach as I starved. I took my two daughters out of school and got into debt. If it had gone on much longer, I think my baby would have died."

Most of the explanations we were given at the time have turned out to be false. It didn't happen because supply fell: the International Grain Council says global production of wheat actually increased during that period, for example. It isn't because demand grew either. We were told the swelling Chinese and Indian middle classes were pushing it up, but as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand from those countries for them actually fell by 3 percent over this period.

There are some smaller explanations that account for some of the price rise, but not all. It's true the growing demand for biofuels was gobbling up much-needed agricultural land - but that was a gradual process that wouldn't explain a violent spike. It's true that oil prices increased, driving up the cost of growing and distributing food - but the evidence increasingly shows that wasn't the biggest factor.

To understand the biggest cause, you have to plough through some concepts that will make your head ache - but not half as much as they made the poor world's stomachs ache.

For over a century, farmers in wealthy countries have been able to engage in a process where they protect themselves against risk. Farmer Giles can agree in January to sell his crop to a trader in August at a fixed price. If he has a great summer and the global price is high, he'll lose some cash, but if there's a lousy summer or the price collapses, he'll do well from the deal. When this process was tightly regulated and only companies with a direct interest in the field could get involved, it worked well.

Then, through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into 'derivatives' that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born.

So Farmer Giles still agrees to sell his crop in advance to a trader for £10,000. But now, that contract can be sold on to financial speculators, who treat the contract itself as an object of potential wealth. Goldman Sachs can buy it and sell it on for £20,000 to Deutschebank, who sell it on for £30,000 to Merryl Lynch - and on, and on, provided they think the price can be jacked up, until it seems to bear almost no relationship to Farmer Giles' crop at all.

If this seems mystifying, it is. John Lanchester, in his superb guide to the world of finance, 'Whoops! Why Everybody Owes Everyone and No One Can Pay', explains: "Finance, like other forms of human behaviour, underwent a change in the twentieth century, a shift equivalent to the emergence of modernism in the arts - a break with common sense, a turn towards self-referentiality and abstraction and notions that couldn't be explained in workaday English."

Poetry found its break broke with straightforward representation of reality when T.S. Eliot wrote 'The Wasteland.' Finance found its Wasteland moment in the 1970s, when it began to be dominated by complex financial instruments that even the people selling them didn't fully understand. As Lanchester puts it: "With derivatives... there is a profound break between the language of finance and that of common sense."

So what has this got to do with the bread on Abiba's plate? How could this parallel universe of speculation affect her? Until deregulation, the price for food was set by the forces of supply and demand for food itself. (This was itself deeply imperfect: it left a billion people hungry.) But after deregulation, it was no longer just a market in food. It became, at the same time, a market in contracts that were speculating on theoretical food that would be grown in the future - and the speculators drove the price through the roof.

Here's how it happened. In 2006, financial speculators like Goldman's pulled out of the collapsing US real estate market, and they were looking for somewhere else to make their stash of cash swell. They started to buy massive amounts of derivatives based on food: they reckoned that food prices would stay steady or rise while the rest of the economy tanked. Suddenly, the world's frightened investors stampeded onto this ground and decided to buy, buy, buy.

So while the supply and demand of food stayed pretty much the same, the supply and demand for contracts based on food massively rose - which meant the all-rolled-into-one price for food on people's plates massively rose. The starvation began.

The food price was now being set by speculation, rather than by real food. The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US - which take up a small part of the business - 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely to inflate the price and sell it on. Even George Soros said this was "just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices." The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.

When I asked them to comment on the charge of causing mass hunger, Merrill Lynch's spokesman said: "Huh. I didn't know about that." He later emailed to say: "I am going to decline comment." Deutsche Bank also refused to comment. Goldman Sachs were a little more detailed in their response: they said "serious analyses... have concluded index funds did not cause a bubble in commodity futures prices", offering as evidence a single statement by the OECD.

How do we know this is wrong? As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period - but only a fraction as much as the ones affected by speculation. Her research shows this speculation was "the main cause" of the rise.

So it has come to this. The world's wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. This is what happens when you follow the claim that unregulated markets know best to the end of the line. The finance sector's Wasteland moment created a real wasteland. What does it say about our political and economic system that we can so casually inflict such misery, and barely even notice?

If we don't re-regulate, it is only a matter of time before this all happens again. How long would it last then? How many people would it kill next time? The moves to restore the pre-1990s rules on commodities trading have been stunningly sluggish. In the US, the House has passed some regulation, but there are fears the Senate - drenched in speculator-donations - may dilute it into meaninglessness. The EU is lagging far behind even this, while in Britain, where most of this "trade" takes place, advocacy groups are worried David Cameron's government will block reform entirely to please his own friends and donors in the City.

Only one force can stop another speculation-starvation-bubble from swelling, probably soon. The decent people in developed countries need to shout louder than the lobbyists from Goldman Sachs. In the UK, the World Development Movement is launching a week of action this summer as crucial decisions on this are taken: text WDM to 82055 for your marching orders. In the US, click here to find out what you can do. The last time I spoke to her, Abiba said: "We can't go through that another time. Please - do anything you can to make sure they never, never do that to us again."

[ http://johannhari.com/2010/07/02/how-go ... or-and-won ] [-- pdf's and further info at link.]

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Act now to protect financial reforms from being watered down by Wall Street lobbyists
(scroll down for updated posts)


Fat cat Wall Street bankers are pulling out all the stops to weaken the recently passed Dodd-Frank financial reform bill. Please act now (don’t wait, we need to send as many messages as possible before the end of the month) to help ensure that the relatively strong reforms passed by Congress are not watered down during the implementation process when regulatory agencies define the details of how the law will be enforced.

As this article explains, “More than 90% of the groups that appear in the meeting logs [with regulators] are banks, hedge funds and other big companies that rely on the financial industry…” They are asking for exceptions to the new rules for the same companies that caused the economic crash.

We cannot lose this fight! Click here now to send a letter to the Commodity Futures Trading Commission (CFTC) with key recommendations to make sure commodity markets are not unduly influenced by outside speculators.

Don’t wait – the CFTC needs to hear from you NOW! Wall Street is talking with them everyday.

Please send your friends and family to this page to send letters as well. We need to counterbalance the wave of Wall Street lobbying!...

[ http://stopgamblingonhunger.com/?p=1 ]



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To Justice my maker from on high did incline:
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The highest Wisdom and the first Love.

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

Postby JackRiddler » Mon Nov 22, 2010 5:27 pm

Current subjects:

- Ireland
- MERS/Foreclosures.
- Supposed imminent insider trading indictments by SEC. (Also, Cuomo inquiry on Rattner/NY pension fund)
- QE2, including Krugman/Hudson
- G20 slap on US - is this it?
- "Kill The Banks"
- Catfood commission
- Banking fraud commission report delayed?

Damn, that's a lot to cover.
We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

To Justice my maker from on high did incline:
I am by virtue of its might divine,
The highest Wisdom and the first Love.

TopSecret WallSt. Iraq & more
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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Tue Nov 23, 2010 1:49 am

"Teach them to think. Work against the government." – Wittgenstein.
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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Tue Nov 23, 2010 2:09 am

Hostages to the Bond Holders!

18/11/2010
EU and IMF market vultures circle over Ireland

Joe Higgins, Socialist Party (CWI in Ireland) MEP


’Everyone is really a hostage to the bond markets!’ This dramatic statement was made yesterday on Morning Ireland by Tony Connolly, the Europe Correspondent of Ireland’s national broadcaster, RTE.

‘At last,’ I thought, ‘a correspondent in the establishment media is speaking truth to power. Now let’s have the questions begged by this forthright statement.’ And the questions.

‘Isn’t mass hostage taking a grievous crime against humanity? Isn’t it official policy that you don’t pay the ransom demanded? That if you do pay, it encourages the criminals to go again, thus endangering ever greater numbers of innocent people who will become the victims of this criminality?’

Sadly, these questions didn’t follow, either on RTE or in any other section of the establishment media. Instead the questions were, ‘What can be done now to satisfy the hostage takers? How many billions must taxpayers deliver in crates to secure their release from the grip of their captors?’ For yes, they, the taxpayers, are the hostages?

The European Union’s political establishment endlessly boasts about ‘European values.’ - democracy, humanitarianism and care for the poor and vulnerable. What is the reality?

