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.

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