Thursday, August 27, 2009

Rise of the Parasitic Anarchists

The new world order is becoming infected with parasitic anarchists.

Minyanville:
Anarchists Give Wealthy a Run for Their Money -- One a night, almost every night, for six months.

This is the pattern Berlin police have been following since the spring in a bizarre series of arsonist attacks on area luxury vehicles, particularly Mercedes (DAI), BMWs, and Porsches.

With 170 luxury vehicles reduced to burnt-out auto carcasses, Berlin police are estimating conservatively that at least 93 of these attacks were politically motivated. Particularly in Europe, it’s just the latest and most high-profile attack on symbols of wealth. And with the backlash against the rich -- and a Michael Moore film about Wall Street from Paramount Vantage (VIA) on the way -- it could just be the beginning...

related:
ana-mpa.gr:
Self-styled anarchists claim responsibility for firebombs against Greek embassy in Belgrade
riverfronttimes:
St. Louis Police Apologize to "Anarchists"
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Is Maurice Schwenkler a vandal, a radical leftist, a progressive, or simply an anarchist?

Maurice SchwenklerGawker:
Trans Anarchist Punk Arrested In Attack On Democratic Party HQ -- Either because they wanted conservatives blamed or because of the natural antipathy radical young leftists have for establishment liberals, two anarchists reportedly smashed up the Colorado Democratic party headquarters...
discussion:
Talking Points Memo:
UPDATED -- Attack On CO Dem HQ May Not Be What It Seems -- given that the person arrested has anarchist ties and is on the record as a vocal left-wing opponent of Obama, it looks like that interpretation was wrong. It now seems more likely that the goal was more straight-forward: to express anger at Obama and the Democrats...
Jessica Fender / Denver Post:
1 suspect in custody following Dem HQ vandalism in Denver — A 24-year-old arrested this morning on suspicion of smashing 11 windows at Colorado Democratic Party headquarters tried to conceal his identity while allegedly committing the crime, according to police descriptions.
discussion:
Conn Carroll / The Foundry: Morning Bell: A Sobering Wake Up Call
related:
Michelle Malkin:
Fake hate crime alert: Leftists vandalize Denver Democrat HQ; Dems smeared Obamacare foes — Nabbed: Left-wing Obamacare supporter Maurice Schwenkler, not Obamacare foes, arrested in attack on Denver Democrat HQ — I called out GOP fake hate crime perpetrator Ashley Todd last year …
discussion:
Jared Jacang Maher / The Latest Word: Is alleged Colorado Democratic Party headquarters window-smasher …
Amanda Terkel / Think Progress:
Colorado Democratic headquarters vandalized.
discussion:
Don Surber: Anatomy of a lefty climbdown
John McCormack / Weekly Standard: Beware of Fake Hate Crimes, Cont.
GottaLaff / The Political Carnival: Once again, David Shuster listens
Elpresidente / Peoples Press Collective:
Smash-troturfing Vandal's Connections, No Apology from Dems' Waak …
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Global Guerrillas:
The US, GLOBALIZATION and the RED QUEEN -- [...] So, what are the parasites to this homogenous global system? Networks. They range from financial/corporate networks (per the recent financial crash) to terrorist networks (al Qaeda, etc.) to criminal networks (narco-gangs, MEND, etc.). All of these parasites are post-modern in that they don't adhere to any meaningful ideology that can replace the state (even al Qaeda envisions a decentralized feudal Caliphate as an end game). They all are in the process of co-opting global system functions (host functions) to achieve operational space for the advancing their evolutionary advantage. Unfortunately, per the Red Queen hypothesis, a rapidly evolving parasite's competition against a static, non evolving, homogenous host likely results in extinction of the host...
related:
Global Guerrillas: JOURNAL: Deviant Globalization
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Wired:
Exclusive Interview: Pirate on When to Negotiate, Kill Hostages --
Under what conditions would you kill the hostages?

Hostages — especially Westerners — are our only assets, so we try our best to avoid killing them. It only comes to that if they refuse to contact the ship’s owners or agencies. Or if they attack us and we need to defend ourselves...
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Monday, August 24, 2009

Goldman's Front-running Tactics

Goldman Sachs has perfected the art of front-running and cheating the investing public.

Goldman's Trading Tips Reward Its Biggest ClientsSusanne Craig / Wall Street Journal:
Goldman's Trading Tips Reward Its Biggest Clients -- Goldman Sachs Group Inc. research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show.

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry's research didn't find out he was bullish until his written report was issued ...

discussion:
Wall Street Pit:
Goldman’s Top Clients Given Access in Advance to Selective Information -- In any event, and stating the obvious here - these type of Wall Street practices are not a bit surprising. Allowing one set of clients to front-run another set of clients is unfortunately, the norm in Wall Street. What this story will do however, I think, is bring more unwanted attention to Goldman Sachs who continues to face unfavorable media stories.

