Tag Archives: Wall Street

Monetary Looting, by Michael Krieger

The Federal Reserve is at the head of a banking cartel that has looted hundreds of billions of dollars from customers and taxpayers. From Michael Krieger at libertyblitzkrieg.com:

The United States has historically bragged about its free and transparent markets. But what the Fed is doing today is pulling a dark curtain around the financing of this so-called free and transparent market. The public has no idea which Wall Street firms have received this $3 trillion or why they can’t borrow it elsewhere. This kind of obfuscation by the Federal Reserve could actually stimulate distrust in the U.S. banking system. The Fed admitted as much in its most recent Federal Open Market Committee (FOMC) minutes, writing that participation in the Fed’s loan program “could become stigmatized.”

Wall Street on Parade: Is the Fed’s $3 Trillion in Loans to Trading Houses on Wall Street Legal?

The business model of Wall Street is fraud.
– Bernie Sanders

Financial services as currently structured is the most pernicious, predatory and corrupt industry on earth. Moreover, it’s the deliberately complex and opaque nature of the industry which then limits public debate when some problem arises and governments and central banks are called upon to take emergency measures to “save the system,” which is just a euphemism for enormous sums of corporate welfare being funneled to people and institutions who couldn’t survive otherwise.

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Tick Tock, by Jim Quinn

It’s only a matter of time before it all blows up. It’s probably already started. From Jim Quinn at theburningplatform.com:

“This country, and with it most of the Western world, is presently going through a period of inflation and credit expansion. As the quantity of money in circulation and deposits subject to check increases, there prevails a general tendency for the prices of commodities and services to rise. Business is booming. Yet such a boom, artificially engineered by monetary and credit expansion, cannot last forever. It must come to an end sooner or later. For paper money and bank deposits are not a proper substitute for non-existing capital goods. Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.” – Ludwig von Mises – 1952

Image result for recession

As the von Mises quote proves, economic cycles, artificial booms created by Federal  Reserve easy money and delusional human nature are cyclically constant across the decades. Anyone with an ounce of critical thinking skills realizes the current artificial boom, created by a feckless Fed captured by Wall Street banks and corrupt Washington politicians who took Dick Cheney’s “deficits don’t matter” mantra to obscene levels, will end in another financial crisis. Our Deep State controllers have “solved” a financial crisis caused by too much debt by tripling down on more debt.

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No Fracking Way: Debt-Laden Shale Producers May Unleash The Next Financial Crisis, by Tyler Durden

Many shale producers are borrowing more than they’re making. From Tyler Durden at zerohedge.com:

After nearly two decades of horizontal drilling, fracking – as it is commonly known, has “turned the energy world upside down,” according to Journalist Bethany McLean, a former Goldman Sachs analyst-turned-journalist.

And according to a new op-ed in the New York Times, McLean has a warning for anyone betting the farm on the shale industry; beware.

In a nutshell, the fracking industry – which “could not have taken off so dramatically were it not for record low interest rates after the 2008 financial crisis,” is setting up for a spectacular fall without rising oil prices and global demand. Fracking companies have largely survived, according to McLean, because “plenty of people on Wall Street are willing to keep feeding them capital and taking their fees.”

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Why Have Investigations of Wall Street Disappeared from Corporate Media? by Pam Martens and Russ Martens

The corporate media, most notably the Wall Street Journal, has no interest in investigating Wall Street. From Pam Martens and Russ Martens at wallstreetonparade.com:

Hurricanes, wildfires, the multiple investigations of Russia’s involvement in the 2016 presidential election and the calamity-du-jour in the Trump White House are gobbling up an outsized share of digital and print news pages at corporate media. What’s gone missing is intrepid, in-depth investigations of Wall Street’s latest scam against the public – even at corporate media outlets purporting to focus on Wall Street.

