Jim Grant Is Wise. Talks With Kelly Evans & Bartiromo
Jim Grant was in top form in the above piece. But I’m also impressed with Kelly Evans. First time I came across Evans she was challenging JPM’s chief economist in an online interview for the WSJ, and doing a fine job. I suspected she might be headed for something big. A few years later, and she’s a CNBC talking head, chatting with Jim Grant. Congrats. Keep it up, that unique anti-establishment bug you have.
h/t ZH
21 Comments
Really good interview! This should be “required” viewing!
Do they think we are stupid?
Sometimes you wonder if we’re living in an alternate universe.
Recent news reports that cite un-named sources and indicate the MF
Global criminal case has “gone cold” are curious. In fact, these news
reports are even more bizarre than previous reports claiming MF Global
client funds have simply “vaporized.”
A pattern of behavior and reporting appears to be emerging that
supports one overall goal: push the MF Global story under the radar,
avoiding serious investigation and keep the inner workings and
questionable circumstances surrounding a historic event out of public
view and understanding. This, in turn, paves the way for MF Global
creditors to legally swoop in on what rightfully belongs to the
customers.
http://www.opalesque.com/641018/Do_they_think_we_are101.html
Propaganda Wars: Our Version – Balance sheet instabilities
So far in Propaganda Wars we have looked at the Bank’s version of reality in which the banks were blameless victims of unscrupulous and fiendishly clever paupers who ‘took’ loans from the banks against the bankers better judgelment and will. In the next part we began to turn the tables and attack the banks where they feel they are strongest – in how they manage risk. We began with “Netting Out”, where Liabilities and Assets are supposed to cancel each other out leaving the bank, no matter how huge its balance sheet, no matter how seemingly exposed to losses, just this side solvent at all times. I suggested this sort of cancelling out is fine on paper but in reality is more akin to people trying to swap sides in a rowing boat. I further suggested that this was why, despite the lovely graphs showing how it would all “Net Out”, in the event, nearly all the major banks went bust and had to be bailed out.
In the Liabilities graph to right take a look at the aptly coloured ‘thin blue line’ of Equity. This is the money investors have put into the bank. It is the bulk of the bank’s capital. As you can see it was never big, but as the bank has grown it has become smaller and smaller relative to everything else. Relative to the size of the bank’s total liabilities (money the bank owes to others) on the one hand, and its total Assets (money it is owed – which means money it has lent OUT Mortgages etc. ie Money at risk) on the other, the equity base of the bank has become vanishingly small. Which is a problem because that equity is the base upon which the security of the bank rests; It is money the bank would need to call on if – in the most unlikely event – some of the loans it had made didn’t work out. Unlikely I know but bear with me.
But dramatic and stupid as this sounds, and is, it falls far short of describing the real predicament, because these figures are based only on what appears ‘on-balance-sheet’ and does not count the bank’s ‘off-balance sheet’ assets and liabilies. When these are counted as well leverage at the peak of the bubble was on average 50 times the equity base! And some insitutions (think Fannie and Freddie and AIG to name a but a few) were even higher.
http://www.golemxiv.co.uk/2012/03/propaganda-wars-our-version-balance-sheet-instabilities/
MF Global Trustee Asking Customers To Release Legal Claims In Return For Their Money
It is hard to believe that the Trustee Giddens intends to ask customers to surrender their right to sue Jon Corzine and other parties in return for only a partial repayment of their stolen money.
This could be a simple misunderstanding. That would be a bit much even by the outrageous standards of this scandal.
Let’s see how this is resolved.
Bloomberg
MF Global Customers Call Trustee’s Demands ‘Unwarranted’
By Linda Sandler
Mar 8, 2012
MF Global Inc. trustee asked futures customers to release claims on the defunct brokerage in return for money they are owed, demanding an “unwarranted” transfer of legal rights, a group of customers said.