Zero Hedge:
Is Goldman's Selective Trading Disclosure A Legal Way For Preferred Clients To Front Run The Market? -- This pretty much summarizes the "magical" performance that many hedge funds generated in Wall Street's golden age: Goldman (and other firms, many of which however now are defunct) treated several clients preferentially, creating a "club" in any given name, running it up, then releasing what the club already knew to the broader investing public, as the club unloaded its positions to the witless majority. And this went on for many years, and in many aspects, still does.

Megan Barnett / Minyanville:
In Defense of Goldman's Research Practices -- Evidently the bank holds weekly meetings where its research analysts share trading ideas that are then passed on only to its biggest trading clients. The tips usually involve expectations for short-term swings in stocks they cover, and they sometimes differ from what the official ratings on the stocks reflect. The information is typically shared with about 50 "favored clients" of the bank, including Citadel Investment Group and SAC Capital Advisors. Smaller Goldman clients are unhappy with this...

Like it or not, this is simply another example of how the world works...

Deal Book: Goldman’s Analysts Take One for the Team
MarketWatch: Questions raised over Goldman research policy
Yves Smith / naked capitalism: Goldman Gives Preferred Clients Stock Trading Tips Early, Defends Practice
Barry Ritholtz / The Big Picture: Its Not Called “First Call” For Nothing . . .
Ashby Jones / Law Blog: For Goldman, Alleged Software Theft Gets Criminal Treatment
Melly Alazraki / DailyFinance: Stocks in the news: Procter & Gamble, Goldman Sachs, Nokia

related:
Zero Hedge:
Full Kaufman Letter To Mary Schapiro, Or Is The HFT Party About To End?

Thursday, August 13, 2009

Great Recession Watch — August 13, 2009

Items of Interest:

CNNMoney.com:
Foreclosure plague: No cure yet -- The housing market is still sick, with a record number of foreclosure filings posted in July.

The foreclosure plague continued to devastate last month.

There were more than 360,000 properties with foreclosure filings -- including default notices, scheduled auctions and bank repossessions -- an increase of 7% from June and 32% from July 2008, according to RealtyTrac, an online marketer of foreclosed homes. In fact, one in every 355 U.S. homes had at least one filing during July...

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Bloomberg:
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ClusterStock:
Elizabeth Warren: "We Have A Real Problem Coming..." --
  • The banks are still insolvent.
  • That little tweak to mark-to-market accounting a couple of months ago has allowed us all to plunge into deep denial.
  • Now that the banks are allowed to lie about what their toxic assets are worth, they'll never sell them (because if they did they would have to write them down)...
discussion:
ZeroHedge: Elizabeth Warren "We Have A Real Problem Coming"
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ResearchRecap:
Commercial Loan Losses Cast Shadow Over Regional Banks -- Despite some hopeful signs of relief for U.S. banks in second-quarter 2009, the next several quarters likely will continue to be a struggle, especially for small regional institutions, Standard & Poor’s Ratings Services analysts said during a quarterly conference call on Aug. 6...
related:
Bloomberg:
Next Bubble to Burst Is Banks’ Big Loan Values: Jonathan Weil
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Nouriel Roubini / Forbes:
A 'Jobless' And 'Wageless' Recovery? -- Any sustained and strong improvement in growth has to come from a revival in private demand, and not from temporary factors like inventory adjustment and policy measures. The U.S. consumer, who, as we've noted, still accounts for close to 70% of GDP, is pulling back. Investment, which still trails consumer spending at home, will be weak. Exports will be a source of growth only in the medium term. In the short term, the rest of the world will remain dependent on the U.S. to drive demand while consumption abroad will be unable to offset the decline in U.S. consumption.

These factors suggest a sluggish economic recovery for the U.S. in the coming years until new sources of growth emerge (such as exports to emerging markets, investment, new energy and technology). Factors such as unsustainable public debt, higher structural unemployment, lower credit growth and higher taxes in the future will also constrain growth.
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Mr Practical / Minyanville:
The State of the Economy --
  • Libor markets have returned to normal (we are guaranteeing this market).

  • Swap spreads have returned to normal (we are guaranteeing this market).

  • Housing starts and prices have stabilized (the U.S. government is providing 15% tax credits, effectively paying the down payment for first time home buyers).

  • Car sales are seeing signs of life (the U.S. government is providing cash for clunkers).

  • The U.S. economy has stabilized because the U.S. government has effectively become almost half of the U.S. economy. But stimulus has been shown to have a zero multiplier: stimulus comes from either borrowing or transferring wealth from taxpayers, so every dollar eventually is taken back. Tax increases tend to have a minus 3 multiplier: tax increases eventually reduce growth by three times the increase.

  • "Green shoots" will wither away very quickly as the U.S. government has effectively become a very large part of the economy. That is temporary. Without the ability to generate more credit, growth will turn negative.
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Mr. Practical / Minyanville:
Deflationary Debt Destruction Must Run Its Course -- [regarding] the recent meeting between Chinese and US officials (berries).