Consider today’s front page of the Wall Street Journal: there’s an article on health care; central banks and stimulus; Iraqi forces and Kurdish fighters; how Blackstone Group is on the prowl for retail investors; and a curious report on long-haul truckers cooking up jambalaya and Thai peanut pork (you can’t make this stuff up). There is nothing about an investigation of a mega Wall Street bank; the dangers these behemoths continue to pose to taxpayers and the U.S. economy; nothing about Wall Street’s return to its jaded ways that led to the epic financial crash of 2008 – despite the fact that all of this is happening and timely and the public has a right to be reading about it in a paper whose beat is ostensibly Wall Street.

Rupert Murdoch’s News Corp. bought Dow Jones & Company in late 2007 after a century of ownership by the Bancroft family. The purchase just happened to come at a time when the Federal Reserve had secretly begun to funnel what would end up totaling $16 trillionin cumulative low-cost loans to bail out the Wall Street mega banks and their foreign counterparts.

In 2011, the Pew Research Center released a study on how front page coverage had changed since the News Corp. purchase of the Wall Street Journal. Pew found that “coverage has clearly moved away from what had been the paper’s core mission under previous ownership—covering business and corporate America.  In the past three and a half years, front-page coverage of business is down about one-third from what it had been in 2007, the last year of the old ownership regime.”

What is not down but “up” at the Wall Street Journal is its defense of the Wall Street banking giants’ indefensible practices on its editorial and opinion pages.

To continue reading: Why Have Investigations of Wall Street Disappeared from Corporate Media?

Should Trump “Unleash” Wall Street? by Bill Bonner

Wall Street is a perfect case study in how an industry deteriorates in a mixed economy. From Bill Bonner at bonnerandpartners.com:
LOVINGSTON, VIRGINIA – Stocks show little movement. Investors are waiting for something to happen.

And wondering…

Corporate earnings have been going down for nearly three years. They are now about 10% below the level set in the late summer of 2014.

Unleashing Wall Street

Why should stocks be so expensive?

Oh, yes… because the Trump Team is going to light a fire under Wall Street.

But they must be wondering about that, too.

Raising up stock prices – as we’ve seen over the last eight years – is not the same as restoring economic growth and family incomes.

And as each day passes, the list of odds against either seems to be getting longer and longer. As the petty fights, silly squabbles, and tweet storms increase, the less ammunition the administration has available to fight a real battle with Congress or the Deep State.

Still…

“Goldman Stock Hits Record on Bets Trump Will Unleash Wall Street,” reads a Bloomberg headline.

Goldman Sachs is a pillar of the Establishment, with its man, Steve Mnuchin, heading the Department of the Treasury. So a win for Goldman is not necessarily a win for us.

“Unleashing” suggests a win-win deal, as in allowing the financial industry to get on with its business. But there are different kinds of “unleashings.”

Some things – like Dobermans – are kept on a leash for a good reason. Unleashing the mob… or a war… might not be a good idea, either.

Untying Wall Street from bureaucratic rules is at least heading in the right direction. But it will only benefit the Main Street economy if Wall Street is doing business honestly, facilitating win-win deals by matching real capital up with worthy projects.

Deep State Industry

That, of course, is what it is NOT doing. It is a Deep State industry aided and abetted by the Fed’s fake money.

To continue reading: Should Trump “Unleash” Wall Street?

 

They Said That? 2/5/16

Today’s Wall Street Journal had an article, “Clinton’s Wall Street Dilemma” detailing the difficulties Hillary Clinton is having fending off innuendo from Bernie Sanders that she is a tool of Wall Street in light of the nearly $15 million her campaign has received from Wall Street Super PACs, the fact that she has received more money than any other candidate from Wall Street executives, the over $100 million the Clintons’ “charitable” foundation and political campaigns have received from Wall Street over the years, and the more than $20 million they have received in speaking fees. A suspicion that Wall Street is  interested in more than just good governance is not off base, and if anything, Sanders has gone far too easy on Clinton.

One propellant for the massive protest vote fueling Sanders’ campaign and the Republican insurgencies of Donald Trump and Ted Cruz is the bullshit factor. People are simply tired of being lied to by politicians, bureaucrats, and media figures  who have no apparent compunction about lying and no apparent remorse when caught doing so. From the Wall Street Journal article:

“She went to Wall Street before the crash and warned them that what they were doing could hurt the economyand called them out on it,” Clinton campaign manager Robby Mook told reporters Thursday. “She has introduced the strongest plan in this race…It actually deals with the swaps and derivatives that led to this crash.”