All weekend the bastions of European ‘democracy’ have been in full flight before the hostage takers. The EU Commission, the European Central Bank and elected governments of the Member States have been in panic mode to ‘calm the markets’, to ‘ satisfy the markets’, to ‘reassure the markets’, in other words, to abjectly surrender to the demands of the hostage takers.


Six months ago the hostages were the Greek people. Their government, in collusion with the EU establishment, paid the ransom demanded. No wonder the hostage takers moved confidently to their next victims – the Irish people. And all weekend the institutions of the European Union have been threatening and bullying the Irish government to give in to meet their demands, so they are guaranteed the booty they crave.

The argument for further capitulation is ‘to prevent the contagion spreading’ to Spain and Portugal. In other words sacrifice the Irish people in the hope that the Spanish and the Portuguese people might be spared. What blindness.

The blood appetites of these ravenous vampire squids - as Rolling Stone magazine dubbed one of the biggest players, Goldman Sachs - grow with drinking. Once they are guaranteed control of the lifeblood of the Irish workers and poor, their tentacles will move inexorably to wrap themselves around the workers and poor of the Iberian Peninsula.

Just how bloodthirsty the market speculators are was bluntly illustrated by Holger Schmieding, Chief Economist of the Berenberg Bank in Germany when he denounced in the newspaper Frankfurter Allegemeine the extent of the ransom being demanded by them for loans to Ireland. He said there was no justification for an interest rate of 9% on Irish sovereign bonds. ‘Ireland has better chances than Greece of pulling out of the swamp, a good 4% would be more like it.’

What this means is that the vampires in the markets – international banks, hedge funds and other assorted speculators – are able to suck billions of Euro from the Irish people in interest simply because they are allowed to do so. For interest on the Irish loans read super profits for the marketeers.

Commentators trace the current blackmailing activities of the market operators to comments by German Chancellor Angela Merkel when she tentatively suggested that the speculators should take some of the hit for the crisis as opposed to taxpayers taking it all.

The response of the speculators demonstrate who is really in power in Europe. They ruthlessly ratcheted up the pressure on the current weakest link, Ireland. The plan is to create total panic, hint that Spain and Portugal are next and secure a guarantee from the EU that their gambling bets will be guaranteed not to lose, and their profits assured.

The German Chancellor shook her fist in the direction of the market bullies but now they are squaring up to her, Frau Merkel is running away. And joining her in the race are the EU Commission, the ECB and the entire EU political establishment.

These advocates of European values are prepared to feed the workers and poor of Europe to the ravenous bloodsuckers in the markets who are faceless, unelected and unaccountable. First the Greeks and for the last two years the living standards and public services of the workers and poor of Ireland have been sacrificed to a chorus of approval from the European establishment. Yet the Irish government dares talk about the need to protect ‘our sovereignty’.

Working people are the greatest power in Europe. Once they realise that, they can brush away the financial parasites who prey on them and reorganise society in an entirely new way. It’s high time that campaign began.


[ http://www.socialistworld.net/doc/4677 ]


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

Postby JackRiddler » Tue Nov 23, 2010 10:48 pm

Thanks to Montag from other thread.

Citigroup Honored By Bank-Sponsored "Charity" For Heroic Achievements

Interesting little encounter with CEO Pandit...

http://www.newyorker.com/reporting/2010 ... 7QB8V0TTrM

EXCERPTS

John Cassidy wrote:What Good Is Wall Street?
by John Cassidy

November 29, 2010


A few months ago, I came across an announcement that Citigroup, the parent company of Citibank, was to be honored, along with its chief executive, Vikram Pandit, for “Advancing the Field of Asset Building in America.” This seemed akin to, say, saluting BP for services to the environment or praising Facebook for its commitment to privacy. During the past decade, Citi has become synonymous with financial misjudgment, reckless lending, and gargantuan losses: what might be termed asset denuding rather than asset building. In late 2008, the sprawling firm might well have collapsed but for a government bailout. Even today the U.S. taxpayer is Citigroup’s largest shareholder.

The award ceremony took place on September 23rd in Washington, D.C., where the Corporation for Enterprise Development, a not-for-profit organization dedicated to expanding economic opportunities for low-income families and communities, was holding its biennial conference. A ballroom at the Marriott Wardman Park was full of government officials, lawyers, tax experts, and community workers, two of whom were busy at my table lamenting the impact of budget cuts on financial-education programs in Vermont.

Pandit, a slight, bespectacled fifty-three-year-old native of Nagpur, in western India, was seated near the front of the room. Fred Goldberg, a former commissioner of the Internal Revenue Service who is now a partner at Skadden, Arps, introduced him to the crowd, pointing out that, over the years, Citi has taken many initiatives designed to encourage entrepreneurship and thrift in impoverished areas, setting up lending programs for mom-and-pop stores, for instance, and establishing savings accounts for the children of low-income families. “When the history is written, Citi will be singled out as one of the pioneers of the asset movement,” Goldberg said. “They have demonstrated the capacity, the vision, and the will.”

Pandit, who moved to the United States at sixteen, is rarely described as a communitarian. A former investment banker and hedge-fund manager, he sold his investment firm to Citigroup in 2007 for eight hundred million dollars, earning about a hundred and sixty-five million dollars for himself. Eight months later, after Citi announced billions of dollars in writeoffs, Pandit became the company’s new C.E.O. He oversaw the company’s near collapse in 2008 and its moderate recovery since.

Clearly, this wasn’t the occasion for Pandit to dwell on his career, or on the role that Citi’s irresponsible actions played in bringing on the subprime-mortgage crisis. (In early 2007, his predecessor, Charles Prince, was widely condemned for commenting, “As long as the music is playing, you’ve got to get up and dance.”) Instead, Pandit talked about how well-functioning banks are essential to any modern society, adding, “As President Obama has said, ultimately there is no dividing line between Wall Street and Main Street. We will rise or we will fall together as one nation.” In the past couple of years, he went on, Citi had rededicated itself to “responsible finance.” Before he and his colleagues approved any transaction, they now asked themselves three questions: Is it in the best interests of the customer? Is it systemically responsible? And does it create economic value? Pandit indicated that other financial firms were doing the same thing. “Banks have learned how to be banks again,” he said.

About an hour later, I spoke with Pandit in a sparsely furnished hotel room. Citi’s leaders—from Walter Wriston, in the nineteen-seventies, to John Reed, in the nineteen-eighties, and Sanford Weill, in the late nineteen-nineties—have tended to be formidable and forbidding. Pandit affects a down-to-earth demeanor. He offered me a cup of coffee and insisted that I sit on a comfortable upholstered chair while he perched on a cheap plastic one. I asked him if he saw any irony in Citi being commended for asset building. His eyes widened slightly. “Well,” he said, “the award we are receiving is for fifteen years of work. It was work that was pioneered by Citi to get more financial inclusion. And it’s part of a broader reform effort we are involved in under the heading of responsible banking.”

Since Pandit took over, this effort has involved selling or closing down some of Citi’s riskier trading businesses, including the hedge fund that he used to run; splitting off the company’s most foul-smelling assets into a separate entity, Citi Holdings; and cutting the pay of some senior executives. For 2009 and 2010, Pandit took an annual salary of one dollar and no bonus. (He didn’t, however, give back any of the money from the sale of his hedge fund.) “This is an apprenticeship industry,” he said to me. “People learn from the people above them, and they copy the actions of the people above them. If you start from the top by acting responsibly, people will see and learn.”



--and the headline of that article caused me to recall this 23-year-old thing:

http://www.nytimes.com/books/00/03/05/s ... orner.html

E.L. Doctorow in NYT column after the Black Monday crash wrote:
October 25, 1987

From the Writers' Corner: Pumping Out Success
By E. L. DOCTOROW

I have difficulty understanding what real contribution the stock market makes to the economy beyond the capital it provides companies upon their initial stock offerings. People bet against each other just as they do in a poker game. The money swirls around, changes hands, and eventually in the early morning hours of the history of the Republic somebody at the table realizes that when the sun comes up he will actually have to go out and go to work. As I write now the market has bounced back about halfway from its big one-day loss of 500 points. That should be no more comforting to a student of reality than the original loss.

I don't know anything about money, and I don't speculate in stock, but I have studied the language of the market and would characterize it as high-tech baroque, the kind of diction that is self-insulating and self-ennobling to its users, very often lyric and almost always metaphorical. It suggests something is there when in fact nothing is there at all. It suggests that as a nation we can go on making money without producing anything. As a literary man I know fantasy when I see it.

