Lord Mandelson is plotting the downfall of the EU's foreign affairs supremo Baroness Ashton, it was claimed yesterday. Reports suggested she was 'on the verge' of resigning from her £328,000-a-year job because of constant criticism and the fact that she was out of her depth. Lady Ashton's aides denied the reports and said the whispering campaign was the work of Lord Mandelson, long viewed as a master of the dark art of media spin. 'Plot': Lord Mandelson is said to be keen for David Miliband to take Baroness Ashton's role in the EU so he can become the next Foreign Secretary The Business Secretary spokesman's in turn denied this claim, but gave a less than ringing endorsement of Lady Ashton's performance in her role as the unelected European Union High Representative. 'He thinks she is doing quite a reasonable job,' the spokesman said. David Miliband turned down a job at the EU last year Westminster insiders said Lord Mandelson may covet the powerful position himself, especially if he is looking for a new job after next week's General Election. At the time of Lady Ashton's appointment last November it was rumoured that Lord Mandelson, a former European trade commissioner, also wanted the post. Yesterday's newspaper reports claimed that Lady Ashton, 54, would leave her position within months, despite being expected to fill it for five years. An unnamed European Commission official was quoted as saying that 'every day is an uphill struggle' and that her position was untenable because of her lack of experience and political weakness. These claims were strenuously denied by Lady Ashton, who was yesterday on an official visit to China. Her official spokesman said: 'She completely refutes the media report that she is stepping down.' One of the Labour peer's aides said: 'When I saw the report I immediately thought of Mandelson. It has his fingerprints all over it.' Her team claimed that Lord Mandelson started the Ashton resignation rumour by placing it in an Italian newspaper, La Stampa, in the knowledge that it would be followed up in Britain. Another theory, put forward by Lady Ashton's aide, is that Lord Mandelson wants to force her to resign so the EU job can be handed to David Miliband. The Foreign Secretary, was offered the post last year but refused it, reportedly because he didn't want to spend 'years on a plane' and because he was angling to become the next Labour leader if the party loses power. Mr Miliband's departure from the British political scene would clear the way for Lord Mandelson to become Foreign Secretary if Labour has a role in the next government. 'Mandelson is desperate to become Foreign Secretary,' said a source close to Lady Ashton. But a spokesman for Lord Mandelson said: 'The story does not stack up under any objective criteria. Lord Mandelson doesn't take any view on the future of Baroness Ashton.' Lady Ashton has run into problems ever since her surprise appointment. She was the fourth British choice for the post after Mr Miliband, Lord Mandelson and former Cabinet minister Geoff Hoon either declined it or were vetoed by other countries. She was seen as a compromise choice. She has been criticised for not being able to speak French and for failing to have full command of her brief. Lady Ashton also ran into trouble for failing to visit Haiti after the earthquake in January.Lord Mandelson 'behind campaign to oust Baroness Ashton as EU foreign chief'
Saturday, 1 May 2010
By Whitney Kisling and Esmé E. Deprez May 1 (Bloomberg) -- U.S. stocks fell, breaking the Dow Jones Industrial Average’s longest winning streak since 2004, after credit downgrades for Greece, Portugal and Spain spurred concern that global economic growth will slow and prosecutors considered filing fraud charges against Goldman Sachs Group Inc. Banks dropped the most in the Standard & Poor’s 500 Index this week as the Justice Department scrutinized Goldman Sachs, which was sued by securities regulators on April 16. Goldman Sachs lost 7.8 percent, completing its biggest monthly retreat since Lehman Brothers Holdings Inc. filed for bankruptcy in 2008. Transocean Ltd. and Halliburton Co. fell more than 12 percent as an oil spill in the Gulf of Mexico worsened. The S&P 500 slumped 2.5 percent to 1,186.69. The Dow lost 195.67 points, or 1.8 percent, to 11,008.61, its first weekly decline since February. Both posted the largest weekly losses since January, when President Barack Obama proposed bank curbs. “People are now questioning if maybe the worst is not over for Greece and Portugal,” said Mark Bronzo, an Irvington, New York-based money manager at Security Global Investors, which oversees $21 billion. “The rationale is: The sovereign risk will weigh on Europe and the global economy. It’s another unknown for the stock market.” Greek Prime Minister George Papandreou said the country’s survival was at stake in talks to win a potential $159 billion European Union-led bailout in exchange for budget cuts denounced by unions as “savage.” Investors demanded 5.95 percentage points more to buy Greek 10-year bonds than German bunds amid speculation the nation will default. Beating Estimates Concern that indebted European nations will drag down global economic growth offset U.S. earnings that beat estimates. Almost 78 percent of S&P 500 companies have topped the average analyst profit forecast for the first quarter, near the highest proportion in Bloomberg data going back to 1993. Companies in the S&P 500 increased profit by 47 percent during the first quarter, according to analyst estimates compiled by Bloomberg. U.S. equities posted their biggest daily drop since February this week when S&P lowered its rating for Greece’s debt to junk, saying bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. Portugal and Spain also had their ratings reduced on budget concerns. ‘Pay For It’ “Equity investors should be very mindful of the