Tag: Wall Street

In a Bill Moyers interview with Simon Johnson, former chief economist of the IMF and now a Professor of Global Economics and Management at MIT’s Sloan School of Management, Johnson expressed a pessimistic view of those empowered to lead us out of this economic crisis.  

Jane Hamsher at FDL explains:

Johnson isn’t for “nationalization” per se, he’s for “scaled up FDIC intervention,” breaking down the “oligarchy” by pitting one faction against the other.  Based on his analysis of who is holding the financial keys at the moment, he fundamentally believes that the people in charge of determining the outcome of the situation have a vested interest in not standing up to the banking interests and doing the things that need to be done.  And that is not a comforting thought.

No.  It’s not a comforting thought.  There’s no comfort in knowing that Captain Geithner seems intent upon ramming into the same iceberg Captain Paulson rammed into, there’s no comfort in knowing only the elites will get to board the lifeboats, there’s no comfort in being trapped below decks in steerage class while all of this iceberg ramming is going on.  

The world is full of people paying for the economic fraud of unelected, rapacious and sociopathic dictators.

Latin America and Africa tend to be the hardest hit by this phenomena.

This is what happens:

Mr. Tin Pot Dictator runs up an incredible debt buying gold cadillacs and weapons with which to dominate and exploit the people of his country. The people suffer miserably, the Dictator lives a lavish lifestyle above the law until he is deposed in some manner, then the banks move in and enslave the people and control the sociopolitical landscape by leveraging that illegitimate debt against the progress of the population, innocent victims of authoritarian rule.

It seems to me that there’s been a quickening of this trend, and it’s taken place right here in America – naked right in the open. Bankers have muscled out the middle man, the Tin Pot Dictator, and have become the Dictators themselves.

On the eve of a new and historic Presidency, one I have yearned for and supported, I find myself increasingly unable to savor our victory.  We are still at war, still killing innocent people for bogus reasons, and there is every reason to believe that we are not about to stop our militaristic bullying of our neighbors on this planet.  Otherwise we would not be escalating that idiotic and immoral war in Afghanistan – or opening a billion dollar embassy bigger then the Vatican in Baghdad, along with fourteen ‘enduring’ bases across the country.  There are too many indications that not nearly enough has changed.  We are still firmly entrenched in the idiotic war business, people are still being tortured, there is too much money still being stolen and too many lies are still being told.

Last Friday, I wrote about how 10% of $700 billion bailout is to cover Wall Street banker pay and bonuses.

At least one member of Congress is awake. None other than Rep. Dennis Kucinich has called for an investigation. According to The Guardian —

Kucinich, an outspoken Democratic opponent of the US taxpayer’s $700bn bank bail-out, said his staff would immediately begin asking Wall Street firms set to benefit what plans they had to distribute bonuses.

“When Congress placed restrictions on excessive executive pay, it had no intention of permitting business as usual with respect to bonus structures,” he said. “It would add insult to injury to ask taxpayers not only to bail out a firm, but to pay for bonuses as well. The Guardian’s report necessitates an immediate inquiry.”

Why in a time when banks are being bailed out by the American taxpayers, do they still believe they should award bonuses to their executives and other employees?  

Cross-posted from Progressive-Independence.org.

According to Reuters, the wealthy are starting to feel the sting of what they’ve done to the American and global economies.

http://www.reuters.com/article…

Wealthy Americans like Morrison and Goldberg were relatively insulated from the global financial crisis until just a few months ago. Now, falling stock markets are slashing their investments, and some are even starting to panic.

“I’m a little angry that I didn’t trust my own gut, my own instinct to stay on the sidelines and wait,” said Goldberg, 57, an executive coach who lives in Washington. “I’m angry at myself.”

Of course, reaction to the financial crisis differs from person to person and even from husband to wife.

“My husband’s approach has been ‘Oh my God, I’ve got to sell, we’re mature people and there goes our retirement’,” said Morrison, 59. Morrison, who lives in Alexandria, Virginia, and runs a PR firm, has about $2 million in investable assets.

Why, they’re even having second thoughts about buying those extra yachts and private jets!

http://www.reuters.com/article…

GENEVA (Reuters) – The financial crisis is forcing the wealthy to rethink splurges like fancy cars and yachts, private bankers say, threatening to crimp the free-wheeling luxury goods spending bonanza of previous years.

