EU-DIGEST

Labels: Britain, EU, financial speculators, Greece, US, Wall Street

Labels: EU, Wall Street

Labels: EU, Goldman Sachs, Greece, Wall Street

Labels: EU, Goldman Sachs, Greece, Wall Street

Labels: EU, Greece, Wall Street

Wall Street is so steeped in destruction that the symbols of death are everywhere. Wall Street calls the big newspaper ads they take out to herald the launch of their market offerings a “tombstone.” (To understand how appropriate that is, consider the billions in bond and stock offerings they raise for Big Tobacco.) What does Wall Street call the completion of a buy or sell order: an “execution.” (Think of how many derivative trades they “executed” for the now crippled, life support patients Fannie Mae, Freddie Mac and AIG; or the off balance sheet vehicles they created for Enron, WorldCom, and dozens of now bankrupt companies.)

Wall Street calls an order to complete a trade without any reduction in quantity a “fill or kill.” This could just as reasonably be called a “fill or cancel” order but it’s so much more fun for the thundering herd to race around a trading floor screaming “kill it, kill it!”

What is the benefit to Wall Street in killing things or bringing the share price of companies to near worthless? Tails they win; heads you lose. Wall Street can and does make enormous profits on bets that share prices will decline (shorting), that companies will disappear (credit default swaps), that the economy will crater (interest rate swaps). And there’s a slogan on Wall Street: the trend is your friend. When it’s clear the bull is lying in the center of the ring (think Lehman’s death and the Merrill Lynch shotgun wedding on September 15, 2008), Wall Street moves its bets to the downside.

Labels: US, Wall Street

Labels: economic meltdown, US, Wall Street

Banks are mobilizing a smooth-running lobbying machine in Washington to ­battle Barack Obama's plans to limit the size and scope of Wall Street institutions, as financial services firms gear up to stop a shake-up that could slice away large chunks of their operations.

Their influence on Capitol Hill is broad – the top eight US banks spent euro 18.3m ($26m) on lobbying efforts last year, an increase of 6% on 2008 despite their financial woes, according to Congressional records. And in the first 10 months of 2009, the financial industry donated euro 55.3 m ($78.2m) to federal candidates and party committees – more than any other business sector – according to political research institute the Centre for Responsive Politics.

"The power of the financial services sector in this city has not dissipated at all … they've just done things in a quieter way," said Ethan Siegel, an analyst at financial consultancy The Washington Exchange, who monitors Congress for big investors. "They haven't pulled back on their lobbying just because they've become piñata [punchbags] in the press."

Labels: Barack Obama, US Economy, Wall Street

Labels: US, US Financial Sector, Wall Street

Labels: US Economy, Wall Street

Wall Street pay soars to record levels. But have you got a job yet?

Despite all the rhetoric of "our" political leaders the so-called regulation of the financial market so far has only been a lot of "hot air". Today major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite the announced "regulatory scrutiny" of Wall Street’s pay culture. Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal. Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year’s $117 billion — and to top 2007’s $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels. An economic advocate noted: "the market might have rallied, but the public on Main street is not convinced the economy is getting better for them. Many people are becoming more and more convinced that this holiday season they will be spending far less on all kinds of unnecessary plastic and electronic junk (not produced in their own countries) for their families. Bottom line: "the stop gap" economic measures are not working for the public at large and if not drastically corrected very soon there will be a "class warfare", with the people taking control of the deteriorating situation".

Labels: Financial Regulation, Wall Street, World Economy

US Economy - Mayor Bernero tells CNN that recession ‘ain’t over for a lot of our people’

Mayor Virgil Bernero was on CNN Wednesday morning responding to statements from Federal Reserve Chairman Ben Bernanke that the recession that has crippled our economy, tossed millions of Americans out of jobs and made the housing crisis worse, is over. Bernero told CNN’s John Roberts that while Bernanke might being seeing hopeful signs in the economy, it is not translating to Michigan. “Look, there’s a long way to go,” Bernero said. “But I would say it is premature at this point to say the recession is over. It ain’t over for a lot of our people. It’s not over for working people. It may be over for Wall Street but I will tell ya there is still a major disconnect between Wall Street and Main Street.”

