A Tribute to Craig Ferguson
. . . something really good was happening after midnight for the last decade, and it made drinking and partying look like a waste of both time and human potential. Craig Ferguson — one of the brightest, kindest and most sincerely original talents in late night television — has been brilliantly rewriting the script for what it means to be fun and funny since taking over the “Late Late Show” in January 2005, roughly 13 years after he had his last drink, a fact he has willingly publicized. For most who have been watching, they know it’s been something special.
Not just ignoring the playbook for late night television, but rather blowing it up with the glimmering-eyed determination of a schoolboy lighting his first firecracker, Ferguson rejected house bands, human co-hosts and scripted questions for his guests. He resisted gossip and pandering, and just said no to cheap shots. In all ways, he annihilated formula with a combination of whip-smart language, guillotine-sharp wit, and a steely fearlessness . . . .
Craig's show was the best late-night TV I've ever indulged in (and for 10 years!) and it is a shame that he was so underrated by the management at CBS.
I know I'll never watch CBS that late again.
Or anything else tempting me to stay up until 1:30 AM so as not to miss the generousity and brilliance found in Craig Ferguson's one-man performance.
Nor can I imagine anything capturing my attention so totally that I've fought much-needed sleep on many nights in order to catch the latest from Craig and his co-anchors Jeff the Robot and the horse, Secretariat!
Thanks to Bob Newhart and Drew Carey for those final heart-warming show stoppers (fond bow to the memory of Suzanne Pleshette's surprise vignette which ended "The Newhart Show.")
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I've been reporting these facts for years.
I guess we can be glad that the Age of Wikileaks makes it clear that this is not a conspiracy theory.
Anyone want to join me in chorusing "Brrrrr - aaaaaaaaaaaaahhhh!" ?
Friday, Dec 19, 2014
The former secretary of labor examines how deregulation under Reagan and Bush has spawned savage inequalities
A few years ago, hedge fund Level Global Investors made $54 million selling Dell Computer stock based on insider information from a Dell employee. When charged with illegal insider trading, Global Investors’ co-founder Anthony Chiasson claimed he didn’t know where the tip came from.
Chiasson argued that few traders on Wall Street ever know where the inside tips they use come from because confidential information is, in his words, the “coin of the realm in securities markets.”
Last week the United States Court of Appeals for the Second Circuit, which oversees federal prosecutions of Wall Street, agreed. It overturned Chiasson’s conviction, citing lack of evidence Chaisson received the tip directly, or knew insiders were leaking confidential information in exchange for some personal benefit.
The Securities and Exchange Act of 1934 banned insider trading but left it up to the Securities and Exchange Commission and the courts to define it. Which they have – in recent decades so broadly that confidential information is indeed the coin of the realm.
If a CEO tells his golf buddy that his company is being taken over, and his buddy makes a killing on that information, no problem. If his buddy leaks the information to a hedge-fund manager like Chiasson, and doesn’t tell Chiasson where it comes from, Chiasson can also use the information to make a bundle.
Major players on Wall Street have been making tons of money not because they’re particularly clever but because they happen to be in the realm where a lot of coins come their way.
Last year, the top twenty-five hedge fund managers took home, on average, almost one billion dollars each. Even run-of-the-mill portfolio managers at large hedge funds averaged $2.2 million each.
Another person likely to be exonerated by the court’s ruling is Michael Steinberg, of the hedge fund SAC Capital Advisors, headed by Stephen A. Cohen.
In recent years several of Cohen’s lieutenants have been convicted of illegal insider trading. Last year Cohen himself had to pay a stiff penalty and close down SAC because of the charges, after making many billions.
SAC managed so much money that it handed over large commissions to bankers on Wall Street. Those banks possessed lots of inside information of potential value to SAC Capital. This generated possibilities for lucrative deals.
According to a Bloomberg Businessweek story from 2003, SAC’s commissions “grease the super-powerful information machine that Cohen has built up” and “wins Cohen the clout that often makes him privy to trading and analyst information ahead of rivals.”
One analyst was quoted as saying “I call Stevie personally when I have any insight or news tidbit on a company. I know he’ll put the info to use and actually trade off it.” SAC’s credo, according to one of its former traders, was always to “get the information before anyone else.”
Insider trading has also become commonplace in corporate suites, which is one reason CEO pay has skyrocketed.
CEOs and other top executives, whose compensation includes piles of company stock, routinely use their own inside knowledge of when their companies will buy back large numbers of shares of stock from the public – thereby pumping up share prices — in order to time their own personal stock transactions.
That didn’t used to be legal. Until 1981, the Securities and Exchange Commission required companies to publicly disclose the amount and timing of their buybacks. But Ronald Reagan’s SEC removed these restrictions.
Then George W. Bush’s SEC allowed top executives, even though technically company “insiders” with knowledge of the timing of their company’s stock buybacks, to quietly cash in their stock options without public disclosure.
