Thursday, August 18, 2016

(Loathing Lessers)  Here’s Why Americans Are Mad as Hell at Wall Street and Washington  (Catch 22 Revisited)  Bonnie Raitt:  Not Ending Well for Global Elites  (Foreign Floods of PAC Money)  Summer of the Shill(s)  (Continuing Bank Corruption Print Gobs of $$$ To Keep Market Roaring?)

Tom Frank is obviously the man of this minute.

But no one is paying attention to the time(s) now.

At the convention in Philly, Truthdig founder and editor Robert Scheer ran into Thomas Frank, whose latest book, Listen, Liberal: Or, What Ever Happened To The Party Of The People? is a must-read for all progressives and, hopefully, for some Democrats who aren't already too far gone. Frank admitted Democrats aren't paying the book any serious attention..
His critique - "that what we have today is a liberalism of the rich ... of the professional classes, these sort of affluent people who have developed a whole kind of pseudo-Marxist theory of why they’re affluent and why they deserve to be affluent, and why those who, you know, their former supporters in the working class don’t deserve to be affluent." He despairs that this new rationale behind the New Democratic Party "is a really ugly ideology, but it’s not something that they are prepared to change their tune on."

He analyzes Hillary's career in one chapter, even if he feels she's incapable of change. The New Dem wing types, the corporate Dems, don't want to hear "unconstructive" criticism of her and she really believes that folks who run the financial institutions in New York have a mission civilisatrice and those Wall Street banks "are in fact run by fine, upstanding individuals who are opening up the doors of possibility for the poor people of the world, or something like this. She really believes in what they’re doing. Democrats [from the Hillary wing of the party, which is obviously ascendent now] look at Wall Street and they see people like themselves. It’s not that they’re bribed to like these guys; it’s that they have an ideological kinship with them.

He didn't expect Bernie to make the case at the convention that the Clintons aren't to be trusted - but he would have loved it. "When you want to talk about inequality, you want to talk about what’s gone wrong in this country, the sinking of the middle class - everything that’s gone wrong, and I would include in my bill of complaints, my bill of grievances, the rise of Donald Trump - all of these things are attributable to the Democrats’ abandonment of their traditional constituency and their traditional sort of Rooseveltian identity.
Hillary is a perfect example — a perfect specimen — of the kind of Democratic politics that I’m talking about. Very oriented towards the professional class; she really believes — I mean, how many times did you hear that word “innovation” from the podium yesterday? You know, people talking about education as the solution to every economic problem. This really is her ideology. She is a true believer in neoliberalism. It’s not an afterthought, it’s not something that she did in order to win the affection of the money men. This is who she is. And it’s who her husband is. And you know, I think that the Democrats have to deal with this, and I think it’s especially important in this year, because in some ways their abandonment of blue-collar people, or I should say the white working class specifically, is this really has allowed Trump to do what he’s done. This is what has made his success possible.

So I was just in the Republican convention in Cleveland. And the man, you know, is this kind of monster in many, many, many ways, but there’s this one issue where he has got, he is reaching out to working-class voters and he’s doing it really effectively. And this is trade. And he talks about it constantly. And he’s very ham-handed, and he doesn’t have a plan, but he talks about it in a way that is convincing to a lot of these people. And here’s Hillary - and by the way, this is the perfect, I was saying just this morning — Hillary Clinton is the only Democrat that Donald Trump could possibly beat, and vice-versa. Right? Donald Trump is the only Republican that Hillary Clinton could possibly beat; they’re both, two of the least popular politicians ever to run for this office. But had it been any other Republican, Hillary would be in big trouble; had it been any other Democrat, i.e. Bernie Sanders, Donald Trump would be in enormous trouble. But when he goes against these trade deals, he’s always talking about NAFTA. And this is - look, again, his party is largely responsible for free trade and for all of this stuff, for the free market theory and the reign of globalization. That’s his guys that did that. But NAFTA, and a couple of the other ones, he can blame on the Clintons. And Trans-Pacific Partnership, he can blame on Obama. And this is very, very, very effective. And Hillary Clinton is possibly the one candidate where this sort of thing would work.

...[W]hen I mentioned that Trump has this one issue where he is talking a good game, this makes people really mad, because they want to believe that he is, that he has this dark, diabolical, sort of Svengali power. And I’m saying to them, no; this is something unfamiliar, this is something new; this is not Marco Rubio, or if Ted Cruz had been the nominee. This is something different, this is a new beast. And I don’t think he’s a fascist, but it’s not a bad comparison, because the fascists had — you know, they also built the Autobahn. And they also, you know, had this enormous public works program. And they also did all these things that was kind of like, you know, there was a reason that they were sort of popular.

[T]he vast majority of people in this country still haven’t recovered from that recession that was brought about by those toxic derivatives. And the derivatives were explicitly deregulated by Bill Clinton. But it goes on and on and on - it’s like NAFTA, it’s - when I was listening to the speeches yesterday, it was like they’re promising, they’re running on a promise to reverse all the things that Hillary Clinton did the first time around, or that her husband did, I should say. But the crime bill of 1994, they’re going to, oh, they’re going to reverse mass incarceration - it’s like, well, why didn’t you just not do it in the first place? You know, they’re going to fix the global economy - well, why didn’t you just not fuck it up in the first place, you know? On and on and on, down the list. And you know, the trade deals - we’re going to stop these terrible, these trade deals have been so bad for working people. It’s like, well, why did you sign off on them?
Why do you go to Davos every year? Why is your sitting president, representative of your party, trying to get one passed right now? In the Democratic platform, there’s a big thing about the revolving door, where they’re really against the revolving door — do you know who the secretary of the Treasury is right now? Right now! It’s Jack Lew! Came from Citibank, where he oversaw their hedge fund division. You know? And then he’s in charge of the department that’s bailing out Citibank, because their hedge fund division that he managed dragged them down! This is insane! And he was put there by a Democrat. A Democrat who’s going to come here and give a speech on Thursday. This is - yes, you’re exactly right.
There’s enormous cognitive dissonance for these people, but they wipe it away, like so many - I mean, there are so many examples of this, the way they think about Trump, the way they think about the working class, the way they think about NAFTA. It’s all this guilty stuff, they can’t deal with it, there’s something psychological going on. But this is the biggest. You know, they can’t deal with the legacy of the sitting president and the legacy of Hillary’s own husband. And they can’t talk about it in a straightforward way.