Note EU-Digest

The disconnect between Wall Street and Main Street has never been greater. It is also risky and unrealistic to make assessments of the US future economic health and overall market performance based upon stocks in which Uncle Sam holds anywhere from a 40-80% equity stake. Trading these stocks is pure gambling, not investing, and every honest economic analyst will agree with that evaluation. While the industrial segment of the US economy appears to be stabilizing as a result of savings made by reducing the payrolls by millions of people, the consumer, which controls 70% of the US economy, remains severely stressed. Delinquencies and defaults continue to run at a record pace across almost every form of debt, including mortgages, and credit cards. Also looming in the background as another danger is the commercial real estate market, which is ready to collapse at any moment.

Labels: Economic Health, G20, US Economy, Wall Street

The NEW US (World) Economy - Truly A Joke - by David Spurr

The US economy has officially involved into a farce. It’s a joke. It’s surreal. Everyday CNBC talks about endless bailouts of private businesses. Banks are insolvent. There is no doubt about it. They would all have failed had it not been for the TARP money and the endless expansion of the Federal Reserve’s balance sheet. Money managers try to define rational suggestions for asset values. The chatter continues. Bottoms are called. Bottoms are broken. Markets gyrate each day, but make no real forward progress. The days of BUY and HOLD are dead on arrival. You can no longer survive in the “New US Economy” unless you have a trader’s mentality.

The government is now so deeply involved in the calculation of asset values, that the “free market” as we knew it, prior to 1987 is dead. This is now a market that is manipulated and controlled by the US Government.

Numbers printed on financial statements are about as worthwhile as toilet paper."

Labels: Green Shoots, US Economy, Wall Street

The Party Has Started Again: Are Big Payouts Set for Revival on Wall Street?

After the government handed out billions of dollars in bailouts, Congress passed legislation banning all companies that received support from the Troubled Asset Relief Program, or TARP, from paying their top 25 executives bonuses greater than a third of their salary, though they were not subject to specific salary cap. Some firms, like Goldman Sachs and Morgan Stanley, have thrown off the yoke of bonus restrictions by repaying the government bailout funds. While others, like Citigroup and Bank of America, have been focused on raising employees’ base salaries to try to shift attention away from bonuses. Whether through bonuses, base salary or a combination of both, the goal for all of them is the same: To retain their top talent.Goldman is set to pay as much as $20 billion this year, or about $700,000 per employee, The Journal said, citing analysts’ estimates. That would be almost twice the $363,000 it paid on average last year, and slightly higher than the $661,000 average in 2007, according to analyst estimates reviewed by The Wall Street Journal. Morgan Stanley, meanwhile, is expected to pay $11 billion to $14 billion in compensation and benefits this year, also according to The Wall Street Journal.

Note EU-Digest: Unfortunately the taxpayer who has helped bail out the banks could once again be in for a big surprise when the disaster we are in today repeats itself. Where are the promised controls, where are promised checks and balances?

Labels: Banking Industry, Economy, US, Wall Street

Forget Wall Street, beware the crash on Main Street

Institutional Risk Analytics overnight released stress tests of almost all US banking institutions indicating that 1575 of about 8000 are troubled. Meanwhile, The Wall Street Journal has reported that Morgan Stanley, Wells Fargo and GMAC have joined Bank of America and Citigroup in the underfunded bank category. The analytics report is alarming as it reveals that a huge number of banks scored an F, indicating they are severely stressed and threatening Main Street, while the US Administration and the media have concentrated on the big 19 banks crucial to Wall Street.So with more than 1500 smaller and regional US banks slowly starving on dwindling lending income, the implications for Main Street are apparent. As the risk analytics group noted, banks do not or cannot lend as they are unsure of the viability of other companies and financial institutions. While it is vital to ascertain the viability of the big banks so money starts moving through the international credit markets, the same is true for smaller banks that fuel the real economy.

Note EU-Digest: The era of "Zombie Banks" has arrived bringing back a revitalized "Wall Street Casino". The result: a "Main Street" which remains in intensive care with life support systems shutting down.

Labels: Bank Stress tests, Barack Obama, US Economy, Wall Street

US Politics: President Obama and the Big Dogs- by William Greider

"What we are witnessing is a high-stakes melodrama of glandular politics. This rival power center, though gravely weakened, is contesting for control with the president. For three decades, the Wall Street guys in good suits have ruled the economy, demanding deference from the political system and from corporate managements, too. Those who failed to follow them were punished, either through stock prices or election financing. Despite their catastrophic failure, the surviving bankers and financiers are trying to hold on to their thrones. Obama wants to govern through public-spirited cooperation. The financial titans play hardball in return. I say "seems" because we do not yet know about Obama and how he will resolve this mess. The administration has been stalling action on the troubled banks, as if it believes in its own wishful forecasts about an early recovery for the economy.

