Tag Archives: wall street

Bloomberg Tells Michigan Grads They Must Defeat Bernie’s Plan to Jail Wall Street Felons

By  William K. Black
May 2, 2016      Bloomington, MN

Michael Bloomberg has just published, in Bloomberg, what he describes as “an adaptation of an address to the University of Michigan’s class of 2016.”  Having graduated twice from Michigan, as did our eldest, I was intrigued.  Bloomberg’s title was “Here’s Your Degree.  Now Go Defeat Demagogues.”  What Bloomberg means is that he is frightened that so many young people supported the “Occupy Wall Street” movement and support Bernie Sanders.  I’ve written before about Bloomberg, a Wall Street billionaire, and the myths he tries to spread about Bernie.  Wall Street elites fear Bernie.  They know he won’t take their money, he will end the systemically dangerous banks, and he will imprison their leading felons.  Bloomberg’s hate for, and fear of, Bernie is perfectly rational.  Why he thinks that Michigan students will take his advice and learn to love Wall Street’s felons is a lot less clear.

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Obama’s Great Lie: What’s Good for Wall Street Felons is Good for America

By William K. Black
April 30, 2016     Bloomington, MN

To no one’s surprise, President Obama lobs periodic attacks on Bernie Sanders’ plans to restore the rule of law to Wall Street elites.  Obama launched his latest attack, fittingly, through Wall Street’s sycophant-in-chief, Andrew Ross Sorkin.  Sorkin’s column expresses his shock at how Obama repeatedly extended their interview for hours beyond its scheduled length.  No one else is shocked that Obama, trying to make the case that bailing out the Wall Street felons was an act of supreme genius, would find Sorkin’s relentless sycophancy towards those felons and their political cronies so endearing.  This is the first segment of my response.  It focuses on the Obama administration’s great lie – the only policy “tools that work” in response to a financial crisis are getting “in bed with the banks” and making even wealthier through federal bailouts the bankers who grew wealthy by leading the fraud epidemics that caused the crisis.

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Fraud Key Profit Center for Wall Street

BWU/NEP’s Bill Black is interviewed by Greg Hunter over at USAWatchdog.com. The topic is fraudulent banking. You can view the post here.

Wall Street Declares War on Bernie Sanders

By William K. Black

Wall Street billionaires are freaking out about the chance that Bernie Sanders could be elected President.  Stephen Schwarzman, one of the wealthiest and most odious people in the world, told the Wall Street Journal that one of the three principal causes of the recent global financial trauma was “the market’s” fear that Sanders may be elected President.  Schwarzman is infamous for ranting that President Obama’s proposals to end the “carried interest” tax scam that allows private equity billionaires like Schwarzman to pay lower income tax rates than their secretaries was “like when Hitler invaded Poland.”

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NEP’s Bill Black on The Real News

Bill appears on The Real News along with Public Banking Institute founder Ellen Brown. They are discussing Hillary’s record on regulating Wall Street. You can watch the video below and for the video with transcript, you can visit The Real News here.

Bernie Sanders Decries Lack of Wall Street Prosecutions

NEP’s Bill Black appears on The Real News and says it’s important to reimplement the Glass-Steagall Act – but it’s not enough to prevent another financial crisis. You can view here with transcript or watch video below.

Loathsome Wall Street Deficit Hysterics: ‘Blame the Old and Sick, Not Us’ – Part 2

By Michael Hoexter

[Part I]

Stated as above, the deficit hysteria-driven austerity campaign would have never gotten off the ground; no one outside the financial industry or its paid minions would choose to design society to facilitate the financial sector’s enrichment at the expense of the rest of the economy.  However, the engineers of this campaign, including Peterson and Rubin, have couched the deficit hysteria campaign as if Social Security and other social spending are simply financial transactions between members of the private sector, generalizing as it were from their experience on Wall Street.  In transactions between members of the private sector, credits and liabilities are assumed to balance.  Debts must be paid in full or the debtor is assigned a social or financial penalty and/or stigma.  This simple morality is supposed to apply to private sector to private sector business transactions (though often for Wall Street and the well-connected this morality is rarely compulsory) and is in most day-to-day interactions a workable rule of thumb for anonymous or largely anonymous business dealings between people.

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Loathsome Wall Street Deficit Hysterics: ‘Blame the Old and Sick, Not Us’ – Part 1

By Michael Hoexter

The austerity push by politicians, political operatives, and pundits of the last 5 years is the height of economic, political, and social perversity and stupidity. Yet, as it still resonates in the halls of power, in the White House and Congress, and in many parts of the media, it still requires explanation and clarification.  Besides inspiring the reduced level of government funding we are now seeing in the US and elsewhere, the deficit hysteria campaign is threatening to undermine what remains of the American social safety net that helped form and support the American middle class over the past 70 years.  In addition, now and in the future, we will need a government able to use the full range of fiscal (i.e. financial) tools to combat climate change, tools which the austerity campaign seeks to lame or sequester for the benefit of a small financial elite.   In the latest turn, deficit hysterics are trying to incite intergenerational warfare between the young and the old, accusing the latter of taking more than their share of public financial resources which the young will need later in life.

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Wall Street uses the Third Way to lead its assault on Social Security

By William K. Black
(Cross-posted at HuffingtonPost.com)

Third Way, lobbyists for and from Wall Street who are leading the effort to enrich Wall Street by privatizing Social Security, was created by Wall Street to fool some of the people all of the time.  I have written previously to expose their fictional claims to be a moderate or liberal Democratic group. Continue reading

It Takes Real Skill to Lose $2 Billion

By L. Randall Wray
Sometimes you come across a story that really warms the cockles of your heart. I am talking, of course, about the report on UBS’s star trader, Kweku M. Adoboli who lost $2 billion. He is only 31 years old. Now, what had you accomplished by the time you were 31? Mr. Adoboli had risen through the ranks to the point that he was entrusted with a trading account that let him accumulate a loss of $2 billion. Imagine this guy’s potential! Limitless opportunities await him on Wall Street—at least, once he gets out of prison. And he could open a “think tank” like Michael Milken, devoted to proving that his trades might possibly have made good if only the world had cooperated.

