Makovsky is a PR group that specializes in representing banks. Because of that dual specialization they should be the most skilled shills for fraudulent bankers that money can buy. This fact makes their annual “reputation” survey delectable. Each year, the survey unintentionally documents how depraved senior bankers are as a group. They come to praise Caesar, but end up burying him in a garbage dump.
Here are key findings of their 2014 survey:
For the purposes of writing a column I ended up reading materials written by the financial industry PR specialist Makovsky and found this nugget. A Makovsky executive was interviewed about Millennials and he explained the finance industry’s perspective on that group. Millennials have been leading victims of financial fraud and the resultant Great Recession so they have no love of financial firms: “the four major banks in the U.S, were ranked in the 10 least loved brands among Millennials according to Viacom.”
The Millennials’ disdain for big finance is terrifying to finance for an excellent reason that Makovsky quantified.
The old line that one should be very careful about what one wishes for – for you may receive it applies to Germany’s installation of Jean-Claude Juncker as head of the EU Commission. Germany’s Prime Minister Angela Merkel has just crushed her UK counterpart (David Cameron) by orchestrating a nearly unanimous vote among EU nations to appoint (not, really, “elect”) Juncker as head of the EU Commission (not, really, “Parliament”).
The old days of needing to hide Germany’s control of the EU through the façade of a German-French partnership are long gone. EU nations know that there will be a high price to pay for attempting to buck Germany – and that the effort will fail. Cameron’s effort to block Juncker is generally viewed outside of the UK as quixotic and humiliating while Merkel is viewed as reigning supreme and serene.
John Cochrane, the U. Chicago apologist-in-chief for elite corporate criminals, might want to read what the industry says about fraud. Cochrane claims that the reason we have a modest economic recovery has nothing to do with inadequate demand, but is instead caused by government civil suits (not even prosecutions) against the financial industry’s massive frauds.
Cochrane apparently knows that corporate fraud does not exist, which is why he describes the government’s civil fraud suits as a “witch hunt.” As I’ve described several times, Cochrane refuses to read the relevant criminology literature, but perhaps he’s willing to listen to the industry.
Monday, July 7, 2014 provided another example of Paul Krugman explaining why austerity was an insane response to the Great Recession and the New York Times authoring another of its endless articles that assumes that austerity is essential to a eurozone recovery. I have no problem with the NYT reporters providing their rationale for why they concluded that Krugman was wrong and that austerity is the proper response to a recession. My problems are with the NYT reporters ignoring Krugman’s views – views shared by the great bulk of economists – and with their failure to question whether austerity is the proper response to a recession.
Recessions occur when demand becomes seriously inadequate and industries fire workers and decrease production and investment. Austerity further reduces already inadequate demand by reducing public sector demand. Austerity is akin to bleeding the patient (the economy) to make him well. It would, therefore, be exceptionally strange if austerity were to be the optimal response to the Great Recession. We have a great deal of real world experience in dealing with recessions that confirms that austerity is self-destructive in such circumstances.
By William K. Black
(Cross posted on Benzinga.com)
A classic accounting control fraud, Gowex, has collapsed in Spain. Gowex was a wi-fi firm. It was able to run its scam for at least four years. It was a crude scam that involved simply making up contracts and borrowing to grow rapidly.
“The US firm Gotham City Research had described Gowex as a ‘charade’ and said that its revenues were ‘at most’ 10% of those reported.”
As soon as Gotham City Research blew the whistle on Gowex it made it impossible for Gowex to borrow additional funds and avoid collapse.
In a PR effort that aptly illustrates his approach to governance, President Obama has revealed that he is meeting with a “wide variety of economists” to try to figure out what economic policies he should follow. “Obama Seeks Advice From Wide Variety of Economists.”
Obama is already well into the lame duck phase of his presidency, so this is simply a PR exercise. The message Obama wants to send is the same one he has sounded throughout his presidency. He is open to economic views from the parts of the political spectrum that range from the hard right to the mild left.
In a recent column I responded to a conservative scholar’s (Victor David Hanson) claim that U.S. “employment rates for college graduates are dismal” by showing that the employment rate for college graduates seeking employment was 96.8% – and rising.
Employment rates for recent college graduates are far worse than “dismal” in the periphery of Europe because the EU troika (the ECB, the EU Commission, and the IMF) have inflicted austerity on these nations. This produced a gratuitous second Great Recession in the Eurozone as a whole, but it also caused Great Depression levels of unemployment in Spain, Greece, and Italy. Those three nations have over 100 million in total population – roughly one-third of the eurozone’s total population. College graduates in these nations have unemployment rates ten times greater than in the U.S. (Hanson is a big fan of austerity, so he managed to get everything – the facts and the cause – reversed in his fable.)
Gretchen Morgenson has brought a revealing study to the attention of the public in her article entitled “The CEO is My Friend, So Back Off.” Here’s the bad news – the situation is vastly worse than the authors of the study conclude and the policy advice that experts offered Morgenson in response to the findings would fail where they were most needed.
Morgenson begins her article by describing a recent speech by the head of the SEC to an audience containing many board directors.
Posted in William K. Black
Tagged accounting control fraud, banksters, CEO, criminogenic environment
Introduction
Wikileaks has done the world a great service again by publishing a leak of an April 2014 (partial) draft of the Trade in Services Agreement (TISA).
Professor Jane Kelsey of the Faculty of Law, University of Auckland prepared an analysis of the leak that I recommend that everyone read. She, appropriately, emphasizes that any analysis must be tentative because we have only a partial, stale draft through the whistleblower(s).
My analysis is more limited in scope but is consistent with the thrust of her concerns.
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