Free Republic

I recently sat down with legendary investor Ted Forstmann to discuss why, on the one-year anniversary of the financial meltdown, the press has largely ignored the role of government in creating the meltdown—and possibly setting the stage for another one—by allowing Wall Street to borrow cheaply and easily during the past three decades. "I guess reporters think writing about greedy investment bankers is more interesting," Mr. Forstmann laughed. [....] The greed merchants needed a co-conspirator, Mr. Forstmann argues, and that co-conspirator is and was the United States government. "They're always there waiting to hand out free money," he said. "They...

The government, which ordered 250 million doses, has recommended that the limited supply go first to high-risk groups: children and young people through age 24, people caring for infants under 6 months, pregnant women and health care workers.

The drama unfolds slowly at first. First-term (anti-bailout candidate) Democrat Alan Grayson questions Elizabeth Coleman, Inspector General of the Federal Reserve. The issue is oversight of the Fed's balance sheet, and the potential multi-trillion dollar loss that would be borne by you. If watching the clip sends you into an apoplectic seizure as it does to me, then please help. We need millions of Americans to become aware of the Fed and its abuses. Monetization of the national debt is occurring daily (quantitative easing), as Bernanke simply creates credit and purchases Treasuries. And we haven't even begun to discuss the...

On September 29th 2008 my wife and I and our oldest grandchild waited patiently in a nearby park while our newest grandchild was about to be born. That Monday, several hundred miles to the east, America’s financial community was literally given its economic walking papers as Wall Street delivered crushing economic news. That day Dow Jones plunged 777 points and the market lost an incredible 1.2 trillion in market value -- the largest single-point plunge in America’s history. It withered main street America retirement plans, college savings plans, and housing mortgages. Each successive week brought an escalating tidal wave of...

[Excerpt] "Sometimes our technology, in creating these securities, outpaces our ability to cope with them." That's what Larry Fink told the New York Times in May 1987 when asked about Howie Rubin's trading disaster. In the past, Fink would have made that statement to a reporter and then celebrated with his team the fact that one of his competitors, particularly one like Merrill Lynch, which he saw as a pesky upstart in the field he aimed to dominate, was now being nailed with massive losses. But Fink wasn't celebrating, because, much like Howie Rubin, he had just gotten his first...

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had...

NEW YORK (MarketWatch) -- U.S. stocks remained sharply lower Friday afternoon in a broad sell-off led by the financial sector that wiped out Thursday's huge gains and had the Dow Jones Industrial Average looking flat for the month. The Dow Jones Industrial Average was recently down 224 points, or 2.3%, at 9735, on track for its 10th day this month of a triple-digit move. At its intraday low, the Dow hit 9688.77. If it closes below 9712.28, the Dow would end the month in the red. All its 30 components were lower recently, led by financial components Bank of America...

Fed's Massive Secret Wall Street Bailout Still Going Strong Posted Oct 30, 2009 08:53am EDT Henry Blodget Remember last fall, when our government explained that the reason we needed to give $800 billion to Wall Street was so the banks could lend it back to us and shock the economy back to life again? That was a happy story! And we fell for it. What happened, of course, was that the banks took the money, stopped lending, and used it to pay themselves and their shareholders through the nose.[snip]

The financial crisis is now more than a year old, and Americans are still angry -- angry that the economy tanked, angry that they're out of work. But mostly, people seem outraged by Wall Street bonuses. Seeking to assuage that ire, the Obama administration's "compensation czar," Kenneth Feinberg, last week announced plans to cut the pay of top executives at the seven companies receiving federal support through the Troubled Assets Relief Program. He has suggested that the cuts, which slashed pay for top executives by an average of 50 percent, should be a model for the rest of Wall Street...

During the boom years, New York–based small-business lender CIT group went heavy into the risky subprime loan business, under the guidance of CEO Jeffrey Peek. This past year, after it all came crashing down, CIT accepted $2.3 billion in TARP money and then went and asked the administration for more. They were denied. ("Their Plan A was: Seek assistance from the government. And their Plan B was: Ask again," a senior Obama administration official told the Journal at the time.) Absent a plan, the company spiraled toward bankruptcy, and last week Peek was forced to resign. Now his wife, Liz...

