WHY IS THE STOCK MARKET
Goldman Sachs Gave Obama More Than A Million in Campaign
It Was A Very Good Investment. Under
Treasury Secretary Paulson, the ex-Goldman CEO
gave Goldman Sachs $10B in bailout funds.
Goldman paid $6.5B in bonuses to their executives in 2008.
Obama continues the incestuous
relationship at the taxpayer expense.
OBAMA PLANS TO GIVE HUNDREDS OF BILLIONS MORE TO
ADVISORS ARE ALL TO CLOSE TO THESE BANKS
solution to the failure of the American Banking system - keep all the banksters
office and give them hundreds of billions. This will not fix what ails America
or the world.
problem is not that banks aren't lending. It's that too many people are broke.
political power) is too concentrated. One percent of Americans own 50% of the
his Treatsury Secretary (Geithner) and his Chief Economic Advisor (Summers) all
banks aren't lending because their banance sheets are loaded with "bad assets"
the market has temporarily grossly underpriced. The truth is the banks and
make loans because they realize too many people are too broke to trust that they
able to pay back their loans.
believes that "once the banks start lending, the economy will recover.
reality: American consumers still have debt coming out of
their ears, and they'll be working it
for years. House prices are still falling. Retirement savings have been
crushed. Americans need
increase their savings rate from today's 5% (a vast improvement from the 0% rate of two
the 10% long-term average. Consumers don't have room to take on more debt, even if
are willing to give it to them."
DEBT AS A PERCENT OF GROSS NATIONAL PRODUCT
Wall Street insider tips and excessive pay offend my Mid-Western values. When I worked
on Wall Street 40 years
ago, I saw first hand how partners in a major brokerage got inside information
which they did not
share with their public clients. (An obscure shipping company named Natomas had
an interest in a major
new oil discovery in Indonesia. This I learned from a telegram that came into
the Research Department
of Harris, Upham at 120 Broadway, New York - later bought out my Smith
Barney. I was a
trainee stock broker at the headquarters of this stock brokerage. Naively, I
I would see how
important information would be disseminated in the firm. That did not take place
for several months.
First, the partners, I was told, bought the stock between 22 and 25. Only
it had doubled, did I
see a public report on the stock for customers of Harris Upham. The partners
then sold some of their
shares and helped provide the stock to meet the newly created demand.
It was a very
speculative market. The stock had tripled by the time the broader public heard
about Natomas in
Time magazine on 8/29/1969. This is the experience that made me see how
insiders buy long
before the full story is released to the public.
When I worked at Harris, Upham & Co I saw a lot of other things that made me distrust
Wall Street. I
saw the filing cabinets, one after another, of numbered Swiss Bank bank accounts
in the margin
department. The margin clerk laughed about how little the wealthy owners of
stocks had to pay in
taxes if they used Swiss Bank accounts. I also watched the Mafia rig
and manipulate a series
of low priced stocks. A customer worked for the Mafia (he was a pimp
celebrities) and bought 7 straight stocks through me that tripled or quadrupled.
I also saw the good-old
boys' trade stock tips. They got rich because of who they knew not what
they created or
accomplished professionally. They had every reason to obsequiously ingratiate
themselves with the
well-connected. They had no reason to think independently or critically
about the workings of
I say these things so, you will understand how it offends me when I see that Obama's
kow-tow to big Wall Street interests all the while Obama pretends to
represent Main Street.
Last night on C-Span I saw Geithner refuse to promise to publish the
number (not the names)
of employees receiving more than a million dollars a year in pay
and bonuses from banks
getting public TARP funds. House Rep. Sherman had asked him to
provide Congress this
information in House Banking and Finance Committee hearings.
Treasury Secretary, demurred and refused to say "Yes". He said he would
have to think about
the request. (Who says Congress runs the the show even though it
appropriates the money
for these bailouts? So much for responsible government under Obama!)