“Even for a lot of people on Wall Street , the concept of equity resonates,” said David Lichtenstein, a real estate investor who hosted a fundraiser last month for Mrs. Clinton.

“People on Wall Street have been supporting her not because they think she’s going to roll over on Wall Street, but because they agree with her on other isues outside of Wall Street,” said Thomas Nides, a former deputy secretary of State under Mrs. Clinton and now vice chairman of Morgan Stanley.

Even The Wall Street Journal, which prefers Clinton over Sanders or Trump, cannot keep the truth entirely out of its story, although the truth is termed “the cynical view.”

“She moved to the left because she needed some political cover in her fight against Sanders,” said Greg Valliere, chief global strategist at asset manager Horizon Investments. “Her plan may be aggressive, but her ties to Wall Street make it unlikely that this proposal of hers will be a top priority…it’s the cynical view.”

No, as noted, it’s the truth. As for the fawning and servile eyewash served above, the people quoted can be dismissed as paid for prostitutes, but that would demean a profession far more honorable than politics.

He Said That? 11/12/15

From Greg Valliere, chief global strategist at Horizon Investments, in a client note:

A nasty—and ignorant—anti-Wall Street climate prevails in both parties, and it’s something our industry has to worry about.

The Wall Street Journal, “Populism Rises In GOP Race,” 11/12/15

There’s that nasty, ignorant populism again (see “ASSHOLES,” SLL, 11/12/15). The banks that promoted, then sliced, diced and repackaged garbage mortgages and sold them all over the world were magnanimously satisfying a need for yield during the housing bubble, and besides, that’s ancient history. And who can blame Wall Street for making “friends” in the federal government? Who can blame the government for taking care of its friends, spending trillions of dollars of taxpayer money not letting them go bankrupt? And those zero percent interest rates we’ve had the last seven years, a speculators’ Nirvana courtesy of the Federal Reserve? They have been officially blessed by a number of Nobel Prize-winning economists. It’s unfortunate that savers, especially retirees, had to be thrown under the bus, but hey, that’s the price of “recovery” and a bull market. The Fed’s debt bubble is now bursting, but nobody could have seen that coming. That anti-Wall Street climate is absolutely inexplicable.

Junk-Rated, Money-Losing, Revenue-Challenged Dell Tries to Pull off Largest Tech Buyout Ever, by Wolf Richter

The Dell acquisition of EMC has disaster written all over it. From Wolf Richter at wolfstreet.com:

Peak desperation.

When Standard and Poor’s downgraded Dell to junk in September 2013, it cited the slump in the PC business, the pricing pressures in the sector, and the proposed buyout of the company by founder Michael Dell and private equity firm Silver Lake Management. They’d heap new debt on the company whose sales at the time had dropped 8% from a year earlier, and whose net profit had plunged 32%. But at least it still had a profit.

Today the PC industry is still in trouble. HP has been laying off people in big mega-waves, so have Microsoft, Intel, and others.

But OK, instead of investing in cutting-edge products and services that could move the company forward, it’s the perfect time for Dell and its investors to embark on the largest tech deal ever, a masterpiece of financial engineering, the $67 billion buyout of data-storage company EMC.

Standard and Poor’s, which affirmed Dell’s current junk rating of BB+ but put EMC on CreditWatch negative, figured that the deal would be funded through a mix of debt issuance, including perhaps $40 billion in leveraged loans, equity from current owners and the Singaporean wealth fund Temasek, some cash on hand, and the issuance of a flimsy tracking stock – similar to issuing old bicycles – to track VMware’s stock price. Details have not been disclosed.

Wall Street loves it. A whole slew of financial advisors are in on the deal, on both sides. The $40 billion in leveraged loans alone could rake in $500 million in fees, Business Insider reported. Total advisory and financing fees could exceed $700 million. Ka-ching.