Sen. Chris Dodd produced language that allowed Feinberg to cut salariesBy VICTORIA MCGRANE 10/23/09 4:37 PM EDT Remember all the heat Sen. Chris Dodd took earlier this year over writing the loophole in the stimulus that let AIG executives collect $165 million in bonuses? But that same provision had another key section – the authority for a White House pay czar to slash top executive pay at seven financial firms that still hold billions in taxpayer bailout funds. So what Dodd’s legislation gave away in the form of bonuses, it has taken back with special pay master Kenneth Feinberg’s power...

Congress put American taxpayers on the hook for $700 billion last year when it approved the massive bailout to paper over the imprudent lending decisions of nine Wall Street giants: Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Merrill Lynch, State Street and the Bank of NY Mellon. The bailout was essential to save the nation from a complete economic meltdown. Or so insisted President George W. Bush, Treasury Secretary Hank Paulson, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi. One year later, however, a little-noted report by the U.S. Government Accountability Office...

NEW YORK (Fortune) -- There's no need to fear a Wall Street brain drain -- despite the crackdown on pay by Washington. On Thursday, White House pay czar Kenneth Feinberg outlined compensation restrictions at seven firms that got special bailouts, and the Federal Reserve proposed to review pay practices at 28 unnamed giant banks. Critics warn that reining in pay makes it hard to keep talented employees. Hemmed in, institutions like AIG (AIG, Fortune 500),Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) could lose their best people. These firms would then perform even more abysmally, if that's...

Yesterday, the White House pay czar, Ken Feinberg, did his round of interviews to explain the massive cuts in executive pay for bailed out firms. The Washington pay czar who's ordered steep pay cuts for executives at bailed-out firms could have practically unlimited power to regulate compensation at any company that gets federal funding, lawyers say -- even if his legal authority is sketchy. The move raises questions about whether the mandate will be limited to the seven firms Kenneth Feinberg is currently targeting -- and whether it could trickle down to smaller companies. "He has a lot of authority...

After a big flop with Chrysler, Cerberus finally has a winner on its hands. Even better, right-wing gun nuts have another shot at profits. I can’t wait. Baltimore – I live in a neighborhood where guns are common. I like it that way. Last night, the lady of the house and I decided to enjoy what may be one of the last warm evenings of the year on the East Coast by taking a short hike along the river that flows just two miles from our front door. While meandering along the water and dodging groundhog holes, we heard the...

Worried about a potential slippery slope with the Obama administration dictating what people are paid in the private sector - TARP bailout or no TARP bailout? Message from CNBC's Jim Cramer: Get over it. On CNBC's Oct. 21 "Street Signs," the "Mad Money" host ripped into Wall Street executives that objected to the government dictating the rules of compensation. Opponents argue these pay restrictions inhibit Wall Street firms ability to retain the best employees possible - an argument Cramer says doesn't matter. "Hey, there's no God-given right to work at those companies," Cramer said. "These people can go off if...

The vice-chairman of Goldman Sachs has launched an astonishing defence of bumper bonuses just a year after bankers brought the world's economy to the brink of collapse. In a speech likely to recall fictional banker Gordon Gekko in the film Wall Street - whose mantra 'greed is good' came to sum up the excesses of the 1980s - Lord Griffiths claimed taxpayers should 'tolerate the inequality'. And he insisted that banks should not be ashamed of rewarding staff. Lord Griffiths (left) has echoed the 'Greed is good' maxim by Gordon Gekko, played by MIchael Douglas in the film Wall Street,...