Readers may be interested in my take on what has gone so terribly
September 21, 2008 Monopolistic
Finance Capitalism and Wall Street Are Dangerously Out of Control.
September 19, 2008 Bush Corruption
and Cronyism Reach Dizzying Heights in Paulson's Plan
for US Tax
Payers To Spend A Trillion Dollars Buying Worthless
Private US Banks. Someone Must Say "NO"!
September 18, 2008 The Greenspan
"De-Regulation" of Banking, by Abolishing the
1933, Has Led Directly to the 2007-2008 Bear
Both Political Parties Are To Blame.
Neither Admits This To
Geithner Defended The Bank
Executives within The Administration.
Last month the NY
Times reported that it was Geithner who "resisted those (in Obama's
new Administration) who
wanted to dictate how banks would spend their rescue money. And he
prevailed over top
administration aides who wanted to replace bank executives and wipe out
shareholders at institutions
receiving aid... Abandoning any pretense about limiting the moral
hazards at companies that
made foolhardy investments, (Geithner's new TARP-II) plan ...
will not require shareholders
of companies receiving significant assistance to lose most or all
of their investment."
TARP II - Taxpayers Get The Downside Again
and Hedge Funds Get The Upside
proposed public-private buying of the banks' toxic assets and bad loans with an
FDIC guarantees of 80% of the loan
is actually a plan that Goldman Sachs developed. They
have convinced Geithner that the
bad loans and mortgages are actually worth something.
That is not what banks who have have
conducted some detailed investigations of a sampling
of these debts. At most, they may
be worth only 5 cents on the dollar. If this is true and such
assets are sold to public-private
consortiums for more than that, the taxpayer will stand to lose
a lot of money. In effect,
Geithner is betting the farm, our farm, on an idea that Goldman Sachs
is promoting, so that it can get still
more management fees from the Government. ( Source. )
Geithner and Goldman Sachs
Goldman Sachs not only received TARP payments directly from the Government, it
100% of the money AIG owed it
when the government took AIG over. Goldman was AIG's biggest
creditor. AIG had
insured the packaged mortgages that Goldman distributed and sold against
were the infamous Credit Default Swops. Andrew Cuomo, NY Attorney General,
on March 26th subpoened AIG
credit default swap data to see whether Goldman Sachs and others
were being improperly
compensated by the taxpayers. These CDS were at the "heart of the
"The question is whether the contracts are
being wound down properly and
efficiently or whether they have
become a vehicle for funneling billions in taxpayer dollars to
capitalize banks all over the
world. . Nobel Prize-winning economist Joseph Stiglitz also has said
AIGs settlement of
credit-default swaps following its bailout by the U.S. government looks
like grand larceny. It is highly significant that it is
Andrew Cuomo who is looking after
the American public's
interests in this, because Geithner and Obama have aided and abbetted
the theft of taxpayer
Reserve had previously refused to provide
Congress with the banks
who benefitted from the bailout of AIG. Many of these are foreign
The second bailout of AIG in February also sent large amounts indirectly to Goldman
Goldman received 100% of what
it was owed. No one asked it to take a smaller amount considering
AIG's bankruptcy. How
was this arranged? The NY Times reported that Lloyd Blankfein, now the
chief executive of Goldman,
was the only Wall Street executive at a meeting at the New York
Federal Reserve on Sept. 15
to discuss the A.I.G. bailout. A Goldman spokesman said Mr. Blankfein
was not there to represent
his firm's interests, but rather that Goldman "engaged" the issue
because of the implications
to the entire system. The fallout from the AIG bankruptcy was never
publicly explained or
detailed. ( Source.
Treasury Secretary Geithner's chief of
staff is Mark Patterson, a
former lobbyist for Goldman Sachs.
At Goldman Sachs, he worked against a
bill that would have let shareholders voice symbolic disapproval
for excessive executive pay and bonuses.
The bill was pushed by Obama. It had another provision.