And what multiple is Dell paying for EMC? Back in 2013, Michael Dell and his compadres were paying 5 times Ebitda (earnings before interest, taxes, depreciation, and amortization) for Dell. Now, to show the world just how crazy the M&A boom has gotten, and how valuations have soared, they’re paying 12 times Ebitda, according to Bloomberg’s math. At this valuation, things would get dicey even in a hot, high-growth industry for a healthy, growing, and profitable acquirer.

But Dell is none of these.

To continue reading: Dell Tries to Pull of Largest Tech Buyout Ever

The Guillotine Blade, by Robert Gore

There are a number of reasons to suspect that the impending financial and economic crash will be more severe than the 2007-2009 crisis. The recovery since that crisis has been anemic. Real income has not regained its pre-crisis peak. While measures of unemployment have improved, the quality and renumeration of the jobs filled leave a lot to be desired. Governments and central banks have taken on massive amounts of debt, and interest rates are close to generational lows; in some cases they’re negative. Total world debt is significantly higher. Finally, the faith that financial markets have demonstrated in governments and central banks since the bottom in 2009 is dwindling and will soon be gone.

Pundits are forever bemoaning the citizenry’s cynicism and lack of trust in its government and politicians. They’ve become a Greek chorus with the failure of establishment-anointed candidates to gain any traction to date and the ascendancy of Trump, Carson, and Sanders. The wonder is not that people don’t believe, but that there is anybody left who still believes. Government consistently promises more and delivers less than eat-all-you-want-and never-exercise weight-loss plans and miracle wrinkle creams. If it were a business the class action shysters would haul it into court for blatantly false advertising. Lacking that remedy, voters are turning to the outsiders.

For the last six years, US financial markets have conspicuously suspended disbelief. If you keep getting new credit cards and maxing them out without paying them down, you’ll go bankrupt. Incredibly, Wall Street and Washington “economists,” blessed by a majority of academics, assure us that what inevitably leads to ruin for an individual leads to prosperity when followed by governments and central banks. One branch holds that government debt is the key to economic growth; the other branch holds that a central bank exchanging its own conjured-from-thin-air debt for that government debt is the answer. Either branch removes economics from the pretension that the field is a science. Almost as inapt is the reluctant concession by a few that it’s more an art. No, this economics is destined for the Weird and Tragically Deluded Cults bin with the Moonies and the Kool Aid guzzlers.

Many on Wall Street and in Washington know that what they’re peddling is a fraud, but both finance and politics are giant sales jobs, and fiscal sanity has very limited consumer appeal. However, you can only deny reality for so long, and the reality is that magic beans have not sprouted a beanstalk to the sky, only a faux recovery and a growing mountain of debt that does indeed reach the sky. The global economy has to climb that mountain before it can attain even a semblance of growth. The unfolding contraction indicates that it has finally succumbed to altitude sickness.

The computer algorithms that increasingly trade financial markets don’t notice, but the idea that governments and central banks can “manage” anything at all has been taking hits left and right. Crashing commodity markets have made a mockery of efforts to ignite inflation. The normally predictable Swiss revalued their franc and caught the markets by surprise. The Greeks voted down austerity and another farcical European rescue and their government then accepted more stringent austerity and another farcical rescue. The Chinese have frantically attempted and failed to re-inflate their deflating stock markets and economy. After 14 years of the US and its assorted coalitions of the willing, not so willing, and out and out bribed or dragooned mucking around in the Middle East and northern Africa, a stream of refugees leaving various hell holes threatens to overwhelm Europe and their spendthrift welfare states. None dare call it blowback, and every US presidential candidate is proposing more of the same military and foreign policy that produced it.

SLL has predicted that the path of equity markets during the gathering crisis would be similar to that of the last one: roller coaster plunges interrupted by occasional madcap rallies precipitated by announcements of various government and central bank schemes (all of which would eventually prove either ineffectual or counterproductive). SLL may be wrong. Belief ran much deeper back then; now it’s hanging by a gossamer filament. When it breaks, the market graph may well look like the drop of a guillotine blade rather than the more typical sawtooth downward progression. In other words, this crash may happen very quickly. Two words to the wise—which includes all those who read SLL—will be sufficient. Be prepared.