potential for increases in global borrowing costs,” John Lynch, who helps oversee $155.5 billion as chief market analyst at Evergreen investments, said in an interview with Bloomberg Television. “We’ve had an awful lot of foreign governments create a lot of stimulus, and at some point we’re going to have to pay for it.” Quarterly reports scheduled for next week include Merck & Co., Pfizer Inc. and Kraft Foods Inc. Financial firms posted the biggest weekly fall among 10 S&P 500 industries, declining 3.8 percent as a group, as Goldman Sachs executives defended themselves during a congressional hearing and Barclays Plc reported a drop in investment-banking revenue. The U.S. Senate questioned Goldman Sachs executives about their role in marketing financial products that contributed to the worst financial crisis since the Great Depression. Federal prosecutors are weighing criminal fraud charges for Wall Street’s most profitable firm. Goldman Sachs fell 7.8 percent this week to $145.20. It plunged 15 percent in April after falling three straight weeks following the Securities and Exchange Commission’s civil lawsuit. ‘Very Difficult’ “It is very difficult to see the shares making further progress until the matter has been resolved,” Guy Moszkowski, an analyst at Charlotte, North Carolina-based Bank of America, wrote in a report yesterday. He downgraded the stock to “neutral” from “buy.” Energy companies in the S&P 500 slid the most as a group since January. London-based BP Plc fell 13 percent to $52.15 in U.S. trading. The company will have to pay the costs associated with an oil spill in the Gulf of Mexico after last week’s explosion of a well that is leaking as much as 5,000 barrels of crude a day, or five times faster than initially estimated, the Obama administration said April 29. Louisiana fisherman and shrimpers sued BP, along with Transocean and Halliburton, for environmental damage and personal injuries. Transocean owns the oil rig, and Halliburton was responsible for capping the well, according to the lawsuit. Transocean lost 20 percent to $72.32 and Halliburton retreated 12 percent to $30.65. Small Caps Sink Small companies fell more than large ones. The S&P SmallCap 600 Index fell 3.4 percent this week, the biggest drop since October. This week’s decline also ended an eight-week winning streak, which was the longest in a year. Harman International Industries Inc. had its biggest weekly drop in almost two years after forecasting a lower-than-expected profit margin, while Eastman Kodak Co. reported earnings that missed estimates and sent the shares on a 23 percent slide. Sprint Nextel Corp. fell 1.7 percent this week, ending a seven-week gaining streak, after the third-largest U.S. mobile- phone carrier posted a larger-than-expected loss, signaling it’s failing to stem customer defections to rivals. Office Depot Inc. posted a ninth straight quarter of sales declines along with earnings that fell short of projections. Shares of the second-largest U.S. office-supply retailer sank 19 percent to $6.86 for the worst weekly decline in more than a year. “Expectations really become the enemy for investors,” said Greg Woodard, portfolio strategist at Manning & Napier in Fairport, New York, which manages $28 billion. “To hit your numbers is not going to be enough in this environment. You’ll have to produce top-line and bottom-line incremental grow to continue to see the rally.” To contact the reporters on this story: Whitney Kisling in New York atwkisling@bloomberg.net; Esmé E. Deprez in New York atedeprez@bloomberg.net.U.S. Stocks Fall Most Since January on European Debt Downgrades
April 30, 2010 There was a strange moment last week during President Obama's speech at Cooper Union. There he was, groveling before a cast of Wall Street villains including Goldman Sachs chief Lloyd Blankfein, begging them to "Look into your heart!" like John Turturro's character in Miller's Crossing...when out of the blue, the POTUS dropped this bombshell: "The only people who ought to fear the kind of oversight and transparency that we're proposing are those whose conduct will fail this scrutiny." The Big Secret, of course, is that every living creature within a 100-mile radius of Cooper Union would fail "this scrutiny"--or that scrutiny, or any scrutiny, period. Not just in a 100-mile radius, but wherever there are still signs of economic life beating in these 50 United States, the mere whiff of scrutiny would work like nerve gas on what's left of the economy. Because in the 21st century, fraud is as American as baseball, apple pie and Chevrolet Volts--fraud's all we got left, Doc. Scare off the fraud with Obama's "scrutiny," and the entire pyramid scheme collapses in a heap of smoldering savings accounts. That's how an acquaintance of mine, a partner in a private equity firm, put it: "Whoever pops this fraud bubble is going to have to escape on the next flight out, faster than the Bin Laden Bunch fled Kentucky in their chartered jets after 9/11." And that's why this SEC suit accusing Goldman Sachs of fraud is really just a negotiating bluff to give Obama's people some leverage--or it's supposed to be, anyway--according to the PE guy. He dismissed all the speculation that the fraud investigations would turn on other obvious villains like Deutsche, Merrill, Paulson & Co., the Rahm Emmanuel-linked Magnetar and so on. "You don't get it, Ames. Even Khuzami, the SEC guy in charge of the Goldman case, is a fraud; the fucker was Deutsche's general counsel when they pulled the same CDO scam as Goldman. You have no idea how deep this goes." And it's clear that a lot more people here are aware of how fundamentally rotten things are but they're not willing to face the big fraudonomics bummer yet, preferring instead to stick with specific accusations. My position on this was, "Good, throw the book at those crooks too, I don't see what the