“It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
JPMorgan Chase & Co. had an awkward moment recently when it bet its hedges instead of hedging its bets. This resulted in a $2 Billion loss, some management changes, and loss of CEO Jamie Dimon’s ability to lobby against Wall Street reform with a straight face.
Many American invested in securities that matured last night. Mega Millions Lottery tickets.
Expected payout: $640 million
Total invested: $1.5 billion
Winning numbers: 2-4-23-38-48 Mega Ball 23
Chances of winning: 1 in 176 million
You are 50 times more likely to get struck by lightning, 8,000 times more likely to be murdered, 20,000 times more likely to die in a car crash.
Lotteries: The tax on the dreams of the poor.
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“Goldman Sachs, the global investment bank and financial services firm, announced Friday morning that it is running for president of the United States.”
“… the conglomerate will forgo donations altogether and instead finance the campaign with a portion of the $10 billion in taxpayer-funded bailout money the investment bank received in 2009. “
— “Goldman Sachs announces presidential run,” K.M. Breay, Salon
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Citigroup CEO Vikram Pandit said he would be happy to talk with Occupy Wall Street protesters, calling their motives “completely understandable.” “Trust has been broken between financial institutions and the citizens of the U.S., and that is Wall Street’s job, to reach out to Main Street and rebuild that trust,” said the chief of the third largest U.S. bank. He made the remarks as he mingled with plain working folks at a breakfast organized by Fortune magazine. If you can’t make it to Mr. Pandit’s executive suite, Gawker obligingly provides his mobile phone number (646-512-4269) and suggests a few questions. Can’t get through? Try Mr. Pandit’s office phone (212-793-1201) or email him (vikram.pandit@citi.com).
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Dominique Strauss-Kahn or “DSK,” head of the International Monetary Fund, is accused of raping a hotel maid in his $3,000-a-night suite. At last, international finance news we can understand.
Betsy Rothstein rates the scandal coverage:
“IMF Sex Scandal Headline: Who Did it Best?” Betsy Rothstein, FishbowlDC
Courtney Comstock at Business Insider made the real headline find, last month’s French interview with alleged dirty old man Strauss-Kahn:
“Oui, j’aime les femmes, et alors?” [“Yes, I Love Women, So What?”] Antoine Guiral, Libération
The virtual linguist snares a turn of French phrase, DSK described as “a chaud lapin or ‘hot rabbit,’ which evokes quite a different picture to the English equivalents ladies’ man or Don Juan.”
PNC Bank and public TV’s Sesame Street say they are teaming up to teach kids about money. David Sirota explains it another way: “A bailed-out financial institution teams up with PBS to teach our kids how to spend money on useless crap.”
“‘Sesame Street’: Brought to you by PNC Bank,” David Sirota, Salon
“PNC” logo and the Sesame Street logo element and creature are property of their respective trademark owners and used here under the “Parody” provisions of the “Fair Use” doctrine. Hey, if PNC hasn’t paid back all that Federal bailout money, taxpayers probably own some rights in their stuff anyway.
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“Nobody goes to jail,” notes Matt Taibbi. “This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail.”
Way back in 2005 the U.S. economy was in high cotton under the leadership of America’s first MBA president, financial genius George W. Bush. No one was worried about the White House climate of deregulation and non-enforcement since the country’s industrial capacity had been successfully converted to the manufacture of huge paper profits instead of boring, useful things.
The economy was one big teenage beer bash, but there was no anxiety because we had an adult chaperone. Alan Greenspan was still Chairman of the Federal Reserve.
A newly-released transcript of a 2005 Federal Reserve Open Market Committee meeting, however, shows Mr. Greenspan’s reaction to warnings of impending Housing Bubble doom by the Fed’s Board of Governors:
“Let’s take a break for coffee.”
The full meeting transcript is here, but Salon’s Andrew Leonard details key excerpts, including Fed Governor Mark Olson’s prescient view of mortgage-backed securities.
Related: “The Fed Has Spoken: No Bailout for Main Street,” Ellen Brown, Truthout.
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Goldman Sachs once gambled with other people’s money in an unregulated market in mortgage-backed securities of dubious value. Bailed out with billions of taxpayer dollars, the company seems to have learned its lesson. Goldman Sachs is now gambling with other people’s money in an unregulated market in shares of social media company Facebook.
Since Facebook is privately held, isn’t openly traded, and really doesn’t make cash profits, there is no way to value shares of … whatever it is that is thought to comprise the firm’s assets. If shares are sold to no more than 499 parties, the transactions are not subject to regulation, and may be legally traded in yet another shadow market.
Face it: the only thing this country can manufacture these days is bad business deals.
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