IF YOU WANT TO ENSURE FAILURE, IGNORE SUCCESS. ROBERT GORE’S STUNNING AND PANORAMIC NOVEL IS SET DURING THE MOST SUCCESSFUL—AND MOST IGNORED—PERIOD IN AMERICAN HISTORY.

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AMAZON

KINDLE

NOOK

Cynics, step aside: there is genuine excitement over a Hillary Clinton candidacy, by Glenn Greenwald

It’s All About Winning

Hillary Clinton is wired into the people she is going to need to be wired into for her 2016 election run. From Glenn Greenwald, at The Intercept (please refer to the original article, from the link at the bottom of this excerpt, to access links in that article):

It’s easy to strike a pose of cynicism when contemplating Hillary Clinton’s inevitable (and terribly imminent) presidential campaign. As a drearily soulless, principle-free, power-hungry veteran of DC’s game of thrones, she’s about as banal of an American politician as it gets. One of the few unique aspects to her, perhaps the only one, is how the genuinely inspiring gender milestone of her election will (following the Obama model) be exploited to obscure her primary role as guardian of the status quo.

That she’s the beneficiary of dynastic succession – who may very well be pitted against the next heir in line from the regal Bush dynasty (this one [Jeb Bush], not yet this one [George P. Bush]) – makes it all the more tempting to regard #HillaryTime with an evenly distributed mix of boredom and contempt. The tens of millions of dollars the Clintons have jointly “earned” off their political celebrity – much of it speaking to the very globalists, industry groups, hedge funds, and other Wall Street appendages who would have among the largest stake in her presidency – make the spectacle that much more depressing (the likely candidate is pictured above with Goldman Sachs CEO Lloyd Blankfein at an event in September).

But one shouldn’t be so jaded. There is genuine and intense excitement over the prospect of (another) Clinton presidency. Many significant American factions regard her elevation to the Oval Office as an opportunity for rejuvenation, as a stirring symbol of hope and change, as the vehicle for vital policy advances. Those increasingly inspired factions include:

Wall Street

Politico Magazine, November 11, 2014 (“Why Wall Street Loves Hillary”):

Down on Wall Street they don’t believe (Clinton’s populist rhetoric) for a minute. While the finance industry does genuinely hate Warren, the big bankers love Clinton, and by and large they badly want her to be president. Many of the rich and powerful in the financial industry—among them, Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO James Gorman, Tom Nides, a powerful vice chairman at Morgan Stanley, and the heads of JPMorganChase and Bank of America—consider Clinton a pragmatic problem-solver not prone to populist rhetoric. To them, she’s someone who gets the idea that we all benefit if Wall Street and American business thrive. What about her forays into fiery rhetoric? They dismiss it quickly as political maneuvers. None of them think she really means her populism.

Although Hillary Clinton has made no formal announcement of her candidacy, the consensus on Wall Street is that she is running—and running hard—and that her national organization is quickly falling into place behind the scenes. That all makes her attractive. Wall Street, above all, loves a winner, especially one who is not likely to tamper too radically with its vast money pot.

According to a wide assortment of bankers and hedge-fund managers I spoke to for this article, Clinton’s rock-solid support on Wall Street is not anything that can be dislodged based on a few seemingly off-the-cuff comments in Boston calculated to protect her left flank. (For the record, she quickly walked them back, saying she had “short-handed” her comments about the failures of trickle-down economics by suggesting, absurdly, that corporations don’t create jobs.) “I think people are very excited about Hillary,” says one Wall Street investment professional with close ties to Washington. “Most people in New York on the finance side view her as being very pragmatic. I think they have confidence that she understands how things work and that she’s not a populist.”

