Posted on 07/23/2002 5:11:52 PM PDT by rumrunner
Larry Kudlow mentioned that the Federal Reserve may be meeting tonight to discuss the exposure of Citibank and JP Morgan Chase to derivatives and the stock market collapse.
Possible that both banks have billions of derivatives that need to be unwound. Would collapse the banking industry.
"Screenplay. Nobody ever loved life, feared death, or described them better than Tolstoy. In this famous novella, the archetypal story of a man who "has it all", Ivan is stricken by cancer in middle age, rages against the idea of death, and is finally reconciled to its inevitability. Tolstoy satirizes nineteenth-century Russian society, the bureaucracy, the medical profession, and marriage. This screenplay contains an animated sequence describing a failing marriage through the use of "Mamushka" dolls; music by Tchaikovsky. Approx. running time: 120 minutes."
You really ought to pick up a copy of "At Any Cost: How Al Gore Tried to Steal the Election." After reading that book, you'll never trust any network on anything they ever say ever again ... not even Fox.
Tue Jul 23
Citigroup Inc. (NYSE: C - News) and J.P. Morgan (NYSE: JPM - News) Chase & Co . , already facing scrutiny for devising allegedly deceptive transactions for Enron Corp., marketed similarly structured deals to a slew of other companies, Tuesday's Wall Street Journal reported, citing testimony that a senior congressional investigator will give at hearings that start today.
The names of the other companies weren't disclosed.
The hearings, part of a Senate investigation into the role banks played in Enron's troubled finances, are the latest in a series of investigations into the two banks regarding their ties to Enron, which filed for bankruptcy-court protection late last year. The investigations include separate probes conducted by the Securities and Exchange Commission ( news - web sites) and the office of Manhattan District Attorney Robert Morgenthau.
Now, a person familiar with the matter says, the Justice Department ( news - web sites)'s Enron Task Force also is looking into the roles that financial institutions, including Citigroup, J.P. Morgan , Merrill Lynch & Co . and National Westminster Bank, now a unit of Royal Bank of Scotland PLC, may have played in Enron's demise.
Citigroup and J.P. Morgan declined to comment on the hearings or the investigations. Merrill and Royal Bank of Scotland couldn't be reached for a comment.
The deals under congressional scrutiny include arrangements known as Yosemite, devised by Citigroup, and Mahonia, devised by J.P. Morgan , both of which were designed to make Enron's public disclosures more appealing to investors, according to the testimony.
An official familiar with the investigation will testify at today's hearings before that panel that Yosemite, Mahonia and other deals allowed Enron to understate its debt by 40% while overstating cash flow by as much as 50%, according to a draft of his statement. Cash flow is a crucial measure of financial health for energy companies such as Enron.
"The evidence indicates that Enron would not have been able to engage in the extent of the accounting deception it did, involving billions of dollars, were it not for the active participation of major financial institutions," says a copy of the testimony.
Banks such as J.P. Morgan and Citigroup were "willing to go along with and even expand upon Enron's activities."
J.P. Morgan , in fact, had a "pitch book" to sell other companies on similar financing vehicles, according to a copy of the testimony. J.P. Morgan entered into similar transactions with seven other companies, while Citigroup shopped such deals around to as many as 14, with at least three entering into such relationships, the testimony says.
The hearings will focus on a commodity-trading vehicle known as a prepay, in which a financier gives money in exchange for future delivery of a commodity such as gas, gold or oil. Such arrangements are common, but in the hands of Citigroup and J.P. Morgan , they became the building blocks for extremely complex transactions that Enron used to disguise debt as trades and create the appearance the company was generating cash, people familiar with the matter said.
Wall Street Journal Staff Reporters Jathon Sapsford and Paul Beckett contributed to this report.
I still haven't heard ONE WORD about Robert Rubin in a negative light from the "news' reporters". If he were "friends" of Republicans or Bush it would be breaking news yesterday, today, tomorrow...
Give the WSJ guys a few days. They live for company-destroying scandals like this, and have so many sources they WILL find out those names pretty soon.
And when they do, how much do you want to bet that the vast majority have very strong ties to Clinton Administration cabinet member, Al Gore, or The Big Unit himself?
Not at all.
He'll be on vacation at some VERY secluded spot, with no cel phone. Oh, and he'll be with his family, so we MUST respect his privacy.