...[T]hings are going to get worse. Four more years of this? So Obama - I voted for Obama with enthusiasm in 2008; I was excited, I thought he was my generation’s Franklin Roosevelt, I thought this was, we’d come to the turning point. And then he continued the policies of the Bush administration on the banks, on a lot of essential issues, and things got, for working people, things have gotten worse and worse and worse. Wages still don’t grow; the share of what we produce here in America is less than, is smaller than it’s ever been before, the labor share, what the economists call the labor share of GDP. Smaller than it’s ever been since World War II. This is under Obama, the most liberal, we’re always told, the most liberal possible president.
Look, of course it’s going to continue with Hillary as president; nothing is going to change. This is going to get worse and worse and worse. You’re going to continue to see the recovery or whatever, all the gains, all the economic gains going into the banking accounts of the top 10 percent or so. The Dow might continue to go up, but who benefits from that? It’s the people at the top, of course. Four years of this, inequality’s going to continue.
That’s always what it comes back to, is that word “inequality.” And that’s going to get worse. The "Appalachification" is going to keep going. And four years from now, you’re going to have another Trump. And a Trump who’s not a fool, a Trump who’s not an imbecile, who’s not a buffoon, who’s not an open racist, is a Trump that can win.
Hell, this Trump might win [laughs] if the Democrats blunder into his hands, which they are presently doing. We’ll talk about that some other time. But a Trump minus all of these sort of features of Trump would actually be successful. Now, you could also have another Bernie in four years, and another Bernie, someone who plays the game slightly differently, could also be successful, although it’s really hard to beat a sitting president from...
Since then, Frank did a gruesomely pessimistic piece for The Guardian Sunday, With Trump Certain to Lose, You Can Forget About a Progressive Clinton. "Come November," he predicts, "Clinton will have won her great victory - not as a champion of working people’s concerns, but as the greatest moderate of them all. And so ends the great populist uprising of our time, fizzling out pathetically in the mud and the bigotry stirred up by a third-rate would-be caudillo named Donald J Trump... Today it looks as though [Thomas Friedman's] elites are taking matters well in hand. 'Jobs' don't really matter now in this election, nor does the debacle of 'globalization,' nor does anything else, really. Thanks to this imbecile Trump, all such issues have been momentarily swept off the table while Americans come together around Clinton, the wife of the man who envisaged the Davos dream in the first place." 
As leading Republicans desert the sinking ship of Trump's GOP, America's two-party system itself has temporarily become a one-party system. And within that one party, the political process bears a striking resemblance to dynastic succession. Party office-holders selected Clinton as their candidate long ago, apparently determined to elevate her despite every possible objection, every potential legal problem. The Democratic National Committee helped out, too, as WikiLeaks tells us. So did President Barack Obama, that former paladin for openness, who in the past several years did nearly everything in his power to suppress challenges to Clinton and thus ensure she would continue his legacy of tepid, bank-friendly neoliberalism.

My leftist friends persuaded themselves that this stuff didn't really matter, that Clinton's many concessions to Sanders' supporters were permanent concessions. But with the convention over and the struggle with Sanders behind her, headlines show Clinton triangulating to the right, scooping up the dollars and the endorsement, and the elites shaken loose in the great Republican wreck.

She is reaching out to the foreign policy establishment and the neocons. She is reaching out to Republican office-holders. She is reaching out to Silicon Valley. And, of course, she is reaching out to Wall Street. In her big speech in Michigan on Thursday she cast herself as the candidate who could bring bickering groups together and win policy victories through really comprehensive convenings.

Things will change between now and November, of course. But what seems most plausible from the current standpoint is a landslide for Clinton, and with it the triumph of complacent neoliberal orthodoxy. She will have won her great victory, not as a champion of working people's concerns, but as the greatest moderate of them all, as the leader of a stately campaign of sanity and national unity. The populist challenge of the past eight years, whether led by Trump or by Sanders, will have been beaten back resoundingly. Centrism will reign triumphant over the Democratic party for years to come. This will be her great accomplishment. The bells will ring all over Washington DC.

... My friends and I like to wonder about who will be the "next Bernie Sanders", but what I am suggesting here is that whoever emerges to lead the populist left will simply be depicted as the next Trump. The billionaire's scowling country-club face will become the image of populist reform, whether genuine populists had anything to do with him or not. This is the real potential disaster of 2016:  That legitimate economic discontent is going to be dismissed as bigotry and xenophobia for years to come.
Maybe you saw the Gallup poll released a couple weeks ago measuring the country's complete lack of enthusiasm for Clinton's completely mediocre corporate Dem running mate. He's even more of a snooze for most Americans than the dull - dull and actively evil - Pence.
. . . A Berniecrat who, like most, has gone over to the Hillary Brigade, Robert Reich, wrote on his Facebook page that Hillary is going to need Bernie's revolution. He naively assumes she wants to get some progressive stuff done when she ascends to the White House and claims she'll never revolutionists to help. Jesus! She's not going to flip the House and the Senate, which will be miserably led by self-serving Wall Street suck-up Chuck Schumer, will not be close to filibuster-proof... and worse. 
She's unlikely to have a typical presidential honeymoon because she won’t be riding a wave of hope and enthusiasm that typically accompanies a new president into office. She’s already more distrusted by the public than any major candidate in recent history. On Election Day many Americans will be choosing which candidate they loathe the least.
At 2:00 AM,  Anonymous said... I assume you will write more, a lot more, about "Brand New Congress, an ambitious effort to run at least 400 progressive candidates for Congress in 2018."

Ah, Clinton, like the reemergence of a venereal disease.

"Moderate" and "centrist" are code words for the political ideology that serves the corporate person first and which admonishes human citizens to "humor the terminally greedy for their detritus shall sustain you."

If I hadn't already de-registered as a "Democrat" this article would certainly have been the reminder to do so.

John Puma
At 11:02 AM,  Anonymous said...
So we will likely have the most despised Democratic President going into the 2020 redistricting election. Obama and his team completely dropped the 2010 redistricting elections and assured that he would never have a Democratic House again. Now it looks like the Democrats will again go into a redistricting election without anything positive to run on or even any policies that promise a better future.

I no longer consider myself a Democrat and these sorts of miscalculations and the horrid neoliberal policies are the reason why.

Life must seem pretty sweet for the D.C. Dims after all the election hoorah.

For now, Bonnie Raitt speaks for almost all of the rest of us.

At least 99%.

Bonnie Raitt Just Keeps Getting Better

By Harvey Wasserman, Reader Supported News
16 August 16
t’s not often a single stanza can sum up a whole political system. But those words from Bonnie Raitt ring truer every day as this pathetic “selection” season lurches ever deeper into astounding ugliness.
As evidenced by her new album, "Dig in Deep," and her current concert tour, the opposite is true of Ms. Raitt, whose astonishing talent and endless heart just keep growing.
_ _ _ _ _ _ _

You got a way of running your mouth
You rant and rave, you left it all out
The thing about it is, little that you say is true

Why bother checkin', the facts'll be damned
It's how you spin it, it's part of the plan
I'm here to tell you that your sicken loan is coming due

Only so long you can keep this charade
Before they wake up and see they've been played
Too many people with their livin' at stake
Ain't gonna take it
The comin' round is going through
The comin' round is going through
You say it's workin', it's tricklin' down
Yeah, there's a trick, cause the jobs ain't around
From where you're sittin'
Tell me how you think you possibly know?

The way it feels to get turned away
Never enough, it's day after day
Yank that by your bootstraps
Cause that's the way it really goes

Only so long you can keep this charade
Before they wake up and see they've been played
Too many people with their livin' at stake
Ain't gonna take it
The comin' round is going through
The comin' round is going through

Cause when the money's makin' money
It comes down to a few
Got their hands on the throttle and nobody gets through
You can work all your life for a hand that will play
With one role of the dice, it gets swept away

Just look around, things are startin' to slip
You're outta control, and you're losin' your grip
No way to stop it, that river's spillin' over for good
We don't have the answer, we know what it's not
Cause the people will keep pushin' 'til they get a shot
Your money's no good there
We wouldn't cash you a check if we could

From Running Cause I Can't Fly:

“There was only one catch and that was Catch-22, which specified that a concern for one's own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn't, but if he was sane he had to fly them. If he flew them he was crazy and didn't have to; but if he didn't want to he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle. "That's some catch, that catch-22," he observed. "It's the best there is," Doc Daneeka agreed."

- Joseph Heller, “Catch-22”

"What happens if the Deep State pursues the usual pathological path of increasing repression? The system it feeds on decays and collapses. Catch-22 (from the 1961 novel set in World War II "Catch-22") has several shades of meaning (bureaucratic absurdity, for example), but at heart it is a self-referential paradox: you must be insane to be excused from flying your mission, but requesting to be excused by reason of insanity proves you're sane.
The Deep State in virtually every major nation-state is facing a form of Catch-22: the Deep State needs the nation-state to feed on and support its power, and the nation-state requires stability above all else to survive the vagaries of history.