The stock market is America at its mythological heart, pumping out the idea of success apart from any consideration of the means of achieving it. Like drug use or sexual fetishism, it is a way of life that leads to a distortion of rational and sustaining human values. For example, men who use the market to gain control of a corporation, and who have no love for the business it is in or concern for its substantive nature, but only for its abstract achievements, its numbers, are ipso facto chief executive officers; we've got a lot of these numbers men around who destroy everything they touch, triumphantly showing profits while mulcting real capital - not only the quality of what is produced but the minds and spirits of the men and women who've done the work.

The stock market attracts quick-witted people who would do better for themselves and their country if they took their stake and actually went out and made something, or invented something, or devised something, or discovered something, that their fellow citizens could buy and use, or find beautiful or that would increase their lifespan. Stock speculation is like the game of chess - strategic and absorbing but finally a trivial use of time. We have the wherewithal to make everyone in this country self-sufficient. Why don't we do it? Surely that is a challenge more worthy of the brains of Wall Street than shoving billions of dollars in and out of computers every day.

E. L. Doctorow wrote ''Loon Lake'' and''Lives of the Poets.''
We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

To Justice my maker from on high did incline:
I am by virtue of its might divine,
The highest Wisdom and the first Love.

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

Postby JackRiddler » Tue Nov 23, 2010 11:07 pm

.

USA Today and CNBC explain why the old, sick, bankrupt and dying are highly irresponsible for not paying off their credit cards on the way to their own funeral.


Dying with debt: A dirty little retirement secret

By Cindy Perman, CNBC.com

Retired Americans are racking up credit-card debt like never before, be it for vacations or medical expenses, and a surprising number have no intention of paying it off before they die.

Nearly 40% of retired Americans said they've accumulated credit-card debt in their twilight years — and aren't worried about paying it off in their lifetime, according to a survey released by CESI Debt Solutions.

"At the end of the day, some people of a certain age say, 'It's too late in the game for me to do anything about it. I can't win. So I'm just going to stop playing the game,'" said Neil Ellington, executive vice president at CESI.

This may come as a surprise to younger generations who


-- are complete strangers to their own parents, and derive their view of their parents from a Tom Brokaw cliche --

thought their parents, the so-called Greatest Generation, were more responsible than youngsters raised in an era of easy money, a culture of credit.

But remember that this is the generation that frowns upon talking about money — and certainly would be embarrassed by any potential money problems. Add in a recession that slashed many retirement accounts in half and that leaves a generation sinking deeper into debt, with a diminishing timeframe to do anything about it — and too much pride to talk about it.

"Most people are too scared to talk about their financial problems, especially in their 'Golden Years,'" Ellington said. "Retirement is supposed to be all about enjoying the time you've been saving up for, and the reality is that many people couldn't save enough," he said.

And yet, that didn't stop them from retiring.


As, in most cases, their employers pushed them out the door.

More than half of those surveyed had saved less than $50,000 — and many of that group said they'd saved absolutely nothing — yet they retired anyway. Just 4% said they had delayed their retirement due to debt.

"They get to a certain age and they feel privileged," Ellington said. "They say, 'I'm going to go on that trip even though I have to put it on my credit card.'"

When you're young, you have time to pay off splurges like a trip to Hawaii, but for retirees, procrastination can lead to serious financial problems.


Unless, heathen, you don't believe your debt rolls over into the afterlife.

It's not just vacations and entertainment; one of the biggest sources of senior debt is medical expenses.


Very kind of you mention that. But surely that's a tiny minority compared to all the octagenarians maxing out the plastic so they can loll about Hawaii.

More than 75% of the seniors surveyed said they went into debt for medical or funeral expenses.

Part of the reason they're not paying off their debts is they don't know where to start and they're too embarrassed to ask for help. But the financial crisis may have also played a role.


No. Really? Shock me some more.

"Financial institutions haven't been perceived as the most friendly" and many people blame them for the recession, Ellington said. "They think, 'Hey, I'm not going to pay back these guys who ripped off America.'"

One of the biggest mistakes seniors make when it comes to credit cards is being late with a payment.

"That triggers a penalty APR that can exceed 30%, which can trap those seniors who can't pay their balances in full each month in a downward spiral of debt," said Ben Woolsey, the director of marketing and consumer research at CreditCards.com.


Mistake! Those stupid seniors!

Another mistake they make is relying on debt-settlement companies when they get into trouble.

"It's much better to contact card companies directly to work out repayment plans or work with a non-profit debt-counseling service rather than a fee-based settlement company," Woolsey said.

And while many retirees who are being quietly buried under a mound of debt may think they're protecting their kids by not burdening them with their financial problems, if they don't pay off their debts before they die, it will eventually become their children's burden.


Another mistake is forgetting, which our CNBC expert also forgot to mention, that there is such a thing as a bankruptcy court, where you can often fix that well in advance of your demise, in the hallowed tradition of both of the two most famous US businessmen of all time, Henry Ford and Walt Disney.

Whatever that parent owes will be deducted from his or her estate before that estate is divided among the children and other beneficiaries.

Imagine a scenario where the kids are bickering over who gets mom's house and, in the end, no one gets it because it had to be sold to pay off mom's credit-card debt.


So kids, talk to your parents and get them to a bankruptcy court soon as you can. (Admittedly conditions do vary from state to state, but New York and California are still pretty good.)

"That is a very realistic scenario," Ellington said. "A lot of kids don't find out how much their parents are struggling until they pass away."

Unfortunately, this debt denial isn't exclusive to seniors: Among those surveyed who had not yet retired, 25% said they were carrying debt of $5,000 or more — yet more than half said they didn't plan to delay retiring because of debt.


Because they all have a choice, right?

And more than one in four said they weren't worried about paying off their debt in their lifetime.

"People think it will all just work out somehow," said Samir Kothari, co-founder of BillShrink.com, a site that helps people lower their bills.


Whereas Kothari having died and been resurrected knows that the debt does, indeed, roll over into the afterlife.

"These things are not based on logic but on people being very optimistic about life — defying reality. I think that's what gets people into trouble."


Thinking you will die is very optimistic and defies reality. Trouble is when you don't pay off the 30% APR.

Now Cindy Perman is dying -- that is, dying to get to the part where she can advertise some of her sponsors!

Taking Charge of Your Debt

For those who carry a balance on their credit cards, BillShrink recommends PenFed's Promise Visa, which costs $20 as a one-time fee to join and charges annual percentage rates of 7% to 9%, or CapitalOne's Platinum Prestige card, a no-fee card with an annual-percentage rate of around 12%.

You might assume that most people have paid off their mortgage by the time they retire, but nearly a third of those surveyed said they were still carrying mortgage debt into retirement. BillShrink recommends the Wells Fargo Home Rebate card where your rewards dollars automatically go toward paying off your principal balance on your mortgage.

If you want to make sure your loved ones don't get into debt trouble, BillShrink suggests the Edward Jones Personal Card or Fidelity's Retirement Rewards Card, where your rewards dollars are directly deposited into an IRA, Roth IRA or 529 college-savings plan.

It's not just about choosing the right card, it's also important to lift the taboo on talking about money.


But keep the one on talking about bankruptcy court.

It's not only important to talk about money with a spouse or partner, but also with your parents and your kids — before it's too late.

"Talking about money to the important people in your life forces you to come clean about the life you are living and … the way you manage your money," said Katie Dunsworth, one of the "Smart Cookies," a group of friends who formed a money group and now teach others how to take control of their money.

© 2010 CNBC.com

http://www.usatoday.com/money/perfi/cre ... debt_N.htm

Copyright 2009 USA TODAY, a division of Gannett Co. Inc.
We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

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

Postby JackRiddler » Wed Nov 24, 2010 1:06 pm

S&P terror operation hits Ireland - Portugal next

All articles archived here with original links given for strictly non-commercial fair use in education and debate.

http://www.rte.ie/news/2010/1124/rating ... view=print

S&P says growth predictions 'too optimistic'

Updated: 16:11, Wednesday, 24 November 2010

S&P cut - Rating agency places Ireland on 'credit watch'

The Government is assuming growth assumptions that are too optimistic and Ireland's economy will struggle to grow at all over the next two years, ratings agency S&P said today.

S&P cut Ireland's rating to A from AA- last night and placed the country on negative watch, citing the likelihood the Government would need to fund further capital injections into the troubled banking system.

The Government is assuming real GDP will grow by an average of 2.75% in the years from 2011 to 2014, but S&P said nominal GDP would be 'close to flat' over the next two years.

