Tag: Wall Street

I have 4 articles for you this morning!

First, 3 regarding free speech, consistency, and hypocrisy in the wake of the Charlie Hebdo killings:

These are the biggest hypocrites celebrating free speech today in Paris

But as Daniel Wickham points out (as amplified by the journalist Glenn Greenwald), many of the 40 leaders attending the rally in Paris don’t have the best record of defending the principle of free speech so viciously attacked earlier this week:

Jump!

Cross posted from The Stars Hollow Gazette

Attorney General Eric Holder claimed that the banks were too big and too hard to prosecute for the “massive criminal securities fraud” behind the high risk mortgage securities that led up to the 2008 financial collapse. Instead the Justice Department opted for civil settlements with large fines with no admission of any wrong doing.

Actually, it wasn’t. It appears that the Obama administration’s chief law enforcement officer chose not to prosecute despite all the evidence at his disposal. In his return to Rolling Stones, investigative journalist Matt Taibbi introduces Alayne Fleischmann, JPMorgan Chase’s $9 billion nightmare:

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'” [..]

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.

Thanks to a confidentiality agreement, she’s kept her mouth shut since then. “My closest family and friends don’t know what I’ve been living with,” she says. “Even my brother will only find out for the first time when he sees this interview.”

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her.

She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. “Every time I had a chance to talk, something always got in the way,” Fleischmann says.

This past year she watched as Holder’s Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called “statements of facts,” which were conveniently devoid of anything like actual facts.

Matt and Ms. Fleischmann joined Democracy Now‘s hosts Amy Goodman and Juan González to discuss ow JPMorgan wrecked the economy and avoided prosecution.

From wikipedia-

Lennon originally titled the song “Maharishi”, but changed the title to “Sexy Sadie” at George Harrison’s request. Lennon was disillusioned after Maharishi Mahesh Yogi had allegedly made a sexual advance at one of the female members attending the course the Maharishi was teaching at his ashram.

Leaders or spiritual gurus making fools of everyone….

There are entire political establishments that routinely screw the people they claim to be advocates for.

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.  

(Truth be told, friends, we’re really not that disorganized; the fact that we’ve managed to put this series together and stick with it disabuses the notion that we’re disorganized, right?  Also, I wish I had a censored night once in awhile, but alas, this is something my producers made me say.)

This Day in History

Cross posted from The Stars Hollow Gazette

In an interview with economist Richard Wolff, Bill Moyers discusses discuss the fight for economic justice, including a fair minimum wage and how to tame capitalism run wild.

“We have this disparity getting wider and wider between those for whom capitalism continues to deliver the goods by all means, [and] a growing majority in this society facing harder and harder times,” Wolff tells Bill. “And that’s what provokes some of us to say it’s a systemic problem.”

Cross posted from The Stars Hollow Gazette

Why is the financial world freaking out over the possibility of former New York State Governor Eliot Spitzer becoming New York City’s Comptroller? Professor of Political Science at the University of Massachusetts Thomas Ferguson laid it out in his article republished at naked capitalism:

Who, when the Justice Department, Congress, and the Securities and Exchange Commission all defaulted in the wake of a tidal wave of financial frauds, creatively used New York State’s Martin Act to go where they wouldn’t and subpoena emails and corporate records of the malefactors of great wealth, winning convictions and big settlements.

Who in 2005, as New York State Attorney General, actually sued AIG instead of thinking up ways to hand it billions of dollars of taxpayers’ money.

Who brought a suit over the Gilded Age compensation package Stock Exchange head Richard Grasso had been awarded by his chums on the board.

And who in 2013 with business as usual once again the order of the day, is promising to review how the Comptroller’s Office, which controls New York City’s vast pension funds, does business with Wall Street and corporate America. With his incisive questions about Wall Street’s fee structures and criticism of the passive stances most pension funds take to skyrocketing executive compensation in the companies they invest in, Eliot Spitzer is the last person on earth Wall Street wants to see in that slot.

The chorus of outrage from Wall Street pundits and media over Spitzer’s return after embarrassing exit from the governor’s office after his out of state tryst with prostitutes (omg, he had the nerve to use his own money) and, according to a New York Times article, his out of control ego and combative, go-it-alone style.

Prof. Ferguson dismisses the hyperbole as a “smoke screen” for the real objections that Spitzer would stop Wall Street from using the city’s pension funds to make profits for the 1% while cheating the workers out of a lifetime of investment. Spitzer as an activist for the 99% scares the crap out of them.

The compelling case for activism in the Comptroller’s Office by somebody of Spitzer’s intelligence, knowledge, and experience rests mostly on quite different grounds. As Spitzer has observed, most pension funds put up little or no resistance to management’s soaring claims for compensation. These come massively at the expense of investors as a group; pushing back would benefit investors in general and, obviously, beneficiaries of City pension funds. At a time when the air is filled with sometimes dubious claims of pension fund inadequacies, increasing returns to the City pension funds would be a real triumph. You can be sure, however, that the threat to ever-escalating executive salaries fuels a lot of the animus to Spitzer within much of big business and finance.

