Archive for Occupy Wall Street

MF Global, Flatfooted Regulators & Chesapeake Energy, 401(k)s

Posted in Uncategorized with tags , , , , , , , , , , on November 3, 2011 by economicwarrior

It appears that all of the regulators, the SEC, the New York Fed, Finra, the CME and the Commodities Future Trading Commission (CFTC) were all asleep at the wheel when Jon Corzine’s $6.3 billion trade in European bonds sank the trading powerhouse. It appears at least $600 million, maybe $700 million is missing and nobody has a clue where the money is, its customers money.

But the reason, regulators who theoretically oversea the securities markets are all part of the revolving door between Wall Street, the government, the banking industry, and often Ivy League academia. The William Dudley, who runs the New York FED, is a former Goldman Sachs Banker. Mary Shapiro, who runs the SEC, used to be the CEO of Finra. The Commodities Future Trading Commission Gary Gensler, is a former Goldman Sachs banker and an aide-de-camp of Larry Summers when he was the go-to economic guy for U.S President William Jefferson Clinton. Richard Ketchum, the head of Finra, used to be chief counsel for Citigroup’s investment bank, a bank which would not exist without bailouts from the taxpayer. Don’t know much about Craig Donohue of the CME Group, but reckon he was making a Pirates pay of around $3.6 million in 2006. It is all just one big incestuous revolving door. Woe is us.

Chesapeake Energy’s CEO Aubrey McClendon, shows that outrageous pay is not just confined to The Pirates of Manhattan. It appears shareholders–who at the end of the day most likely to be funded with your 401(k), are thrown under the bus on a routine basis. As usual, CEOs extract monstrous paydays while rank and file employees get thrown under the bus. As I document in my upcoming book, The Pirates of Manhattan II: Highway to Serfdom, Chesapeake Energy has thrown rank and file folks into target-date mutual funds, while CEO Aubrey McClendon robs the store. In 2008, McClendon extracted $112 million in compensation, and sold 500 antique maps to his company for an eye-popping $12.1 million.

It does not appear that much will change in this corporate American culture. But more will be revealed in the next book as how your 401(k) actually fuels this mess. As Don Corleone from the Godfather once said, “A man with a briefcase can steal more money than a hundred men with guns.”

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MF Global, Jon Corzine, HMS Deregulation

Posted in Uncategorized with tags , , , , , , , , on November 2, 2011 by economicwarrior

“The fault dear Brutus lies not in the stars, but within ourselves” Shakespeare

Strange times these days are.  We want to point a finger at everybody instead of our own role in the problems we have today. I am probably just as guilty as anybody of blaming everyone else, but God willing, I am willing to own up more to the fires I have ignited. At least I am better than I used to be.

What has that got to do with today? Plenty. The Centers for Disease Control and Prevention released some very dreadful news the other day. It appears that we are losing a battle with ourselves more than terrorism. The truth is, Americans insatiable need for prescription drugs is a bigger problem than the War on Terror, the Karl Rove-George W. Bush creation. The Center for Disease Control announced that 14,800 people died in 2008 from over doses in painkillers, up from 4,000 in 1999. Annual deaths from painkiller prescription drugs now surpass those from heroin and cocaine combined. Then when you look at the war zone in Mexico–the root of the problem is not the Mexican drug cartels, it is Americans insatiable appetite for drugs.

My free market friends claim there is too much regulation in America and to large extent I agree, but not when it comes to finance, not when it comes to Wall Street. On Wall Street, HMS Deregulation is alive and well, and it is not just an American problem, but a global one. Think global warming is bad, global deregulation of the financial markets is a frigging nightmare. Regrettably, when we see the financial crisis in Greece today, and which  will inevitably migrate further into Europe and into the U.S., finance, Wall Street is always lurking in the shadows. Banks have their fingerprints over the mess. Does not matter whether it is Goldman Sachs, Barclay’s, BNP Paribas, Deutsche Bank or Banco Santander or Nomura or Lehman. Exploding banks are a world problem.