'That is a different projection from the Government's underlying assumptions which they published today in the national recovery plan which is the four-year medium term fiscal plan,' said Frank Gill, director of S&P's sovereigns rating group EMEA.

Gill said two-thirds of negative credit watch actions have historically resulted in a further downgrade, on average about a month later.

Last night the credit rating agency lowered its rating on Ireland's debt, saying the country is set to borrow more than expected in order to put more money into the banks.

The agency said it was lowering its long-term sovereign credit rating on the Ireland to A from AA-. It also placed Ireland on what it calls 'credit watch', which means a further downgrade is possible.

The move followed Ireland's formal request for financial help from the EU and International Monetary Fund.

'The lower ratings reflect our view that the Irish government looks set to borrow over and above our previous projections to fund further bank capital injections into Ireland's troubled banking system,' it said.

S&P said the EU/IMF plan could bring confidence to the banks, but would not reduce levels of Government and private debt.

The agency said it expected little economic growth over the next two years, due to high levels of private debt, tough Budget measures and an uncertain outlook for the European economy.

S&P said the Irish banking system will take several years to downsize, and until that happens it is unlikely to be able to support economic growth.

It also expects little economic growth over the next two years, because of high private debt, tough Budget measures and an uncertain outlook for the European economy.

But it says that Ireland's economic flexibility will continue to prove highly attractive to foreign investors.

S&P's latest report came out close to midnight last night. Under EU law, rating agencies are required to give a minimum 12 hours notice to a country before a ratings action.

Given that timeframe, the report on Ireland was written before news emerged of the new capital ratios necessary for the banks.

For information on how consumer deposits in banks are protected, see the Financial Regulator's website here


http://www.cbc.ca/money/story/2010/11/2 ... mount.html

Ireland's budget cuts harshest in its history
Low business tax rate stays intact

Last Updated: Wednesday, November 24, 2010 | 10:35 AM ET Comments117Recommend32

CBC News

Ireland unveiled the harshest budget measures in its history Wednesday, a four-year plan to claw back 15 billion euros ($20.4 billion Cdn) using spending cuts and extra taxes.

Some 24,000 state employees could lose their jobs and the sales tax could soar to 23 per cent.
Workmen repair the office of Irish Transport Minister Noel Dempsey Tuesday after it was vandalized and painted with the words: 'traitors.' (Peter Morrison/Associated Press)

Altogether, the program would cut spending by about one-fifth and raise five billion euros ($6.8 billion Cdn) in extra taxes over the next four years.

It included welfare cuts of 2.8 billion euros ($3.8 billion Cdn) and income tax increases of 1.9 billion euros (2.6 billion Cdn).

Those moves are among the steps planned to narrow the budget deficit to three per cent of gross domestic product by the end of 2014.

The plan is a condition set by the EU and IMF for their aid in bailing out the country's troubled banking system.

“Those who can pay the most will pay most, but no group can be sheltered,” the government said in a report. “Postponing these measures will lead to great burdens in the future for those who can bear them.”

The minimum wage will fall by one euro to 7.65 euros ($10.39) and income tax bands will be widened so more lower-paid workers pay taxes, and middle-class workers can expect their annual taxes to rise more than 3,000 euros ($4,100).
Business tax not cut

Ireland did not increase its exceptionally low 12.5 per cent rate of tax on business profits, which is less than half the EU average and has helped to lure about 1,000 high-tech multinationals.

France, Germany, Austria and Britain all have called for Ireland to raise that rate, arguing it amounts to unfair competition at a time when other EU members will have to raise their own debt-fuelled borrowings to lend money to Ireland.

The announcement came the same day as the prime minister, Brian Cowen, said that its bailout loan could total 85 billion euros ($115 billion Cdn).

Some analysts said that figure would be much too small to save the country from eventual default.

Overnight, credit ratings agency Standard & Poor's lowered its long-term rating on Ireland's financial reliability by two notches to A from AA- and warned that there could be further downgrades.

Bank shares fell a third straight day Wednesday on the Irish Stock Exchange, as concerns grow that shareholders will be left with nothing if the government is forced to seize total control of the country's two dominant banks, Allied Irish and Bank of Ireland.

Bank of Ireland fell 27 per cent to a record low and Allied Irish fell 18 per cent to just off its record low.

Ireland has already nationalized three other banks left bankrupt by the 2008 collapse of the country's decade-long real estate boom.

Property prices have slumped by more than 50 per cent, hundreds of thousands of homeowners are trapped in homes no longer worth what they owe and the heads of many of Ireland's construction companies have declared bankruptcy or fled the country.
Budget to come Dec. 7

The plan aims to cut Ireland's 2014 deficit to three per cent of gross domestic product, the euro zone limit. This year's deficit is forecast to reach 32 per cent, a modern European record.

The austerity plan came ahead of the government's Dec. 7 publication of its 2011 budget, which is expected to call for tax hikes and the deepest spending cuts in the 88-year history of independent Ireland.

"The government is completely in denial about the amount of money they'll have to borrow," said Constantin Gurdgiev, a finance lecturer at Trinity College Dublin.

Cowen told lawmakers the 85 billion euros would represent an overdraft or credit line, not the total required immediately.

He also said the final terms were still subject to detailed negotiations with International Monetary Fund and European Commission experts who descended last week on Dublin to pore over the books of both the government and the banks.

Some financial analysts declared that Ireland — crippled both by a runaway bank-bailout program it can no longer afford and the worst deficit in Europe — will need far more cash to forestall national default in a few more years, when many government bonds and the developing EU-IMF loan come due for repayment.

"If we do take this loan, then two to three years down the road we will be forced to restructure our sovereign debt. We will be in a full default across the entire country," said Gurdgiev.
With files from The Associated Press


http://www.reuters.com/article/idUSTRE6AN3SZ20101124

Portugal will need EU/IMF bailout: Reuters poll
10:20am EST

By Andy Bruce

LONDON (Reuters) - Portugal will probably follow Greece and Ireland at some point in seeking bailout funds from the European Union, according to a majority of economists in a monthly Reuters poll.

Thirty-four out of the 50 analysts who answered an extra question in Reuters' monthly interest rates poll said Lisbon would be forced to seek outside financial help, with four also saying Spain would eventually have to be bailed out.

The poll did not specify when such bailouts might be required but financial markets are already turning their focus away from Ireland and speculating about other smaller euro zone countries that are facing grave fiscal challenges.

Portugal's bond yield spread over 10-year German government bonds -- a measure of the pressure markets are putting on Lisbon and the chances of default -- touched a euro-lifetime record of 481 basis points on Wednesday. Ireland's are around 645 basis points while Spain's have also risen to 260 bps.

The wider survey of 74 economists also showed the European Central Bank would keep interest rates on hold until the fourth quarter of next year, with some pushing back their rate hike predictions into 2012.

"The cost of funding has gone to prohibitive levels for Portugal -- it is impossible to think they could continue to roll over their debt next year if (market) interest rates remain where they are now," said Silvio Peruzzo, economist at RBS.

Countries like Greece, Ireland and now Portugal have seen a structural economic shift, he said, moving into a new equilibrium of poor economic growth and higher funding costs that ultimately requires outside help.

"The market's going to squeeze you like a lemon, basically," said Peruzzo.

Like Ireland and Greece, Portugal this year announced vast budget austerity measures aimed at convincing financial markets it can deal with its debt burden itself while issuing bonds at affordable rates.


EU President Herman Van Rompuy said on Tuesday he saw no need for Portgual to seek outside help, explaining that its circumstances were very different from Ireland's.

The EU and IMF offered Ireland an emergency funds deal on Sunday dependent on Dublin passing an austerity budget on time in December -- something by no means certain given a political fight that threatens to topple the current government.

DIVERGENT DILEMMA

While the debt crisis rages on in the euro area's periphery, the core German and French economies have been performing well, pointing to the case eventually for higher interest rates.

Business surveys released on Tuesday showed a strong resurgence in German and French private sector growth while the periphery stagnates, while Wednesday's closely-watched German Ifo business sentiment survey hit a record high in November.

"Pressure from core countries, particularly Germany, (for the ECB) to normalize conventional policy rates is going to build," said Ken Wattret from BNP Paribas.

ECB policymakers next week also have to decide how best to unwind the emergency liquidity measures it introduced to ease money market stresses.

"The exit from unconventional policy measures will continue, though probably more slowly given ongoing problems in sovereign debt markets," said Wattret.