The customers, including William Fleckenstein, Thomas Wacker and Summit Trust Co., said in a court filing yesterday that they were notifying the judge supervising the firm’s liquidation of their “concern” in case he wasn’t aware that trustee James Giddens had mailed his demands to some customers along with his determination of their claims. One of Giddens’s demands may require customers to release claims made in class- action lawsuits, they said.
http://jessescrossroadscafe.blogspot.com/2012/03/mf-global-trustee-asking-customers-to.html
Overstock.com Announces Court Declines to Seal Evidence in Goldman Sachs/Merrill Lynch Case
SALT LAKE CITY, March 8, 2012 /PRNewswire/ — Overstock.com, (NASDAQ: OSTK – News) today announced that in its stock manipulation suit against Goldman Sachs and Merrill Lynch the court denied mostly all of defendants’ motion to seal the evidentiary record on the summary judgment hearing. The ruling is significant because the evidence submitted to the court lays out in detail the means by which Goldman Sachs and Merrill Lynch used naked short selling, in concert with others, to manipulate downward Overstock.com’s share price.
http://finance.yahoo.com/news/overstock-com-announces-court-declines-144400038.html
Bill Black: US Promotes Flawed Economic Dogma that Encourages Fraud and Needlessly Perpetuates a Pattern of Recurring and Intensifying Financial Crises
On the natural tendency of unregulated capitalism to evolve into crony capitalism: Pure capitalist systems do not exist anywhere – for very good reason; they throw lots of humanity into the ditch, and they produce elite criminals. Unregulated capitalism tends to evolve into crony capitalism. Conservative economists like Adam Smith have recognized this from the beginning. They always emphasize that government must be there. And they always emphasize one key role for government: Enforcing the law against fraud. Even Ayn Rand emphasized that the government is essential to stop businesses from using fraud.
On how Americans and Europeans are being treated: They think we are children. They think they can lie to us and that they can be really clumsy in their lies – and we’ll just think, “OK. We guess these banks are really healthy now. What brilliance!” They don’t think we are bright enough to put it together. They think we have lost any capacity for outrage.
http://www.capitalismwithoutfailure.com/2012/03/bill-black-usa-exports-flawed-economic.html
70% of all Ground Beef Contains “Pink Slime” … and USDA Bought 7 Million Pounds of the Stuff for School Lunches
The USDA just bought 7 million pounds of pink slime to add to school lunches (up from 5.5 million pounds in 2009).
But at least we know where the real meat part of ground beef comes from … right?
Nope … the World Trade Organization struck down American laws requiring labeling of beef to disclose the country of origin:
http://www.zerohedge.com/contributed/2012-10-11/70-all-ground-beef-contains-pink-slime-and-usda-bought-7-million-pounds-stuff?
An Open Letter to Jamie Dimon
Through my role as the co-founder of the Commodity Customer Coalition and pro bono counsel for some 8,000+ customers whose property it looks like your institution may be holding without their consent, I have loudly advocated for JPMorgan Chase to return this property. In response to this, rather than doing the right thing, you closed all of my personal and corporate bank accounts and my personal credit card. I have been told by multiple members of the media that JPMorgan Chase has called them and stated that if their media outlet has me on television again, that JPMorgan Chase will pull their advertising from the offending network.
http://www.zerohedge.com/news/guest-post-open-letter-jamie-dimon?
Financial Repression Back to Stay: Carmen M. Reinhart
As they have before in the aftermath of financial crises or wars, governments and central banks are increasingly resorting to a form of “taxation” that helps liquidate the huge overhang of public and private debt and eases the burden of servicing that debt.
Such policies, known as financial repression, usually involve a strong connection between the government, the central bank and the financial sector. In the U.S., as in Europe, at present, this means consistent negative real interest rates (yielding less than the rate of inflation) that are equivalent to a tax on bondholders and, more generally, savers.
In the past, other measures also included directed lending to the government by captive domestic entities (such as pension funds or banks), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter coordination between governments and banks, either explicitly through public ownership of some institutions or through heavy “moral suasion” by officials.
http://www.bloomberg.com/news/2012-03-11/financial-repression-has-come-back-to-stay-carmen-m-reinhart.html
Why the American Empire Was Destined to Collapse
Author and social critic Morris Berman says the fact that we’re a nation of hustlers lies at the root of our decline.
Several years after the Wall Street-ignited crisis began, the nation’s top bank CEOs (who far out-accumulated their European and other international counterparts) continue to hobnob with the president at campaign dinners where each plate costs more than one out of four US households make in a year. Financial bigwigs lead their affluent lives, unaffected, unremorseful, and unindicted for wreaking havoc on the nation. Why? Because they won. They hustled better. They are living the American Dream.