But now it’s normal practice. According to research by Professor William Lazonick of the University of Massachusetts, between 2003 and 2012 the chief executives of the ten companies that repurchased the most stock (totaling $859 billion) received 58 percent of their total pay in stock options or stock awards.
In other words, many CEOs are making vast fortunes not because they’re good at managing their corporations but because they’re good at using insider information. It’s the coin of their realm, too.
None of this would be a problem if the only goal were economic efficiency. The faster financial markets adjust to all available information, confidential or not, the more efficient they become.
But profiting off inside information that’s not available to average investors strikes many as unfair. The “coin of the realm” on Wall Street and in corporate boardrooms is contributing to the savage inequalities of American life.
If Congress and the Securities and Exchange Commission wanted to reverse this and remove one of the largest privileges of the realm, they could. But they won’t, because those who utilize those coins also have a great deal of political power.
(Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His new movie "Inequality for All" is in Theaters. His widely-read blog can be found at www.robertreich.org.)
More Robert Reich.
Bob Rubin's personal company, Citi does the honors.
Take it away.
I mean, yes.
Former SEC Attorney, James Kidney, Speaks Out on Court’s Insider Trading Bombshell
By Pam Martens: December 16, 2014
Citigroup is the Wall Street mega bank that forced the repeal of the Glass-Steagall Act in 1999; blew itself up as a result of the repeal in 2008; was propped back up with the largest taxpayer bailout in the history of the world even though it was insolvent and didn’t qualify for a bailout; has now written its own legislation to de-regulate itself; got the President of the United States to lobby for its passage; and received an up vote from both houses of Congress in less than a week.
And there is one more thing you should know at the outset about Citigroup: it didn’t just have a hand in bringing the country to its knees in 2008; it was a key participant in the 1929 collapse under the moniker National City Bank. Both the U.S. Senate’s investigation of the collapse of the financial system in 1929 and the Financial Crisis Inquiry Commission (FCIC) that investigated the 2008 collapse cited this bank as a key culprit.
The FCIC wrote:
“…we do not accept the view that regulators lacked the power to protect the financial system. They had ample power in many arenas and they chose not to use it. To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not…Too often, they lacked the political will – in a political and ideological environment that constrained it – as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee.”
The words above from the FCIC also perfectly describe what just happened in Congress and the Oval Office. Citigroup snuck its deregulation legislation into the $1.1 trillion Cromnibus spending bill that will keep the government running through next September. (It’s called Cromnibus because it’s part Continuing Resolution or CR and part omnibus spending bill.) Just as the FCIC wrote about the reasons for the financial collapse, Citigroup was able to pass this outrageous deregulation legislation because the majority of Congress and the President “lacked the political will” and the “fortitude to critically challenge the institutions and the entire system they were entrusted to oversee.”
What Citigroup has now done with the willing participation of Congress and the President is to set the country up for the next financial collapse in which it appears destined to play another starring role, seeing that the Fed gave it a failing grade on its stress test this year. The legislation that was just passed by Congress allows Citigroup and other Wall Street banks to keep their riskiest assets – interest rate swaps and other derivatives – in the banking unit that is backstopped with FDIC deposit insurance, which is, in turn, backstopped by the U.S. taxpayer, thus ensuring another bailout of Citigroup if it blows itself up once again from soured derivative bets.
According to Bloomberg data, over the past five years – when Dodd-Frank financial reform was supposed to be making these mega banks safer – Citigroup has increased the notional amount of derivatives on its books by 69 percent. As of this past June, according to Bloomberg, “Citigroup had $62 trillion of open contracts, up from $37 trillion in June 2009.” That’s trillion with a “t.”
How much might Citigroup need from the taxpayer if it blows up again? According to the General Accountability Office, Citigroup received more bailout assistance than any other bank in the last collapse. On October 28, 2008, Citigroup received $25 billion in Troubled Asset Relief Program (TARP) funds. Less than a month later it was back with hat in hand and received another $20 billion. But its finances were so shaky that it simultaneously needed another $306 billion in government asset guarantees. And on top of all that, the New York Fed was secretly funneling it over $2 trillion in emergency loans at interest rates frequently below 1 percent.
This is how we described Citigroup’s 2008 meltdown in an article on November 24, 2008:
“Citigroup’s five-day death spiral last week was surreal. I know 20-something newlyweds who have better financial backup plans than this global banking giant. On Monday came the Town Hall meeting with employees to announce the sacking of 52,000 workers. (Aren’t Town Hall meetings supposed to instill confidence?) On Tuesday came the announcement of Citigroup losing 53 per cent of an internal hedge fund’s money in a month and bringing $17 billion of assets that had been hiding out in the Cayman Islands back onto its balance sheet. Wednesday brought the cheery news that a law firm was alleging that Citigroup peddled something called the MAT Five Fund as ‘safe’ and ‘secure’ only to watch it lose 80 per cent of its value. On Thursday, Saudi Prince Walid bin Talal, from that visionary country that won’t let women drive cars, stepped forward to reassure us that Citigroup is ‘undervalued’ and he was buying more shares. Not having any Princes of our own, we tend to associate them with fairytales. The next day the stock dropped another 20 percent with 1.02 billion shares changing hands. It closed at $3.77.