Despite the debt market ructions, 27 out of 49 economists who answered the question said ECB staff would probably revise up their 2010 economic growth projections, while 19 said they would revise up forecasts for 2011 growth.

ECB staff in September projected economic growth of between 1.4 and 1.8 percent for 2010 and between 0.5 and 2.3 percent next year.

(Polling by Bangalore Polling Unit; Editing by Patrick Graham)

© Thomson Reuters 2010. All rights reserved.

Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.


http://www.reuters.com/article/idUSTRE6AN2JG20101124

Factbox:
[b]Anti-austerity protests around Europe[/b]

UPDATE 4-Portugal unions strike over austerity measures
9:55am EST
Portuguese unions strike as euro contagion threatens
8:43am EST
UPDATE 4-Greece pledges more cuts to meet bailout terms in 2011
Thu, Nov 18 2010
British student fee protest turns violent
Wed, Nov 10 2010
Student fee protest turns violent
Wed, Nov 10 2010

Wed Nov 24, 2010 8:18am EST

(Reuters) - Here are details of some of the major recent and forthcoming protests in European countries as Portugal's biggest unions staged their first joint general strike in more than 20 years on Wednesday.

* PORTUGAL:

November 24 - Portugal's biggest unions, the CGTP and the UGT, disrupted transport and halted services from healthcare to banking in protest against wage cuts and rising unemployment in the first joint general strike by the top two unions since 1988.

* BRITAIN:

Oct 3 - A 24-hour strike by workers on London's underground rail system disrupted much of the network. A strike on November 3 forced millions of commuters to struggle to work in their third walkout since September in a dispute over 800 planned job cuts. Another 24-hour strike is planned to start on November 28.

October 19 - Britain's trade unions took protests over spending cuts to parliament, promising to fight to protect public services. Unions have said they would first focus on a campaign of political pressure to fight cuts but agreed to take coordinated strike action if the government failed to change tack over austerity measures.

November 10 - About 55,000 students took part in a demonstration in London against the government plans to triple university tuition fees up to 9,000 pounds. A small group took part in protests at Millbank Tower, home to the Conservative Party headquarters, which saw windows smashed and missiles hurled at police. Around 66 people were arrested.

November 24 - Thousands of students and pupils staged walkouts and marches across Britain against government plans to almost triple tuition charges to up to 9,000 pounds ($14,500) a year.

* FRANCE:

-- The pension reform was signed into law by President Nicolas Sarkozy on November 9. The reform raised the minimum retirement age to 62 from 60 and the full retirement age to 67 from 65 to balance the loss-ridden pension system by 2018.

-- Fierce opposition by trade unions and the French public, who staged a sustained wave of protests over austerity measures, turned the reform into the biggest battle of Sarkozy's presidency. Unions mobilized nationwide street protests eight times since early September and rolling strikes at oil refineries caused serious fuel shortages at one stage, but the strikes are over and the turnout for protests slumped.

* GREECE:

May 4-5 - Public-sector workers staged a 48-hour nationwide strike. On May 5, a 50,000-strong protest in Athens led to violence in which demonstrators fought police and three people were killed in a petrol bomb attack on a bank.

June 29 - Police fired tear gas at rioters shouting "burn parliament" in Athens. About 12,000 people joined marches during a strike against raising the retirement age to 65 for all.

July 8 - About 12,000 people marched against pension reform in the unions' sixth 24-hour strike against austerity measures.

Oct 7 - Civil servants stopped work for 24 hours, protesting against EU/IMF prescribed austerity measures despite a waning turnout.

* ITALY:

June 12 - Thousands marched in Rome against cuts in funding to local authorities and a freeze on public sector salaries.

June 25 - The CGIL, Italy's biggest union with 6 million members, held rallies in Rome, Milan and other cities to try to force the government to redraft its austerity package.

October 16 - Thousands of Italians marched in Rome in a rally organized by the FIOM metalworkers union and backed by the CGIL to protest the bleak outlook for jobs and demand more rights for workers.

* SPAIN:

June 8 - The two largest unions said that up to 75 percent of 2.3 million public sector workers joined a strike against planned labor reforms.

June 22 - Prime Minister Jose Luis Rodriguez Zapatero's minority government won approval for its labor reform bill in parliament after opposition parties abstain. On June 30, underground rail workers walked off the job for a third day, affecting 2 million commuters.

Sept 29 - Spain's first general strike in eight years, called to oppose spending cuts, disrupted transport and factories but the impact was limited as most Spaniards appear to resign themselves to austerity to trim a massive deficit.

* CZECH REPUBLIC:

November 8 - The main Czech labor union called a one-day strike of public sector workers for December 8 to protest against the government's planned wage cuts and layoffs. Such strikes are rare in the central European country, whose center-right government has pledged to balance its budget by 2016.

(Writing by David Cutler, London Editorial Reference Unit;)

© Copyright 2010 Thomson Reuters
Last edited by JackRiddler on Wed Nov 24, 2010 9:28 pm, edited 1 time in total.
We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

To Justice my maker from on high did incline:
I am by virtue of its might divine,
The highest Wisdom and the first Love.

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

Postby JackRiddler » Wed Nov 24, 2010 1:38 pm

Proposition No. 5

Thanks to MacCruiskeen for this find! Thread:
viewtopic.php?f=8&t=30297

Published Apr 19 2010 by The Oil Drum, Archived Apr 19 2010

Excerpts from "Energy, Growth, and Sustainability: Five Propositions" by Steve Sorrel

by Gail Tverberg

Steve Sorrel, Senior Fellow, Sussex Energy Group, University of Sussex in the UK has recently published a 25 page paper called Energy, Growth and Sustainability which can be downloaded at this link. This post provides some excerpts from the paper, which summarize its findings. Readers are encouraged to read the entire paper.

According to the introduction to the paper:

This paper questions the conventional wisdom underlying climate policy and argues that some long-standing and fundamental questions regarding energy, growth, and sustainability need to be reopened. It does so by advancing the following propositions:

1. The rebound effects from energy efficiency improvements are significant and limit the potential for decoupling energy consumption from economic growth.

2. The contribution of energy to productivity improvements and economic growth has been greatly underestimated.

3. The pursuit of improved efficiency needs to be complemented by an ethic of ‘sufficiency’.

4. Sustainability is incompatible with continued economic growth in rich countries.

5. A zero-growth economy is incompatible with a debt-based monetary system.

These propositions run counter to conventional wisdom and highlight either blind spots or taboo subjects that deserve closer scrutiny. While accepting one proposition reinforces the case for accepting the next, the former is neither necessary nor sufficient for the latter.



[...]


Proposition # 5:

A zero-growth economy is incompatible with a debt-based monetary system

[i]An excerpt:

[...] A purely private enterprise system can only function if companies can obtain sufficient profits which in turn requires that the selling price of goods exceeds the costs of production. This means that the selling price must exceed the spending power that has been ‘cast into circulation’ by the production process. Hence, to ensure sufficient ‘aggregate demand’ to clear the market, additional spending power is required from some other source. In a purely private enterprise system, this normally derives from investment in new productive capacity which will increase the amount or quality of goods supplied, but only after some interval. Investment therefore serves the dual role of increasing productive capacity and creating additional demand to clear the market of whatever has already been produced (Hixson, 1991). Importantly, the investment cannot be financed from savings since the resulting increase in aggregate demand would be offset by a corresponding decrease in consumption spending.

Aggregate demand is commonly expressed as the product of the amount of money in circulation and the speed with which that money circulates through the economy. Hence increases in aggregate demand require increases in the money supply or the speed of circulation or both. Increases in the money supply, in turn, lead to increases in aggregate output, the average price of goods and services or both.

The key issue is how the increase in the money supply is brought about. Governments could (and should) create the new money interest-free and spend it in to circulation in much the same way as coins and notes are created. But instead, the bulk of the money supply is created by commercial banks who print credit entries into the bank accounts of their customers in the form of interest-bearing loans. This system of ‘fractional reserve banking’ has its origins in the essentially fraudulent practices of the early goldsmiths who made ‘loans’ of a far greater quantity of gold that they actually held in their vaults. This gave them substantial profits and allowed them to increase their claims on wealth (in the form of collateral), but also served the essential function of increasing purchasing power in a growing economy. This practice gradually evolved into modern banking, with central banks imposing minimum reserve requirements and acting as a lender-of-last-resort.