No less important, though, is another reality to which Spitzer has alluded to from time to time. Wall Street overcharges for financial advice and pension funds often find it expedient to tolerate this, rather than shop vigorously around. Studies of pension funds returns routinely note the frequency with which high fees accompany relatively shoddy performance, often over many years. It is high time attention was focused on this situation; Spitzer would likely do that.

And the Office of the Comptroller has subpoena power, that’s a lot of power:

First, part of the comptroller’s job is ensuring that private sector employees working on city projects are paid the prevailing wage. If an employer, for example a construction company, is reported to be paying workers below-market rates, the comptroller can open an investigation and subpoena payroll records if the employer won’t cooperate.

In addition, the comptroller has the authority to review all legal settlements entered into by the city’s corporation counsel. Last fiscal year, the city paid $486 million to settle lawsuits filed against its agencies or employees, the comptroller’s office said in a report last month. The settlements were for cases such as malpractice at city hospitals or police misconduct.

That’s just for starters.

I’ve often said the left is essentially dead–or moribund (I love the word). Certainly the old left looks dead very much like Polly Parrot in the Dead Parrot sketch.

But there’s something simmering below the surface that those of us who are veterans of the old left can take heart in–massive numbers of people are unhappy and disillusioned. They lack any framework for their disillusion other than things like buying guns but I think we have a chance to step into an opening.

There are two issues only a new revivified left can work with: 1) massive criminality of all the major actors in the political economy; and 2) the lying mainstream media. That’s the only issues we need. We don’t need to talk about the debt or the deficit or “entitlements” or imperialism or any of that. Yes those are issues that are important, more or less, but not as important as the fact our society is run, at the top, by criminals. And it is not that this is hard to determine. The evidence is overwhelming and we don’t even have to go to the assassinations of the sixties or 9/11 or anything like that. No just the simple facts as they are The government and the media allowed massive fraud to occur in both Democratic and Republican administrations.

In 2006 one third of all lending were “liar’s loans” meaning that these loans were deliberately created out of falsified income statements and property appraisals. Washington Mutual, Andrew Cuomo (when he was AG of NY) found out, had created a blacklist of honest appraisers that were never to be used. Regulators, the FBI and many others consistently warned that there would be a financial crisis because of massive fraud going on. I knew it, though I’m hardly that well-connected I just happened to know a Wall Street guy who tole me in 2005 that the whole thing was going to blow in the next few years because Wall Street was creating fraudulent instruments.

In the S & L crisis there were 1000 FBI agents investigating criminals at the top and there were over 1000 convictions even though many particularly high profile suspects got away due to political influence. But in the more recent crisis that was 70 times greater only 120 agents were assigned to mortgage fraud!!!! On the surface this looks like massive criminality and I can assure you that a clear case with loads of evidence beyond anything that I’m indicating here can prove that the basis of our current political economy is naked criminality in almost every sphere, to be sure, but particularly prevalent in the financial industry. I’m also confident that there is no possible counter-argument.

The fact this is so obvious has to automatically indict the mainstream media from Fox News to PBS for covering up and refusing to cover the truth about the financial crisis which, as I said, is stunningly obvious. It will then quickly be seen how corrupt the media is. Not the reporters who do what they can but who have editors that continually and systematically discourage them to pursue stories that might make powerful people look bad (other than celebs, but they are toys of powerful people so they don’t count). When people understand that, for the most part, they are being fed a pile of turds everyday that they then have to pretend to eat–man, no wonder people are stressed and the U.S. leads the world in mental illness.

All we have to do is hammer away at those two issues ONLY and then the unassailable wall around the imperial court will break. We don’t have to talk about income inequality just criminality–not about class-struggle just criminality–not about the environment just criminality. We don’t have to argue with Tea Baggers about anything–just say that crime is a bad thing dontcha think? No argument. Sure a few will say, but it was Acorn that caused the crash, gov’t bureaucrats who wanted to put people in homes–you say sure AND those banks made a lot of money falsifying information, corrupting appraisers, originators. There’s no absence of proof and no possible counter-argument to the central fact that our problem is not Republicans or Democrats or private enterprise of the government our problem is criminal gangs have taken over–over and out.

Cross posted from The Stars Hollow Gazette

Journalist Steve Brill wrote brilliant cover story for Time magazine, Bitter Pill: Why Medical Bills Are Killing Us, which lays out the reason US health care costs are out of control, just follow the money. He explains how the hospitals and their executives are scamming the system through billing to maximize profits. As an examples of the absurd charges, for a 15 cent Tylenol tablet hospitals charge as much as $1.50, $6 for a marker used to mark the body before surgery and as much as $77 for each of four boxes of gauze used. In hospital a patient can be charges as much as $450 for an electrocardiogram that in a doctor’s office would only cost $150.

