Friday, November 9, 2012

Former #GoldmanSachs Trader Accused of Fraud. $GS

In what should be filed under same old, same old. A former Goldman Trader stands accused of fraud by U.S. regulators. Well now, what a shocker. It appears one Matthew Marshall Taylor stands accused of defrauding the bank of 118m. The FT piece states;

"in late 2007 “intentionally concealed from his employer the size of the S&P 500 e-mini futures contracts position, risk and profits and losses,” the Commodity Futures Trading Commission said in a civil complaint filed in a New York district court on Thursday."

Okay.

"For instance, the CFTC said, Mr Taylor put on a real trade of 34,604 e-mini trades on December 13 2007. He then manually entered a fabricated sale of 33,000 contracts, the regulator claims. The false sale had the effect of appearing to reduce Mr Taylor’s e-mini positions from 37,104 contracts to 4,104 contracts."

Okay.

"On that same day, the CFTC said, Mr Taylor went on to amass a position in the futures contracts worth over $8.3bn. Mr Taylor then prepared an end of day profit and loss report showing a false loss of $2m, the CFTC said. Mr Taylor’s actual loss for that day was $52m."

Okay

“He . . . was promptly removed from his job and terminated soon thereafter. Since these events, which had no impact on customer funds, we have further enhanced our controls.”

Okay got it.

"After leaving Goldman, Mr Taylor went on to work for Morgan Stanley."

Say what?

Okay, I think I have the picture but I have a couple of questions and then some comments regarding this whole thing.

First. This happened in late December 2007 and the CFTC is now filing this complaint now? Is the CFTC that busy chasing down thugs on Wall St. or have they caught the porn surfing bug from the SEC?

Second. How does a trader at a global leader in finance, a firm on the cutting technological edge of all things financial - the type of high tech stuff that can sniff linen with the number 100 & Ben Franklin's face on it from a couple hundred nautical miles-, the place where God's work is done, get away with manually entering a fabricated sale of contracts to conceal a position's size?

Third. How does an thug like Taylor pull off this stunt and then get hired across the street at Morgan Stanley?  Sounds to me like Wall St. does a much due diligence on their new hires as they do on their IPO offerings to customers. ZERO!

Morgan Stanley either did or didn't investigate his background. Seriously. How long would it take Morgan to have found out the skinny on this dirt bag Taylor? About 15 minutes via the phone, that's how long. Wall St. gossips more than a room full of Italian ladies on their husband's bocce day. So let's assume Morgan did investigate him and knew his background. This tells me they simply don't care so long as he can make em' a buck.

I'll tell you why this happens. Because there is a culture on Wall St. today that would make a Charlie Merrill and others of his era cringe at the thought of. A culture of thugs and thieves that would sell their wife and/or daughter into sex slavery for a 6 figure bonus. A culture of tolerance for the intolerable so long as they make the managing partners buck. A culture of willful blindness by even the decent and honest (who are the majority) among them to patently offensive behaviour as to insult one's intelligence. A culture rotten to the core.

By tolerating this lawlessness and thuggery they are killing the proverbial golden goose which is the market. Not to mention what the criminal high frequency trading has done but you can re-read my piece Culture of Risk from August this year following the Knight Capital debacle for that .







Monday, October 22, 2012

Virnetx Holding - $VHC

I came across Virnetx Holding, ticker $VHC,  while I was chart surfing. Quite the flag formation after a volume laden impulse move down.


As my notes indicate, a break of the lower boundary of this flag implies things that are- how do I say this diplomatically,..... -not nice.

Thursday, October 18, 2012

#Goldcorp - $GG

After quite the impulsive move up off the 32 level Goldcorp - ticker $GG - has stopped to catch its breath and is sporting quite the nice looking flag formation. We could violate the lower bound of the channel to se up a small double bottom inside the channel. Need to see that low of Oct 15 hold.



As an aside the larger double bottom off $32 with a midpoint of $41 carries a target of $50 on it. This flag if broken to the upside carries a target of, depending on breakout of $61, which if you peek at a longer term chart would make new highs. Very bullish longer term!


#CarboCeramics - $CRR

Weekly view of Carbo Ceramics ticker $CRR. Notes on the chart.




Below is a daily close up view  where it appears to be sitting on some long term support. I want to watch this very closely here. 



#FirstMajesticSilver - $AG

The daily chart on First Majestic - ticker $AG - shows a really nice pennant (highlighted area)  forming here.  Coincidently, right on top of the prior reaction high at $22. Worth watching people.


Thursday, October 11, 2012

Cummins - $CMI False Sense of Security?

The weekly view of Cummins Engine ticker $CMI is shown below. Back in early 2011 we had what looked and then turned out to be a 'too good to be true' looking head and shoulders formation (shown in aquablue). The break of the neckline in August lead to quite the skirmish between bulls and bears with bulls winning out. Notice the low volume rally back in January this year. What was that about volume and validity???


Either way made a new high by about $10 bucks, attracted all the momo hedge fund valet attendants most of which know as much about risk management on YOUR money as they do about the ecosystem in the Republic of Congo. The stock looks to have rolled over with one last gasp forming a possible right shoulder of a NEW head and shoulders formation. So now having disappointed folks once will this new formation lull stockholders into a false sense of security??

The late 2009 consolidation around $45 looks like the target if the neckline and more importantly, the reaction lows of 2011 are broken.

#Caterpillar - $CAT Time to Say Good Night Irene?

Quite the chart Caterpillar ticker $CAT, is sporting. The weekly view below shows couple of things. An interesting looking double top, a very tired looking 13/34 week moving average scene and last but not least the breakdown from a recent bear flag.


The break of the bear flag brings in a target of $50.
A break of the double top low of roughly $65 brings in a target of ..... ummm, uhhh, $15.

Remember now this is a weekly chart! Time will tell. The CAT bulls will consider this talk heresy but come to think of it the Nortel bulls thought the same way years ago. Of course this time, live every other, is always different.

Thursday, October 4, 2012

A Look at Apple - $AAPL

I took a moment to take a look at every Ivy League educated money managers favourite "must own" stock Apple - ticker $AAPL. Remember now, this is cheap and gold is the one in the bubble!