The only possible output of extreme wealth inequality is social and economic instability. The financial elites of the Deep State (and of the nation-state that the Deep State rules) generate wealth inequality and thus instability by their very existence, i.e. the very concentration of wealth and power that defines the elite. So the only way to insure stability is to dissipate the concentrated wealth and power of the financial Deep State. This is the Deep State's Catch-22.

What happens when extremes of wealth/power inequality have been reached? Depressions, revolutions, wars and the dissolution of empires. Extremes of wealth/power inequality generate political, social and economic instability which then destabilize the regime. Ironically, elites try to solve this dilemma by becoming more autocratic and repressing whatever factions they see as the source of instability.

The irony is they themselves are the source of instability. The crowds of enraged citizens are merely manifestations of an unstable, brittle system that is cracking under the strains of extreme wealth/power inequality. Can anyone not in Wall Street, the corporate media, Washington D.C., K Street or the Fed look at this chart and not see profound political disunity on the horizon?
(Click image to enlarge.)

Many consider it "impossible" that Wall Street could possibly lose its political grip on the nation's throat, but I have suggested that Wall Street has over-reached, and is now teetering at the top of the S-Curve, i.e. it has reached Peak Wall Street. Consider what the extremes of Wall Street/Federal Reserve predation, parasitism, avarice and power have done to the nation, and then ask if other factions within the Deep State are blind to the destructive consequences.
. . . Debt has been the temporary savior of Deep States everywhere. Borrowing money from future earnings and future taxpayers has worked for seven long years, but it's unlikely to last another seven. You can borrow money for a time to fund super-welfare for all (elites and debt-serfs alike) but you can't make energy or food cheap again or regenerate social mobility or dissipate rising wealth/power inequality."

Read the entire essay here.

“It Won’t End Well for Global Elites”

“Elections aren’t about finalities, they’re about processes. They may be about departures. Case in point, the 2016 presidential contests, which feature Hillary and The Donald. If Trump wins, the process of the November election might start a departure in more than politics. It could be historic. It won’t be good, however, for the global elites inhabiting New York, DC, Boston, and San Francisco- or wherever else ivory towers, mahogany-paneled offices, pricey secured buildings, and gated communities are found. Trump’s election would have reverberations overseas, too, in London, Paris, Berlin - yes, wherever else ivory towers, et al, are found.

A Hillary victory means there won’t be a departure; merely a doubling-down by the elite, as they act with renewed zest to secure their interests - versus the national welfare. The Great Imposition - a war waged on average Americans - will continue with awful consequences.

Impose and divide – divide to conquer. Blacks against whites. (That’s more Milwaukees.) Hispanics against Anglos. (That’s more illegals and all legalized). Poor against rich. (Lots more free sh*t.) Takers versus producers. (Lots more free sh*t.) Marginalize the working class. (Further cede manufacturing to the Chinese; shut down coal and domestic energy production, generally.) Demean the middle classes. (Who knuckle-drag their bibles, guns, and backwater values through life.)

The worldview among many of our elite is anti-nation - dare we say - anti-American, anti-law and order, anti-tradition, anti-faith (with exceptions carved out for Islam), anti-durable values and enduring truths, like marriage between a man and woman, and family, as defined by a man, woman, and children. The elite, so very cosmopolitan, have evolved past antique beliefs and ways.

The dangers are domestic and foreign. President Hillary and anti-nation elites would continue failed policies toward Islamic militants and insurgencies. They’d serve up more perverse rationalizations for why Islam doesn’t animate jihadists. More dangers in the offing with rogue nations Iran and North Korea. Mounting danger in Asia, with China, where the PRC is boldly militarizing the South China Sea.

All pose existential threats, to one degree or another. To the elite? Obstacles to the world they’ve created for themselves. Perhaps to be solved with appeasements, like tribute (it worked for the Romans - for a while). Ransoms (monetary and otherwise). Accommodations. Retreats. Misdirection and outright lies. 

. . . Ms. Merkel had put the entire burden of a huge cultural change not on herself and those like her but on regular people who live closer to the edge, who do not have the resources to meet the burden, who have no particular protection or money or connections. Ms. Merkel, her cabinet and government, the media and cultural apparatus that lauded her decision were not in the least affected by it and likely never would be.

Nothing in their lives will get worse. The challenge of integrating different cultures, negotiating daily tensions, dealing with crime and extremism and fearfulness on the street-that was put on those with comparatively little, whom I’ve called the unprotected.

The powerful show no particular sign of worrying about any of this. When the working and middle class pushed back in shocked indignation, the people on top called them “xenophobic,” “narrow-minded,” “racist.” The detached, who made the decisions and bore none of the costs, got to be called “humanist,” “compassionate,” and “hero of human rights.”

So, too, on these shores, our elite aim to imitate Merkel, from Obama, who aids and abets illegals, and who’s pushing the import of Syrians, to Paul Ryan (an elitist on the spectrum), who speaks of compassion and fairness toward illegals and Muslim refugees. Never mind they’ll be no costs attendant to the speaker. But Ryan isn’t merely being abstract. His favoring amnesty serves cheap-labor business interests at the expense of struggling citizens.

With friends like these, why would the plutocrats need us/US?

“Spies’s memo is an explicit how-to guide for foreign nationals to get money into U.S. elections through U.S.-based corporations that they own,” said Paul S. Ryan, deputy director of the campaign finance watchdog organization Campaign Legal Center. “It shows that although Obama was attacked in public for misleading Americans about Citizens United, in private people like Spies and others like him seemingly realized that Obama was right and set to work making his prediction a reality.”
Reached for comment by phone, Spies stated that the memo had been prepared “to ensure compliance with the law,” but he declined to say anything further about the circumstances leading to its writing or about APIC itself.
When asked whether Obama’s remarks in 2010 were vindicated by his memo, Spies grew agitated. After a short discussion, he said, “I don’t think there’s any point in our continuing this conversation,” and then abruptly hung up the phone.
The story of APIC captures the bizarre reality of the U.S. political system:  George H.W. Bush and George W. Bush between them appointed three of the five members of the Supreme Court’s Citizens United majority; this majority opened up a loophole allowing foreign money to flow into U.S. elections; and this loophole was used to grab foreign money in an attempt to make a third Bush president.
. . . When contacted by Elaine Yu, a Hong Kong-based journalist and contributor to this series, Tang offered to give her 200,000 dollars in an unspecified currency (Hong Kong and Singapore both denominate their money in dollars) if "The Intercept" did not reference unverified claims on Chinese-language websites that he had been accused of criminal activity.
. . . Now headquartered in San Francisco, APIC calls itself a “diversified international investment holding company.” It currently owns, among other properties, five hotels and several residential developments in San Francisco, and three luxury hotels in China.
. . . Neil Bush is a member of the board of APIC and in 2013 joined SingHaiyi’s board as a nonexecutive chairman. Bush owns a small percentage of the Singapore company.
(Bush, like his business partner Tang, has been the subject of government investigations. Bush was famously sued by the federal government for his role on the board of Silverado Savings & Loan in Colorado from 1985 until 1988, when it collapsed with over $1 billion in debts. Silverado made $141 million in never-repaid loans to two investors in Bush’s oil exploration business; one of them used his free Silverado money to buy the entire company from Bush. Bush never faced criminal charges but did have to pay $50,000 to help settle the federal lawsuit and was reprimanded by government regulators.)
“We are very lucky to know them,” Wilson Chen said of the Bush family. “We talk to them as friends.” He noted that the Bushes have always been kind to China and said that “because of our generosity,” he was invited to attend a Right to Rise USA fundraising event hosted by Jeb Bush in April 2015 at the Mandarin Oriental, a luxury hotel in San Francisco.