Secretary of State Hillary Clinton characterized the meeting as one making our Chinese lenders more "comfortable" with their lending, that they are soothed by our handling of the financial crisis (whatever that is) and this should allay our fears that China will lend less at a higher cost to us.

First of all I hope it is not lost on everyone that having a communist country "comfortable" in how we are conducting finance is not a good thing. A communist country that probably has some very sinister ideas of what they really want out of us...

Monday, August 10, 2009

Goldman Sachs on Treasury Secretary Paulson's Speed Dial

Items of Interest:

Hank Paulson made frequent calls to Goldman SachsNY Times:
Paulson’s Calls to Goldman Tested Ethics -- Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.

But today, seven months after Mr. Paulson left office, questions are still being asked about his part in decisions last fall to prop up the teetering financial system with tens of billions of taxpayer dollars, including aid that directly benefited his former firm...

During the week of the A.I.G. bailout alone, Mr. Paulson and Mr. Blankfein spoke two dozen times, the calendars show, far more frequently than Mr. Paulson did with other Wall Street executives....

discussion:
Yves Smith / naked capitalism: Quelle Surprise! Hank Paulson and Goldman CEO Talked to Each Other a Lot!
Raw Story: The secret history of TARP: How Goldman bailed out Goldman...
Daniel Tencer / Prairie Weather: Questioning the obvious
The Big Picture: Looking at Hank Paulson’s Ethics
The Confluence: Your Breakfast Read, Sunday Edition
Douglas McIntyre / DailyFinance: More questions lead to more dirt on Paulson
Zero Hedge: The Misunderstood Treasury-Goldman Connection
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Zero Hedge:
Sergey Aleynikov Strikes Back, Files Goldman Subpoena -- Sergey's alleged Goldman code-theft case, which seemed to be on the fast track to being promptly settled out of court, just took an odd turn. Matt Goldstein over at Reuters reports that instead of keeping quiet, Sergey has taken the offensive and has filed a subpoena on Goldman Sachs, "seeking access to some information." Goldman's response is a not very surprising motion in federal court to quash the subpoena. Either this is a red herring by Sergey, trying to make his plea deal case stronger, or there is indeed something in Goldman's books that needs further observation, and would, presumably, shed much needed light on either the Aleynikov affair, HFT, or both...
related:
Zero Hedge:
Sergey Subpoena Update, Or The Goldman DOJ Connection -- We have learned that Goldman has retained the exalted law firm of Boies, Schiller & Flexner, to quash the Aleynikov subpoena request. The lead partner on submitted papers is Matthew Friedrich, former assistant attorney general at the DOJ and deputy chief of staff to fomer US Attorney General, Michael Mukasey...
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Friday, August 7, 2009

Flat Decade: July 1999 — July 2009 had 0.01% Jobs Growth

The picture for jobs growth stays grim.

NY Times:
In Last Decade, a Lack of Job Growth in the Private Sector -- For the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring...

through July of this year, when the economy was mired in the deepest and longest recession since World War II. For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent...

US Private Sector Employment Growth annual rate of change over 10 yearsrelated:
NY Times: 247,000 Jobs Lost in July; Rate Dips to 9.4%
NY Times: Another Hurdle for the Jobless: Credit Inquiries
NY Times: For Today's Graduate, Just One Word: Statistics

Thursday, August 6, 2009

48% of Homeowners Going Underwater

"By Q1, 2011 a projected 48% of total mortgage borrowers will have negative equity." — Deutsche Bank
Will the people who have called an end to the Great Recession need to take a mulligan?

Bloomberg:
‘Underwater’ Mortgages to Hit 48%, Deutsche Bank Says -- Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends, Deutsche Bank AG said.

The percentage of “underwater” loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011...
discussion:
Zero Hedge:
A Few Pictures Are Worth A Thousand Mortgage Mods --

By Q1, 2011 a projected 48% of total mortgage borrowers will have negative equity.
Calculated Risk:
Negative Equity: 16 Million Homeowners Underwater -- Some 24% of owner-occupied homes had mortgage debt that exceeded the values of those homes at the end of June...
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related:
Mish Shedlock / Minyanville:
ISM Shows Recession Not Over Yet -- The horn tooters have to wait at least another month before the recession is over, judging from the non-manufacturing ISM numbers...
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Minyan Peter / Minyanville:
This is Not a Recession! -- Contrary to most, I don’t believe in a V-shaped recovery. Beyond the headwinds of substantially greater private-sector deleveraging, continued high unemployment, and further deterioration in credit quality ahead, I think there's an equal, if not more severe and profound task ahead in this country -- and that's the enormous “resizing” of the American economy.

By resizing, I'm referring to the need to bring US economic capacity down to a much lower level of long-term domestic demand. Choose just about any industry in America and you will see too much capacity. Our debt excesses enabled it and now our debt destruction will require the elimination of it...

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