Or as one Wall St. uber-genius once proclaimed.  “As long as the music is playing, you’ve got to get up and dance,”.  Why yes you do, especially when (A) it's not your money and (B) your bonus depends on it. 

It will be funny, yet again, to see all the "genius's" managing OPM fighting for chairs when the music stops playing.



Don't Forget About Me - Silver Wheaton- $SLW

With all due apologies to the Simple Minds. Silver Wheaton $SLW a weekly view below. For what its worth, $40.50 looks to be a reliable trigger.




An Old Dear Friend - Agnico Eagle - $AEM

Been watching an old dear friend from tech bubble of late. That old friend is none other than Agnico "you made em' all eat crow" Eagle, ticker $AEM, which looks poised for liftoff. The "you made em' all eat crow" comment comes from buying Agnico back in 1996 thru 1999 for clients in my former life as a broker. These buys were made when the 'all you could eat Gold buffet' was open yet barren of patrons. Sadly many were busy fighting over the much preferred regular fare menu of JDSU, NT, MSFT, INTC  etc. and proceeded to take their appetite and their business elsewhere amidst many a derogatory comment to my pal Agnico. C'est la vie! Needless to say back to reality.


Nice rounding bottom as slowly the 50 has crossed the 200day and now the 200 is turning upwards. The stock poked its nose thru an almost 2 yr downtrend line recently only to back off. rejection off the downtrend line occurs coincidentally right near the top of a large outstanding gap, which we have now filled, from late summer/fall of 2011.

A convincing move up thru 53.25-50 on volume here would seem to do the trick and be your cue to buy a ticket on this train!

Wednesday, October 3, 2012

A Look at Natural Gas $UNG - Chart

Been watching the chart of Natural Gas which you can easily follow via $UNG. Daily view below.



The last 4 years have been a relentless march lower. The action since late April has drawn my attention. We have formed a series of higher highs and higher lows. Just a few days ago the 50 day MA crossed over the 200 day to theupside. For some perspective the 50 has been buried under the 200 since 09/09/08 !  For those interested in longer term stuff the 13 week MA has crossed over the 34 week MA.

Couple of things could happen here. We could back and fill and retest the new upward trendline around 19 or the MA's or we could take out the Aug high along with the recent high at 23 which would be very bullish.

Things could get very interesting here for the patient among us.






Wednesday, September 26, 2012

Silver Wheaton - $SLW - WOW!

The chart of #SilverWheaton, ticker $SLW, 5yr weekly shown below shows an absolutely outstanding flag pattern.


Delightful impulsive break out move through the upper band earlier this month on volume and now we wait. I am waiting on:

1) a re-test of the top of the flag (upper blue line) which would represent an entry point for those that missed the break out and 2) a move though the recent high of and

2) a break out thought the recent high just above 40 which is also the prior resistance lower high from the move down in early 2011.

For those wishing a longer term view of this gem, have a peek a the 10yr monthly below.



Tuesday, September 11, 2012

The Fed, Lunatics and Anonymity

I want you to take a moment if you haven't already, and click the link here and watch CNBC's interview with former Reagan OMB director David Stockman. You don't have to wait very long for the money quote for at about the 1:30 mark Stockman unleashes with this classic that will go down in history;

"The Fed, and the lunatics who are running it, are basically telling the whole world untruths about the cost of money, about the cost of risk, about how you allocate capital."

And yes people that just about sums things up. Regular readers may notice that this very fact is something I have been harping on since this Twilight zone began. I also realize that we live in a country where pedigree and breeding count for much more than substance so maybe just maybe people might listen to a former OMB Director rather than an anonymous blogger. 

While on the topic of anonymity, which is a subject I have wanted to write about for some  time, I have a few things to say. Those not wishing a cure for insomnia may want to change the web channel now.

Few discuss it but I'd like to point out the distinct and sacred place anonymous writing and speech has in this country's society. I have come across some lucid well thought out defences of anonymous speech with few better than "Tyler Durden's" over @ZeroHedge, who put it this way;

"Anonymity is a shield from the tyranny of the majority. It thus exemplifies the purpose behind the Bill of Rights, and the First Amendment in particular; to protect unpopular individuals from retaliation- and their ideas from suppression- at the hand of an intolerant society."

We have all been taught or told the admonition not to judge a book by its cover yet few seem to remember this when the subject of anonymity comes up. People tend to forget that Mark Twain wrote under the psydonym 'Samuel Langhorne Clemens'. Founding fathers Alexander Hamilton, James Hamilton and others wrote under the nom de plume 'Publius' for the Federalist Papers. The widely read Economist magazine is basically and entirely anonymous publication. 20 yr old college juniors could be writing in it, with the help of fancy proof reading and editing gurus, for all we know.

Think to the venom of the economic debate in this country we have. I have often said that if many of the economic and financial pronouncements, analysis and conclusions of Fed governors, Treasury officials, senior Wall St. executives, Ivy league MBA's were uttered by a high school drop out who is roofing your house (no offence to roofers the country over who bust their ass but I need an example right now) we would dismiss them as horseshit but when an Ivy league educated, former Wall St. executive tells the planet Armageddon is coming if we don't bail out his golf buddies we check our brains at the door as we bow down and worship thy pedigreed guru.

Martin Luther King Jr's famous quote "I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character" epitomizes the not judging a book by its cover mantra

I bring this up because Finance and Economics has an extraordinary infatuation with pedigree and your DNA stock. I have seen statistics that are a bit dated but I would believe to still hold true that approximately 90+% of Econ faculty members have their PhD from a top 10 school. Yes, I know top 10 based on what? Content of the work, the merit of the ideas or on the DNA makeup of the family semen?  

Years ago I got into a civil yet passionate debate with an Administration professor I had- who was also the VP Academic at my university -regarding school policy of putting your name and student number on all papers and exams. I argued vehemently but without success for 'student ID number only' as this would remove bias on the part of professors. I had seen another university's study showing a student final grade hovered very near his first piece of works grade. So if you first paper was a B odds showed you were B+ to B- range bound. The statistical spreadsheets bore this out. I do know of people who submitted papers that 6 years prior were good for an A but for a C+ student were only good for a B-. Needless to say he was a good man with a good heart who I will always respect and admire but he was caught in a system that as they saying goes "the nail that sticks out gets hammered".