Luxury brands had signaled they were weathering the global financial crisis better than others, with many saying they expected emerging markets in Asia and China to offset flat or declining sales elsewhere.

But investors have been looking for signs the credit crunch and dismal economic outlook are biting into purchases of luxury goods, and bankers to the wealthy say even the super-rich have begun to rein in spending as they fret over their shrinking portfolios.

It’s even gotten so commodities are going out of fashion!  See?

http://www.reuters.com/article…

GENEVA (Reuters) – Dabbling in commodities markets has fallen out of favor with the wealthy who are abandoning the sector in droves as energy and metal prices slide, private bankers say.

Commodity prices, which have surged for most of the past six years, have imploded over the last three months. Estimates by Citigroup and Barclays Capital put third-quarter losses in the asset class at between $50 billion and $60 billion.

“Commodities were in fashion at the beginning of the year and clients reduced their exposure mid-year,” said Bruno Lebre, head of investment at SG Private Banking, adding he had been advising clients to limit energy and metals exposure in their portfolios.

Rich people everywhere are starting to get skittish, and are now starting to heed the old adage, “don’t put all your eggs in one basket.”

http://www.reuters.com/article…

GENEVA (Reuters) – The world’s wealthiest are opening multiple accounts to help spread risk through the global financial crisis, their bankers say.

“Clients who had accounts with three institutions now have six accounts. Clients who had six accounts now have 12 accounts,” Gerard Aquilina, vice chairman of Barclays Wealth (BARC.L: Quote, Profile, Research, Stock Buzz), told the Reuters Wealth Management Summit in Geneva.

Aquilina said he even had one client with 21 accounts with 50 million British pounds ($88 million) in each of them.

You know the Second Great Depression is having a huge impact when even the ridiculously wealthy get nervous.  We’re supposed to take notice of this, because it’s not as though anyone else has been adversely affected by the financial meltdown, right?

Now she has the time to Grieve for her Son, Killed in Iraq only a short time ago, Her Reality!!

I was just sent the following:

One tenth of the $700 billion bailout to be footed by U.S. taxpayers is projected to go to the pay and bonuses of Wall Street bankers. The same captains of finance who sent the world into a financial meltdown are now going to be rewarded handsomely.

The Guardian has found that the Top Wall Street bankers are to receive $70 billion in pay deals.

Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40.4bn), a substantial proportion of which is expected to be paid in bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash…

Staff at six banks including Goldman Sachs and Citigroup will pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted widespread criticism. The government cash has been poured in on the condition that excessive executive pay will be curbed.

This past April, newspapers were a twitter with the discovery made by two Cambridge University researchers: John Coates, a former trading floor manager on Wall Street, and Joe Herbert, a neuroscientist. In their abstract, they wrote:

We found that a trader’s morning testosterone level predicts his day’s profitability. We also found that a trader’s cortisol rises with both the variance of his trading results and the volatility of the market. Our results suggest that higher testosterone may contribute to economic return, whereas cortisol is increased by risk.

Their research findings were published in the Proceedings of the National Academy of Sciences, Endogenous steroids and financial risk taking on a London trading floor.

So, as The Guardian observed Testosterone is the secret ingredient for making (and losing) lots of money. “Money doesn’t make the world go round: it’s testosterone. The more that traders have, the richer they’ll become – up to a point.”

While normal Americans were watching the Dodgers-Cubs game on Wednesday night, the Senate passed the bailout bill on a 74-25 vote.  The House was unable to pass the bill on Monday, but the Senate fixed the glaring problems of that bill and it breezed through with bipartisan support.  How did the Senate fix and pass the bailout bill?  They added a provision to repeal an excise tax on wooden arrows designed for children.  Now why didn’t the House think of that?

Senators attached a provision repealing a 39-cent excise tax on wooden arrows designed for children to an historic $700 billion financial-markets rescue that passed tonight by a vote of 74-25. The provision, originally proposed by Oregon senators Ron Wyden and Gordon Smith, will save manufacturers such as Rose City Archery in Myrtle Point, Oregon, about $200,000 a year.

(snip)

Representatives for Wyden, a Democrat, and Smith, a Republican, didn’t immediately return calls.

This wasn’t enough for Senator Wyden (D), who still voted against the bailout.  But it apparently swayed Senator Smith (R), who voted in favor of the bailout.