APIC, which was initially incorporated in Oregon, made contributions between 2010 and 2014 to state and local Oregon politicians, mostly Democrats, totaling about $25,000. The earlier donations include $9,500 given to John Kitzhaber, a Democrat who was elected governor of Oregon in 2010 and 2014 and resigned last year in an unrelated ethics scandal.

“You know the politicians,” said Wilson Chen about the company’s history of donations. “They always ask for help.”

Wilson Chen, who unlike his sister and brother-in-law is a U.S. citizen, stated that APIC has never asked for anything specific in return for its money. However, he said, the connections between the company and prominent U.S. politicians gave those involved with APIC stature in Asia.

When asked whether Gordon Tang was unhappy with the donation to Rise to Rise USA given Jeb Bush’s quick defeat, Chen said no:  It was simply about helping a friend. (Right to Rise USA did not spend all of the money it received, and when Bush withdrew from the race, it sent refunds to contributors on a pro rata basis; APIC got back $152,230.)
Matt Taibbi elucidates the Summer of the Shill:

“We are very lucky to know them,” Wilson Chen said of the Bush family. “We talk to them as friends.” He noted that the Bushes have always been kind to China and said that “because of our generosity,” he was invited to attend a Right to Rise USA fundraising event hosted by Jeb Bush in April 2015 at the Mandarin Oriental, a luxury hotel in San Francisco.
APIC, which was initially incorporated in Oregon, made contributions between 2010 and 2014 to state and local Oregon politicians, mostly Democrats, totaling about $25,000. The earlier donations include $9,500 given to John Kitzhaber, a Democrat who was elected governor of Oregon in 2010 and 2014 and resigned last year in an unrelated ethics scandal.

“You know the politicians,” said Wilson Chen about the company’s history of donations. “They always ask for help.”

Wilson Chen, who unlike his sister and brother-in-law is a U.S. citizen, stated that APIC has never asked for anything specific in return for its money. However, he said, the connections between the company and prominent U.S. politicians gave those involved with APIC stature in Asia.

When asked whether Gordon Tang was unhappy with the donation to Rise to Rise USA given Jeb Bush’s quick defeat, Chen said no: It was simply about helping a friend. (Right to Rise USA did not spend all of the money it received, and when Bush withdrew from the race, it sent refunds to contributors on a pro rata basis; APIC got back $152,230.)

Here’s Why Americans Are Mad as Hell at Wall Street and Washington

By Pam Martens and Russ Martens
August 12, 2016
Yesterday we published our 1,007th article here at Wall Street On Parade on the insidiously corrupt financial system in the United States known as Wall Street. It’s a system that now operates as an institutionalized wealth transfer mechanism that is hollowing out the middle class, leaving one of every five children in our nation living in poverty, while funneling the plunder to the top one-tenth of one percent.

Tens of millions of Americans clearly understand that an entrenched system of corruption such as this, perpetuated through a revolving door between Wall Street and Washington, while enshrined by a political campaign finance system that recycles a portion of the plunder to ensure greater plunders, will inevitably leave the nation’s economy in tatters — again. That’s because systemic corruption and legalized bribery within the financial arteries of the nation can only create grossly perverse economic outcomes.

The actual role of Wall Street is to fairly and efficiently allocate capital to maximize positive economic outcomes for the nation. Under the current model, Wall Street is focused solely on maximizing profits in any manner possible, including fraud and collusion, to maximize personal enrichment. When Senator Bernie Sanders said during his campaign stops and a presidential debate that “the business model of Wall Street is fraud,” there was a long, substantive archive of facts to back up that assertion.

Consider the intensely corrupt Wall Street analyst research practices that led to the Nasdaq crash at the turn of this century. Writing in the New York Times on March 15, 2001, Ron Chernow said it best:

“Let us be clear about the magnitude of the Nasdaq collapse. The tumble has been so steep and so bloody — close to $4 trillion in market value erased in one year — that it amounts to nearly four times the carnage recorded in the October 1987 crash.” Chernow compared the Nasdaq stock market, filled with companies boosted by intentionally corrupt Wall Street research, to a “lunatic control tower that directed most incoming planes to a bustling, congested airport known as the New Economy while another, depressed airport, the Old Economy, stagnated with empty runways. The market functioned as a vast, erratic mechanism for misallocating capital across America,” said Chernow.

The financial rewards for this corrupt model flowed to the research analysts at the biggest Wall Street firms and their CEOs who reaped lavish bonuses for the outsized “profits.” The poster boy for this era was Jack Grubman, an analyst at Salomon Smith Barney, a unit of the serially corrupt Citigroup. Grubman was charged by the SEC for fraudulent research. He never went to trial or was criminally charged. He merely paid a $15 million fine, was barred from the industry, and walked away rich. According to the SEC, Grubman’s total personal haul at Salomon Smith Barney “exceeded $67.5 million, including his multi-million dollar severance package.” Let that sink in for a moment: you are barred from your industry for corruption and you still receive a multi-million dollar severance package. There is simply no better testament to the principle that fraud is now both an accepted business model, as well as a profit center, on Wall Street.

After the 2001 collapse of Nasdaq, nothing materially changed to stop the systemic corruption model. In fact, corruption accelerated. Instead of allocating capital to build new industries and new jobs to ensure America’s future, Wall Street allocated capital to unsound derivatives and to subprime borrowers, whom it knew from its own internal reports, did not have the ability to repay the loans. Wall Street then offloaded its derivatives risk to AIG and suckered Freddie Mac and Fannie Mae into buying its toxic subprime debt. All three institutions collapsed under the weight of this Wall Street corruption and, jointly, received over $367 billion in taxpayer bailouts.

In our exclusive report on May 20 of this year, we explained how the U.S. government has quietly been paying billions of dollars to Wall Street banks in recent years on behalf of Freddie Mac and Fannie Mae for derivative bets they are still saddled with. The public has yet to receive any definitive explanation of what is going on with these derivatives.

The Wall Street bailouts that the public knew about during the 2008 crash and its aftermath were chump change compared to the $13 trillion in cumulative loans that the Federal Reserve was secretly funneling to its Wall Street banking pals at below-market interest rates. While Citigroup was charging struggling consumers, in the midst of an economic crisis it helped engineer, over 15 percent on credit cards, it was getting a secret infusion of more than $2 trillion in cumulative loans from 2007 through at least 2010 from the nation’s central bank, much of it at less than 1 percent.

The cataclysmic financial crash of 2008 resulted in promises from the Obama administration that the Dodd-Frank financial legislation would forever reform the scurrilous looting by Wall Street. Not only has Wall Street not been reformed but its arrogance has been unbridled. Consider the following:

On February 16 of this year we reported that “AIG’s Board of Directors just appointed hedge fund titan, John Paulson of Paulson & Company, to its Board – despite the fact that he is named in a SEC complaint as a willful participant in the disgraceful Goldman Sachs deal that was designed to rip off investors while financially lining the pockets of Paulson and Goldman Sachs. While Paulson was not charged by the SEC, its complaint made clear he played a key role and profited greatly to the detriment of misled investors.” AIG became a ward of the taxpayer during the 2008 crash, in no small part because of derivative bets it couldn’t pay to Goldman Sachs. The taxpayer, courtesy of the U.S. government, paid those bets off to Goldman Sachs at 100 cents on the dollar.