problem is here." This was exactly what I argued a week ago, during a verbal slapfight with that acquaintance of mine. We were making a scene in a Midtown yuppie restaurant, arguing over just how much damage Wall Street had caused, and what to do about it. His position was indefensible, and he knew it, so he switched tactics: "OK Ames, which bankers would you throw the book at? Because you're arguing that they're all guilty. So which ones do you go after? Two of them? Three? Half of them?" "Every last one of them. Lock 'em up in one of their private prisons." "Not gonna happen, Che." "Che? Me? Listen, Scarface, I'm about law and order. Don't any of you PE degenerates believe in that anymore?" "OK, here's the deal, Che. I'm going to walk you through this nice and slow so that even an agave-sweetened hippie like you can understand this. Stick with me, this is gonna be a little complicated. Ready?" And so he began. "Let's say the government decides one day, 'You know, we oughta listen to Che here, let's throw the book at every firm and every executive that our people can make a case against. Because you know, gosh, it's all about rule of law and blind justice, just like Che says.' OK, so now this means indicting just about every serious player in finance, so they take down Goldman Sachs, they take down Citigroup, JP Morgan, BofA... and they also serve all the big funds who are at least as guilty, if not more. So they shut down Pimco, Blackrock, Citadel... maybe they indict Geithner and Summers, haul in some of Bush's crooks... right?" "Too bad they don’t serve popcorn here, this is getting good." "OK, now guess what you've just done? You've just caused the markets to completely tank. Remember what happened after the Lehman collapse? Remember how popular that made every politician in Washington? Still wondering why they coughed up a trillion bucks? They were scared for their lives; that's why they voted for that bailout. You'd have done the same goddamn thing. But if we go after everyone guilty of fraud and theft, the market crash this country would see would make 2008 look like Sesame Street. Open that can of worms labeled 'Fraud' and the whole fucking economy collapses. You may as well prosecute people for masturbating. No one will know where the fraud investigation stops and who will be charged next--everyone will try to cash out, and the markets will tank to zero. And guess what happens when the markets tank to zero? Every fucking American with a retirement plan, or an investment portfolio, or a 401k--every state pension plan in the country, every teacher's pension fund, every fireman's pension--every last one of them will be wiped out. That's what the Lehman collapse taught us." "Us? It didn't teach anything but that this country is run by maniacs." "Jesus H. Christ, Ames– you're even more clueless than the idiots who managed the Lehman collapse. I mean, didn't everyone get it how badly those idiots screwed up with Lehman? It was the biggest screw-up this hemisphere has ever seen. You had Secretary Paulson and Fed Chief Bernanke scratching their asses not knowing what to do, so then they go, 'OK, we're supposed to be a free market economy, and we're supposed to be the Republicans--let's try something different for a change since nothing else is working. Let's go out on a limb and actually give this "free market" thing a whirl. Who knows? Maybe the "free market" really works the way we always say it does. Nothing else seems to work, let's let the free market decide Lehman's fate. Maybe corporate-socialism isn't the answer.' So they hung Lehman out in the free-market, and BAM! The. Shit. Hit. The. Fan. No shit, dudes--the free market is for suckers, didn't your daddy teach you idiots that? Not only did Lehman collapse--everything collapsed; confidence in the entire system collapsed. And here's what I'm trying to explain to simpletons like you: Our economy is just a confidence game. Don't ask me how it got this way, don't care." I tried saying something insulting to him, but he just talked right over me, lurching forward baring his laser-whitened teeth. "I'm sure you have the answer, you and Ron Paul and all the other pot-smoking libertarian do-gooders have it all figured out. But what I'm saying is, no confidence means end of the confidence game. That's what Lehman showed. Every single player in finance suddenly had to face the fundamental problem--this whole fucking economy is built on fraud and lies and garbage. So when Lehman collapsed, every single player panicked, going, 'If Lehman was nothing but a Ponzi scheme--and I know what I'm running is a Ponzi scheme--holy shit, that means everyone else is running a Ponzi scheme too! Run for the exits!' No one trusted anyone else, everyone pulled out, and the entire global economy collapsed just like that. And that meant your parents, my parents, every teacher, every fireman, every person in the country going into retirement, every price on every asset--wiped out. "And here's what I'm trying to get you to understand: In the grown-up world, when an entire country's savings accounts are wiped out because of some do-gooder and his law books and his Thomas Jefferson 'What about free and fair markets?' crap, that is a big problem--people don't give a fuck about Jefferson and 'free and fair markets,' they just want their savings to be worth something. And people are right: Jefferson was an imbecile. He should have been a folk singer, not a Founding fucking Father. But that's another issue that's over your head--the point is, the guy who destroys this economy because it's 'the right thing to do' will have to flee for his life, and whatever president or political party was in power when that decision was made will be out of power for the next 200 years. That's why Washington panicked and passed 'the bailout,' they didn't want to be the fools whom all the Ponzi