A crucial consequence of this system is that most of the money in circulation only exists because either businesses or individuals have gone into debt and are paying interest on their loans. While individual loans may be repaid, the debt in aggregate can never be repaid because this would remove virtually all the money from circulation. The health of the economy is therefore entirely dependent upon the continued willingness of businesses and consumers to take out loans for either investment or consumption. Any reduction in borrowing therefore threatens to tip economies into recession.

Individual loans need to be repaid with interest, but the money required to pay this interest was not created with the original loan. While banks will recycle a large part of the interest payments in the form of wages, dividends, and investments, a portion will be retained as bank capital to underpin further loans (Binswanger, 2009). Hence, the only way that individual borrowers can pay the interest on their loans, without at the same time reducing the money supply, is if they, or other borrowers, borrow at least as much as is being removed (Douthwaite, 2000). As a result, the amount of money in circulation needs to rise each year which means that the value of goods and services bought and sold must also rise, either through inflation or higher consumption (Douthwaite, 2000). In other words, both debt and GDP must grow - with the former growing faster than the latter.

Slow or negative growth will leave firms with lower profits and unused capacity, discouraging them from investing. Less investment will means fewer loans being taken out and thus less money entering into circulation to replace that being removed through interest payments. And less money in circulation will mean that there is less available for consumers to spend, which will exacerbate the economic slowdown and cause more bankruptcies and unemployment. By such processes, the monetary system creates a structural requirement for continued growth and increased consumption.


Summary

This paper has advanced five linked and controversial propositions regarding energy consumption, economic growth and sustainability. These run counter to conventional wisdom and highlight either blind spots or taboo subjects within orthodox theory. Each raises numerous theoretical and empirical questions that deserve both detailed and critical investigation. This will take time, but that commodity is becoming increasingly scarce.

A sustainable economy needs to have much higher levels of energy and resource efficiency than exist today and policies to encourage this have a crucial role to play. But for the reasons outlined above, this is unlikely to be sufficient to meet growing environmental constraints. Instead of encouraging further growth and greater consumption, the benefits of improved efficiency need to be increasingly channelled into low carbon energy supply and improved quality of life. Quite how this can be achieved remains far from clear since a credible ‘ecological macroeconomics’ has yet to be developed. Most importantly, a crucial element of that macroeconomics - namely monetary reform - remains almost entirely overlooked. It is hoped that this paper will at least stimulate some thinking in that direction.

http://www.energybulletin.net/node/52507
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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Wed Nov 24, 2010 2:21 pm

VERY BIG


http://www.chinadaily.com.cn/china/2010 ... 599087.htm

Foreign and Military Affairs

China, Russia quit dollar
By Su Qiang and Li Xiaokun (China Daily)
Updated: 2010-11-24 08:02


Image
Premier Wen Jiabao shakes hands with his Russian counterpart Vladimir Putin on a visit to St. Petersburg on Tuesday.ALEXEY DRUZHININ / AFP



St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.


Related readings:
Russia, China pledge to save the tiger
New power bridge across Russia-China border completed
China, Russia reach consensus on energy cooperation
Highlights of Chinese premier's activities in Russia



Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.

"That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries," he said.

Putin made his remarks after a meeting with Wen. They also officiated at a signing ceremony for 12 documents, including energy cooperation.

The documents covered cooperation on aviation, railroad construction, customs, protecting intellectual property, culture and a joint communiqu. Details of the documents have yet to be released.

Putin said one of the pacts between the two countries is about the purchase of two nuclear reactors from Russia by China's Tianwan nuclear power plant, the most advanced nuclear power complex in China.

Putin has called for boosting sales of natural resources - Russia's main export - to China, but price has proven to be a sticking point.

Russian Deputy Prime Minister Igor Sechin, who holds sway over Russia's energy sector, said following a meeting with Chinese representatives that Moscow and Beijing are unlikely to agree on the price of Russian gas supplies to China before the middle of next year.

Russia is looking for China to pay prices similar to those Russian gas giant Gazprom charges its European customers, but Beijing wants a discount. The two sides were about $100 per 1,000 cubic meters apart, according to Chinese officials last week.

Wen's trip follows Russian President Dmitry Medvedev's three-day visit to China in September, during which he and President Hu Jintao launched a cross-border pipeline linking the world's biggest energy producer with the largest energy consumer.

Wen said at the press conference that the partnership between Beijing and Moscow has "reached an unprecedented level" and pledged the two countries will "never become each other's enemy".

Over the past year, "our strategic cooperative partnership endured strenuous tests and reached an unprecedented level," Wen said, adding the two nations are now more confident and determined to defend their mutual interests.

"China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power," he said.

"The modernization of China will not affect other countries' interests, while a solid and strong Sino-Russian relationship is in line with the fundamental interests of both countries."

Wen said Beijing is willing to boost cooperation with Moscow in Northeast Asia, Central Asia and the Asia-Pacific region, as well as in major international organizations and on mechanisms in pursuit of a "fair and reasonable new order" in international politics and the economy.

Sun Zhuangzhi, a senior researcher in Central Asian studies at the Chinese Academy of Social Sciences, said the new mode of trade settlement between China and Russia follows a global trend after the financial crisis exposed the faults of a dollar-dominated world financial system.

Pang Zhongying, who specializes in international politics at Renmin University of China, said the proposal is not challenging the dollar, but aimed at avoiding the risks the dollar represents.

Wen arrived in the northern Russian city on Monday evening for a regular meeting between Chinese and Russian heads of government.

He left St. Petersburg for Moscow late on Tuesday and is set to meet with Russian President Dmitry Medvedev on Wednesday.

Agencies and Zhou Wa contributed to this story.
Copyright By chinadaily.com.cn. All rights reserved
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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Wed Nov 24, 2010 5:51 pm

Montag wrote:Zerohedge isn't worried too much (I'm not sure who he is, but I see a lot of people citing him, haha):

Much Ado About Nothing: China, Russia Drop Dollar In Bilateral Trade
http://www.zerohedge.com/article/much-a ... eral-trade

Somehow the China Daily story we pointed out yesterday morning that China and Russia are expanding their trading terms and will conduct all bilateral trade exclusively in local currencies, thus dropping the dollar as an intermediary, is only today starting to make the rounds. Alas, this story is nothing but more posturing for several reasons: Bloomberg notes: "China and Russia will drop the U.S. dollar for bilateral trade and use their own currencies for settlement, China Daily reported, citing Chinese Premier Wen Jiabao and Russian Prime Minister Vladimir Putin." Oddly enough this is an identical overture from June 2009: yet very little has happened in terms of actual dollar lock out since then. Note the following story from June 17, 2009: "The leaders of Russia and China agreed to expand use of the ruble and yuan in bilateral trade to lessen dependence on the U.S. dollar a day after they took part in the first summit of the so-called BRIC countries." And judging by the market's reaction, and the dollar resurgence overnight it appears that everyone has read through this as just posturing. Furthermore, keep in mind that Russia was not even a top 10 trading counterparty of China in 2010. If China does the same with any of its top 10 partners then there may be a reason to worry. For now, China is merely testing the waters, and has absolutely no intent on isolating the US, nor making its nearly $3 trillion US FX reserves lose a double digit percentage of their value overnight.



No one wants to do this overnight if they can avoid it. Most "events" are markers or culminations of ongoing developments. I think this is a big signal. It goes beyond what they announced last year. The timing comes as the US crisis looks to intensify, after the G20 slap-down for US dollar policy, and with a round of economy-crushing austerity imminent in the new Congress. As to the volume of trade involved, may I remind that Russia is the number one oil producer, and China the future number one oil consumer? And oh look, they share the world's second-longest border. Obviously there is much room for growth between them. The news splash of two giants coming to a small agreement is significant in a context where more and more of these bilateral currency arrangements are announced.

As the US crisis manifests again, there is incentive to set up an anti-dollar, and it will be if the powers involved can understand their mutual interest and work it out politically. Here's a scenario: BRIC and EU can establish a weighted basket of their own currencies fixed relative to each other (or floating within ranges a la Bretton Woods) while floating freely against the US dollar and commodities. A transaction system would allow for trade accounts among participating nations to be settled via this "Dollar for International Trade." Those accumulating DITs could redeem them in any of the participating currencies. Once the oil producers agreed to also price in DITs (as they already do in euros or other currencies under bilateral agreements), it would be more solid than the dollar. To start it off, participants could convert half of their central bank and sovereign fund holdings of dollars into DITs and use these for trade amongst them. To do that, understand, they do not sell their dollar reserves, which would be like a war. Rather, it's a bookkeeping conversion: One-half of dollar holdings are redenominated as DITs and allowed to float against the US dollar. If the Chinese holdings of 3 trillion US dollars are converted to half dollars and half DITs, they are no longer endangered, because a fall in DIT is a rise in the dollar, and vice-versa. Rather, they have 1.5 trillion DITs to go invest and spend in BRIC and EU, which is already the majority of the world's economy.