“Altogether, the stock lost 60 per cent last week and 87 percent this year. The company’s market value has now fallen from more than $250 billion in 2006 to $20.5 billion on Friday, November 21, 2008. That’s $4.5 billion less than Citigroup owes taxpayers from the U.S. Treasury’s bailout program.”
Not everyone has caved under political pressure from Wall Street. Senator Elizabeth Warren delivered three impassioned speeches on the Senate floor last week, culminating in a Friday speech that many are calling an historic battle cry to a complacent nation. Warren explained how Citigroup pulled off its coup, stating:
“Mr. President, I’m back on the floor to talk about a dangerous provision that was slipped into a must-pass spending bill at the last minute to benefit Wall Street. This provision would repeal a rule called, and I’m quoting the title of the rule, “Prohibition Against Federal Government Bailouts of Swaps Entities.”…
“Mr. President, in recent years, many Wall Street institutions have exerted extraordinary influence in Washington’s corridors of power, but Citigroup has risen above the others. Its grip over economic policymaking in the executive branch is unprecedented. Consider a few examples:
“Three of the last four Treasury Secretaries under Democratic presidents have had close Citigroup ties. The fourth was offered the CEO position at Citigroup, but turned it down.
“The Vice Chair of the Federal Reserve system is a Citigroup alum.
“The Undersecretary for International Affairs at Treasury is a Citigroup alum.
“The U.S. Trade Representative and the person nominated to be his deputy – who is currently an assistant secretary at Treasury – are Citigroup alums.
“A recent chairman of the National Economic Council at the White House was a Citigroup alum.
“Another recent Chairman of the Office of Management and Budget went to Citigroup immediately after leaving the White House.
“Another recent Chairman of the Office of Management and Budget is also a Citi alum — but I’m double counting here because now he’s the Secretary of the Treasury.
“That’s a lot of powerful people, all from one bank. But they aren’t Citigroup’s only source of power. Over the years, the company has spent millions of dollars on lobbying Congress and funding the political campaigns of its friends in the House and the Senate.
“Citigroup has also spent millions trying to influence the political process in ways that are far more subtle — and hidden from public view. Last year, I wrote Citigroup and other big banks a letter asking them to disclose the amount of shareholder money they have been diverting to think tanks to influence public policy. Citigroup’s response to my letter? Stonewalling. A year has gone by, and Citigroup didn’t even acknowledge receiving the letter…”
Anticipating public outrage and potential voter backlash in 2016, incoming Majority Leader Mitch McConnell inserted another provision into the Cromnibus that allows individuals to give almost 10 times as much money to political party committees as allowed under current law – ensuring that only the super rich continue to run Washington.
Senator Bernie Sanders of Vermont was outraged, issuing a press release that stated: “Instead of cracking down on Wall Street CEOs whose greed and illegal behavior plunged the country into a terrible recession, this bill allows too-big-to-fail banks to make the same risky bets on derivatives that led to the largest taxpayer bailout in history and nearly destroyed the economy.
Instead of cutting back on the ability of billionaires to buy elections, this bill outrageously gives the wealthy even more power over the political process.”
If all of this is not enough to propel Americans into the streets in mass protests, perhaps the history of how the coddled Citigroup handles the money of its investors and shareholders will stir the pot. Below is just a sampling:
December 11, 2008: SEC forces Citigroup and UBS to buy back $30 billion in auction rate securities that were improperly sold to investors through misleading information.
February 11, 2009: Citigroup agrees to settle lawsuit brought by WorldCom investors for $2.65 billion.
July 29, 2010: SEC settles with Citigroup for $75 million over its misleading statements to investors that it had reduced its exposure to subprime mortgages to $13 billion when in fact the exposure was over $50 billion.
October 19, 2011: SEC agrees to settle with Citigroup for $285 million over claims it misled investors in a $1 billion financial product. Citigroup had selected approximately half the assets and was betting they would decline in value.
February 9, 2012: Citigroup agrees to pay $2.2 billion as its portion of the nationwide settlement of bank foreclosure fraud.
August 29, 2012: Citigroup agrees to settle a class action lawsuit for $590 million over claims it withheld from shareholders’ knowledge that it had far greater exposure to subprime debt than it was reporting.
July 1, 2013: Citigroup agrees to pay Fannie Mae $968 million for selling it toxic mortgage loans.
September 25, 2013: Citigroup agrees to pay Freddie Mac $395 million to settle claims it sold it toxic mortgages.
December 4, 2013: Citigroup admits to participating in the Yen Libor financial derivatives cartel to the European Commission and accepts a fine of $95 million.
July 14, 2014: The U.S. Department of Justice announces a $7 billion settlement with Citigroup for selling toxic mortgages to investors. Attorney General Eric Holder called the bank’s conduct “egregious,” adding, “As a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase profits.”