The Israel Lobby

Foreign Policy, Aaron David Miller, November 7, 2014 (“Would Hillary Be Good For the Holy Land?”):

Should she become president, on one level, better ties with Israel are virtually guaranteed. . . . Let’s not forget that the Clintons dealt with Bibi too as prime minister. It was never easy. But clearly it was a lot more productive than what we see now. . . . To put it simply, as a more conventional politician, Hillary is good on Israel and relates to the country in a way this president doesn’t. . . . Hillary is from a different generation and functioned in a political world in which being good on Israel was both mandatory and smart.

Let’s be clear. When it comes to Israel, there is no Bill Clinton 2.0. The former president is probably unique among presidents for the depth of his feeling for Israel and his willingness to put aside his own frustrations with certain aspects of Israel’s behavior, such as settlements. But this accommodation applies to Hillary too. Both Bill and Hillary are so enamored with the idea of Israel and its unique history that they are prone to make certain allowances for the reality of Israel’s behavior, such as the continuing construction of settlements.

Interventionists (i.e., war zealots)

New York Times, June 15, 2014 (“Events in Iraq Open Door for Interventionist Revival, Historian Says”):

But Exhibit A for what Robert Kagan describes as his “mainstream” view of American force is his relationship with former Secretary of State Hillary Rodham Clinton, who remains the vessel into which many interventionists are pouring their hopes.

Mr. Kagan pointed out that he had recently attended a dinner of foreign-policy experts at which Mrs. Clinton was the guest of honor, and that he had served on her bipartisan group of foreign-policy heavy hitters at the State Department, where his wife worked as her spokeswoman.

“I feel comfortable with her on foreign policy,” Mr. Kagan said, adding that the next step after Mr. Obama’s more realist approach “could theoretically be whatever Hillary brings to the table” if elected president. “If she pursues a policy which we think she will pursue,” he added, “it’s something that might have been called neocon, but clearly her supporters are not going to call it that; they are going to call it something else.”

Old school neocons

New York Times, Jacob Heilbrunn, July 5, 2014 (“The Next Act for Neocons: … Getting Ready to Ally With Hillary Clinton”?):

After nearly a decade in the political wilderness, the neoconservative movement is back. . . . Even as they castigate Mr. Obama, the neocons may be preparing a more brazen feat: aligning themselves with Hillary Rodham Clinton and her nascent presidential campaign, in a bid to return to the driver’s seat of American foreign policy. . . .

Other neocons have followed [Robert] Kagan’s careful centrism and respect for Mrs. Clinton. Max Boot, a senior fellow at the Council on Foreign Relations, noted in The New Republic this year that “it is clear that in administration councils she was a principled voice for a strong stand on controversial issues, whether supporting the Afghan surge or the intervention in Libya.”

And the thing is, these neocons have a point. Mrs. Clinton voted for the Iraq war; supported sending arms to Syrian rebels; likened Russia’s president, Vladimir V. Putin, to Adolf Hitler; wholeheartedly backs Israel; and stresses the importance of promoting democracy.

It’s easy to imagine Mrs. Clinton’s making room for the neocons in her administration. No one could charge her with being weak on national security with the likes of Robert Kagan on board. . . . Far from ending, then, the neocon odyssey is about to continue. In 1972, Robert L. Bartley, the editorial page editor of The Wall Street Journal and a man who championed the early neocon stalwarts, shrewdly diagnosed the movement as representing “something of a swing group between the two major parties.” Despite the partisan battles of the early 2000s, it is remarkable how very little has changed.

So take that, cynics. There are pockets of vibrant political excitement stirring in the land over a Hillary Clinton presidency. There are posters being made, buttons being appended, checks being prepared, appointments being coveted. The joint, allied, synergistic constituencies of plutocracy and endless war have their beloved candidate. And it’s really quite difficult to argue that their excitement and affection are unwarranted.

https://firstlook.org/theintercept/2014/11/14/despite-cynicism-genuine-excitement-hillary-clinton-candidacy/

Nothing about the last election will have any impact on this kind of support, which transcends parties and is based on hard-headed, pragmatic calculations of interest and advantage. Add in the first-woman-president consideration and the Clinton political machine, and Ms. Clinton will be a formidable candidate. And if she wins, America’s further deterioration is all but assured.