It would have been non-binding. Source. Still Goldman
Sachs opposed it. Its CEO, Lloyd Blankfein,
who got $90 million in 2007, argued that
shareholders were not "sophisticated" enough to understand
the complex issue of why such high
compensation was necessary.
There has been a revolving door between
government and Goldman Sachs. Henry Paulson, ex-CEO
at Goldman Sachs was Bush's Treasury
Secretary as the stock market crashed. He had been assistant
to John Erlichman, who was convicted of
conspiracy, obstruction of justice and perjury. Gerald Corrigan,
former vice chairman of the FOMC, was
hired by Goldman. The firm has encouraged senior staffers
to seek government posts. Bring
home the bacon. The foxes will run the hen-house under Obama.
Geithner mishandled Bear Stearns and let Lehman (a competitor to Goldman) Fail.
Goldman Sachs was primary beneficiary of Bailout.
Goldman controls the NY Fed. The charirman works for Goldman. There is no
public interest representation.
"Goldman Sachs is the most powerful investment bank in the
world. It owns the US Treasury...
Rubin, Paulson and now Geithner. GS also
has its own "inside man" in the White House watching
and advising Obama in the form of
Lawrence Summers. Goldman Sachs is like an octopus. Don't be
surprised when BB leaves the Fed, someone
from GS will take over the helm of the Fed.GS already
owns the Canadian and Italian central
banks (all are headed by former GS employees).GS also owns
a signiciant shareholding in the NYSE
(via backdoor listing prior to its listing).I suspect John Thain
will be returning to GS in one form or
Goldman Sachs' derivatives trader Gary
Gensler was Obama's choice to head the Commodity
Futures Trading Commission.
According to Senator Sanders, "Gensler worked with
Sen. Phil Gramm
and Alan Greenspan to exempt credit
default swaps from regulation, which led to the collapse of A.I.G.
and has resulted in the largest taxpayer
bailout in U.S. history. He supported Gramm-Leach-Bliley,
which allowed banks like Citigroup to
become too big to fail. He worked to deregulate electronic
energy trading, which led to the downfall
of Enron and the spike in energy prices. Why would Obama
pick someone who was "part of the greed, recklessness and ilegal behavior" to run
Bailout Cost Heads Towards $5 TRILLION
Guarding The Henhouse: Ex-Goldman Sachs Exec To Oversee Bailout
Rep. Maxine Waters (DEM-CA) asked
Treasury Secretary Timothy Geithner about his connections
to Goldman Sachs at a House banking
hearing Tuesday morning. Goldman Sachs is known to have
received bailout money given to A.I.G.
complained that Goldman Sachs is going to
one of the five firms managing the public-private program to buy toxic bank assets.
OBAMA'S FIRST PRIORITY EMERGING CLEARLY:
PROTECT HIS WALL STREET CAMPAIGN CONTRIBUTORS
At What Cost Has Obama Boosted The Stock Market?
In the last two weeks, as the market has rallied, Obama has stopped criticizing banks
and Wall Street.
He denies that they have committed economic crimes. His Administration
is now signaling Wall
Street that they will protect its executives. That Obama, Geithner and
Summers would not
legally challenge the AIG bonuses was another signal. This week's TARP-II
bank bailout proposal
(which could easily cost taxpayers a trillion more dollars) would have the
guarantee the private investment into the "toxic debts" of the big banks.
This was another clear
signal that Obama was Wall Street's friend. Obama said on Leno's
show that nothing
illegal was done by bankers or brokers to cause the Crash of 2008. He did
not even choose to say
he favored a thorough investigation of what caused the Crash of 2007-2008.
So, I think it's fair
to say that Wall Street is rising now because it considers its $3 million
contributions to Obama will, in fact, be honored by Obama and turn out to be a
We saw this coming. I have written many articles that discussed Obama's true
I have repeatedly said
that he was no populist. He favored the Zombie bank approach.