Sheila Bair was the head of the Federal Deposit Insurance Corporation (FDIC), the Federal agency that insures the deposits of our nation’s banks, during the financial crash of 2008. After Bair stepped down from that role she wrote a definitive book on the crisis, Bull by the Horns. In the book, Bair exposed the government deceit that had surrounded Citigroup during the crisis, writing:

“By November, the supposedly solvent Citi was back on the ropes, in need of another government handout. The market didn’t buy the OCC’s and NY Fed’s strategy of making it look as though Citi was as healthy as the other commercial banks.  Citi had not had a profitable quarter since the second quarter of 2007. Its losses were not attributable to uncontrollable ‘market conditions’; they were attributable to weak management, high levels of leverage, and excessive risk taking. It had major losses driven by their exposures to a virtual hit list of high-risk lending; subprime mortgages, ‘Alt-A’ mortgages, ‘designer’ credit cards, leveraged loans, and poorly underwritten commercial real estate. It had loaded up on exotic CDOs and auction-rate securities. It was taking losses on credit default swaps entered into with weak counterparties, and it had relied on unstable volatile funding – a lot of short-term loans and foreign deposits. If you wanted to make a definitive list of all the bad practices that had led to the crisis, all you had to do was look at Citi’s financial strategies … What’s more, virtually no meaningful supervisory measures had been taken against the bank by either the OCC or the NY Fed … Instead, the OCC and the NY Fed stood by as that sick bank continued to pay major dividends and pretended that it was healthy.”

Consider what’s happening today at Citigroup with not so much as a peep from its myriad Federal regulators. Citigroup is today bulking up on over $2 trillion dollars in notional value (face amount) of the riskiest derivatives, credit default swaps, that brought down AIG and helped make Citigroup the recipient of the largest taxpayer bailout in U.S. history.

Given these facts on the ground, another President who takes a hands off approach to Wall Street while installing Wall Street cronies in the cabinet, will leave this nation terminally financially crippled.

Swiss Central Bank Holds $5.3 Billion in Amazon, Apple, Google, Facebook and Microsoft Stocks

By Pam Martens and Russ Martens
August 15, 2016
At the end of the first quarter of this year, Switzerland’s central bank held $119.7 billion in publicly traded stocks. The Swiss National Bank’s (SNB) web site indicates that it is now allocating 20 percent of its foreign currency reserves to stock investing. Twelve days ago, SNB made its quarterly filing with the U.S. Securities and Exchange Commission showing large positions in individual U.S. stocks.

In just five tech names, SNB held over $5.3 billion with $1.489 billion invested in Apple; $1.2 billion invested in Alphabet, parent of Google; $1 billion in Microsoft; $803 million in Amazon and $741.5 million in Facebook.

Both Apple and Microsoft are among the 30 stocks that make up the Dow Jones Industrial Average (DJIA), a heavily watched gauge of the U.S. economy’s health. The Swiss National Bank owns over $1 billion in two other names in the DJIA: $1.17 billion in Exxon Mobil and $1.032 billion in Johnson & Johnson.

Swiss National Bank positions of $500 million or more that are components of the DJIA include:

AT&T ($862 million); General Electric ($823 million); Verizon ($739.6 million); Procter & Gamble ($718 million); Pfizer ($644 million); Coca Cola ($582 million); and Chevron ($557 million).

Switzerland’s central bank has invested zero dollars in two DJIA components — the two big Wall Street banks, Goldman Sachs and JPMorgan Chase.

The Swiss National Bank is just one of more than a dozen central banks that are now investing in publicly traded stocks – a policy that looks like a train wreck in motion to quite a number of Wall Street veterans.

We checked SEC filings for other central banks that are known to be buying stocks but could find only one other listing: the Bank of Israel. Instead of breaking down the names of the stocks, number of shares, and dollar value of the individual position held as done by the Swiss National Bank, the only public filing from the Bank of Israel tells us simply that it is using three money managers to make its U.S. stock investments. Those money managers are: UBS Asset Management Americas Inc.; BlackRock Investment Management (UK) Ltd.; and State Street Global Advisors Ltd.

We could find no total dollar amount indicated for the Bank of Israel’s investments in U.S. stocks in its SEC filings but in 2013 Bloomberg News reported that the Israeli central bank had spent “about 3 percent of its $77 billion reserves on U.S. stocks,” or approximately $2.3 billion. On June 27 of this year, Reuters reported that Israel’s Monetary Policy Committee had approved investing as much as 10 percent of Israel’s foreign currency reserves in stocks.

Another major central bank plowing into stocks is the Bank of Japan. On April 24 of this year, Bloomberg News reported that the Bank of Japan “ranks as a top 10 holder in more than 200 of the Nikkei gauge’s 225 companies…”

If one adds the stock holdings of massive sovereign wealth funds, which are also deploying government money, to the growing stock market participation of central banks, alarm bells start to go off. Forbes contributor Adam Sarhan wrote the following earlier this year:

“Over the past 7 years, we have seen unprecedented action from global central banks all aimed at keeping stock prices up. It’s normal to see global central banks adjust monetary policy, up or down, based on economic conditions. But it is not normal to see global central banks print gobs of money every day to stimulate markets and it is definitely not normal to see them buy stocks outright. I’m not a lawyer but it raises the question: Is it even legal? I’m sure the BOJ is not alone in this questionable activity. The U.S. Fed refuses to be audited. One is compelled to ask: Why?”

Economist Ed Yardeni also voiced concerns on his web site in April, writing:

“In the long run, it’s hard to imagine that having the central monetary planners buy corporate bonds and stocks with the money they print can end well. In effect, the central banks are turning into the world’s biggest hedge funds, financed by their own internal primary (money-printing) dealers and backstopped by the government — which can always borrow more from the central bank or force taxpayers to make good on this Ponzi scheme…”

"Wall Street On Parade" has written a great deal about “dark pools,” those regulator-lite trading venues that are operated by the big Wall Street banks and function as in-house stock exchanges. Until we start to see more granular data at the SEC on exactly what central banks are buying and selling on U.S. stock exchanges, consider it just more “dark pool” activity and one more reason for the public to view these markets with a cynical eye.

Monday, August 15, 2016

Hillarium Cynicism (Dwarfing Hillary) - Forget About It!  (Rigged System Not to Be Acknowledged) Clinton Enables GOP? (Perkins Coie Wikileaked: DNC Death Mystery Deepens (Or Not))  Big Banks/Insurance Send Scary Signals  (The Obama Jig Testimony)  Hillary/Obama Branding Lets Wall Street Walk

Yes, this argument has been made here since, what? . . . seems like forever. (I've got a crush on this guy. He's soooo much smarter than the average bear.)

With Trump Certain to Lose, You Can Forget About a Progressive Clinton

Lies. Lies. And more lies?

Not from Corey Robin:

I’ve been saying that one of the problems with the “Trump is like no Republican we’ve ever seen before” line is that it prevents us from consigning the Republican Party to the oblivion it deserves. In making Trump sui generis, by insisting that he is an utter novelty, you allow the rest of the party to distance themselves from him, to make him extreme and themselves respectable, and to regroup after November.

Now a leaked email from DNC Communication Director Luis Miranda, which I stumbled across in Carl Beijer’s excellent discussion here, makes plain just how costly this strategy is. Writing back in May, Miranda protests that the Clinton campaign wants to separate Trump from the GOP so that it can point to all the Republican officials who oppose Trump and support her. But as Miranda points out, what’s good for Clinton is bad for down-ballot Democrats. So long as down-ballot Republicans distance themselves from Trump, he says, Clinton is willing to give them an out, thereby hurting their Democratic opponents. (And as Carl points out, Clinton is keeping a lot of the money her organization raised for down-ballot Democrats, doubly hurting them.)

Not only is this bad for down-ballot Democrats. It lets the entire Republican Party—all the decades of its rotten, racist, revanchist formations—off the hook. Clinton gets to say she has the support of mainstream, respectable Republicans; they get to say, if not I’m with her, then at least I’m not with him. And with that, a ticket to legitimacy.
_ _ _ _ _ _ _

The Really Gross Domestic Product of the Image Nation

This is When the Jobs “Recovery” Goes KABOOM

Bill And Hillary Clinton Made A Quarter Billion Dollars Since Leaving The White House, Mostly From Speeches

So they're just like us - except not actually suffering from the continuing recovery Depression.