This doesn’t happen in other countries where costs are controlled by government set rates for what both private and public plans can charge for various procedures. The problem here in the US isn’t that we don’t have single payer, it’s that the government doesn’t regulate the prices that health-care providers can charge. But in an article at the Washington Post by Sarah Kliff for the Wonkblog writes that we don’t need to look to other countries:

Maryland has succeeded in controlling costs for about four decades now. It is the only state that sets rates for hospitals, with the state government deciding what every Maryland hospital can charge for a given procedure..

That system started in 1976, when Maryland had hospital costs 26 percent higher than the rest of the the country. In 2008, the average cost for a hospital admission in Maryland was down to national levels. “From 1997 through 2008, Maryland hospitals experienced the lowest cumulative growth in cost per adjusted admission of any state in the nation,” the state concluded in a 2010 report (pdf).

Here is a brief summery of the article and what you should know about why health care in this country costs so much (and it isn’t malpractice lawsuits, as some would have you believe):

Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer-Medicare-from even trying to negotiate the price of drugs.

Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

Cancer treatment – at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson – has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

Recently, Mr Brill sat down with Hardball guest host Michael Smerconish  and Neera Tanden from Center for American Progress to discuss how the rising health care costs are killing Americans:

   And it actually that bears on the conversation we’re having, because a chunk of that money is paid by Medicare. Medicare is I point out in the article is very efficient at most things. It buys health care really efficiently, which is a great irony, because it’s supposed to be the big government of bureaucracy.

   Where Medicare is not efficient is where Congress, because of lobbyists have handcuffed Medicare. Medicare can’t negotiate what it pays for any kind of drugs. It can’t negotiate what it pays for wheelchairs, diabetes testing equipment. And if Congress took those handcuffs off of Medicare, you could get about half of the spending cuts that we’re sitting around here talking about.

Raising the eligibility age and/or applying a means test as ways to reduce the cost of Medicare will not fix the rising costs. Only government regulation of the hospitals and the ability of Medicare to negotiate pricing for procedures, equipment and supplies will cut the cost for the patient and the tax payers. Take the profit motive out of saving lives and keeping Americans healthy.

Cross posted from The Stars Hollow Gazette

In an a cover story  for Time magazine, journalist Steven Brill spent seven months examining how medical bills are what is really killing us: the extraordinary costs of health care is a “bitter pill”  that nickels and dimes even the insured patient for every pill, band-aid and blanket:

Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high? [..]

· Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer-Medicare-from even trying to negotiate the price of drugs.

· Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

· Cancer treatment-at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson-has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

· Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

Mr. Brill was a guest on MSNBC’s “The Last Word“, he discussed with guest host Ezra Klein the costs of health care, who’s to blame and how we can fix the US broken health care system:

Cross posted from The Stars Hollow Gazette

In a recent on air essay on his PBS program, Moyers & Company and an opinion piece at Huffington Post, Bill Moyers took a look at the revolving door of special interest groups and their lobbyists, how they win and the rest of us lose.

We’ve seen how Washington insiders write the rules of politics and the economy to protect powerful special interests but now, as we enter the holiday season, and a month or so after the election, we’re getting a refresher course in just how that inside game is played, gifts and all. In this round, Santa doesn’t come down the chimney — he simply squeezes his jolly old self through the revolving door. [..]

The last time we looked, 34 former staff members of Senator Baucus, whose finance committee has life and death power over the industry’s wish list, were registered lobbyists, more than a third of them working on health care issues in the private sector. And the revolving door spins ever faster after a big election like the one we had last month, as score of officials, elected representatives and their staffs vacate their offices after the ballots are counted. Many of them head for K Street and the highest bidder. [..]

Reforms were passed that are supposed to slow down the revolving door, increase transparency and limit the contact ex-officials and officeholders can have with their former colleagues. But those rules and regulations have loopholes big enough for Santa and his sleigh to drive through, reindeer included. The market keeps growing for insiders poised to make a killing when they leave government to help their new bosses get what they want from government. That’s the great thing about the revolving door: one good turn deserves another.

The door continues to spin with the latest exodus from Commodity Futures Trading Commission (CFTC). DSWright at FDL‘s News Desk has the latest:

Step right up and Spin the Revolving Door – and what is your prize? Why, a nice job on Wall Street working for the people you used to regulate – you wrote in the loopholes, now you get the cash for exploiting them! [..]

Many Americans understood that the Dodd-Frank “reforms” were mostly worthless. They will not prevent another crisis or another massive TARP type bailout as the law did absolutely nothing about Too Big To Fail banks (which have actually gotten bigger).

This should not have been a surprise given one of the law’s namesakes, Senator Chris Dodd, was caught red handed getting special loans from perhaps the worst offender in irresponsible mortgage origination – Countrywide. Senator Dodd barely survived an ethics investigation from his similarly compromised colleagues.

But what critics may not have understood was that Dodd-Frank was apparently a jobs program for politically connected staffers.

The last count of lobbyists, as of October, directly involved in advising the president, a member of his cabinet or campaign staff is 55.