That was a scenario, true, and a presidents' meeting of Russia and China is a ways away from an agreement between EU and all of BRIC. But crisis accelerates moves that otherwise take decades of planning. The elements for the above are actually all in place. What you're going to see regardless is more and more of these bilateral and regional agreements doing away with the middleman, or in this case, the middle currency.

As for this being bad, presumably meaning for the US: Whether "we" are headed in a downward spiral is up to us. It's up to us to reject the politics of fear, permanent war, austerity and concentration of all wealth in the fewest and most corrupt hands. A better future is among our choices - and among other things the end of the US dollar as world currency and related to that the end of US empire are vital elements of a better future for the American people, assuming that also involves a much larger transformation.

.
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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Wed Nov 24, 2010 9:19 pm

Crime Blotter.

http://www.theglobeandmail.com/report-o ... 756/print/

Image

Executive charged in U.S. hedge fund probe
GRANT MCCOOL, Matthew Goldstein
New York— Reuters
Published Wednesday, Nov. 24, 2010 12:29PM EST
Last updated Wednesday, Nov. 24, 2010 4:53PM EST

An executive of a California research firm was arrested on Wednesday on securities fraud and conspiracy charges after U.S. prosecutors accused him of arranging for inside information to be leaked to hedge funds, the latest development in an investigation of the industry.

The arrest of Don Ching Trang Chu of Primary Global Research stems from wiretaps and the co-operation of Richard Choo-Beng Lee, a hedge fund manager who pleaded guilty last year as part of the insider-trading prosecution of Galleon Group hedge fund founder Raj Rajaratnam and 22 other traders, lawyers and executives.

Mr. Chu, 56, also known as Don Chu, was accused in a criminal complaint in U.S. District Court in New York of introducing hedge funds to corporate executives who gave them insider trading information.

The government scored a victory in the Galleon case on Wednesday when a judge ruled that telephone conversations of Mr. Rajaratnam that were secretly recorded by the FBI were admissible as evidence at his trial. Mr. Rajaratnam has pleaded not guilty to charges of conspiracy and securities fraud and is scheduled to go on trial on Jan. 17.

Prosecutors have described the Galleon case as the biggest investigation of insider trading at hedge funds in the United States. The investigation has widened to include subpoenas of several funds with billions of dollars under management.

In subpoenas served on SAC Capital Advisors and other hedge funds and mutual funds, authorities have asked for information about so-called soft dollar deals, an arrangement in which a hedge fund client executes trades through a designated brokerage that has some relationship with an expert networking firm such as Primary Global.

Expert networking firms take fees to match up hedge funds with experts in particular industries such as medicine, engineering and technology.

The investigation widened on Monday when FBI agents used search warrants to raid three hedge funds in Connecticut and Massachusetts.

Mr. Lee once worked for SAC Capital. There is nothing in Wednesday’s complaint accusing SAC Capital of any wrongdoing. A spokesman for SAC declined to comment.

Authorities are looking at funds established by former associates of SAC founder Steven Cohen, according to lawyers and people familiar with the investigation.

A spokesman for Primary Global Research said in a statement that “based upon recent events, PGR has severed its relationship with Mr. Chu.”

The statement said Mr. Chu served as the firm’s liaison in Taiwan and that he had been with PGR for seven years.

Mr. Chu, of Somerset, N.J., made a brief appearance before a magistrate judge in New York and was released on a bond of $1-million (U.S.). Mr. Chu was not asked to enter a plea to the charges and both of his lawyers declined to comment.

The office of Manhattan federal prosecutor Preet Bharara said Mr. Chu had been scheduled to leave the United States for Taiwan on Nov. 28. His lawyers said Mr. Chu had planned the trip to visit family. The court was told that Mr. Chu had surrendered his U.S. passport and agreed to surrender an expired passport issued by Taiwan.

Prosecutors said Mr. Chu had arranged for hedge funds to receive confidential information on companies including Atheros Communications Inc., Broadcom Corp. and Sierra Wireless Inc.

Sierra Wireless, based in Richmond, B.C., said in a statement it intended to co-operate with prosecutors in the case.

Telephone calls between Mr. Lee and Mr. Chu from July 14 to Aug. 28 of last year were recorded by the FBI, according to the criminal complaint. It does not identify the brokerage that hedge funds were directed to by Primary Global.

However, Primary Global owns a San Francisco-based brokerage called PGR Securities. A company representative declined to comment. The brokerage’s registration statement does not show any previous regulatory infractions.

Prosecutors claim that in 2008 and 2009, Mr. Lee struck up a relationship with Mr. Chu while Mr. Lee was working at Spherix Capital, a now-closed San Francisco fund that Mr. Lee managed with Ali Far.

Mr. Lee and Mr. Far have pleaded guilty to trading on inside information in the Galleon case and are co-operating witnesses.

Mr. Far worked at Galleon for many years. Mr. Lee is a former trader and analyst at SAC.

As part of his co-operation agreement, Mr. Lee agreed to tell prosecutors of any insider trading he engaged in at SAC, which he left more than six years ago.

Mr. Lee’s lawyer, Jeff Bornstein, said: “My client is and continues to be co-operating to the best of his ability with the U.S. attorney and the FBI. Beyond that I don’t have a comment on the specifics.”

© 2010 CTVglobemedia Publishing Inc. All Rights Reserved.



http://www.bbc.co.uk/news/business-11832653?print=true

Business

24 November 2010 Last updated at 10:52 ET
UBS targeted in $2bn lawsuit over Madoff Ponzi scheme

Swiss bank UBS is being sued for over $2bn (£1.3bn) amid claims it concealed the Ponzi scheme of fraudster Bernard Madoff that lost clients billions.

Irving Picard - who is acting as trustee for Madoff's victims - lodged the lawsuit against UBS and various associates at a US bankruptcy court.

The bank, which has made no comment on the charges, earned fees for promoting and administering Madoff's funds.

Madoff was sentenced to 150 years in prison for the scheme exposed in 2008.

The fraudster claimed high and stable returns for his investment fund over many years, attracting large investments from wealthy individuals.

In reality, the fund was worth only a fraction of what he claimed, and Madoff relied on "feeder funds" - such as those managed by UBS - in order to attract new investor money that could then be used to pay out the bogus return to existing investors.
'Aura of legitimacy'

"Madoff's scheme could not have been accomplished unless UBS had agreed not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did," said David Sheehan, a lawyer acting on behalf of the trustee, Mr Picard.

The lawsuit claims UBS and its co-defendents made approximately $80m in fees over several years from their work with Madoff.

UBS "chose to enable Madoff's fraud for their own gain", claimed the trustee, and the bank's involvement gave the fraudster "an aura of legitimacy".

The Swiss bank is not alone in being accused of complicity in the fraud.

Mr Picard has filed at least 19 other lawsuits against other feeder funds, and is seeking to recover $17.5bn in total, including the money claimed from UBS.

BBC © MMX The BBC is not responsible for the content of external sites. Read more.



http://www.nytimes.com/2010/11/19/busin ... nted=print

November 19, 2010
Financier Is Sued by Cuomo in Fraud Case
By LOUISE STORY and PETER LATTMAN

Steven L. Rattner, the financier who oversaw the federal rescue of the auto industry, was formally accused by New York’s attorney general, Andrew M. Cuomo, on Thursday of engaging in a kickback scheme involving the state’s pension system.

On the same day that Mr. Rattner was being celebrated on Wall Street for his role in turning around General Motors, he found himself embroiled in a bitter public battle with Mr. Cuomo, he settled similar charges with the Securities and Exchange Commission and he escalated a separate legal fight against his former investment firm.

Even as a resurgent G.M. went public again in a huge stock sale on Thursday, Mr. Cuomo sought to banish Mr. Rattner for life from the securities business in New York.

The civil fraud claims, which Mr. Rattner fiercely contested, came within moments of news that the financier had settled a related dispute with the S.E.C. In that case, Mr. Rattner accepted a two-year ban from certain Wall Street businesses and, without admitting or denying wrongdoing, agreed to disgorge $3.2 million related to the accusations and pay a penalty of $3 million.