Either way I hope you enjoyed what Stockman had to say, and maybe just maybe in the future we all can look more closely at the content of the idea rather that the packaging said idea comes in. Have a great day!

Monday, September 10, 2012

Facade

According to the cats at Dictionary.com

fa - cade:  [fuh-sahd]
noun

1. a superficial appearance or illusion of something

That pretty much sums things up today now doesn't it.

UK Daily Mail report last week that performer Lady Gaga has about 30 million followers with only 29% of those tweeting regularly. You do the math, real math now, not Wall St. twilight zone math that got us into this mess, but honest to goodness math and it reveals a fakery rate of about 70%. This report on Lady Gaga twitter fakes follows a report from late last week that the President has almost 19 million followers with claims that more than half of 'em don't exist. Half! Should we even hazard a guess as to the number of 'fake' followers the walking, talking, android Mitt Romney has as followers. Should we really be surprised, the come-ons I receive via the net offer 2k twitter followers for the bargain basement price of $15.

Facebook, the much heralded social media outfit that makes nothing, produces nothing which makes it the prototype for a -- sheering of the public, excuse me, I meant to say a vaunted much publicized Wall St. IPO. Actually I am being a bit harsh and overly critical when I proclaim that Facebook makes and produces nothing because it actually permits one to waste vast quantities of time doing nothing, most often while on the company dime. Did I mention Facebook also likes buying less than 2yr old companies with no revenues, no profits for about a billion dollars. Yes I like alchemy over math as well. I actually heard a story that Facebook is going aggressively after spam and fake accounts. Of course Facebook and its IPO handlers on Wall St. knew none of this pre-IPO and have only discovered this now, post IPO. Can anyone in the room spell due diligence? Anyone? Bueller? Anyone? Bueller?

But it doesn't end there. Take the executive Yahoo hired to run their outfit? Seems Scott Thompson fudged his resume a little bit by claiming he had a computer science degree that he actually didn't have one. Oops. Not like he said he varsity lettered when he really was only intramural.

Or the jobs number from last week. When more people drop from the labor force Wall St. and Washington math dictate the unemployment rate goes down. At least we all know how we can officially get unemployment down to 0.0%.


I could go on and on with yet dozens of episodes from the dotcom facade and the Wall St. thugs like Henry Blodget, Jack Grubman, Mary Meeker and their ilk but you have heard them and if not you can Google them. It is an epidemic of fakery and fraud has and continues to spread like locusts across the country. Remember how the banks were having a 'liquidity' problem back in 2009? That purported liquidity problem was so great they had to send in their professional water boys and stooges to get FASB 157 passed.

FASB 157 was the suspension of mark to market accounting on holdings to mark-to-make-believe. Yup, free market capitalism. But you're an idiot blogger when you call it what it is crony or criminal capitalism but you're a contributing regular to financial shill TV when you tow the party propaganda.  I still remember former Fed imbecile Bob McTeer's comments on the benefits of allowing his country club buddies to market securities to any level they deemed. Club memberships do have their privileges right?  Sure Bob, why would the public want to trust an open public market price discovery mechanism to value toxic waste, absolute garbage securities all you buddies and cronies are neck deep via 50:1 leverage when one can simply rely on the honesty, integrity of NINJA/Liar loan offering, robo signing, front running, LIBOR fixing, money laundering management of those same financial institutions? But why take my word for it when you can read what noted sober money manager (emphasis on sober) Paul Singer of Elliot Management had to say on this subject in his most recent communique.


"Decades ago, the balance sheets of the Financial Institutions contained most of the information you needed to know to understand their risks. Today the picture is profoundly different, predominantly due to the growth of leverage through derivatives....As a result, there is no major Financial Institution today whose financial statements provide a meaningful clue about the risks of the firm’s entire panoply of assets and liabilities including derivatives, nor how the firm’s performance, or even survival, will be affected by market movements in the future."

Whatever you do today do not look at the chart of this relic of an economic indicator because in doing so you may see through the facade.

Friday, August 24, 2012

Struggling To Reconcile

Came across an interesting chart recently via the ICI Investment Company Institute in the WSJ. Its illustrates where investors have been putting their money the last few years. Green is bonds and orange is equities. Above the line is positive (money inflows) and below is negative (money outflows).


I struggle to reconcile the above chart with the one below which is the S&P. Maybe 2+2 really does equals 6 as the MBA's at Wall St.'s primary dealers keep telling us. Or maybe in the fullness of time the turth


Thursday, August 23, 2012

Social Networking Junk

I haven't touched on the social networking sector in some time so I thought I would today. These gems are really something to behold. The sector is highlited by Facebook ticker FB. What do you say about this? The chart says it all. The latest news is the sale of a huge whack of stock by insider Peter Thiel.

All the experts out the woodwork now that the horse has left the barn. I especially enjoyed the laughable rant by Jim "any investor who can get shares of Facebook should purchase as many as possible Mad Money 0516/12" Cramer the other day regarding the Thiel sale of stock. Funny how Jim gets lathered by an insider selling out, which by matter of fact is EXACTLY what an IPO is, yet the billion dollar purchase of a NO revenue, NO profit less than 2 yr old startup company Instagram (or Instacam as it should be called) is not concerning? Sadly for the minions who follow the pied piper of hype, the common denominator for Jim Cramer is if things are going up "who gives a shit", but when things tank, look out cause he's a scapegoat huntin'.

But it wasn't just Jim Cramer. The street is full of his ilk. Do you remember these gems.

"I would invest in Facebook, I don't care what the opening price is"
Apple co-founder Steve Wozniak as part of Facebook pre-IPO hype which should become case study blueprint material for aspiring Wall St. propagandists. So sure Steve, and the rest of us would eat, drink and party like drunken sailors were we worth a couple billion.

"Investors looking to short Facebook stock are getting in front of a freight train" 
Needham and Co. senior analyst Laura Martin Wed May 23. 2012 with FB trading around $31-32/share. I didn't even mention the $40 target she had on the stock. Thank heavens they didn't let a junior shill, excuse me, I meant analyst near the stock.

Well, the social networking stocks continue to get crushed which is at it should be. Math is math and 2+2=4 no matter how many times an literal army of paid, Wall St. MBA's tell you it equals 6.

Anyway back on April 23 of this year I had the following posts on twitter regarding some social networkers.