But don't worry.

There is no way the system is rigged.

This longest of election cycles has rightly been called the Year of the Outsider. It was a year that saw a mighty surge of economic populism and patriotism, a year when a 74-year-old Socialist senator set primaries ablaze with mammoth crowds that dwarfed those of Hillary Clinton. It was the year that a non-politician, Donald Trump, swept Republican primaries... But if it ends with a Clintonite restoration and a ratification of the same old Beltway policies, would that not suggest there is something fraudulent about American democracy, something rotten in the state?

And no one has mentioned Denmark.


Welcome to the USA! USA! USA!

Don't forget to duck.

* * * * *
My mentor at BLCKDGRD has saved me the trouble of trying to summarize the OBombrdDrumpfdHillarity and it's a solemn moment so, please, give proper pause:

” All of these men are among the most bloodthirsty elements in the right-wing firmament.

But now they’ve been re-branded as “center-right foreign policy voices.” Also ▼

  • I'm tempted to think Hillary Clinton's sole consideration in everyfuckingthing is that she wants to be president, fuck everyfucking thing else:  There is plenty more to say about how Clinton and her surrogates have taken this election as their opportunity to attack leftist activists, positions, and priorities, but her campaign's relationship with down-ballot candidates is the clearest indication of how she will wield power. Given the opportunity to win back the House and Senate, overcome Republican obstruction, and advance an agenda - not just a leftist or progressive agenda, but an agenda of any kind - Clinton has chosen instead of consolidate her power and maintain the political status quo. She is not only leaving down-ballot candidates to fend for themselves, but is actually placing them in a weaker position by refusing to nationalize this election and turn every Congressional race into a referendum on Trump.

  • In the past I would highlight the hands of the oligarchs at work here:  you must have a Yankees to play the Red Sox in a legendary rivalry to keep the league profitably, unassailably afloat. It's still true, and I need remind myself that beyond my (not even fun anymore) contempt for Hillary, the Hillarium, and motherfucking Hillaryites, Triskelions demand the status quo and no one - since it's to her direct benefit in her myopic determination to be POTUS, dammit - can ensure it more cynically than Hillary Clinton.

  • Limits on drone warfare? Reminder:  Obama's a Triskelion fuck too.

  • When candidate's surrogates call for assassinations.

  • UPDATE! Yes, ▲ as Landru points out in comments is from 2010, does anyone doubt the sentiment has changed? That they would if they could? But yes, I should have acknowledged the Hillarium Official's real call for extrajudicial murder was not recent, as in, contemporaneously counter to Trump's not-call for Hillary's execution.

  • And you thought James Bond was from Scotland. According to the MSM, he's Russian (or something else very very evil).

    Death of Shawn Lucas Brings Attention to DNC Role of Prestigious Law Firm

    . . . . After the lawsuit was filed, Wikileaks released almost 20,000 emails that had been hacked at the DNC by an unknown party. The emails buttressed the allegations in the lawsuit and created so much media notoriety against the DNC that Wasserman Schultz stepped down as Chair along with three other DNC executives whose emails were leaked. Multiple emails also show lawyers at Perkins Coie engaging in strategy that appears to benefit Clinton over Sanders.
    . . . As of this writing, the Office of the Chief Medical Examiner for Washington, D.C. is not releasing the cause of death for Shawn Lucas. Prior to his death, Lucas had gained social media attention through a video released of the service of process. In the video, Lucas compares the serving of this lawsuit to his “birthday and Christmas” all rolled into one. He happily calls out to the DNC representative who eventually accepts the complaint, “Thank you so much, we’ll see you in court.” That video has now been viewed over 380,000 times.
    Perkins Coie has both revenues and reputation at risk in this matter. According to its web site, it has “more than 1,000 lawyers in 19 offices across the United States.” According to the legal web site, Chambers, “its client roster now reads like a who’s who of social media and technology companies.” Chambers lists three of the largest market cap companies in America as its clients — Amazon, Facebook and Microsoft – and notes that Boeing has been its client for a century. (Perkins Coie is headquartered in Seattle where Boeing was founded.)
    What has to be equally distressing to a powerful law firm is that the Chair of its Political Law practice, Marc Elias, has been implicated in the leaked emails from Wikileaks and is turning up in the pages of the Washington Post, owned by billionaire Jeff Bezos, the CEO of its client, Amazon.
    . . . In a 2014 article at Politico, titled “The man behind the political cash grab,” reporter Ken Vogel explains just how lucrative it has been for Perkins Coie over the years to be the legal-go-to-guys for the Democratic power base in Washington. Vogel writes:
    “Perkins Coie’s political law practice, anchored by Elias and former White House Counsel Bob Bauer, has something of a stranglehold on the Democratic Party’s election law business, representing not only the party committees themselves but everyone from [Harry] Reid (whose various committees have paid $317,000 in legal fees to Perkins Coie over the years) to Obama ($7.4 million) to the major Democratic super PACs ($19 million).”
    The thrust of the article, however, is that Elias played a central role in further opening the spigots for legal revenues his firm might be expected to collect in the future by tinkering with Federal legislation at the eleventh hour. Vogel writes:
    “A powerful Democratic lawyer helped craft a provision that was slipped into a year-end spending bill allowing political parties to raise huge new pools of cash — including some for legal fees that are likely going to be collected by his own firm…
    “The change has the potential to halt or at least slow the erosion of power of the political parties, since it would increase the maximum amount of cash that rich donors may give to the national Democratic and Republican party committees each year from $97,400 to $777,600 or more.”
    As "Wall Street On Parade" has regularly reminded our readers, this is not an election to be viewed as a spectator or taken casually — not if you care about the future of your country and the dreams and hopes of the next generation.

    The Cynicism of Hillary

    By Craig Murray, former British ambassador to Uzbekistan and Rector (i.e. president) of the University of Dundee.
    Hillary Clinton’s completely unfounded claim that Russia was behind the passing to WikiLeaks of Democratic National Committee documents was breathtakingly cynical. It was a successful ploy in that it gave her supporters, particularly those dominating mainstream media, something else to focus on other than the fact that the DNC had been busily fixing the primaries for Hillary.
    It was however grossly irresponsible – an accusation that a US Secretary of State would hesitate to make in public even at the height of the Cold War. It raises further the tensions between the World’s two largest nuclear armed powers, and plays into the mood of rampant Russophobia which we are seeing whipped up daily in the press. With the Ukraine and Syria as points of major tension, to throw such an accusation wildly in defence of her own political ambitions, shows precisely why Hillary should never be US President.
    This is all the more true as not only did Hillary have no evidence of Russian involvement, she almost certainly knows the allegation is completely baseless.
    Which brings me to the curious murder of Seth Rich, the DNC staffer killed by an armed street robber who left Rich’s gun, watch, cash and wallet. WikiLeaks have offered an award of US $20,000 for information on his assassination. This does not indicate that it was Rich who leaked the emails. It does indicate that WikiLeaks are aware of profound shenanigans involving the Hillary campaign, and are putting effort and resources into piecing together the picture.

    Big Banks and Big Insurers Send Scary Signals

    By Pam Martens and Russ Martens
    August 11, 2016
    There’s something big and scary going on behind the scenes but, as usual, the public isn’t reading about it on the front pages of the newspapers.
    Yesterday, the broad stock market, as measured by the Standard and Poor’s 500 Index, declined a modest 0.29 percent while big Wall Street banks like Citigroup and JPMorgan Chase fell by triple that amount. Bank of America, which bought the big retail brokerage firm, Merrill Lynch, in the midst of the 2008 crash, fell by 8.6 times the rate of the decline in the S&P to give up 2.50 percent.