So the fall of MF Global and Jon Corzine is a warning shot of more to come, I think. Only in America, Corzine,  a Goldman Sachs banker extraordinaire, adversary of Hurricane Hank Paulson and buddy of J. Christopher Flowers, one day a predatory banker, another, became both a U.S. Senator and governor of New Jersey using his pile of cash he made at Goldman. On another day, Corzine would captain MF Global, now another reckless plunge not only to bet the company’s capital but apparently its customers. Now bankrupt, MF Global pulled down some name brands with it, Fidelity’s Pyramus funds, RS Investments, TIAA-Cref, JP Morgan , Deutsche Bank and CNBC. The truth is there is no real regulation on Wall Street. Jon Corzine may not get his $12 million severance

What is worse MF Global, which was a commodity trading powerhouse is a canary in the coal mine. The asset management industrial complex, which makes MF Global a midget in a land of leviathans such as Fidelity, Pimco, Goldman Sachs, BlackRock and JPMorgan, is an industry which dodged the regulation oversight bullet when it comes to managing your assets in your 401(k). If only folks at Occupy Wall Street could figure this one out, then they would have something to protest about.  As usual, regulators are Keystone Kops in the MFGlobal/Jon Corzine case a kind of what happened moment involving Masters of the Universe. It appears MF Global also stuck J. Christopher Flowers for $48 million, the same guy who owned one of The Pirates of Manhattan biggest private residences.

News Corp. continues its woes. Apparently the hacking culture of the media giant has quite the history. James Murdoch, heir apparent, is pulled into the mess. Heres the link. News Corp Lawyer Noted ‘Hacking’ in 2008.http://online.wsj.com/article/SB10001424052970204528204577012153254681664.html?mod=googlenews_wsj

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Absolute Returns Are An Absolute Joke

Posted in Uncategorized with tags , , , , , , on October 28, 2011 by economicwarrior

“The mutual fund industry offers investors a remarkably wide range of strategies to suit their investment needs. The absolute-return strategy is one of many offered for investors to choose from.  As with all funds, the strategy’s approach and risks described in detail in fund disclosures.”  Rachel McTague, InvestmentNews, October 24, 2011

The greater fool theory is alive and well on Wall Street. The asset management industrial complex–who I call The Pirates of Manhattan, in its continual obsession to sell consumers financial products of questionable value have led the consumer into another maze of blatant misrepresentation.

Absolute, according to the American Heritage Dictionary. means 1. perfect in quality or nature; complete 2. Not mixed; pure: absolute alcohol.

The asset management industrial complex are master wordsmiths, spin doctors extraordinare. Calling mutual funds an absolute return is a scam, there is no absolute returns in the market, yet The Pirates of Manhattan continue to play God. Absolute return funds, which lifted the branding name from the hedge fund industry, maintains that they can achieve a positive return no matter the market will do. Of course everyone would want to achieve positive returns, we all want to be rich, good looking and have are children become Rhodes scholars. This of course is a blatant lie, promoting the greater fool theory is alive and well on Wall Street for the masses.

According to Morningstar, the average absolute-return fund it tracked up to the end of September 30, 2011, was a drop of -4.4%, not bad as the -10% drop in the S&P 500, but certainly not positive. And although this market reaches new zeniths on the chimera of a recovery of the European debt crisis, no doubt more pain is in store as the problems of the welfare-state and a dysfunctional banking system remain alive, a sickness so strong it is doing push ups in the parking lot.

Of course, the holy water for Wall Street is greater disclosure of the risks in prospectuses which no one reads. But this absolute scam of absolute return mutual funds is nothing in comparison to the complete transfer of wealth with target-date mutual funds, which make collateralized debt obligations and derivatives a game of marbles. The Pirates of Manhattan II: Highway to Serfdom is coming soon. www.thepiratesofmanhattan.com

Check out the article in InvestmentNews www.investmentnews.com, ‘Absolute return’ is absolute nonsense’ by Jeff Benjamin

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Wall Street Greed, Jack Welch, $8,000 Tickets, And the Dysfunctional Media

Posted in Uncategorized with tags , , , on September 28, 2011 by economicwarrior

In going to the mailbox today, I was shocked by the grotesque invitation I received from HSMGlobal, www.hsmglobal.com, a New York City company that manages seminars. They invited me to a seminar in November 2011, at the nominal cost of $8000 dollars to see folks like Jim Collins, AG Lafley, Meg Whitman and Jack Welch speak.

The program was entitled “Elite Leadership Program” and with an $8,000 price tag, sure is. Not like the $71 thousand it costs just to show up at Davos Switzerland, but elitist nonetheless.

Jack Welch is not only a poster child for Wall Street and corporate greed, it was under his guidance that Welch made GE Capital a part of Wall Street as much as Credit Suisse or Goldman Sachs. Welch, who was worth around $900 million when skipped out of General Electric, reportedly gets a pension around $9 million a year. GE Capital, you will find in my next book, is Wall Street.

Meanwhile, our esteemed media fails to report about what young people have to protest down in lower Manhattan. Young people are pissed and rightly so. The empire is coming apart, and Wall Street, and companies like GE Capital are at the heart of it. Check out the site of what the young people are doing, www.occupywallst.org.

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