The financial crisis poses the first great moral dilemma of the Obama presidency. Sometime in the next few months, he will be compelled to choose between his technocratic inclinations--rescuing certain financial institutions deemed "too big to fail"--and the obvious moral wrongness of his policy of rewarding the very players who caused our national disaster. The broad public does not doubt that this is morally wrong. I saw a Zogby opinion poll the other day that said only 6 percent of the public supports the financial bailouts. Obama is on the wrong side of that bipartisan consensus."

Labels: Banking Industry, Barack Obama, Financial Community, US, Wall Street

The wailing 1% - And The Rage of the Privileged Class As It Loses Its Privileges -- by Gabriel Sherman

In a witch hunt, the witches have feelings, too. As populist rage has erupted around the country, stoked by canny politicians, an opposite rage has built on Wall Street and other arenas where the wealthy hold sway. Its expression is more furtive and it’s often mixed with a kind of sublimated shame, but it can be every bit as vitriolic. “No offense to Middle America, but if someone went to Columbia or Wharton, [even if] their company is a fumbling, mismanaged bank, why should they all of a sudden be paid the same as the guy down the block who delivers restaurant supplies for Sysco out of a huge, shiny truck?” e-mails an irate Citigroup executive to a colleague. It is difficult to sympathize with these people, their comments laced with snobbery and petulance. But you can understand their shock: Their world has been turned on its head. After years of enjoying favorable tax rates, they are facing an administration that wants to redistribute their wealth. Their industry is being reordered—no one knows what Wall Street will look like in a few years. They are anxious, and their anxiety is making them mad.

It should come as no surprise that being a banker—indeed, simply being rich—is going to be a lot less fun under an Obama administration. In winter 2007, as the Democratic-primary contest got under way, Obama showed up at a Goldman Sachs client meeting to explain his economic agenda to a conference room full of potential campaign contributors. When he opened up the session to questions from the audience, one attendee lobbed the question that was surely on the mind of everyone in the room. “Are you going to raise my taxes?” Obama looked out across the millionaires sitting around him. “Yes,” he answered, without a flicker of hesitation, according to a person familiar with the meeting. The greed won’t disappear, of course. “The smart people are going to make money in good times and bad times,” one investment adviser tells me. “They’ll figure out how to game the system,” says the former Bear Stearns managing director. “You may get a new set of players. This may be a movement back to partnerships and boutique firms. This could be their moment.”

Note EU-Digest: Mr. Obama so far is delivering on his campaign promises and that is very rare for a politician.

Labels: Barack Obama, US Economy, Wall Street

US Economy - Bailouts and manipulations save Wall Street while Main Street still suffers - by Larry Chin

"Wall Street is in the midst of a huge rally, primarily sparked by two recent occurrences. The first was the “surprising” announcement that Citigroup, JP Morgan Chase and Bank of America -- major “zombie” banks laden with “toxic assets,” on the verge of collapse, and the recipients of billions in government (US taxpayer) bailout money -- mysteriously posted profits this year. Wells Fargo, regarded as one of the healthier big banks, and a recipient of $25 billion, also reported a profit last week, rallying the stock markets again before the Easter holiday. We now know, based on insider reports from securities traders, that a massive fraud and manipulation by AIG funneled “bailout” funds (US taxpayer money) to AIG’s counterparties, the very same big “toxic” banks that are now posting profits. This blatant cover-up, ordered at the top, prevents negative news from spoiling the bogus Wall Street rally.

The momentum from the latest fabrication and the latest fraud must not be broken. The worst is over, according to the new noise, and the constant “are we there yet?” yammering from CNBC. No, it’s already time for The Recovery, despite the fact that the worst economic crisis since the Great Depression began mere months ago, and despite the fact that the “toxins” -- the magnificent bubble of derivatives, leverage, hedging and other interlocking Ponzi finance schemes that began the crisis to begin with -- are still out there, still un-popped. The books are cooked and the numbers are faked anyway. Why not? Who’s going to know?"