Regretfully, I reported
that "No Drama Obama" had little backbone, that he picked the
very people Wall Street
liked the most and got much more money (campaign contributions) from
Wall Street than John
McCain. So, when the Peerless chart gave a buy signal one day off
the the 6600 low, I
advocated buying. A day earlier at the bottom I recommended covering
out short sales.
The market is now knocking on 7800 at this time without a reversing sell from
the applicable Peerless
software. Meanwhile professionals are still pushing the market higher.
I say this because of
the still rising trend in TigerSoft's copyrighted "Closing Power". As one
professional wrote me, Peerless/Tiger is a "game changer".
Watch Tomorrow To See if Geithner
Asks To Restore The Glass-Steagall Act of 1933
to outline extensive overhaul of financial regulations
Geithner could stop the rally tomorrow by calling for aggressive regulation of Wall
But I suspect he
will not. I would bet that he has been ordered by Obama to do nothing to
Tomorrow Geithner will be explaining before Congress his proposals to
banking and Wall
Street. I take it as very significant that Obama has not called for a blue ribbon
what really caused the 2008 Crash. Instead, recommendations are quickly being
made without an
thorough investigation was done in 1933 by the Senate. It is known
for Senate's lead
counsel, Ferdinand Pecora. A similar Congressional investigation looked
decline. I remember reading it in the Business School Library at Columbia University
in 1969. It
investigated manipulation by short sellers of stock prices at particular brokerages.
The 1946 chart shows an
easily recognized head and shoulders pattern. Obama's silence on
the need for such an
investigation speaks loudly where his true loyalties lie.
I have criticized Obama for picking as his closest advisors those who helped create the
financial mess we are
Rubin - who helped him select his leading officials, Geithner,
Instead of picking the very people that helped make the financial mess, he might
have chosen some of
those who saw the Crash coming and tried to warn regulators to take
Nouriel Roubini - TigerSoft News
Senator Byron Dorgan - see below
|| The most significant change that seems
necessary is to restore the Glass-Steagall Act of 1933 that prevented banks from becoming
brokerages and insurance companies. In November 1999, Senator Byron Dorgan of North
Dakota warned his colleagues and the public that the de-regulation banks would be
disastrous. With amazing prescience he said: "I
think we will look back in 10 years' time and say we should not have done this but we did
because we forgot the lessons of the past, and that that which is true in the 1930's is
true in 2010... I wasn't around during the 1930's or the debate over Glass-Steagall.
But I was here in the early 1980's when it was decided to allow the expansion of savings
and loans. We have now decided in the name of modernization to forget the lessons of the
past, of safety and of soundness.'
At the time, Senator Bob Kerrey, a Democrat from Nebraska poo-pooed
Dorgan's warnings. ''The concerns that we will have a meltdown
like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska."
Here is a great link: "The Long
Demise of Glass-Steagall"
Regulatory Proposals: 3/26/2009
Imposing tougher standards on financial institutions judged to be so big that their
represent a risk
to the entire system.
==> Nothing about Glass Steagall - the breaking up the
big banks. It is the concentration
of banks that led to the disastrous decline.
federal regulations for the first time to all trading in financial derivatives, exotic financial
such as credit default swaps that
were blamed for much of the damage in the meltdown.
==> Why are these not made illegal? Why is there
nothing about abolishing negative
tick short sales. These led directly to the disastrous decline in 2007-2009..
Requiring hedge funds and other private pools of capital, including private equity
funds and venture
funds, to register with the Securities and
Exchange Commission if their assets exceed a certain size.
threshold amount has yet to be determined.
==> What will registration by itself accomplish? They must be treated as a mutual fund
regulated as such.
Creating a systemic risk
regulator to monitor the biggest institutions. Geithner did not designate
such authority should reside, but the administration is expected to support awarding this
the Federal Reserve.
==> Nothing about Glass Steagall - the breaking up the
big banks. It is the concentration
of banks that led to the disastrous decline.