"ZYNGA shareholders join GRPN 1's hope'g 4 an Instagram-esque buyout miracle. Like GRPN, no fraud, simply "growing pains" 

That comment about  growing pains was from some Wall St. "Henry Blodget-esque' analyst reassuring the 'muppets' that holding the stock that all was well.

"With Wall St. track record sell'g toxic paper I marvel @ the sheep lining up 4 shear'g. IPO shud B renamed ISO. Insiders Selling Out."

To remind everyone the term 'muppets' is how Goldman Sachs fondly refers to its paying clients. I wonder how many Goldman clients out there think, "they can't be referring to me, gotta be the 'other clients"

"Don't forget that other social networking 'must own' gem Angies List ANGI - 14.5 better hold or the target is 9.25"

Below is a daily view of Angies List ticker ANGI. The yellow highlited area is April 23 where I outlined the 14.5 mark. Notice the activity April 27 (purple), May 3 (green) and May 9 (blue). I suspect high frequency trading algorithms on a short stop loss hunt, but I am not an expert in that arena.





I bring this up because ANGI although it took a while and attempted to gouge out the eyes of anyone daring to short it the piece of junk, yes thats what it is, is now trading 9.70 and hit 9.43 this morning.  It took the the milk bus route to get there but arrived nonetheless. 

Tuesday, August 21, 2012

The Math Doesn't Lie

I realize we live in a new world economy. One ruled by the Ivy league MBA, smartest in the room, set, who, full of arrogance, hubris and the next bonus cheque have created this financial Frankenstein that refuses to end. I understand that in this new fangled era of financial alchemy, schemery and chicanery lead can not only be turned into gold, but once you done so and sell it to the Sisters of the Covenant pension fund you can keep your bonus and avoid prosecution when the truth is revealed. Now this can only be accomplished if you possess that Ivy league MBA or have been a guest on CNBC because if you have, you simply cannot be a hack (Jim Cramer's conclusion not mine) or a thief.

In this new era ponzi,  old economic indicators like employment, income per capita, debt, net cash and other meaningful indicators mean little. Why would anyone waste the benefits of said MBA analyzing say shipping rates or container rates when you can spend your day buying the dip, writing an algorithm or gaming the central banks.

Now in keeping up appearances you go to conferences and tell wealthy institutions and individuals that you focus on tried and true financial ratios and fundamentals to help with your asset class selection and allocation but you really don't. I mean, David Tepper told us all on CNBC that "investing is easy" right? So why all the claims of investigation and analysis or to quote Lt. Daniel Kaffee questioning Col. Nathan Jessup in the movie A Few Good Men;  "If you gave an order that Santiago wasn't to be touched, and your orders are always followed, then why would he be in danger, why would it be necessary to transfer him off the base?"

If its so easy, why all the research and analysis?

Well in the non-ponzi real world 2+2=4 whether you matriculated at Harvard, MIT, Insead or the local Community College. It equals 4 no matter whether your net worth is $1,000, $1 million or $1 billion. It equals 4 whether you are a Libor rigging CEO, a customer fund stealing former Governor, or a corner hot dog vendor.

Speaking of the real world have you had a look at the Baltic Dry Index, which you can view here, lately? You should. is in free fall. The Telegraph had a piece last week World Shipping Crisis Threatens German Dominance as Greeks Win Long Game. There's a couple of choice real world quotes from the piece;

"Britain’s oldest shipowner, Stephenson Clark, dating back to 1730,went into liquidation last week." 
 
"Container volumes arriving at European ports plunged in June, dashing expectations of a summer rebound. Imports fell 7.5% from North America and 9% from Asia. Flows into the Mediterranean region crashed by 16%."

Not enough? Check out this 'real world' quote form Martin Smith of ship operators Norddeutsche Vermögen in Hamburg. 

"The market is barely paying above operating cost. If you are loaded with debt, you are in trouble,” 

Now there's a novel concept, loaded with debt = trouble and here I thought, via the smartest in the room because they keep telling us over and over again, that more debt will solve a global debt problem. Remember now, its all an issue of liquidity not solvency! Too funny.


"Commerzbank – the world’s second-biggest provider of ship finance, and reluctant owner of a flotilla of foreclosed ships – said it is shutting down its €20bn (£15.7bn) ship funding operations entirely to “minimise risk and capital lock-up”"


Nice. Seems like banking stupidity wasn't confined to liar, Ninja, fog a mirror you qualify real estate loans. Those genius bankers really spread the stupidity evenly. At least they repossessed the vessels which more than I can say for all our lovely banks here playing the delay and pray, extend and pretend game with their notes. I love the author's (Evans-Pritchard) comment in the piece about how forcing banks to raise capital too fast and too soon can choke lending to the real economy.

Really? Sounds to me like cutting off a crack addicted junkie, but alas we are all accustomed to 24/7 extortionist propaganda fed to us by the banks and their paid media stooges, that we need the banks, Armageddon comes if we let any fail blah, blah, blah. 

The only good part of all this is no matter what the smartest in the room and their brainless stooges concoct and foist upon us, the laws of mathematics are immutable. Or as Ayn Rand once said;

" You can avoid reality, but you cannot avoid the consequences of avoiding reality."


Monday, August 13, 2012

Musings of An Economic and Financial Sociopath

New York Magazine's Jessica Pressler had a great piece over the weekend with $JPM's #JamieDimon entitled 122 Minutes With Jamie Dimon which might be more appropriately titled as my post is.

Take some time to read it as it offers great insight into the thoughts of a real live sociopath. Jamie Dimon, much like Dorothy in the Wizard of Oz, believes he can click his heels 3 times and keep repeating
"Bankers are decent honorable people, bankers do good things, I'm not responsible for the financial crisis and dammit wheres my 8 figure bonus check!"

Tuesday, August 7, 2012

Breathtaking Idiocy

Sometimes you read a story and it simply is breathtaking in its idiocy. I want you to take a quick few minutes and have a look a this must read piece, Where Borrowing $105 million Will Cost $1Billion: Poway Schools via the Voice of San Diego.

I have seen some lunacy in my day but this simply breathtaking in its idiocy.