Labels: Bailout, Economy, Fraud, Wall Street

Wallstreet-"There is a sucker born every day"

The Capitalist system of doing business is usually based on raising capital through public markets. Funds are accessed that are made available by institutions and individual investors. In this scenario, the likelihood that the individual investor somewhere along the line gets the shaft is pretty high, because the market is set up in such a way as to favor the large institutional investors. Basically one could say that the game is rigged and because there are very few rules to avoid that. Brokers and traders today make deals and can manipulate prices every day. So since tens of millions of trades are made around the clock daily in the global marketplace, one could also say that the financial markets operate very much like a multi-national casino. What makes it even more scary is that most of the public is sucked into believing what some of the "insider pundits", like a Cramer, who plays in one market and promotes another says. Therefore, don't be fooled or take any of these market terms - 1y Target Est.,T-Bill index, Actual EPS, CPS, or DPSwe - you get bombarded with serious. Most, or just about all of these terms used have absolutely no scientific base and must be seen as a clever attempt to give legitimacy to what is nothing else but a complex uncontrolled and unregulated financial gambling operation.

The purpose of the stock market has never been to spread wealth, maintain financial order, or support the economy. For every winner in Wall Street you can find a loser, for without losers, there are no winners. Wall Street is a gambling place where the winner takes it all. And like at any Casino the House always takes a cut. Brokers will make commissions no matter what happens, win or lose. Should the taxpayer fund such a rigged and unregulated financial system. Absolutely not.

Labels: Financial Regulation, G20, Stock Market, Wall Street, World Economy

US economy: December 524.000 jobs lost - by Liz Wolgemuth

The U.S. economy lost 524,000 jobs in December, boosting the unemployment rate from a revised 6.8 percent in November to 7.2 percent—a level most economists did not expect to see until 2009.The breadth of the job losses has widened as the recession has progressed. In December, employers in nearly every industry trimmed payrolls. But government and health care have continued to add jobs.

Richard Moody, chief economist at Mission Residential said , "The speed and the breadth of the deterioration in the U.S. economy since September are staggering. With the credit markets still in a dysfunctional state and any fiscal stimulus package months away from being agreed upon, let alone implemented, the outlook for the U.S. economy over coming months is growing increasingly bleak. Even with passage of a large fiscal stimulus package, labor market conditions will continue to deteriorate through 2009, though the pace of decline will moderate, with the jobless rate likely rising into early 2010." Joshua Shapiro, chief U.S. economist at MFR said, "All in all, another terrible job market report. For 2008 as a whole, non farm payrolls fell by almost 2.6 million (about 75% of which occurred in the final four months of the year), which was the most in absolute terms since 1945."

Note EU-Digest: "Many economic pundits fear there could be a second major sell-off on Wall Street towards the end of January or early February as demand for consumer goods continue to slide and unemployment keeps increasing."

Labels: Economy, Stock Market, US, US Economic Meltdown, Wall Street

Wall Street Scandal: Shocking Wall Street fraud affects US and European Firms - by Cathy McCabe

Madoff, a quiet force on Wall Street for decades, was arrested and charged Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever, according to the Associated Press.

On Wall Street, his name is legendary. With money he had made as a lifeguard on the urban beaches of Long Island, he built a trading powerhouse that had prospered for more than four decades. At the age of 70, he had become an influential spokesman for the traders who are the hidden gears of the marketplace. But on Thursday morning, this consummate trader, Bernard Madoff, was arrested at his New York home by U.S. government agents who accused him of running a multibillion-dollar fraud scheme, perhaps the largest in Wall Street's history. Regulators have not yet been able to verify the scale of the fraud. But the criminal complaint filed against him Thursday in U.S. District Court reports that Madoff himself estimated the losses at $50 billion. European investors in Madoff's firm include the British fund manager Nicola Horlick's Bramdean Alternatives and UniCredit's Pioneer Alternative Investments, according to Bloomberg News and Reuters, who cited unnamed people. Benedict Hentsch, a Swiss private bank, said it had 56 million Swiss francs, or $47 million, of exposure to Madoff's investment advisory business. At the request of the SEC, a District Court judge appointed a receiver to secure the Madoff firm's overseas accounts and warned the firm not to move any assets until he had ruled on whether to freeze the assets.