victims blame for tanking the Ponzi scheme, so they broke the glass and pumped up a newer, bigger Ponzi scheme. It was an expensive 14 trillion dollar lesson in, 'Stay the fuck away from free-market experiments, assholes!' How naive are you people to actually believe that 'free market' crap? The problem is when people in power are stupid enough to listen to guys like you: all the do-gooder libertarians and the do-gooder free-market Republicans who forgot that they're supposed to lie. Hello!" "Libertarian, me? Since when was I ever a libertarian?" "That's my point: Fools like you don't even know who you are anymore. They forgot that they're supposed to lie about all that libertarian free-market shit, keep it far the fuck out of policy. But instead of just lying about free-markets while secretly propping up Lehman, the idiots actually tried pulling off a 'free-market' miracle, and we had to pay $14 trillion just to find out what I could have told them for no fee at all, which is: 'Hey, assholes, you're supposed to be hypocrites, OK? You're supposed to be two-faced free-market liars, not libertarian Quakers! You're not supposed to believe in anything--your job is to get up in front of the public and lie about free markets and the rest. Period.' "That's it, how fucking hard is it? Look, watch my face: Say one thing out of one side… and do the other out of the other side. Got that? Let everyone else whine and cry about, 'Ooh, that's not fair, ooh, that's a bailout, that's socialism, that's corruption.' That's what losers do--they whine. You, for example, Che--you whine all the time, and look at you… Can you pay the bill for this meal? Is there a libertarian on earth who can afford to buy a decent meal in Manhattan? And now, look at me: I'm a hypocrite. Hell yes I am! I lie every day of my life, I lie to myself in my sleep. Hell, I'm lying to you right now, in fact I don't even know what the fuck I'm saying anymore because I'm so used to lying. And yet--who's the guy with the black card? Who's the one who's going to pick up the check tonight? Guys with power, guys like me, we lie. You got that? 'Lie' as in 'My Lai' the massacre--as in, 'My Lai you long time, me so free-markety.' You distract the dumbshits with free-market B.S. because hey, for whatever reason, that's what the public likes to hear, it doesn't really matter what lie you feed them so long as it's the lie that puts them in a trance. And then behind the scenes, you do the very opposite: You fix the game, you cover up this problem here with those funds there, you move shit around, you skim budgets and you subsidize the system, you cover up the bad shit and once in a while throw a has-been to the wolves to keep the public entertained--that's the way the system works, and anyone who's an adult understands that. And everyone who doesn't understand that can go form an online libertarian chat group and complain with all their little libertarian friends about free markets and Jekyll Island and 'Wahhh! It's not not fair, waahhhh!'" "What's with the libertarian accusation?" "It's just that you all sound the same to me. Libertarians, hippies--is there really a difference? You all whine alike: 'It's not fair, man! Ooh! You can't do that, it's fraud, it's corruption, ooh no!' Or: 'It's the income inequality, man; Goldman Sachs controls us all man; it's socialism for the rich; it's all too scary for my retarded 5-year-old libertarian brain!' Seriously, anytime I meet libertarians like you--" "Listen--I'm not a fucking libertarian, OK? I want free handouts. How clear do I have to make this? Me--handouts. Me--Big Government. I want to collectivize your productive cash, because I am a resentful parasite. Are you capable of processing a single word of what I'm saying to you, Spaz?" "Uh-huh, sure, whatever. Here's the thing: I think it's great that you and your friends memorized Road to Serfdom in between Star Trek episodes--no really, I'm happy for you. Yeah, we're all so proud. But here's the thing: We grown-ups are really, really busy now trying to sort out the free-market mess you made with that Lehman move of yours. Yeah, so why don't you run along to your libertarian chat rooms and have your little debates about Jekyll Island and the gold standard, because it really means a lot to us. And report back to me as soon as you have it all figured out, m'kay? Just get the fuck out of my face and leave the adults alone." It got a lot more vicious and personal than this, but when our verbal slap-fight ended--and he paid the bill--I thought about what he said, and it made a lot more sense. Fraud has become so endemic in this country that it's woven its way into America's DNA, forming a symbiotic relationship that can't be undone without killing off the host. If they push it just a little too hard, the entire American economy could crash, asset values could tank, and that means tens of millions of extremely pissed off retirees and Baby Boomers. As the Wall Streeter put it: "Whoever is responsible for bursting this latest bubble by exposing all the fraud--and tanking all the markets--will not only be out of power for at least a generation, but they'll all have to get radical reconstructive surgery on their faces and seek political asylum somewhere remote. No one wants to be that guy, and that's why it's not going to happen." That may be true, but all bubbles to eventually burst, all Ponzi schemes do collapse. The only question is when. For those of us not on the verge of retiring, the sooner we have this day of reckoning and get it over with, the better. Fraudonomics: 10 Fun Fraud Facts Ever since I got kicked out of Russia and forced back home, I've been collecting all kinds of news articles about fraud, in a document file titled "America Is Russia." Here's a little taste of the wonderful world of American Fraud: 1). Accounting Fraud: Last year, America's leading banks