This is not the American Dream that says if you work hard you can be more comfortable than your parents; but rather, if you connive well, game the rules, and rule the game, your take from others is unlimited. In this paradigm, human empathy, caring, compassion, and connection have been devalued from the get-go. This is the flaw in the entire premise of the American Dream: if we can have it all, it must by definition be at someone else’s expense.
http://www.alternet.org/world/154453/why_the_american_empire_was_destined_to_collapse/
12 March 2012
MF Global: Mark Melin Interviews Haar And Koutoulas On What Really Happened
http://jessescrossroadscafe.blogspot.com/2012/03/mf-global-mark-melin-interviews-haar.html
Fed To Take Propaganda To The Schoolroom: Will Teach Grade 8-12 Students About Constitutionality Of… The Fed
Most importantly, the “Listening Platform” should be able to “Handle crisis situations, Continuously monitor conversations, and Identify and reach out to key bloggers and influencers.” While it is unclear just how successful the Fed has been in eavesdropping on various critical blogs, and divining “sentiment”, it now appears that the propaganda masters at the Office of Central Planning have decided to go for young American minds while they are still pliable. It appears that as part of its reenactment of Goebbels “economic education” curriculum, the Fed will now directly appeal to K 8-12 student, in which it will elucidate on the premise of “Constitutionality of a Central Bank.” You know – just in case said young (and soon to be very unemployed) minds get ideas that heaven forbid, the master bank running the US is not exactly constitutional – you know, that whole thing between Andrew Jackson and the Second Bank of the United States…
http://www.zerohedge.com/news/fed-take-propaganda-schoolroom-will-teach-k-8-12-students-about-constitutionality-fed?
Ann Barnhardt & W Pollock Re John Locke and Future Trends
The contract between people and their government has been broken. This means that we have to take responsibility for the current condition as we take action towards change. We are collectively responsible for our governance which we have delegated to an elite band spanning congress and private sector oligarchs. There are 310 million of us vs Under 1000-3000 key oligarchs! By failing to remove our defective government we are giving our tacit agreement to a system that is immoral and working against our survival interests. Informed consent was a foundation point of representative government. Our leaders have forsaken us because we have acquiesced to their lies as we delegated away our freedom and property.
http://youtu.be/1_ubyLXMIfY
Anyone who wants to know what the Occupy Wall Street protests are all about need only look at the way Bank of America does business. It comes down to this: These guys are some of the very biggest assholes on Earth. They lie, cheat and steal as reflexively as addicts, they laugh at people who are suffering and don’t have money, they pay themselves huge salaries with money stolen from old people and taxpayers – and on top of it all, they completely suck at banking. And yet the state won’t let them go out of business, no matter how much they deserve it, and it won’t slap them in jail, no matter what crimes they commit. That makes them not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty.
Self-appointed royalty, it’s true – but just as dumb and inbred as the real thing, and every bit as expensive to support. Like all royals, they reached their position in society by being relentlessly dedicated to the cause of Bigness, Unaccountability and the Worthlessness of Others. And just like royals, they spend most of their lives getting deeper in debt, and laughing every year when our taxes go to covering their whist markers. Two and a half centuries after we kicked out the British, it’s really come to this?
Read more: http://www.rollingstone.com/politics/news/bank-of-america-too-crooked-to-fail-20120314#ixzz1pDvXnKlm
If you got 15 percent less for basically the same price, would you not call this a price rise?
http://maxkeiser.com/2012/03/16/if-you-got-15-percent-less-for-basically-the-same-price-would-you-not-call-this-a-price-rise/
FATHER MORAL HAZARD
The person who wrote this article is already known to be a consummate nave and unapologetic Bankster tool. He insists that no actionable crimes were committed by Wall Street in the Subprime meltdown. Word brothers and sisters.
Now he posits the question: why is our ‘savior’ Ben Bernanke so hated?
Look at the discerning pious grin on this central planning fool.
You want to know why he is universally loathed by those of us who know better?
He is the one most responsible for institutionalizing the towering babel of financial moral hazard that has poisoned the global economy.
Wondering why Lloyd Blankfein and Jamie Dimon are chronically recurring raw nerves afflicting the popular psyche.
Because this man shields them from being held justly accountable. Accountable for leading their storied institutions in a perpetually sequenced crime spree of economic rape, pillage and fiduciary sodomy. Reset…
http://www.zerohedge.com/contributed/2012-11-16/father-moral-hazard-ship-fraud?