Labels: Ponzi Scheme, US Economic Meltdown, Wall Street

Fraudulent Practices on Wallstreet USA: Jim Cramer brags about manipulating stock prices when he was a Wall Street trader

Jim Cramer, the boisterous host of CNBC’s “Mad Money,” recently bragged in an interview about manipulating stock prices when he was a Wall Street trader, proving all too directly — and stupidly, I might add — that investment professionals profit off the backs of the naïve investing public.In the Web interview with TheStreet.com's executive editor Aaron Task, which is on YouTube and has been blasted all around the Internet, Cramer gave advice on how to keep a profit on a short-position by driving a stock price down. He gave a number of different examples of manipulation, which he admitted might be illegal, but said it didn't really matter because "the Securities and Exchange Commission never understands this."

And that is the sad point of Cramer's comments and this column: The people who are supposed to guard and protect the public's trust in the markets are letting the people down. They simply aren't doing their jobs effectively. For years the SEC tried to pin something, in a very public manner, on Cramer. But they could never really make anything stick; he ran circles around them. There are now thousands of hedge fund managers playing tricks just like the old Cramer used to when he was running a hedge fund. And regulators are looking on without making a call. And the public still continues to invest like they know better. And hedge fund managers continue to laugh all the way to the bank.

Note EU-Digest: "one day the market goes down 6oo points and the next day it goes up 600, with screaming "know it all" CNBC reporters hyping-up the public This has nothing to do with the investors money, but all about making a select group of Wall Street traders very rich. This fraudulent activity will never stop without very strict regulations on Wall Street".

Labels: CNBC, Fraud on Wall Street, Jim Cramer, US Economy, Wall Street

The Fraudacity of American Finance - by Karl Denninger

John Mack yesterday in a CNBC interview said that the capital deployed by Treasury into the banks was going to rebuild their capital ratios - not be lent out. In other words, they intend to hoard it. This means, bluntly, that not one nickel of benefit will be seen by Main Street, despite claims by Paulson, Bush and others that this bailout is necessary for "Main Street, not Wall Street." Where is the accountability? CNBC's Fast Money finally started talking about the outright fraud and lies last night. Dylan Ratigan was absolutely on fire about the fact that Paulson was in fact one of the executives lobbying hard for removal of leverage limits in 2004, just two years before he took the position at Treasury (and cashed out $500 million in Goldman Sachs stock tax free.)

Labels: US Economy, Wall Street

Wall Street gambled, everybody lost - by Tao Yi-Feng

Over the past 30 years, these “fittest” market economists have used their strong political influence to push other countries toward laissez-faire market economics, calling on governments to loosen financial restrictions and in the process opening up more economies to severe competition on the heels of rapid international capital flows — all in the name of efficiency. However, after the ongoing financial crisis reared its ugly head, we were shown that loosening financial restrictions does not actually improve transparency in market information, nor does it allow for the most effective allocation of resources. The only thing the loosening of restrictions accomplished was to allow financial institutions on Wall Street to play their money games. And the more they gambled, the greater their appetite became for risk and profit-taking. In the past, the destructive behavior of these gamblers had a negative influence on the economies of other countries, but things have now swung around and their actions are starting to hurt the US economy.The US$700 billion debt issue is equal to what the US has spent on its war in Iraq. In simpler terms, it is the same as asking every US citizen to pay US$2,000 to help clean up the mess created by Wall Street investors.

The US government’s plan is clearly aimed at “taking from the poor and giving to the rich,” but everybody has been discouraged from saying anything against it, for opposing something that could potentially help stabilize the market is bound to attract opprobrium. The plan sought to convince the market that the Treasury Department will take on the bad assets of the main US financial institutions to help them regain the confidence of investors while escaping the vicious cycle that has gripped house prices and the financial market since the suprime mortgage crisis began.

Labels: US Economic Meltdown, Wall Street

US Economy: The Wall Street Scam

"By understanding how the Wall Street con game operates, you can at least avoid being taken to the cleaners and perhaps go on to study enough to profit from this knowledge. The unwary investor is made to believe - by a press owned by the very people who are part of the Wall Street scam - that they can make a killing in the stock market if they get lucky. Over the years outsider, small-time investors have lost billions of dollars to the insiders who control and manipulate the stock market to take money from the ignorant.

The brainwashed investor believes that the stock market goes up and down according to what he reads in the Wall Street Journal or hears about on his evening TV program: interest rates, inflation rates, wholesale prices, gross national product, public fears about foreign and domestic events, and the rantings of the head of the "Federal" Reserve Board. This is all a con game to make the hapless investor believe that the rise and fall in stock prices is not being manipulated by the specialists."

Labels: Economy, US, Wall Street