were insolvent. They had tens or hundreds of billions in losses on their books, and the only way to wipe those losses out would be to either a) own up to the mess, raise enormous amounts of money on top of all the bailout money; or b) get out a big fat eraser, and wipe those losses off the books as if they never existed. The first option was nice and all, but a real hassle. So Geithner and Larry Summers chose Door Number Two: Accounting Fraud. They forced the FASB to accept a rule-change in the accounting methodology called "mark-to-model" which let banks decide how much their assets were worth, rather than letting the markets decide. So if for example a BofA owned a complex security called "Orion Butt Fungus" that was worth 5 pesos on the open market, but BofA was too broke to go out and raise 5 pesos to cover that loss, under the new accounting rules, the government told BofA that rather than pricing "Orion Butt Fungus" at what the market will actually pay for it, why not first ask, "How much would BofA like 'Orion Butt Fungus' to be worth, in a perfect world?'" If BofA answers, "Doyee, gee I dunno, how about $500 million?" then under the "mark-to-model" accounting rules, BofA could now value "Orion Butt Fungus" at $500 million, and voila! Their problems are over. That wasn't so hard, was it? Suddenly, BofA looks like it knows how to pick winners! And no one's going to second-guess them, because everyone else is mark-to-modeling their "Orion Butt Fungi" too! The end result: under the old rules, BofA would have had to raise money just to cover its debts, sort of like you and me have to do, and that's just a lot of money going to waste. But now that its portfolio is so profitable, BofA has a much easier time raising money, which it uses to pay ginormous bonuses to its executives. 2). Big Pharma Fraud. Remember that scene early in Fight Club, when Edward Norton explained his job, when it was more profitable to let a car defect go and pay whatever lawsuit settlements come from the deaths, and when it's better to recall the cars because the number of deaths will result in too many lawsuits? This is humanitarian do-gooder stuff compared to the savage real-world fraud-for-profit model that drives America's drug companies. It's really simple and it goes like this: the more fraud a drug company commits, so long as it's off-the-scale fraud with the most horrible consequences for the victims, the drug company's profits always outdo the criminal fines and lawsuits by factors of 20, 30, 100... It's as simple as that. Because the billion in penalties here or the two billion in class action lawsuit settlements there are always far less than the tens of billions you earn from pushing harmful drugs on unsuspecting idiots. To wit: Between May 2004 and March 2010, a handful of top drug companies like Pfizer, Eli Lilly and Bristol-Myers paid over $7 billion in criminal penalties for bribing doctors to prescribe drugs for unapproved uses, with sometimes deadly consequences. However, as a Bloomberg report noted, the fines are always a fraction of the profits--Pfizer alone paid almost $3 billion in criminal fines since 2004, yet that was just one percent of their total revenues; Eli Lilly got busted bribing doctors to prescribe a schizophrenia drug, Zyprexa, to elderly patients suffering from dementia, even though company-run clinical trials showed an alarming death rate of 31 people out of 1,184 participants (double the placebo rate). Whatever--the market for elderly dementia patients meant billions in extra revenues. So Eli Lilly continued pushing Zyprexa on the elderly for another four years until it the Feds busted them. Eli Lilly got hit with $1.42 billion fine, but that was peanuts compared to the $36 billion it earned on Zyprexa sales from 2000-2008. To make it happen, the drug companies buy off all the checks and balances: lawsuits revealed the enormous bribes they pay to doctors, and even America's medical journals are so corrupted by drug company influence that they're no longer reliable as much more than hidden advertisements, according to a recent UCSF study. Medical journals are 5 times more likely to publish "positive" drug reviews than negative reviews, and one-quarter of all clinical trials are never published at all, leading doctors to prescribe drugs assuming they have all the information. The result:prescription drugs kill one American every five minutes ...while Americans pay more for drugs than anyone in the world, spending a total of $12 billion on drugs in 1980 to spending $291 billion in 2008--a 1,700% increase. America is ranked only 17th in the world in life expectancy. 3). Alan Greenspan: Fraudonomics Maestro. America's central banker from 1987-2006 once told a do-gooder regulator not to fuck with the bankers' fraud schemes, because in Greenspan's mind, fraud was not a crime and didn't need to be regulated. Then Greenspan forced the regulator, Brooksley Born, to resign. Just in time for his next and final act as Central Bank chief: from 2001-2004, Greenspan pumped up the biggest housing bubble in human history by holding rates down to nothing, while touring the country promoting the glories of subprime and Alt-A mortgages. Then in late 2005, when the bubble was ready to burst, Greenspan tendered his resignation and switched over to the other side, signing lucrative contracts with three investment firms all of which bet big against gullible American homeowners, and reaped billions. First, Greenspan signed up to work for Deutsche Bank, which is being sued for securities fraud for selling an Abacus-like CDO to a Warren Buffett-owned bank, M&T; Greenspan also worked for Pimco, which earned $2 billion in a single day in September 2008, when Fannie Mae and Freddie Mac were nationalized with Greenspan's lobbying help; and lastly, Greenspan went to work for Paulson & Co., the hedge fund that raked in $1 billion off the same Abacus CDO deal that brought the SEC fraud suit against Goldman Sachs. It's an unusually perfect record for Greenspan, given his atrocious forecasting record at the Fed. It recalls the old Greenspan circa 1984-5, when he worked as a lobbyist for Charles Keating trying to push regulators off his back and vouching on the record for Keating's character...Keating was eventually jailed for fraud in the worst savings and loan collapse of all. 4). Municipal Debt Fraud. America's $2.8 trillion municipal bond market is rife with fraud of the sort you'd expect in an emerging tinpot economy: opacity rather than transparency, plenty of corruption and kickbacks, resulting in decimated budgets and services cutbacks in communities across the country. The problem all stems from way the bonds are issued these days: instead of holding open tenders, nearly all are the result of backroom deals. Back in 1970, only 15 percent of municipal bond contracts were awarded through no-bid contracts; last year, 85% of muni bond deals were assigned in no-bid, non-transparent agreements. Studies show that no-bid bonds invariably cost municipalities more than bonds resulting from open tenders. So far, fraud and corruption charges have been leveled against state employees and city councilors in Florida, New York, New Mexico, Alabama and California, to name a few. Muni bond defaults soared from just $348 million in 2007 to $7.4 billion in 2008--that's an increase of 20 times– with growing numbers of cities, counties and states on the verge of bankruptcy. 5). Journalism fraud. The Washington Post got caught whoring out their venerable editorial staff to corporate lobbyists for anywhere from $25,000 to $250,000 a date, depending on the access. The Atlantic Monthly admitted to TalkingPointsMemo that it routinely sold access to its editorial staff for cash. As for business journalism, all sorts of articles and studies have asked the obvious question: "How did every mainstream business outlet miss the financial collapse of 2008?" Among all the self-flagellating mea-kinda-culpas, you won't find the word "fraud" in their answer. Speaking of business journalism and fraud, The Business Insider, one of the top business news blogs, published a pair of articles defending Goldman Sachs against the SEC fraud charges. The author of the articles defending Goldman Sachs is Business Insider's co-founder and editor, Henry Blodget. In 2003, Blodget himself was charged with securities fraud by the SEC for repeatedly misleading clients into buying stocks of companies that in private emails Blodget referred to as "piece of shit." Under the terms of Blodget's settlement with the SEC, he agreed to a lifetime ban from the securities industry, and he paid $4 million in fines and disgorgements. Since he is not barred from the world of business journalism, Blodget was able to post an article last Friday headlined: "HOLD EVERYTHING: The SEC’s Fraud Case Against Goldman Seems VERY Weak." 6). Fraudonomics K-12. If you want your kid to grow up to succeed in a fraud-based economy, you need to teach him the ABC's of cheating starting at a young age. This is one area where America's schools aren't failing their students. Cheating is so rampant in schools that nowadays if the student doesn't cheat on his exam, chances are his teacher or administrator will cheat on his test for him. One in five elementary schools in Georgia are currently being investigated for tampering with the students' standardized test scores--although suspicious patterns of erasing and remarking answers showed up in half of the state's elementary schools. In California, as many as two-thirds of its public schools admitted to fudging its students' standardized test scores. A survey of graduate school students found that 53 percent of business school grad students admitted to cheating, more than any other grad school discipline. Overall, up to 98 percent of college students today admit to cheating, compared to just 20 percent who cheated in 1940. 7). Boardroom Fraud. Corporate America's boardrooms are stacked up these days in tight, intertwined relationships that turn public companies into crime scenes, plundering money from unsuspecting shareholders and divvying up the loot among the directors and top executives. In 2008, Chesapeake Energy's stock price collapsed from $74 per share to $9.84, wiping out $33 billion in shareholder value. The CEO, Aubrey McClendon, gambled and lost 94% of his stock in the company on a margin call, personally losing about $2 billion. So what did the board of directors do? They voted to award McClendon $112 million for 2008, the highest of any CEO in America. Shareholders were outraged, calling it a "bailout," and several pension funds tried suing Chesapeake, but the courts in Oklahoma blocked the lawsuits. That's because Aubrey McClendon is sort of the George Bush of Oklahoma--a spoiled fuck-up with a rich and powerful granddaddy--Robert Kerr, former governor and senator, and founder of Kerr-McGee--meaning plenty of VIP connections for the loser grandkid. So on Chesapeake's board, you had Aubrey's cousin, Breene Kerr; Frank Keating, Republican ex-governor of Oklahoma whose son Chip (and Chip's wife) works for Chesapeake; Don Nickles, Republican ex-Senator of Oklahoma who co-funded with Aubrey the Republican anti-gay marriage campaign in 2004; Richard Davidson, the former head of Union Pacific, whose corrupt board of directors lavished Davidson with tens of millions in bonuses and a $2.7 million per year pension when he retired... Now multiply a board of directors like this by the sum total of "Corporate America" and you get…a corrupt, tin-pot corporate culture masquerading as a civilized First World corporate culture. That's us. (You can read about this problem in an excellent new book Money For Nothing: How The Failure of Corporate Boards is Ruining American Business and Costing Us Trillions.) 