Archive for July, 2013

My Vote for the Next Fed Chairman

35 | By Shah Gilani

LARRY SUMMERS FOR FED CHAIRMAN!

Why? You just have to get to know the guy, and you’ll see he’s perfectly qualified to head the central banking system of the United States of America.

Here’s just part of his résumé.

From 1982-1983, Lawrence Summers was on staff at Ronald Reagan’s Council of Economic Advisers. That’s where Lawrence of Enablers first earned his “Deregulate Everything” T-shirt.

After his brief stint on the Gipper’s Council, where he was taught how real pros corral free markets for personal profit, the Enabler headed back to Harvard to teach kids (and himself) how to squeeze personal wealth out of mere economic theory.

He got his next shot at stardom as Chief Economist of the World Bank in 1991. He was there until 1993.

While there, he wasted no time shining a light on himself. In a 1991 interview he famously said, “There are no limits to the carrying capacity of the earth that are likely to bind any time in the foreseeable future. There isn’t a risk of an apocalypse due to global warming or anything else. The idea that we should put limits on growth because of some natural limit is a profound error and one that, were it ever to prove influential, would have staggering social costs.”

Interesting.

Who knew that the science of economics, which is more like an art – and in Larry’s case a nihilistic art – had branches in meteorology, geophysics, and earth science?

Now for a good laugh, check out what he did next…

How “Revolving Doors” Protect Wall Street’s Fraudsters

9 | By Shah Gilani

A funny thing happened on Robert Khuzami’s way to a $5-million-a-year job.

By funny I mean sickening; by sickening I mean a travesty of a mockery of a sham; by a travesty of a mockery of a sham I mean how the operatives at the SEC sometimes operate.

Robert Khuzami, the recently former head of enforcement at the Securities and Exchange Commission, just signed with powerhouse law firm Kirkland & Ellis, one of the nation’s biggest corporate firms, for a deal that guarantees him $5 million a year for at least the next two years.

After that, who knows? He might work his way up to join the top slot prestidigitators, I mean professionals, at the firm, who are paid about $8 million a year.

Good for him. He’s smart, aggressive, and knows how the games are played. He’s a playa.

Not at the SEC, of course. There, as the top dog biting the behinds of Wall Street miscreants, the good-looking enforcement chief did a bang-up job chasing down inside traders like Raj Rajaratnam and Rajat Gupta.

And to his credit, he bit the bicycle wheels of the fast-moving Goldman Sachs, slowing them down enough to pay a $550 million fine in 2010 for misleading investors on a collateralized debt obligation (CDO) deal called Abacus.

You may know that round two of that fight – over whether or not Goldman’s man, the Fabulous Fab Tourre, who put one part of Abacus together (there were several deals under the Abacus name), did so with the help of hedge fund honcho John Paulson to guarantee the product would fail and Paulson would reap a windfall – is now on trial.

Here’s what you probably don’t know…

How the Sopranos of Wall Street Just Took Us for $5 Billion in “Rent”

24 | By Shah Gilani

Wow, let’s give giant “kudos” today to journalist Gretchen Morgenson, researcher Alain Delaquérière, and the New York Times, where those two hang their investigative journalist hats.

If you didn’t catch the Business Day section in the Sunday Times yesterday, Gretchen just blew the lid off something that’s been going on for years but has managed to be tucked away so well it’s hardly ever seen the light of day.

If you’ve been paying any attention to what happens on Wall Street, you’re probably not even going to be surprised.

Shocked, yes, but surprised? No.

It’s only costing us about $5 billion this time around…

Banks Caught Manipulating Electricity Trading Now Face Billions in Fines

32 | By Shah Gilani

Are you FERC-ing kidding me?

That’s “FERC,” as in Federal Energy Regulatory Commission. And they FERC-ing rock!

The ostensibly obscure regulator of electricity transmission lines, natural-gas pipelines, and electricity and power trading just shocked some dirty banks into coming clean about their manipulation of the nation’s electricity markets.