Wall Street is up to its old tricks again. One year later, one of the key excesses that led our consumer-based economy into an historic downturn is being abused in the exact same way that got us $147-a-barrel oil last summer. Worse, many in the media are again getting the facts wrong on oil prices and demand— Forget what Cambridge Energy Research Associates reported on Oct. 13. By its calculations oil demand actually peaked in 2005 among the industrialized members of the Organization for Economic Cooperation, while in the U.S. alone oil usage has dropped by 2 million barrels a...

Deserted Shopping Mall Bleak Symbol Of Fed Bailout Wed Oct 21, 2009 8:00am EDT By Alister Bull OKLAHOMA CITY, Oct 21 (Reuters) - A $29 billion trail from the Federal Reserve's bailout of Wall Street investment bank Bear Stearns ends in a partially deserted shopping center on a bleak spot on the south side of Oklahoma City. The Fed now owns the Crossroads Mall, a sprawling shopping complex at the junction of Interstate highways 244 and 35, complete with an oil well pumping crude in the car park -- except the Fed does not own the mineral rights. The Fed...

Frontline PBS TV program on Greenspan; mentioned Alan Greenspan as student of Ayn Rand...Thots.

Wall St. Is Winning: Elizabeth Warren "Speechless" About Record Bonuses Posted Oct 16, 2009 10:58am EDT by Aaron Task in Newsmakers, Banking Elizabeth Warren, chair of the Congressional Oversight Panel, is the rare public official who doesn't mince words. But Warren admits to being "speechless" at reports of record bonuses on Wall Street. "I do not understand how financial institutions could think they could take taxpayer money and turn around and act like it's business as usual," Warren says. "I don't understand how they can't see that the world has changed in a fundamental way - it's not business as...

As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression. » read more

Last week, Goldman Sachs released its second-best set of quarterly earnings ever, putting the firm on track to paying its highest bonuses ever. Reacting to suggestions that this was somehow wrong, Goldman Sachs Chief Financial Officer David Viniar said, "We are focused on the economic climate. We are focused on what is going on with other people." He held back what most people at Goldman are thinking: "We really just don't care." Why should they? The government, with its massive bailout and subsidization of Wall Street, has sent the message that public money will c over private losses if you...

Bailout Helps Fuel a New Era of Wall Street Wealth By GRAHAM BOWLEY Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses. Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes? It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers...

NEW YORK – Get over it, America. Wall Street bankers make too much money. The latest example: Goldman Sachs says it has set aside $16.7 billion so far this year for compensation — or about $530,000 per employee. Not bad for a company that a year ago received $10 billion in federal money as well as $12.9 billion from the government's bailout of American International Group Inc. Maddening? Sure. But forcing Goldman or any other Wall Street firm to pay employees less won't help a single unemployed American find a job. It won't help a single homeowner who can't afford...

<p>On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst.</p>

One of America's wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that prosecutors say generated more than $25 million in illegal profits and should be a wake-up call for Wall Street. Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to trade based on insider information about several publicly traded companies, including Google Inc. U.S. Attorney Preet Bharara told a news conference it was the...

Raj Rajaratnam was ranked by Forbes magazine last year among the 400 richest AmericansThe billionaire founder of the Galleon Group hedge fund and five others were arrested in a $20 million insider trading scandal, federal authorities said Friday. Raj Rajaratnam, 52, ranked by Forbes magazine last year among the 400 richest Americans, was charged with conspiracy and securities fraud along with current and former executives from Bear Stearns, IBM, Intel Capital and McKinsey & Co., according to federal prosecutors. Rajaratnam, was ranked No. 559 by Forbes magazine this year among the world's wealthiest billionaires, with a $1.3 billion net worth....

Lately there's has been an anti-Wall Street sentiment, propagated by the media that has become exacerbated as the Dow Jones Industrial Average (DJIA) hit 10,000 Oct. 14. On CNBC's Oct. 15 "Street Signs," Jim Cramer, host of "Mad Money," was asked by fill-in host Melissa Francis what he thought about the outrage over Wall Street hitting its stride, while unemployment continues to rise. "What did you think about [Morgan Stanley CEO] John Mack's answer to the big question of the day, which is the divergence between Main Street and Wall Street?" Francis asked. "We see Dow 10,000 - bonuses are...