8). Corrupt credit rating agencies. The only way big institutional investors like pension funds could justify buying a piece of the Orion Butt Fungus CDO pie was if ratings agencies like S&P or Moody's gave it a top-notch seal of approval: AAA rated, with a little star on the forehead for good behavior. And in the world of fraudonomics, good behavior looks like this email from a Standard & Poor ratings analyst in December 2006: "Rating agencies continue to create an even bigger monster _ the CDO market. Let’s hope we are all wealthy and retired by the time this house of cards falters." The happy ending to this story is that a huge percentage of thieving scum like this emailer saw their hopes become reality: they got wealthy and retired before the CDO market crashed in a trillion-plus dollar heap of shit. And if they didn't retire, even better--because bonuses in 2009 were soaring, thanks to the always-gullible American taxpayer. 9). Regulatory Fraud: In the OTS, OCC, Fed, pension benefit guaranty agency and of course the SEC, where whistleblowers were routinely ignored because the regulators were too busy painting their monitors while surfing sites like www.fuck-my-wife.com. 10). Judicial Fraud: Juvenile court judges in Pennsylvania took millions of dollars in kickbacks from privately run prisons in exchange for sentencing thousands of innocent kids to juvenile prison terms. Chronic on-the-bench masturbation is running rampant: an Oklahoma judge was accused of using a penis pump on the bench, while nearby in Texas, a Harris County judge masturbated and ejaculated on a defendant's hand. Speaking of Texas, theentire juvenile prison system there was turned into a sex abuse racket involving Texas state officials–over 750 official complaints about prison administrators molesting or raping underaged inmates in all 13 juvenile facilities had been officially logged between 2000 and 2007. The list goes on and on. Hell, even our literature was corrupted with fraud: James Frey's addiction "memoir" A Million Little Pieces turned out to be A Million Pieces of Bullshit, the biggest literary fraud of our time. Fooled readers sued, Oprah chewed him out and Frey is now a bestelling "fiction" author. This is just scratching the surface, but you get the point. We’re way past the point of redemption. No wonder everyone’s dreaming of a violent apocalypse to wipe the slate clean, and take us away to another plane where everything would be better. Anything but this.Confessions Of A Wall St. Nihilist: Forget About Goldman Sachs, Our Entire Economy Is Built On Fraud
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Saturday, 01 May 2010 07:20 Read more: Scandal: Obama, Gore, Goldman, Joyce Foundation CCX Partners to Fleece USA Friday, 30 April 2010 07:59 'While senators froth over Goldman Sachs and derivatives, a climate trading scheme being run out of the Chicago Climate Exchange would make Bernie Madoff blush. Its trail leads to the White House. Lost in the recent headlines was Al Gore's appearance Monday in Denver at the annual meeting of the Council of Foundations, an association of the nation's philanthropic leaders. "Time's running out (on climate change)," Gore told them. "We have to get our act together. You have a unique role in getting our act together".' Saturday, 01 May 2010 07:13 'Another shoe has dropped from the IPCC centipede as scientists in Bangladesh say their country will not disappear below the waves. As usual, the U.N.'s climate charlatans forgot one tiny detail. It keeps getting worse for the much-discredited Intergovernmental Panel on Climate Change, which seems to have built its collapsing house of climate cards on sand or, more specifically, river sediment.'
The global elite has chosen the Bank For International Settlements, which financed Hitler’s war machine, to boss the financial arm of the new world order European Central Bank chief Jean-Claude Trichet’s announcement that the Bank for International Settlements is to become the primary engine for global governance is a shocking admission given the fact that this ultra-secretive menagerie of international bankers was once controlled by top Nazis who, in collusion with global central banks, funneled money through the institution which directly financed Hitler’s war machine. During a speech to the elitist CFR organization earlier this week, ECB head Trichet said that the Global Economy Meeting (GEM), which regularly meets at the BIS headquarters in Basel, “Has become the prime group for global governance among central banks”. The GEM is basically a policy steering committee under the umbrella of the Bank for International Settlements. In its current form, the BIS, which itself is not accountable to any national government, is comprised of banking chiefs from global central banks, most of which are private and also have no responsibility to their nation states or their citizens. The board of directors who control the BIS include Federal Reserve chief Ben Bernanke and Bank of England head Mervyn King, as well as Trichet himself. So how did the Bank for International Settlements get started? The BIS was founded in 1930 by Governor of The Bank of England, Montague Norman and his German colleague Hjalmar Schacht, who later became Adolf Hitler’s finance minister. The bank was initially founded in order to facilitate money transfers related to German reparations arising out of the Treaty of Versailles, but by the start of the second world war, the BIS was largely controlled by top Nazi officials, people like Walter Funk, who was appointed Nazi propaganda minister in 1933 before going on to become Hitler’s Minister for Economic Affairs. Another BIS director during this period was Emil Puhl, who as director and vice-president of Germany’s Reichsbank was responsible for moving Nazi gold. Both Funk and Puhl were