Mr. Cuomo, New York’s Democratic governor-elect, is seeking stiffer penalties, including $26 million. While other major figures in the pension investigation had already resolved their cases and Mr. Rattner had been expected to reach a settlement with the S.E.C., the charges from the attorney general’s office amounted to a public showdown between Mr. Cuomo and a man who is not only a prominent figure on Wall Street but also a powerful Democratic fund-raiser.

Indeed, the dispute between Mr. Rattner and Mr. Cuomo has devolved in recent months into hostilities. After months of negotiations, neither camp has much to lose by digging in. Unless Mr. Rattner reaches a settlement with Mr. Cuomo — an outcome that, for now, seems unlikely — Mr. Cuomo will hand off the investigation to a new attorney general when he becomes governor in January.

Mr. Rattner lashed out at Mr. Cuomo’s office on Thursday and accused the attorney general of political grandstanding. He also took aim at the private investment company he helped found, the Quadrangle Group, which settled with Mr. Cuomo and the S.E.C. several months ago.

“I will not be bullied,” Mr. Rattner said. “This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity.” He added, “I intend to clear my name by defending myself vigorously against this politically motivated lawsuit.”

Within hours, Mr. Cuomo’s office fired back, saying that Mr. Rattner had stonewalled its investigation. “Mr. Rattner now has a lot to say as he spins his friends in the press, but when he was questioned under oath about his pension fund dealings, he was much less talkative, taking the Fifth and refusing to answer questions 68 different times,” said Richard Bamberger, a spokesman for Mr. Cuomo.

Mr. Rattner’s lawyers went on the offensive on Thursday with a flurry of court filings contesting Mr. Cuomo’s allegations. In one document related to a dispute with Quadrangle, Mr. Rattner’s lawyers wrote: “The time for the scapegoating of Mr. Rattner is over.”

The lawyers also sought to gain access to internal communications in Mr. Cuomo’s office related to the case because Mr. Rattner wanted to know who there was leaking information to the news media.

Mr. Rattner’s dispute with Mr. Cuomo began several years ago, when the attorney general’s office began examining how investment firms won business from the pension fund and whether they had improper dealings with officials.

Investments from New York’s fund not only yielded management fees — $5 million in Quadrangle’s case — but also added a luster that helped attract other investors. Pay-to-play practices have since been banned by some pension funds.

The dispute between Mr. Rattner and Mr. Cuomo escalated in 2009, after Mr. Rattner became a leader of the federal auto task force helping to restructure G.M. and Chrysler. For Mr. Rattner, it was a triumphant return to Washington, where he worked early in his career as a reporter for The New York Times.


By the time Mr. Rattner was named to the auto task force, Mr. Cuomo’s office had already granted Mr. Rattner immunity from criminal charges related to the kickbacks because his e-mails did not indicate that he had played a personal role in the matter.

After Mr. Rattner left Quadrangle, the firm investigated its involvement with the state pension fund and discovered e-mails that had not been turned over to Mr. Cuomo’s office. Those became central to Mr. Cuomo’s case against Mr. Rattner; the attorney general’s office was furious that the messages had not been originally provided.

Tensions flared in the spring when Quadrangle settled with the S.E.C. and Mr. Cuomo’s office, without Mr. Rattner’s involvement. Quadrangle asked Mr. Rattner to pay more than half of the $12 million it settled for, with the rest paid by current and former partners at the firm. Mr. Rattner earned upwards of $190 million, including earnings from investments he made, during his nine years at the firm, according to a person with knowledge of his pay.

Davidson Goldin, a spokesman for Mr. Rattner, said Mr. Rattner believed his share of the $12 million should be lower and reflect his stake in Quadrangle.

In August, Mr. Cuomo’s office issued a subpoena for Mr. Rattner to be questioned at a deposition. “Given that the attorney general made repeated threats of prosecution, of course Mr. Rattner’s lawyers advised him not to speak,” in response to any of 68 questions he was asked, said Mr. Goldin, his spokesman. Mr. Goldin was referring to possible perjury charges related to the early discrepancies in accounts about Mr. Rattner’s involvement in the case. Mr. Cuomo has not filed perjury or other criminal charges.

Despite his legal troubles, Mr. Rattner has maintained a busy schedule of news media appearances. His wife, Maureen White, has also remained active in fund-raising circles. Ms. White donated $5,000 early this year to Eric T. Schneiderman, who will replace Mr. Cuomo as attorney general. Her donation, however, was made before Mr. Schneiderman announced that he was running for that office. A spokesman for Mr. Schneiderman declined to discuss the case but said he would be tough as attorney general.

Mr. Cuomo’s office notified Mr. Rattner’s lawyers on Wednesday night that it planned to file suit on Thursday, according to two people briefed on the phone call. When a CNBC reporter asked Mr. Rattner on Thursday if the investigations would take away any of the shine of G.M.’s success, Mr. Rattner demurred.

“Well, others will have to judge that,” he replied. “What I would say for me, it was the most painful episode I’ve ever been through in my professional life.”


Nicholas Confessore contributed reporting.


This article has been revised to reflect the following correction:

Correction: November 20, 2010


An article on Friday about New York State’s lawsuit against the financier Steven L. Rattner incorrectly characterized the payment that Mr. Rattner will make to the Securities and Exchange Commission to settle allegations about his role in New York’s state pension kickback case. Mr. Rattner agreed to disgorge $3.2 million related to the accusations and pay a penalty of $3 million; he will not pay a $6.2 million fine.



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News Analysis: Amid Bailout Dangers, Spain Poses Biggest Risk
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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Wed Nov 24, 2010 9:24 pm

http://www.google.com/hostednews/afp/ar ... 8d0117.121


General strike cripples debt-hit Portugal

By Thomas Cabral (AFP) – 17 hours ago

LISBON — Portugal ground to a halt Wednesday as unions staged the country's first general strike in more than two decades to protest spending cuts that the government says are vital to avoid financial disaster.

Both public and private sector workers joined the one-day strike, which follows similar stoppages in other troubled euro economies such as Greece and France, as governments are forced into unpopular cost-cutting programmes.

The transport sector was crippled by the stoppage with no flights taking off or landing at any airport. More than three-quarters of train services were cancelled and 60 percent of bus services were also scrapped, operators said.

Lisbon's metro system was also closed for the day while the capital's ferries stayed in their docking berths.

The strike, the first time since 1988 that private and public sector workers have come together, also hit banks, media and petrol deliveries.

Union leaders said the strike had had a "massive impact" on the private sector, in particular on the auto sector with less than 10 percent of the workforce turning up at Volkswagen's Autoeuropa plant near the northern city of Porto.

"The mobilisation of workers is enormous," said Manuel Carvalho da Silva, the head of the major CGTP syndicate.

The strike began on the stroke of midnight with union members setting up picket lines across the country, including outside Lisbon's international airport.

Scuffles broke out between police and union activists during a picket outside a sorting office in Lisbon, although no charges were filed.

The unions' anger has been stoked by government plans for a drastic round of spending cuts and tax rises, worth some five billion euros (6.85 billion dollars) which are currently being pushed through parlaiment.

The package of cuts is intended to reduce the deficit from 7.3 percent of GDP to 4.6 percent next year in a bid to quell growing international unease over the state of its finances.

Portugal's main opposition party said on Tuesday it would not block the government's 2011 budget, paving the way for its adoption on Friday.

But the unions say the cuts are intolerable, particularly from a Socialist government led by Prime Minister Jose Socrates.

"It is unacceptable that workers are making all the sacrifices," said unionist Joao Proenca.

"We cannot accept that the first, second and third priority of Portugal is the deficit," said Proenca, referring to the country's 10.9 percent unemployment rate, an all-time high.

Portuguese bond yields rose to 6.636 percent from 6.523 percent on Tuesday amid growing concerns over the country's deficit-reduction efforts.

The government on Monday announced that spending had actually increased by 2.8 percent through October on a yearly comparison, raising the deficit to 11.9 billion euros.

Socrates has rejected suggestions that his country is next in line after Ireland to receive an European Union bailout, saying that Portugal did not need financial aid.

The situation is even affecting the country's priesthood.

The archbishop of Braga has called on priests in his northern diocese to donate a month's wages to people suffering in the crisis.

"We live in extremely serious times. We cannot ignore this and must show a concrete love for the people," Archbishop Jorge Ortega said in a letter to priests.

Copyright © 2010 AFP. All rights reserved. More »
Last edited by JackRiddler on Wed Nov 24, 2010 9:27 pm, edited 1 time in total.
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