If you choose to skip it here it is in a nutshell;

"The bottom line: For borrowing $105 million in 2011, taxpayers will end up paying investors more than $981 million by 2051, or almost 10 times what the district borrowed" 

The piece references that the district sought the advice of a, as of yet unnamed, financial consultant. What are the odds this consultant has an MBA, better yet a prestigious Ivy league one at that?

 California’s ever-strapped districts have increasingly looked to capital appreciation bonds to raise money for improvements without increasing taxes on current residents. Across the state, districts have borrowed billions this way, using exotic financing to shift the burden for paying for today’s school construction to future generations of Californians.

Sadly this story is not confined to the Poway School district. This something for nothing, kick the can, end run bullshit has become an epidemic around the globe.

I saw it firsthand during the tech bubble when sound analysis was replaced with tales, hype lies and outright deceit. Think Henry Blodget, Mary Meeker, Frank Quattrone, Jack Grubman et al.

Sadly nothing will change so long as the clients, or muppets as they are more accurately described by Goldman Sachs personnel, both institutional and retail continue to accept it period. The phrase "shit for brains" comes to mind for the whole thing. Advisor, client everyone. 

Thursday, August 2, 2012

Culture of Risk

The news de jour is Knight Capital ticker $KCG. It appears their in house high frequency trading algorithm went berserk resulting in a, are you ready $440 million loss.  Just to give you an idea of the order of magnitude of this loss, Knight Capital financially had;

Q2 revenue of $289million and net income of $3.29million
Q1 revenue of $349million and net income of $33.11million

If you do a quick cocktail napkin tally Knight's quarterly net income backwards this loss wipes out ALL net income since the beginning of 2008. Yes 4.5 years of profit wiped out in 1 day and as you might have guessed, put the company's very survival at risk without a lifeline.
 
I would hazard a guess that there may be a problem with the risk reward model they use over at Knight. Acutally I wish Wall St. would do us all a favor and stop using phrases like risk management and loss prevention. Start calling it for what it is, a culture of risk  plain and simple. A get rich or die trying mentality. Who cares if you sink the ship and 1400 odd people get thrown out of work over your bonus chasing psychopathy you retire in grand fashion maybe even catch a gig at Fed, Treasury or regular on CNBC.

One of the comments I heard to today in the multitude of articles and commentary on this fiasco was something to the tune of 'Knight Capital has been one of the biggest beneficiaries of the evolution of the market (high speed trading)'. Over at the Room Temperature IQ institute, of which I am still a senior fellow in good standing, we call it;

 "you live by the sword die by the sword"


This whole Knight fiasco should simply stand on its own as yet another shining example of how the financial alchemists, snake oil salesmen and Ivy league ponzi prostitutes (shall I keep going) have utterly distorted, corrupted, and perverted a market that was once the envy of the globe into a listless, lifeless shell of its former self. Be proud of your creation fellas, you deserve all the karma that's coming for what you have done. 

When the dust of your genius experiment settles I expect to see many out there, face to face, on the curb under the buttonwood tree readily employing the 4 c's of credit not to mention a handshake as from the ashes of your avarice and greed will arise the trust, honor, integrity and class that an public securities exchange should have and be.

P.S. under that new scenario, fraud and transgressions will NOT result in fines with neither admissions nor denials of wrongdoing!

Wednesday, August 1, 2012

When Thugs Apologize for Other Thugs

I don't know if you happened to catch the news but it appears that the cats over at Zynga are in some hot water. An insider trading lawsuit has been filed against Zynga's executives. It appears that the traditional "lock up" restriction that bans insiders from selling their shares until a certain 'later' date was somehow circumvented or waived.

For reference purposes Zynga went public in December 2011 at $10/share. The stock peaked in early March 2012 at about $16. Since they it has been in free fall notwithstanding Jim Cramers admonitions back in March "the force is with Zynga".  The accused insiders were allowed to dump their holdings 43 million shares at $12/share.

In case you were wondering Zynga is now $3/share. How lovely. This is yet another crony capitalist story to pile on top of the existing heap. But I enjoyed this story for its sidebar. That sidebar is one Henry Blodget the former BA in english proof reader, turned internet guru, turned securities fraudster, turned history revisionist, turned born again financial messiah.

Here's what banned for life from the securities industry Blodget had to contribute to the discussion about this cess pool our capital markets, in particular the IPO market has become and that he knows all too well;

"I know many of these folks personally, including at the company's underwriters, and like and respect them.  I think the last thing they would intentionally do is unload stock when they thought it was about to crash—especially when the amount they made in the sale, though huge, is still relative chicken feed for them.

Also, all of these folks only sold a fraction of their holdings, so they've been hammered along with the rest of Zynga shareholders by the subsequent collapse."

What more does one say about this. So because its chicken feed we should ignore it? Because Blodget knows and respects them they get a pass? Too bad Carlo Ponzi wasn't around for Bernie Madoff or his legal could have called him a character witness.

He went on to claim;

"I also know from personal experience (unfortunately) just how quickly things that seem to be going well can fall apart."

Funny how ponzi schemes and scams tend to from the penthouse to the outhouse overnight when the suckers stop showing up.

Some Random $GM Thoughts

I want to touch on the General Motors - $GM - something as I haven't done in quite a while. We all know this is the new and improved, born again, General Motors. 



A quick glance at that chart suggests that lower band around 19 sure better hold.
Today we received the news that GM July auto sales were down 6%, Ford's were down 4% by comparison. We do know from previous reports that GM is ramping up subprime auto loans to drive sales. You can debate the merits of this marketing strategy till the cows come home but put simply this is business decision risk which, on a planet known as Earth and a system formerly known as free market capitalism, would normally be born by management and the company's shareholders. Not so anymore.

Some while back ultimate insider Fritz Henderson was shown the door by the board. That move by the omnipotent Ed Whitacre got me to REALLY thinking a lot about all of GM. Fritz had been a lifelong GM'er. So to those who thought he was something different than Rick Wagoner you can continue to keep dreamin' on. I will admit that it must be nice to get fired and then hired back for a $3,000/hr consulting gig but what would I know.

On to more important things. Below is a long term chart of GM's market shares vs imports. Suffice to say GM's dominance peaked in the 60's near 50%. 