convicted at the Nuremberg trials as war criminals. Other BIS directors included Herman Schmitz, the director of IG Farben, whose subsidiary company manufactured Zyklon B, the pesticide used in Nazi concentration camp gas chambers to kill Jews and political dissidents during the Holocaust. IG Farben worked closely with John D. Rockefeller’s United States-based Standard Oil Co during the second world war. Baron von Schroeder, the owner of the J.H.Stein Bank, the bank that held the deposits of the Gestapo, was also a BIS director during the war period. As Charles Higham’s widely acclaimed book Trading With The Enemy, How the Allied multinationals supplied Nazi Germany throughout World War Two points out, several parties at the Bretton Woods Conference in July 1944 wanted to see the Bank for International Settlements liquidated, because its role in aiding Nazi Germany loot occupied European countries during the war. Norway called for the bank to be shut down, a view supported by Harry Dexter White, U.S. Secretary of the Treasury and Henry Morgenthau, but the BIS survived despite its highly contentious Nazi influence. Higham writes that the BIS became, “A money funnel for American and British funds to flow into Hitler’s coffers and to help Hitler build up his machine,” founded by Nazi finance minister Hjalmar Schacht on the basis that the “Institution that would retain channels of communication and collusion between the world’s financial leaders even in the event of an international conflict. It was written into the Bank’s charter, concurred in by the respective governments, that the BIS should be immune from seizure, closure or censure, whether or not its owners were at war.” “The BIS was completely under Hitler’s control by the outbreak of World War II,” writes Higham. “Among the directors under Thomas H. McKittrick were Hermann Shmitz, head of the colossal Nazi industrial trust I.G. Farben, Baron Kurt von Schroder, head of the J.H. Stein Bank of Cologne and a leading officer and financier of the Gestapo; Dr. Walther Funk of the Reichsbank, and, of course, Emil Puhl. These last two figures were Hitler’s personal appointees to the board.” Higham details how the gold looted from countries invaded by the Nazis was packed into vaults controlled by the Bank for International Settlements, and how Nazis who controlled the bank then forbade any discussion of the theft. “The BIS was an instrument of Hitler, but its continuing existence was approved by Great Britain even after that country went to war with Germany, and the British director Sir Otto Niemeyer, and chairman Montagu Norman, remained in office throughout the war,” writes Higham, explaining how Washington State Congressman John M. Coffee objected to American money being invested with the bank in 1944. “The Nazi government has 85 million Swiss gold francs on deposit in the BIS. The majority of the board is made up of Nazi officials. Yet American money is being deposited in the Bank,” complained Coffee. In 1948, the BIS was finally compelled to hand over a mere £4 million in looted Nazi gold to the allies, and thanks to people like Harry Truman and the Rockefeller family, the bank was not dissolved. One of its most influential directors, Nazi banker Emil Puhl was later invited to the United States as a guest of honor in 1950. Despite its inglorious past, the Bank For International Settlements continues today as a major management arm of the global elite. The bank wields power through its control of vast amounts of global currencies. The BIS controls no less than 7% of the world’s available foreign exchange funds, as well as owning 712 tons of gold bullion, presumably a sizeable portion of which is the bullion which was stolen from occupied countries by the Nazis who controlled the bank during the war. “By controlling foreign exchange currency, plus gold, the BIS can go a long way toward determining the economic conditions in any given country,” writes Doug Casey. “Remember that the next time Ben Bernanke or European Central Bank President Jean-Claude Trichet announces an interest rate hike. You can bet it didn’t happen without the concurrence of the BIS Board.” The BIS is basically a huge slush fund for global government through which secret transfers of wealth from citizens are surreptitiously handed to the IMF. “For example, U.S. taxpayer monies can be passed through BIS to the IMF and from there anywhere. In essence, the BIS launders the money, since there is no specific accounting of where particular deposits came from and where they went,” writes Casey. The fact that top Nazis were intimately involved in the activity of a global central bank that is now being touted as the primary powerhouse of the economic arm of world government is frightening. Every time we delve into the origins of the march towards world government, we find that top Nazis were instrumental in setting up and managing the same institutions that today seek to manage the imposition of global government. Just as with the institutions that comprised the embryonic stages of the European Union, Nazi fingerprints are all over the origins of the move towards a global authority ruling the planet with nation states and sovereignty playing second fiddle. This fact demolishes any notion that global government is benevolent, humanitarian or progressive. Centralization of power into the hands of the few is inherently undemocratic, elitist, and to the detriment of the people. The Nazis who breathed life into the same framework of global authoritarianism being used to set up world government today may have been usurped by an elite altogether more patient in their bid to impose a dictatorship run by banking dynasties, but the ultimate agenda remains the same – world government by consent or conquest.Former Nazi Bank To Rule The Global Economy
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