Economic Warrior's Blog

“I turned to look but it was gone I cannot but a finger on it now…The child is grown, The dream is gone…I…have become comfortably numb”  Comfortably Numb by Roger Waters & David Jon Gilmour, Pink Floyd

What is the difference between Las Vegas & Wall Street? …One is a casino in the desert and another is a casino on an island in Manhattan. It seems each day we hear more about Wall Street corruption, MF Global, the now bankrupt Wall Street trading giant, was commandeered by Jon Corzine, former U.S. Senator and governor no less, appears to have been involved in the Wall Street trick of window dressing, which is more or less camouflaging debt, a trick which backfired on Enron and Lehman Brothers and who knows who else at this point. I..have become comfortably numb…

In another corner of the banking world, it appears that Bank of New York Mellon, which is in the cross hairs of regulators from New York, Virginia, Massachusetts and Manhattan’s U.S. attorney wants to settle for overcharging its pension clients billions in currency transactions. It wants to settle without admitting nor denying any wrong doing. Robert Kelly, the former CEO of Bank of New York Mellon, who was the Chief Financial Officer of Wachovia when it made the idiotic purchase of Golden West Financial for $25 billion or so, walked out the door of Bank of New York Mellon for with a heist of $33 million of final compensation…I…have become comfortably numb…

Kodak, the once mighty American giant in photography business,  appears to be in its final hours,  on life support by selling its intellectual property and selling more debt. The company immortalized by Paul Simon’s Kodachrome is a symbol of the decline of the American Empire. I…have become comfortably numb.

Meanwhile, the ranks of the poorest sections in America climbed to a record high according to the Census Bureau. About 20.5 million people, or 6.7% of the population are surviving on incomes of $5,570 for individuals or $11,157 for families. The District of Columbia, America’s capital, had the highest increase in poverty since 2007 with an increase of 10.7%. Robert Kelly from the Bank of New York Mellon walks away with $33 million. Henry Kravis, the buyout tycoon makes something like $58 thousand an hour. The greatest concentration of poverty in America, is in Washington D.C. I…have become comfortably numb.

In todays Wall Street Journal, it was announced that Morgan Stanley would off-load its mortgage servicing unit known as Saxon Mortgage for $59.3 million, a whopping $646 million loss over the the price the investment bank paid for the mortgage mill in 2006 at the top of the bubble.

Goldman Sachs  bulked up on subprime mortgage mill at the top bubble  December 2007 with its purchase of Litton Loan Services, a company that specializes in collecting debts on high risk mortgages near default for $430 million. In September 2011, Goldman unloaded Litton for $264 million for a $166 million loss, but that did not include the $60 million settlement Goldman had to pay 700 Massachusetts mortgage holders for foreclosing on a bankrupt subprime lender, Fremont Investment & Loan.

As the masters of the universe stumble in their greed, a common threat revealed itself. Goldman Sachs and Morgan Stanley, who would not be in busines without taxpayer bailouts, central bank interventions and mutiny over the shareholders they were supposed to serve both sold their mortgage problem children to Ocwen Financial Corp.

One thing this author realized is that when you look under the hood of finance, not only are Wall Street banks at the heart of the financial crisis, banks from the Euro Zone are as well, and regrettably intricately connected into Wall Street and the asset management industrial complex.

Bankers, as Napoleon once warned, show no motherland, their reach is enormous and not about the benefit of the country it serves, but about making money. What do I mean by this? It has been known for years that the Rothschild banking dynasty had the nasty habit of financing both sides of warring countries. British Rothschild’s financed the British, French Rothschild’s financed the French, The Germans financed the Germans.

Today in America international bankers treat the United States as their economic playground. BNP Paribas owns San Francisco based  Bank of The West. Societe Generale owns the mutual fund giant TCW out of Los Angeles.  Deutsche Bank AG not only makes most of its money in the U.S. and London, it owns a mutual fund giant DWS, the former Scudder. Barclay’s bank is still big in ETFs, yet its old iShares business is now at the heart of BlackRock. Allianz, the giant German financier, owns not only Allianz insurance group, but the giant mutual fund manager PIMCO, which has used Alan Greenspan and Neel Kashkari, the Goldman Sachs banker who was Hurricane Hank Paulson’s right hand man when the U.S. Treasury bailed out Wall Street, is a key employee at PIMCO.  Citigroup and General Electric, both major banks, not only enjoy taxpayer bailouts, but most of their revenues and growth come from outside the U.S.

Regrettably at the end of the day, bankers, The Pirates of Basel number one concern is making money, period. If this financial crisis has taught us anything, bankers make money in good times, and in bad times they get bailed out to pay themselves outrageous sums.

Recent research by this author found out that Robert Kelly,  now former president of Bank of New York Mellon, who was chief financial officer of Wachovia, when it bought the idiotic purchase of Golden West financial for $25 billion, which now resides in the belly of Wells Fargo, walked out of Bank of New York Mellon with a $33 million payday.  Bank of New York Mellon was a major recipient of TARP bailout money, and just this month was sued by the city and State of New York as well as the Department of Justice for overcharging its pension customers $2 billion in currency transactions.

Scott Powers, President of State Street Global Advisors, another recipient of TARP funding made $13.5 million in 2010 while President of State Street, Joseph Hooley, took home $12.9 million in 2010. Yet State Street is being sued by Arkansas and California for overcharging its customers on currency transactions as well.

Finally, there is Sallie Krawcheck, who was the head of wealth management for Bank of America Merrill Lynch. Krawcheck, who reported took home $15 million a year when she was overseeing the wealth practice at Citigroup Smith Barney, was kicked out of Bank of America Merrill Lynch the other week. But bankers never go home with an empty bail. Krawcheck got around $6 million in a total exit package while the Bank of America itself paid no federal  taxes in 2010.

Nassim Taleb, an NYU Professor did a great interview on the banker compensation problem. This is not just an American problem, it is The Pirates of Basel problem. Deutsche Bank AG investment bank compensation in the U.S. paid its 15,893 employees an average $514 thousand in 2010. It is The Pirates of Basel, The Pirates of Manhattan.

Click on the link to Nassim Taleb’s interview. Taleb on bankers, bonuses, and Occupy Wall Street Video OWS (video)

http://www.bloomberg.com/video/78027552/#ooid=14NWx3Mjqutt8V5W_-0P6aJoMH9hzHIV