Now lets compare this market share chart with the chronological list of GM's former chief executives and their background;
  • Alfred Sloan 1923-1946 (engineer)
  • Charles Wilson 1946-1953 former CEO of GE (mftg concern at the time and not a closet hedge fund like today)
  • Harlow Curtice 1953-1958 (wholesale produce family biz exec)
  • James Roche 1967-1971 (statistician)
  • Richard Gerstenberg 1972-1974 (comptroller, treasurer)
  • Thomas Murphy 1974-1980 (accountant)
  • Roger Smith 1981-1990 (MBA)
  • Robert Stempel 1990-1992 (engineer)
  • Jack Smith 1992-2000 (MBA)
  • Richard Wagoner 2000-2009 (MBA and Hygiene salesman from P&G Ron Zarella)
  • Frederick Henderson 2009-2009 (MBA)
  • Ed Whitacre 2009- present (engineer)

It sure looks to this simpleton like the fall started with James Roche as the paper pushers and money changers took over. Sure Stempel (who I was a big fan of) got a shot but for the most part MBA's finance and number experts took over. 


According to GMWiki, the transition from Roche to Gerstenberg;

 "When James Roche retired the chairmanship in 1971, Gerstenberg was elected to that post. His main rival for the position was GM President Ed Cole. Cole was a "car guy" with a background in engineering and production and was seen as the logical heir from the traditionalist view point. However, Gerstenberg was chosen by the board because his strengths as a money manager and an articulate defender of the increasingly criticized auto industry were viewed as necessary to handle the problems GM looked to face in the coming years. "

Strengths as a money manager and an articulate defender of the auto industry huh. Lovely. I have a good friend whose father is a very successful 'old school' attorney who was visiting and had the opportunity to meet and have a long discussion with on many subjects. His age, his experience coupled with his insight made for a very interesting and educational evening. He did make one comment in particular that night that has stuck with me in which he said;

"Whatever you do never, ever under any circumstances invest in a company where the fella in charge is an attorney or an accountant unless that company is in the law or bookkeeping business."

Based on the above market share chart and CEO time line that advice sure would have saved some GM shareholders some money.

I cannot help but look at that CEO list and not notice a couple of things in particular. First good ol' Roger Smith and his baby Saturn. Smith's baby Saturn which was started back in 1985, had never, ever, ever made a profit but that sure didn't keep the brain trust of GM from pumping billions into keeping afloat this modern day marvel of ego. Sure the dealers made a few bucks sellin' em but at the manufacturing level this "New Kind of Car Company"  had never earned a dime. This would, one might think, beg the question as to at what point any of the management or board of directors- assuming they were anything more than a Neiman Marcus dressed version of the Keystone cops-  might ask the question why are we keeping this thing going? Maybe they were too busy flying first class cashing their cheques and shutting down money maker Oldsmobile but I digress. Secondly is Bob Stempel who in my opinion over the past decades of rotting decay yes men and governmentication at GM was the only 1 guy worth a red cent over there. Lastly Rick Wagoner. What more needs to be said about this empty suit surrounded by grovelling yes men that hasn't already been 'cept we can always he was responsible for landing that gem Ron Zarella.


Here is my 2 cents. GM needs someone with engineering or industrial back ground period. In a perfect world GM would find another Alfred Sloan. Think about this Alfred Sloan quote I dug up;

"If we are all in agreement on the decision - then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."

Now juxtapose that with the lightweights and con artists of today like GM CFO Dan 'the scam' Ammann. Now tell me your shocked he worked in investment banking at Morgan Stanley. So long as he's sorry, has apologized and really promises not to do it again I really am okay with dirt bags like this rising to the top, getting caught and everyone letting bygones be bygones. Of course this is definitely NOT cronycapitalism nor selective justice just.  Sign of the times I should think. Now contrary to popular opinion and while I may be pessimistic when the facts support it, I don't believe even for a NY minute there is not another Alfred Sloan out there in this great country amongst the reams of Dan Ammanns out there. We simply have to know where to look for him or her. To save us all some time I can most readily assure you Harvard, Princeton, Yale and Wall St. are the very LAST places you will find him or her. 

I would assume that such a person will, by having an engineering or production background and NOT someone having that country club coveted Ivy league MBA. This lack of Ivy league MBA most assuredly guarantees his/her comprehending that 2+2=6 no matter what your Wall St. financiers and investment bankers tell you! Being MBA-less will also indicate that he/she understands that when you build an garbage product (think Vega, Aztec, Cimarron, Citation and Catera) it bombs and when sell your product to people who cannot pay, bad shit happens to your profits, period! 

I am definitely no expert nor do I possess an Ivy league MBA (thank my lucky stars) but I do believe that better people and better products win out as least they did in a true free market capitalist system.

But They're Sorry!

A 5 yr weekly view of #HSBC ticker $HBC (below). Lower highs, lower lows, money laundering etc. Worry not shareholders as management at HSBC has apologized. Ya gotta love not only cronycapitalism but our justice system as well or as Gerald Celente is fond of saying justice is  "just us".



#Netflix - $NFLX update.

Remember this weekly chart of Netflix ticker $NFLX I posted on June 8 ( reprinted below) where we wondered if that level could hold?



Well it didn't. Things will get interesting now and not in a good way. The daily view belowThe dead cat hit the pavement, bounced,  and has now fallen through a manhole cover on the street. Big time trouble ahead. 



Thursday, July 12, 2012

Seems I've Heard This Before.

If you won't listen to me, then maybe you'll listen to an expert from MIT. He thinks The Market Has Spoken, and It Is Rigged. He's a bit more polished and offers people who can't site the musings of an idiot blogger the 'legitimate cover' to now do so.

Tuesday, July 10, 2012

Lets Stop Playing Make Believe

I love the blogosphere and twitter but with the seriousness of goings on I get a huge kick out of a lot of the financial people in the space. They bask in the buy this, sell that, I know this, I said that mentality and you know what? There is nothing wrong with it. Self promotion is a huge, no check that, an enormous part of the success formula. So is making money. But I am here today to pinch you, to attempt to wake you up to the big picture unfolding around us. That big picture is the complete and utter cess pool of fraud the game you play and live off of has become and the fact we are all standing chest deep in it and sinking. 