Next, scream Halliburton and Harkin, and the paper goes to bed.
I still have my dream: that Robert Rubin sits before a Congressional Committee and is forced to plead the Fifth Amendment. On television, so that the tape can be run in 1000 campaign commercials for the GOP.
TOOOO LATE! This was a viable plan in January `01. But NOOOOooo! Jorge had to go the "bipartisan" route. Now, it would look like Jorge has come completely unglued and is desperately fishing for scapegoats.
Like it or not, this will go down in the history books as the Great Bush Depression.
I'm surprised that no one has looked at William B Harrison's leanings. He's the CEO of JP Morgan Chase and an old buddy of Erskine Bowles from prep school. See the following from http://www.nymag.com/page.cfm?page_id=5763
Stranger still was the firm's $60 million investment, in October 1999, in Intelisys (which became Metiom). At the time, the company was little more than an in-house software company incubated by Chase Manhattan. It aimed to develop software to feed the then booming business-to-business procurement market on the Internet. B2B, in the parlance of the time, was the hot investment theme. And since Bowles was a prep-school classmate of fellow North Carolinian and Chase CEO William Harrison, it was natural that Intelisys go first to Forstmann Little.
While Bowles was a board member of McLeod, tiny little Metiom, over which he presided as board chairman, was the company that absorbed the vast bulk of his time. For over a year, Bowles logged hundreds of hours trying vainly to use his comprehensive Rolodex to bring the company business.
It was an odd pairing. Bowles's $4.28 million salary at Forstmann Little was not far from Metiom's entire revenue. Forstmann had employed a similar strategy when he had recruited Donald Rumsfeld to whip his bedraggled General Instrument into shape in the early nineties. And Bowles did try to make some rain.
They chose unwisely.
No, this will not be The Bush Depression, because the administration has refrained from dumping on the Clintons. Now that there is something that can be proven, I imagine that the SEC (who hired lots of extra people early this year) and the DOJ will be quite busy. This is pretty easy to explain in a campaign commercial, if the media refuses to cover it.
One idea for a commercial theme: the Rats don't care about the economy as long as they can gain power.
Yeah, "dream" is right! Rubin and Clinton will be fingered for ruining our financial system right after the American media and university academics issue a joint apology to the late Joe McCarthy for ever having doubted his assertions that the federal government was full of Soviet spies!
A few weeks ago John MacLaughlin said "Ten more Enrons." This has been in the pipeline for a while.
Once when mounting a step ladder to show the upholsterer, who did not understand, how he wanted the hangings draped, he made a false step and slipped, but being a strong and agile man he clung on and only knocked his side against the knob of the window frame. The bruised place was painful but the pain soon passed, and he felt particularly bright and well just then. He wrote: "I feel fifteen years younger." He thought he would have everything ready by September, but it dragged on till mid-October. But the result was charming not only in his eyes but to everyone who saw it.Actually, it is a pretty short story. Here it is. I am generally not a fan of Tolstoy- I have this thing about anarchists and especially ones who tend to write in a boring matter. But this was a good story. A troubling work about dying.In reality it was just what is usually seen in the houses of people of moderate means who want to appear rich, and therefore succeed only in resembling others like themselves: there are damasks, dark wood, plants, rugs, and dull and polished bronzes -- all the things people of a certain class have in order to resemble other people of that class. His house was so like the others that it would never have been noticed, but to him it all seemed to be quite exceptional. He was very happy when he met his family at the station and brought them to the newly furnished house all lit up, where a footman in a white tie opened the door into the hall decorated with plants, and when they went on into the drawing-room and the study uttering exclamations of delight. He conducted them everywhere, drank in their praises eagerly, and beamed with pleasure. At tea that evening, when Praskovya Fedorovna among others things asked him about his fall, he laughed, and showed them how he had gone flying and had frightened the upholsterer.
"It's a good thing I'm a bit of an athlete. Another man might have been killed, but I merely knocked myself, just here; it hurts when it's touched, but it's passing off already -- it's only a bruise."
Thanks for sanity checking me !
There are several variiables playing into this, including the coming attack on Iraq or Iran, the coming Congressional elections, the fact that Clinton will not keep his mouth shut, and the fact that the President gave all these people a chance to work together for the good of the country, which they refused to do.
I am betting on Dubya, who has proven to be a lot smarter than the pundits.
As I said, we will see.
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