Look, it’s easy to make billions on Wall Street—any dopey trader can do that. You can always follow the example set by John Paulson. Approach Goldman Sachs and propose that the firm let you pick the worst possible toxic waste assets, bundle them into securities, and then Goldman sells them to its own clients. Upward of 98% of the bad assets prove to be, well, bad, and both you and Goldman make out like bandits, and the clients get screwed. Duping customers is the sure-fire investment bank way to make profits. You cannot help but funnel client’s money to traders’ bonuses. It is impossible to lose, and that is why Wall Street is doing just fine, thank you, while the global economy collapses all around us.

Mr. Adoboli presumably tired of the sure thing. According to reports, he was supposed to be working in exchange traded funds, matching buyers and sellers in a high volume, low risk market where risks are easily hedged. That is sort of like the investment bank equivalent of a Jimmy Stewart thrift. Obviously, no one wants to do that kind of business—earning spread money. And so investment banks have created an infinite number of schemes to dupe sellers and buyers, trading for their own account while betting against clients.

But that’s the sure thing. Mr. Adoboli instead—according to various reports—tried to take advantage of price differentials between traded index securities and underlying stocks, and avoided hedging risk.
It’s hard to lose money in investment banking, but if you are really, really clever you can find a way to do it.

I hope he gets his bonuses this year. Initiative deserves reward. After all, the big banks continued to pay stupendous bonuses when the financial crisis hit, rewarding traders and CEOs for record losses. The argument, of course, was that in a time of such distress, no bank could afford to lose such highly skilled help. Where would they find replacements able to dream up losing propositions?

Now, UBS will need to keep Mr. Adoboli on retainer or they’ll lose him to a competitor looking for a star with potential to lose big bucks. After a stint punching out license plates, he’ll rise to the top of some investment bank. I’ll put my money on him—as the next Bob Rubin, Lloyd Blankfein, Dick Fuld, John Thain, Hank Paulson or Joe Cassano, all richly rewarded for driving their institutions into the ground.
No one remembers the CEOs or traders who actually make money for their shareholders. Name one. That’s what I thought, you can’t. Because it’s child’s play. We remember the Nick Leesons, the guys with real vision and willingness to take risk, and ability to run up losses.

Even John Paulson got tired of the easy, sure thing. He’s now on a fantastic losing streak. He’s down 40% this year. Yes, I know he made $5 billion last year betting on gold. But gold is a fool’s bet. Look, when Dallas hedge fund manager J. Kyle Bass dupes the University of Texas into buying a billion dollars in gold bars, you know gold has become the sucker’s bet. Poor Paulson does not realize he is on the client side of a Vampire Blood Sucking Squid trade this time!

After all, investment banks only lose the money of clients and shareholders. Who cares? Wall Street is just a crap shoot, with other people’s money—heads Wall Street wins and tails everyone else loses. Why all the fuss?

Think about it this way. Let us say you go to Las Vegas to lose $2 billion (maybe you are the treasurer for a pension fund) and start feeding the slot machines as quickly as you can. The problem, of course, is that you are going to win occasionally—so you’ve got to get those coins back into the slots. Your goal is to lose, say, $1000 per day. Maybe you’ve got to put $1850 on average per day into the one-armed bandits to average a loss at that daily rate. It’s going to take you about 5500 years to lose $2 billion. That shows you the long odds that Mr. Adoboli was up against—he’s only 31 and he’s already lost his first $2 billion.

That folks, is skill.  

In related news you cannot miss three similarly heart-warming stories.
1. In a new book to come out this week by Ron Susskind (Confidence Men: Wall Street, Washington, and The Education of A President) we’ll see how Timmy Geithner saved the world from a rookie President Obama who ordered the Treasury to develop a plan to shut down the biggest banksters. Fortunately, Geithner thought better of that, so instead he worked with the Fed to provide a $29 trillion dollar rescue package to keep the banksters in business. If he had actually listened to his president, who knows whether Mr. Adoboli would have been able to lose those billions. 
2. Former Senator Bob Graham urged President Obama to reopen and investigation into the Bush Administration’s rescue of Saudis in the aftermath of 9-11. You see, most of the terrorists involved were Saudis and they almost certainly had help from rich and prominent Saudis living in the US. Fearing a backlash, investigation, and possible prosecution they asked President Bush to make a wee little exception to the grounding of all aircraft. Bush launched a fleet of jets to rescue them. All this had been exposed long ago by Michael Moore, but new information sheds lights on close connections between particular terrorists and rescued Saudis. Since the Bushes and the Bin Ladens are close family friends (even closer than the Bass brothers), all stops were pulled to sweep them out of the country. You’ve got to love the loyalty.
3. And speaking of loyalty, what do you do when your best bud dies? You take him bar-hopping of course. Especially if you live in Denver, where they not only serve drunks, but even corpses! When two guys found their buddy dead, they loaded him into the car and headed to the bar. The dead guy paid. After a couple of bars, his friends dropped him back at home to rest in peace, then they hit the ATM machines using his card. He won’t need the money in the sweet hereafter, after all. (The only Bush angle I could find is that brother Neil helped to bring down Silverado in Denver, with Uncle Sam footing the billion dollar loss. But we know those Bushes like to party and I’m sure they appreciate the spare-no-opportunity-to-party initiative taken.)