I completely understand that the perpetual apologists on CNBC and Bloomberg who play make-believe daily, whose stance is based on maintaining their living which is dependent on cheerleading the continuation of the debt fueled ponzi cess pool. Yes, the same boobs and boobs in chairs who surmised Angelo Mozillo, AIG, LIAR LOANS, fraudulent ratings, MF Global were all one-off events and not part of a larger decay of our capital markets and did not amount to a hill of beans wouldn't know common stock from livestock if it bit them on the ass. But alas, the stories of corruption, deceit, looting and fraud continue unabated.  Whether it be the indirect route taken by maggots like Bob Diamond of Barclays who do their thieving quietly over time only to ride off into the sunset worth 9 figures (are you kidding me?)  or the more direct route taken like the statement falsifying looting maggot Waserdorf over at PFGBest and the report over $200 MM in missing customer funds is missing.

I'd love to tell you stories about the incompetence of the porn surfing regulators but that smokescreen is only good for cocktail party chatter. The real story there is the revolving door, bought and paid for corruption that has invaded the regulatory agencies from Wall St. like ants to a picnic. There are so many points of decay on this temple of disgust that that I truly think razing it and starting over may be the only option.

For those of you who missed it or simply dismissed it I encourage you to re-read Ann Barnhardt's final letter to customers back on November 11, 2011 announcing that she was ceasing operations.

In her letter Ann remarked and I am paraphrasing her here:

'that the entire system had been destroyed by the MF Global collapse -I prefer the words pre-meditated fraud to her choice of collapse but I won't quibble here- and that in good conscience (yes another foreign concept to Wall St.) she could not continue soliciting trades she knew were unsafe or holding funds she knew could be in jeopardy.'

The worry about the trade position is only half the battle, now you have to worry if you can get your money out of the joint. What a lovely table the products of some of the finest educational institutions this country has to offer have set for us. I do continue to find it more than Interesting all these patriotic business types I have mentioned before in my rants and who we see regularly on CNBC and Bloomberg, men like Wilbur Ross, Boone Pickens, Jack Welch etc., purported defenders of captialsm are all so mute on this subject of the integrity of the game.

Years ago men brought a 6-shooter on their hip to the card game to ensure they were not cheated in the game or of their winnings, they didn't take a Prozac, they didn't call their lawyer and didn't rely on bought and paid for golf buddy, porn surfing regulators nor oversight committees.

So for all you cats out there chasing Cramer's 6 stocks in 60 seconds (ROFLMAO) or the Fast Money laureates or simply chugging along focused about how much you're making might I humbly suggest you read Ann's letter again and then look around at the bigger picture soon. I say this for if you don't I fear you might only have a game left that is played against the computer (HFT) or God forbid you might not have a game left to play at all.

The time has come for us all to stop playing make-believe that everything is okay, we need to move on and that everything will work out.

Wednesday, June 27, 2012

Criminal Syndicates, Nothing More.

Was sitting down last night after playing in a charity golf tournament, reflecting on whether the title of my post yesterday Global Cess Pool of Serial Liars & Banking Stooges. Kept thinking it might have been a little too harsh, that not everyone in the industry is like that. For a moment, I considered penning a little pick me up piece offering the bright side to such filth.

Then I awoke to the Barclays news today. For those unaware, Barclays was charged and has now settled (of course neither admitting nor denying wrongdoing right?) with the CFTC that it manipulated and made false reports related to interbank lending rates LIBOR. For those interested in some of the details on these thugs, you can read the CFTC report here.

Here is a couple of snippets from the report:


"Barclays’ Unlawful Conduct to Benefit Derivatives Trading Positions"

Now that's nice.


"Barclays’ Unlawful Conduct at the Direction of Senior Management"

  
Really, at the direction of senior management huh? And their punishment?

"Barclays said that Chief Executive Bob Diamond and three other top executives—Chris Lucas, Jerry del Missier and Rich Ricci—will forgo their annual bonuses for 2012." 

 Give up their bonus, why thats heresay. I can only imagine how that 4th marriage trophy wife will react to that development.

Regarding these thugs and their actions here's what CEO Bob Diamond had to say;

"Nothing is more important to me than having a strong culture at Barclays,"


How lovely. Strong culture huh Bob, if you mean culture of criminality then you're spot on. Check out the Barclay's mission statement from their web site.

Our Framework, code and rules

“Good corporate governance practice is an important ingredient in creating and sustaining shareholder value, and ensuring that behaviour is ethical, legal and transparent.”
Barclays Chairman Marcus Agius.


What stands out to me here is I am thoroughly shocked that Marcus Agius doesn't have the title Sir before his name. Hope this episode doesn't affect his ability to secure his place among the nobility. (Marcus make sure your grease check doesn't bounce as that will surely put the kibosh on your knighthood.

As a result of all this, Barclays was fined $160million by the Dept. of Justice $160 million, $200 million by the CFTC,  and £59.5 million ($93.08 million) by the FSA. Anyone care to guess what this amount represents in relation to the profits garnered by Barclays from the scheme? What a sad joke this all is. Actually this whole looting and pillaging shtick is getting old and tired. Even the Attila and his Huns must have gotten a little bored of plundering everything they encountered. These entities are criminal syndicates, nothing more, posing far greater threat than any mobster or drug lord. Until there are consequences commensurate with the sins this plot of lawlessness will play out over and over again.

Monday, June 25, 2012

Global Cess Pool of Serial Liars & Banking Stooges

 In a remake of an Abbott and Costello movie, Wednesday last week you had Spanish Finance Minister Cristobal Montoro "saying Spain won't need assistance "because it does not need to be rescued". Today you get Economy Minister Luis de Guindos on bended knee asking for a bailout. But wait, it gets better. According to Spanish Foreign Minister Jose Manuel Garcia-Margallo:

"The question of whether the money will go directly to the banks or to the state is still open," 

Re-read that line again. I'll wait for you.

Lovely, send the money directly to the financial terrorists who created the mess. Banker stooge extraordinaire Garcia-Margallo indicated:

"Spain would seek the longest period possible for repayment and the lowest interest rate".

Really now. Nice move. Thy master commands and thy errand boy responds. Pathetic.

Remember when Portugal didn't need a bailout and PM Socrates denied over and over again they didn't until finally one day he did.