Reason Foundation http://reason.org http://reason.org/news/show/three-guiding-principles-for-r Three Guiding Principles for Reforming Wall Street Cure the problems, don't create new ones Anthony Randazzo October 12, 2009 In the wake of the massive bank bailouts, nearly everyone is calling for some kind of financial regulatory system overhaul. The Obama administration has outlined what it would like to see and Congress is currently holding hearings on how to best reform the regulatory structure. But the lobbying began long ago. Big banks are squaring off against smaller banks in the debate over consolidating national banking regulatory powers. All banks are lining up against financial institutions like...

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 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...

I remember that just a year ago people on the Left were excited with the Dow’s fall because the “rich” on Wall St, “the wealthy,” were losing money. So… why are they now excited with the Dow’s 10,000? Furthermore, in late ’03, under President Bush, the Dow in a period of just a few months reclaimed 10,000 of its 7,600 low. I do not remember the left calling that a “recovering” economy, and in November ’06 when the Dow was at 12,000, the Left didn’t call it a “good” economy either.

NEW YORK – Bruce Wasserstein, the CEO of Lazard Ltd., has died, according to a Wall Street Journal report Wednesday, which cited sources familiar with the matter

“IF you really want to know why the financial system nearly collapsed in the fall of 2008, I can tell you in one simple sentence.” The statement came from a man sitting three or four stools away from me in a sparsely populated Midtown bar, where I was waiting for a friend. “But I have to buy you a drink to hear it?” I asked. “Absolutely not,” he said. “I can buy my own drinks. My 401(k) is intact. I got out of the market 8 or 10 years ago, when I saw what was happening.” He did indeed look...

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one. The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people...

"Today, I was listening to the Glenn Beck program and heard about Rep. Paul Kanjorski’s comments on the financial crisis that took place on September 15th, 2008. According to Mr. Kanjorski: “On Thursday [September 15] , at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two. Money was being removed electronically. The treasury tried to help with $150 Billion, but could not stem the tide. It was an electronic run on the banks The treasury intervened...

We are Wall Street. It's our job to make money. Whether it is a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it was profitable. I didn't hear America complaining when the market was roaring to 14,000 and everyone's 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I have never heard of anyone going to Gamblers anonymous because they won too much in Vegas. Well now the market crapped out, & even though it has come back somewhat, the government and the...

Stocks tumbled Thursday after a disappointing ISM report on manufacturing piled on to worries about the economic recovery. The Dow Jones Industrial Average lost 203 points, or 2.1 percent — it's worst decline since July 2, which was before the summer rally began. The S&P 500 fell 2.6 percent and the Nasdaq dropped 3.1 percent.The Institute for Supply Management reported its gauge of manufacturing activity fell to 52.6 in September from 52.9 in August, short of expectations. "This was a good report even if the 'what have you done for me lately' crowd tries to trash it," Joel Naroff of...

Just a few short weeks ago the President spoke to Wall Street CEOs on the anniversary of the Lehman Bros. collapse: Unfortunately, there are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we're still recovering, they're choosing to ignore those lessons. I'm convinced they do so not just at their own peril, but at our nation's. So I want everybody here to hear my words: We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this...

You have to love the "moral outrage" expressed in articles like this: The information that flowed from the banks, the ratings agencies, the regulatory agencies, and the mainstream media—the bedrock of the financial markets, in a sense—was viewed with great suspicion, and that created an opportunity for financial bloggers: a motley assortment of amateurs and professionals from all over the map. There are traders, economists, venture capitalists, financial advisers, and pajama-clad cranks all vying to explain the complex machinations that got us into this mess and to critique governmental solutions. Complex machinations? On the contrary. The only thing that is...