    Equally noteworthy, two major insurers, MetLife and Prudential Financial, saw percentage market losses far in excess of the S&P. MetLife declined by 2.74 percent while Prudential Financial lost 1.68 percent. Prudential Financial has been named a Systemically Important Financial Institution (SIFI) by the Financial Stability Oversight Council. MetLife had received the same designation but won a court battle to rescind the designation. The U.S. government is appealing.

    The vote of no confidence on down market days in the complex U.S. banks that hold both insured deposits from Mom and Pop savers while also making huge derivative gambles is a repeat of the action we saw earlier this year. On February 3, 2016, four big Wall Street banks (Bank of America, Citigroup, Goldman Sachs and Morgan Stanley) set 12-month lows in intraday trading – far outpacing the declines in the broader market index as measured by the S&P 500. The banks have recovered some since then but are nowhere near setting record highs as the broader market indices have of late.

    These mega banks should be a barometer of the overall health of the stock market and the U.S. economy. After all, these are the banks that are making corporate loans, underwriting corporate stock and bond issues, and doling out credit to consumers. If the mega banks are experiencing air pockets of buying interest in declining markets, this does not bode well for either the market or the U.S. economy.
    The price performance of MetLife should also be a red flag that perhaps the Financial Stability Oversight Council got it right when it designated the firm a SIFI.

    There is at least one potential concern that is contaminating market perception of the stability of these banks. That’s the fact that despite all of the promises that the Dodd-Frank financial reform legislation would rein in the Wild West derivative trading at these banks, no such thing has happened.
    Dodd-Frank was supposed to push the derivatives out of the commercial banks which hold the insured deposits to prevent another taxpayer bailout, the so-called “push out” rule. But in December of 2014, Citigroup was able to sneak legislation into the must-pass spending bill to keep the government running that overturned the push-out rule. The Congressman who placed the provision into the spending bill on behalf of Citigroup was Kevin Yoder of Kansas. The non-partisan Center for Responsive Politics shows  “Securities and Investment” as the number one industry contributing to Yoder’s campaign committee and leadership PAC.

    Using its insured bank’s balance sheet as ballast, Citigroup’s bank holding company now ranks as the largest holder of all derivatives in the U.S. According to the Comptroller of the Currency, the very bank that blew itself up in 2008 and received the largest taxpayer bailout in history, now holds $55 trillion in notional amount of derivatives.

    But far more alarming is the type of derivatives Citigroup appears hell bent on gaining market share in trading. Last week we reported that Citigroup is plowing into credit default swaps, the very derivatives that blew up the big insurance company, AIG, in 2008 and forced a government bailout of AIG to the tune of $185 billion. We noted on August 4: 

    “According to the data, Citigroup now has $2.08 trillion in Credit Derivatives (the vast majority of which are Credit Default Swaps). Only JPMorgan is bigger with $3.1 trillion in credit derivatives. Equally frightening, the vast majority of these are private contracts between financial institutions (Over-the-Counter) where regulators lack the granular details of the deals. President Obama falsely promised the American people that derivatives would be moved onto exchanges with proper capital and transparency following the Dodd-Frank financial reform legislation in 2010. That has not happened. The vast majority of all derivatives are still traded in the dark.

    “Not only are Citigroup’s Federal regulators allowing it to engage in this high risk trading but they are actually allowing Citigroup to purchase the high risk positions of a deeply troubled bank – Deutsche Bank. Risk Magazine reports… that Citigroup bought $250 billion of Credit Default Swaps from Deutsche Bank in 2013. Bloomberg News also reported on the $250 billion Citigroup purchase from Deutsche Bank.”

    The ink was barely dry on our article when the very next day, Bloomberg News reporters Jeff Voegeli and Donal Griffin wrote that Citigroup had “purchased a portfolio of credit-default swaps from retreating rival Credit Suisse Group AG” which had a notional value (face amount) of $380 billion.

    To many rational minds, $250 billion here, $380 billion there, pretty soon you’re talking about real money – and real potential for blowups like those seen in 2008.

    On March 8 of this year, the Office of Financial Research, which was created under the Dodd-Frank legislation to monitor the buildup of systemic financial risks, released a study on Credit Default Swaps. Its findings were deeply troubling.

    The report effectively suggested that the Federal Reserve was conducting its stress tests all wrong. The researchers noted that the Fed’s stress test is looking at only the bank holding company’s “direct counterparty concentrations” for credit default swaps rather than the indirect fallout. The authors found that “indirect effects can be as much as nine times larger than the direct impact” on the bank holding company, and ignoring that reality “could understate the stress on banks.”

    That study may have sent a shot across the bow of the Fed, alerting it to nip in the bud any cascading effect from loss of confidence in the European banks that are holding credit default swaps. Both European banks that sold Citigroup their credit default swaps (Deutsche Bank and Credit Suisse) have seen their share price implode over the past 12 months. Deutsche Bank’s stock has lost 56 percent of its value over the past 12 months while Credit Suisse is down by 58 percent based on mid morning trading.

    But if the Fed is attempting to ring fence credit default swaps by allowing Citigroup to be the buyer of last resort, that has the potential to spread panic not contain it. Citi is, after all, the bank that brought us this mess by muscling through the repeal of the Glass-Steagall Act.

    Have you taken a close look at Michael Bloomberg's actions lately?

    Below is the testimony of Pam Martens to the Federal Reserve on June 26, 1998, imploring it not to repeal the Glass-Steagall Act and usher in an era where Wall Street banks like Citigroup could own both insured deposits at its commercial bank as well as engage in high risk trading at its investment bank.

    According to Forbes, during Michael Bloomberg’s 12-year stint as Mayor, his wealth exploded more than ten-fold, from $3 billion to $31 billion. The bulk of Bloomberg’s wealth has derived from leasing his Bloomberg data and news terminals at a cost of approximately $24,000 per terminal per year to tens of thousands of Wall Street trading desks and global banks around the world.

    The Mayor’s wealth and where it comes from is a reality that poses an inherent conflict of interest for any news outlet but it is especially so for a news organization like Bloomberg News that is supposed to be investigating the very Wall Street firms that write checks to pay for their Bloomberg terminals.

    While the Mayor was running the City of New York, maintaining a hands-off approach to the Bloomberg newsroom, investigative reporters there regularly distinguished themselves. Two blockbuster stories came out of that era that greatly advanced the public interest thanks to the courageous reporting of Bloomberg reporters.

    Mark Pittman was one of those reporters. His stonewalled Freedom of Information Act requests to the Federal Reserve led to Bloomberg News filing and winning a Federal Court case against the Fed. The Fed was forced to turn over documents showing that it had secretly funneled a cumulative $13 trillion in below-market-rate loans to Wall Street banks and foreign banks during the financial crisis. Pittman died at age 52 in 2009. (A Bloomberg News story carried in the Washington Post at the time of his death reported that “He had heart ailments, although the cause of death was not immediately clear.”)

    The reporting team of  Stephanie Ruhle, Bradley Keoun and Mary Childs broke the story in 2012 on JPMorgan Chase’s wild gambles in derivatives – a story that infamously became known as the London Whale. Those revelations led to Congressional hearings; an intense investigation by the U.S. Senate Permanent Subcommittee on Investigations that revealed the bank had been using depositors’ savings to make its gambles; $1.2 billion in fines; and losses of at least $6.2 billion on JPMorgan’s wild gambles. Ruhle has moved on to MSNBC; Keoun is now a freelance writer; Mary Childs is now reporting for the Financial Times.