Electricity markets? Who knew?

You may remember that back in the 1990s, the U.S. began deregulating electricity markets. States like California, New York, and Texas reorganized their “markets” to facilitate wholesale buying and selling, in other words, trading of electricity.

Hey, it’s a free market, right?

Well, apparently not.

You’ve got to see this…

How to Trade the Big Banks Now

3 | By Shah Gilani

The escalator taking Big Bank stocks higher may have finally reached the “top floor.”

That means now’s a good time to take a look at how they got to where they are and where their stocks might go from here.

Also, if you own these stocks or are thinking about buying any of them because they’ve had a nice run up, you’re going to need a strategy going forward. I’ll give you an easy one.

Let’s go.

After 14 Years of Free-for-All, Glass-Steagall Is Back

26 | By Shah Gilani

Three cheers for Elizabeth Warren!

Yesterday she launched a wire-guided Scud missile at the too-big-to-fail banks.

The freshman senator from Massachusetts, formerly a Harvard Law School professor specializing in bankruptcy law, introduced her “21st Century Glass-Steagall Act” co-sponsored with Sens. John McCain (R-Ariz.), Maria Cantwell (D-Wash.), and Angus King (I-Maine).

And it’s got the Big Banks shaking in their boots.

Here’s why.

How Big Banks Make Millions Steering Clients into Their Own Funds (and Why Nobody’s Stopping Them)

32 | By Shah Gilani

Today I want to tell you about a bank. It’s a very BIG bank. And it’s very shady.

I call this bank “the Hydra,” after the multi-headed monster from Greek mythology, because it’s got many heads: commercial banking, investment banking, market-making, trading, asset management, retail brokerage, prime brokerage, securities lending, clearing, and primary dealer status.

And if any of these “heads” get “cut off” by any of the regulators occasionally scratching its back so hard they nick the money-spewing fountainheads, not to worry. Another head will appear with a bag full of money to clear the stump for yet another head to pop up.

About 10 years ago, one of the monster’s heads was cut off – or it was supposed to be cut off. But now it’s back.

Oh, but you can relax. It’s been cut off again… supposedly.

So really, it’s been there all along and probably always will be there. (See how this works?)

Allow me to introduce “the Hydra”…

We Have to Declare Our “Independence” Again

2 | By Shah Gilani

Happy Independence Day, America!

Just one problem. We’re not truly independent here. Not even close.

Crony capitalists control Congress, the President, and his administration, while the Federal Reserve controls our banking system and our once-free markets.

We’re certainly not free, either. The Bill of Rights has been trampled to within an inch of its life. Haven’t you been paying attention? After the AP Scandal… the IRS debacle… the mass secret surveillance program leaked by Edward Snowden… drone strikes on our own citizens… there’s almost nothing left intact among those “inalienable” rights.

And don’t even get me started on our leaders in Washington

Well, at least we’re free to be bound and manipulated by our own people, instead of a foreign power.

That’s democracy, folks.

Oh, wait a minute, we don’t have to put up with this crap. Isn’t that what the Declaration of Independence was all about?

How Obamacare Will Aggravate an Already Screwed-Up System

39 | By Shah Gilani

Check out the title of a Wall Street Journal article that hit my computer screen this morning:

“Health-Insurance Costs Set for a Jolt”

That headline hit me in more ways than one.

I read the article, and the upshot is this. When the “Affordable Care Act” goes into full effect on January 1, 2014, we are all screwed. Well, not all of us. The very rich aren’t screwed, and the very poor aren’t screwed. Everybody else… we’re screwed.

As if the healthcare system in the U.S. wasn’t problematic enough, our socialist-leaning President is letting the crony capitalists eat their cake, and he has socialized an out-of-control greedy free market system so that everybody who’s not rich or poor has to serve it to them.

You’re not going to believe this…