SO, is this how Goldman Sachs does it? "It," of course, is making gobs of money even when nobody else on Wall Street can. And those profits then go into outrageous bonuses to employees, which cause rancor on Capitol Hill and on Main Street. You've heard the old saying, "it's not what you know, but who you know." Goldman Sachs knows lots of important people. That fact is indisputable, mainly because former Goldman employees are scattered around the country, and the globe, in important, decision-making financial positions.

Wall Street has showered nearly $11 million on the Senate since the beginning of the year, and more than 15 percent of it has gone to a single senator: Democrat Chuck Schumer of New York. Schumer’s $1.65 million take from the financial services industry is nearly twice that of any other senator's — and more than five times what the industry gave to any single Republican senator.

Democrat's $1.65 million take from the financial services industry is nearly twice that of any other senator's Wall Street has showered nearly $11 million on the Senate since the beginning of the year, and more than 15 percent of it has gone to a single senator: Democrat Chuck Schumer of New York. Schumer’s $1.65 million take from the financial services industry is nearly twice that of any other senator's — and more than five times what the industry gave to any single Republican senator. While the industry has scaled back its political spending in the wake of last year’s economic...

Investors will look to slew of economic reports to be released this week NEW YORK - Investors are just not sure where the economy is headed. And so the stock market may be in limbo for a while. After stocks stumbled last week on disappointing reports on housing and manufacturing, investors are concerned that the economy's rebound will be slower than originally thought. They may cool their buying and even resort to more selling until they are more certain that the strength of the recovery warrants extending the nearly seven-month-long advance in stocks

The Administration’s proposal on the resolution of systemically-important financial institutions, if adopted, would lead to the creation of ‘zombie banks’ that can neither die nor restructure sufficiently to be viable.

Note: The following text is a quote: HE BRIEFING ROOM • THE BLOG TUESDAY, SEPTEMBER 22ND, 2009 AT 4:55 PM For Whom the (Trading) Bell Tolls: Reforming Wall St. to Protect Main St. Posted by Jared Bernstein In the heat of the debate about the need to fundamentally reform the way financial markets operate, both here in America and abroad, one crucially important point risks getting lost: the stakes for the middle class. Too often, debates like these end up with the regulators on one side and those whom they would regulate on the other. When the debate is focused...

HANK Paulson has admitted that he kept in touch with "market participants" on Wall Street when he was Treasury secretary. But did the former head of Goldman Sachs use his government position to enrich his friends during one of the most tumultuous times in US financial history? Paulson's phone logs, which I obtained after a Freedom of Information Act request, show that the Treasury chief kept in frequent touch with a virtual Who's Who of Wall Street's power players. But a half-hour block of time could prove to be the most intriguing bit of non-information in his schedule. Let me...

Trading volume surged 14% or more last month from July at online brokerage firms Charles Schwab Corp., TD Ameritrade Holding Corp. and E*Trade Financial Corp. Electronic trader Knight Capital Group Inc. also posted a 7.7% increase. It amounts to an unusually large jump in online trading, traditionally the domain of smaller investors. "Usually, August is one of the worst months of the year," said Richard Repetto, with volume typically falling 10% from July. The trading surge coincided with a powerful rally in stock prices -- a wave these traders may have been trying to ride. The Dow Jones Industrial Average...

WASHINGTON -- In her maiden Supreme Court appearance last week, Justice Sonia Sotomayor made a provocative comment that probed the foundations of corporate law. During arguments in a campaign-finance case, the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled. But Justice Sotomayor suggested the majority might have it all wrong -- and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have. Judges "created corporations as persons, gave birth to corporations as persons,"...

The Financial Crash, U.S. Dollar, Cash and Gold Sep 16, 2009 - 09:21 AM By: Tarek_Saab With the Dow continuing its steady climb into September, economists are giddy with enthusiasm as they usher forth a stream of emotional pontification throughout the news media. Calls for a new bull market and an end to the recession are increasing with the rising levels of optimism (see: MarketWatch). How anyone can be bullish on stocks despite the innumerable economic warning signs is beyond my comprehension. The recent figures in the Daily Sentiment Index reporting that traders are 89-90% bullish is a testament to...