The Fed’s Stress Test Was Merely The Latest “Lipstick On A Pig” Farce
Last week we learned two things: that Jamie Dimon specifically telegraphed he is now more powerful than the Fed, and that the US economy is back down to the same March 2009 optical exercises in financial strength gimmickry to stimulate rallies. Recall that on FOMC day, the market barely budged on Bernanke’s ambivalent statement and in fact was in danger of backing off as the readthrough was that of no more QE… until JPM announced a major stock buyback and dividend boost. The catalyst: a successful passing of the latest and greatest Stress Test, which according to experts was “much more credible” than all those before it. Wrong. The test was merely yet another complete farce and a total joke. But as expected, the test had its intended effect: financial shares soared across the board, and banks promptly took advantage of investors and robot gullibility to sell equity into transitory strength. Bloomberg’s Jonathan Weil explains.
How stressful were the Fed’s tests? One anecdote stands apart: Regions Financial Corp. (RF), which still hasn’t paid back its bailout money from the Troubled Asset Relief Program, passed.
The footnotes to the company’s latest financial statements tell the story. There, the Birmingham, Alabama-based lender disclosed that the loans on its books were worth $8.1 billion less than what its balance sheet said, as of Dec. 31. By comparison, the company’s tangible common equity, a bare-bones measure of net worth, was $7.6 billion.
So if it weren’t for the inflated loan values, Regions’ tangible common equity would have been less than zero, with liabilities exceeding hard assets. In short, the test was a joke, although it had its intended effect.
http://www.zerohedge.com/news/feds-stress-test-was-merely-latest-lipstick-pig-farce?
How America Avoided A Fascist Coup in 1933
BBC Documenary on ‘The Business Plot’ of 1933 in which a powerful group of wealthy Americans attempted to set up an organization patterned on the French fascists and German Storm Troopers and overturn democracy and the Constitution.
http://jessescrossroadscafe.blogspot.com/2012/03/how-america-avoided-fascist-coup-in.html
March 18 – The Author of “Power, Inc.”
As this year’s elections become more of a merger between a casino and
a circus, with billionaire ringmasters offering competing clown shows,
we begin with a discussion about who really runs our country and the
world. The CEO and Editor-at-Large of Foreign Policy Magazine, David
Rothkopf joins us to talk about his new book “Power, Inc. The Epic
Rivalry Between Big Business and Government – and the Reckoning That
Lies Ahead”.
http://ianmasters.com/content/march-18-author-power-inc-empire-retreats-iran-and-russia-are-winning-syria
Another Hidden Bailout: Helping Wall Street Collect Your Rent
Here’s yet another form of hidden bailout the federal government doles out to our big banks, without the public having much of a clue.
This is from the WSJ this morning:
Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae…
While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs.
In con artistry parlance, they call this the “reload.” That’s when you hit the same mark twice – typically with a second scam designed to “fix” the damage caused by the first scam. Someone robs your house, then comes by the next day and sells you a fancy alarm system, that’s the reload.
Read more: http://www.rollingstone.com/politics/blogs/taibblog/another-hidden-bailout-helping-wall-street-collect-your-rent-20120319#ixzz1paBZ72or
The Age of Double Standards
Robert Kuttner
March 19, 2012
American Airlines can declare bankruptcy and wipe away debt. But you can’t—and that’s just the beginning.
Petty felons and 200,000 small-time drug users do prison time, while corporate criminals whose frauds cost the rest of the economy trillions of dollars are permitted to settle civil suits for small fines, with shareholders bearing the expenses. Ordinary families pay tax at a higher rate than billionaires. When fracking contaminates a property and makes a home uninhabitable, the homeowner rather than the natural-gas company suffers the loss. The mother of all double standards is taxpayer aid and Federal Reserve advances—running into the trillions of dollars—that went to the banks that caused the collapse, while the bankers avoided prosecution, and the rest of the society got to eat austerity.
Linking all of these disparities between citizens and corporations is the political power of a new American plutocracy. Until our politics connects these dots and citizens start resisting, the financial elite will rule. Despite the Occupy movement, most regular people have yet to experience the sudden enlightenment of Captain Yossarian, who decided, unpatriotically, that he didn’t want to die. In the face of economic pillaging, we are behaving like damned fools.
http://prospect.org/article/age-double-standards