    In June of last year, Damaris Colhoun reported at the Columbia Journalism Review that “highly respected journalists” who had been “lured away from The Wall Street Journal,” were being “sidelined or pushed out…”

    Colhoun also wrote about how new investigations are now commenced at Bloomberg News:

    “…for an investigation to pass muster, it must hew to a more restrictive definition of an appropriate Bloomberg subject, namely finance, money, and power. To some, this represents a curtailing of ambition, one that favors softer, magazine-style articles over deep, sustained investigations…

    “That’s why it’s often been a thorny endeavor for Bloomberg to launch major investigations of corporate and other targets that pose a conflict of interest, akin to pointing a gun in the customer’s face.”

    Equally troubling, Colhoun also noted that the former mayor is spending “more time in the newsroom than he did even before leaving for city hall.”

    Two particularly embarrassing episodes have arisen in recent years. In 2015, an internal memo by Bloomberg reporter Dawn Kopecki was leaked to the media where she called the atmosphere at Bloomberg News “a climate that makes editors and reporters afraid to speak their minds.” Kopecki was part of a round of layoffs three months later. She now reports for the San Antonio Express-News.

    The former Editor-in-Chief, Matt Winkler, was called out in a New York Times article in 2013 after Bloomberg reporters alleged he had spiked articles critical of China after they had worked on the reports for the better part of a year. The New York Post also wrote that reporter Michael Forsthye “was escorted from Bloomberg’s Hong Kong office” on November 14, 2013 “after he was fingered as the person who leaked embarrassing claims about how the news and data giant spiked a story that could have angered leaders in China.” China is an important source of Bloomberg Terminal leases.

    "Wall Street On Parade" has also reported on a pattern of troubling editorials and opinion pieces at Bloomberg which are factually unsound and/or conflicted. In March we reported that now Editor-in-Chief-Emeritus Matt Winkler had written a highly questionable opinion piece titled “Stop Bashing Wall Street. Times Have Changed.”
    One of the most absurd assertions in Winkler’s column was on the issue of derivatives. Winkler wrote:

    “Banks also have reined in most of the proprietary trading in derivatives that brought them into conflict with their depositors.”

    At the same time that Winkler was making that statement, Citigroup – the giant U.S. bank that blew itself up in 2008 and received the largest bailout in U.S. history – was loading up on the very same derivatives, credit default swaps, that blew up the big U.S. insurer, AIG, and added billions of dollars more to Citigroup’s own losses. (See our report:  “Bailed Out Citigroup Is Going Full Throttle into Derivatives that Blew Up AIG.”)

    Then in May of this year, Michael Bloomberg teamed up with the CEO of one of his largest customers, JPMorgan Chase’s Jamie Dimon, to write an OpEd at the Bloomberg web site. The two billionaires were subtly suggesting in the opinion piece that the unprecedented wealth inequality in the U.S. might be improved if high schools offered vocational training to those not heading to college. Under Dimon’s leadership of JPMorgan Chase, the bank received a combined three felony counts in 2014 and 2015.

    That’s the first time that has happened in U.S. history where a major insured bank is involved. Is this really an appropriate voice to lecture the country on how to reform itself?

    During the "Occupy Wall Street" protests in Manhattan that occurred while Michael Bloomberg was the Mayor (which were directed against the firms that made Bloomberg a billionaire and continue to add billions to his net worth), the New York Civil Liberties Union (NYCLU) and more than a dozen major media outlets and media associations wrote to the Bloomberg administration to document beatings, assaults, arrests and intimidations of reporters attempting to do their job. (See here and here.)

    The NYCLU noted the following in its letter:

    “Beyond preventing journalists from documenting the actions of the police, numerous journalists were arrested and subjected to physical force by NYPD officers during and after the eviction. We have heard numerous stories of NYPD officers liberally using force against both journalists and others. There seemed to be no supervisors in some of the areas, and officers gave the impression of ‘a blue-shirt free-far-all,’ in which they did not know what they were supposed to be doing and instead improvised aggressively.”

    The New York Times and other media outlets described the following incident as one of many forms of physical abuse against reporters during the Occupy Wall Street protests:

    “…a photographer, standing on the sidewalk on Trinity Place, was photographing a man the police were carrying from somewhere in the park who was covered in blood. The photographer was standing behind a metal barrier 20 to 30 yards from the scene. As he raised his camera to take a picture two other police officers came running toward him, grabbed a metal barrier and forcefully lunged at him striking the photographer in the chest, knees and shin. As they did that they screamed that he was not permitted to be taking pictures on the sidewalk – the most traditionally recognized public forum aside from a park.”

    "Wall Street On Parade" also broke the story that the Bloomberg administration was overseeing a high-tech surveillance center in lower Manhattan which, bizarrely, allowed personnel from the same Wall Street firms being charged with serial crimes against the citizenry to jointly man the surveillance operation with the New York City Police Department.

    The Bloomberg administration refused to answer any of our Freedom of Information Law (FOIL) requests on this matter.

    Philosophically, you can't improve on listening to Harold Pinter's speech delivered when he won the Nobel Prize for Literature (not Peace).

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    And no one can do better than listen to Max and Stacy explain how all the economic games are really O-V-E-R (and understood very well by all discerning observers). (Do yourself a favor and take a 5-minute break to listen to their very articulate rendering of the horrors - and, don't faint, but there are a lot of laughs included in their telling (very dark telling) too.)

    Keiser Report:  Phantom Pension Funding (E952)

    Published on Aug 11, 2016

    Check Keiser Report website for more:

    In this episode of the Keiser Report from Washington DC Max and Stacy discuss the reckless gamble that Governor John Kasich of Ohio - one of the ‘legitimate’ and ‘respectable’ candidates (as per the media) in the Republican primaries - chose to take with the state’s pension funds. In the second half they interview Francine McKenna of about what Donald Trump’s tax returns might show. Francine suggests that they would show ‘yuge’ business losses but that ordinary people wouldn’t understand investing for the specific purpose of such losses. They also discuss what the IRS audit of the Clinton Foundation might show and what the transcripts of Hillary’s talks to Goldman Sachs would show.

    Keiser Report:  ‘Crexit’ & the Dark Heart of Italy’s Banking Crisis (E953)

    In this episode of the Keiser Report from Washington DC, Max and Stacy discuss “crexit” and the dark heart of Italy’s banking crisis, as central bank intervention increases financial risk. In the second half, Max continues his interview with Francine McKenna of about the current trials of auditors taking place in courts across the United States.

    Recorded from RT, Keiser Report , August 13, 2016

    Don't miss Francine McKenna! She will simultaneously impel your next heart attack and uplift your spirits.

    Keiser Report:  Collapse of Political World (E951)
    Published on Aug 9, 2016

    In this episode of the Keiser Report from Washington DC Max and Stacy discuss their observations on the road during election season 2016. They observe that the political world has collapsed because of the bailouts and now we have the most disliked candidates in modern history and the most insane conspiracy theories masquerading as political analysis.

    And if you have another few minutes, no one is better with whom to end your weekend on a high note (figuratively!) than Chris Hedges.

    Published on Aug 14, 2016

    Black America with Prof. Eddie Glaude of Princeton University

    On this week’s episode of "On Contact," Chris Hedges explores the harsh economic, social, and political realities of African Americans with Princeton Professor Eddie Glaude, as they discuss the institutionalized racism that is holding down black America, as addressed in Glaude’s book, Democracy in Black:  How Race Still Enslaves the American Soul. RT Correspondent Anya Parampil brings us the numbers that depict the racial divide.

    Chris Hedges Brace Yourself! The American Empire Is Over 2016

    Wow. Now that's a video for all times.