Or how about Luxembourg PM Jean-Claude Juncker's famous line;

 "When it becomes serious, you have to lie," 

Sure you do. So who after all this bullS%^# who would believe an assembled cast of characters like this, yet alone trade on anything they say? Why, the products of prestigious MBA schools the world over that's who course! Yes that smart money, 2+2=6 crowd that brought you Enron, MCI Worldcom, repo 105. SIV's (structured investment vehicles) toxic, Liar/NINJA, roboclosures, heck the list is endless. loans that not only were foisted upon pension plans in every corner of the planet but were, still love this one, re-hypothecated over and over again. If it all weren't so tragically sad I would be rolling on the floor laughing right now.

You just gotta had those Ivy league genius credit, when they create a scam they do it thorough. Sell you toxic shit. borrow it, claiming it is in such demand, pledge it as collateral to yet another imbecile, use proceeds to seed yet ever more toxic paper. Rinse repeat. I mean, who comes up with this shit, not some bucket shop operators from JT Marlin out of Jersey our Bernie Madoff who was content to simply run your basic Ponzi 101 racket but rather those sought after graduates of the worlds most prestigious universities, that's who!

Might I suggest the time has come for global banking crime syndicate, along with their representative stooges in government, to simply drop all pretences and simply to walk in and take the money and dare anyone to stop them. My guess is their grovelling, bought and paid for stooges in government would carry the heavy suitcases full of cash out for them.  I know this sounds defeatist and apathetic but the vast majority of the population is so Prozac'd, Ambien'd, Khardashian'd & Idol'd up they wouldn't know the difference.

Saturday, June 23, 2012

Is a Bag of Tricks is All That Matters?

Don't know how but I missed quite the twitter post from @Pimco #BillGross recently. I like Bill. He is as market astute as they get.  I just can't help pointing out his bouts of hypocrisy, from time to time. That being said, his twitter post on Jun 21 was a doozy. Here it is as it appeared then;

"Gross: Risk markets at risk as monetary bag of tricks empties"

Hang on a minute.

Do you mean to tell me that the recovery all these shills and charlatans on CNBC and Bloomberg have been crowing about is a facade? Does Bill mean to say that the Fed is the impotent Wizard of Oz behind the curtain, that the whole thing has been a monetary magic show?

In turn, am I to believe that the smart money, Ivy league MBA, 2+2=6 crowd knows this? I mean they're the smart money aren't they? They're gambling, excuse me, investing your hard earned 401k, IRA and pension plan money in the markets based on sound macro and micro economic and fundamentals analysis right? Due diligence on stuff like employment numbers, incomes, balance sheets, bond yields, foreclosures, debt levels, profit margins, capacity utilization, historical ratio comparisons, NET cash levels etc.

These financial genius types surely wouldn't be betting, excuse me again, allocating your retirement assets based on the Fed's monetary 'hocus pocus in the hope that they will get a seat first when the music stops ( a la Chuck Prince) before all the other smartest in the room, Ivy league MBA, 2+2=6 types do?

They would never be invested in a fundamentally deteriorating market with the risk skewed horribly to the downside. I mean surely those that tried this during the dotcom bubble- those that knew the field was a field of mines yet still ventured in chasing bonus's- and yet again in the liar loan, NINJA mortgage fueled housing bubble have been drummed out of the business. (Ha ha if you think this then you don't know Irvin Goldman of JPM (formerly Cantor Fitz) or the Lehman or Bear genius's relocated on Wall St.)

They had to have learned from the dotcom and housing bubbles there are never enough seats as there is ego to go around, not matter what daddy told them about how smart and special they are in between tennis and golf lessons at the club.

I have surmised in the past the those in the know, know the ship is in big trouble and are stealing anything not nailed down before it sinks. I have indicated that the Fed and Treasury's machinations are only a stay of execution of the mathematical inevitable. Actually Bill Gross could have replaced the phrase monetary bag of tricks with Ponzi tactics collapse.

Or as I said in my own twitter post Jun 19

"In u ignore bond yields, job mkt, 4closures & debt levels, all that matters is easing which, sans , =yet more suckers"

In a Ponzi scheme and to those Ponzi worshippers, whose incomes & bonus depend on the ponzi continuing, a bag of tricks is all that matters. Its simply cloaked in official sounding phrases like "don't fight the Fed" & "quantitative easing" to gain respectability.

Wednesday, June 20, 2012

Deflation

lnteresting report from Marty & Charlie over at #ComstockPartners entitled Special #Deflation Report. It certainly is not for the 2+2=6 crowd nor those parking valets chasing bonus money via OPM (other peoples money. (Wait a minute, isn't that the same group of people?) The piece is accompanied by some very interesting charts at the top of the page. Hope you enjoy it as the cats at Comstock do very good work which always is worth discussion.  Thanks again fellas, it's very much appreciated.

Tuesday, June 19, 2012

With Expertise LIke This, Heaven Help Us

Regular readers know what I think of former proof reader turned Wall St. internet shill, turned bought and paid for lying thug, turned born again "I have a conscience now" faux pundit Henry Blodget. The apologists out there can save their breath and keystrokes making excuses for this sorry excuse of an individual. Professional history revisionist that he is Henry would have us believe he is quite the expert on all things economic and Wall St.

Actually there is no one I would prefer were I to need an expert lesson on deceit, misdirection, being on the take, bought and paid for smoke and mirrors horseshit sans maybe a Mary Meeker or a Jack Grubman. For a moment, lets forget the absolute unfathomable metamorphosis it takes to turn a BA in English proof reader into an Wall St. internet expert, which on its face should explain a whole hell of a lot about Wall St. to you, and focus on Henry's more recent masterpieces.

Yes, not content to take his generous Merrill severance money and do investors an enormous public service and disappear Blodget is back out trying to show us not only how magnanimous he has become, but also how his brilliant economic mind can be used for good now that he has grown a conscience. Which by the way should be much easier to have obtained given that 7 figure severance package but I digress. 

Lest you be fooled by Blodget and his self promotional propaganda campaign check out his latest gem of uber-imbecility out today entitled Yes, It's Time For A Massive Infrastructure Spending Program.

Just so you don't think I am anti Blodget 100% of the time ( I assure you I am an equal opportunity offender) I offer this gem I previously posted Send Your Kid to Princeton, Be My Guest of yet more uber-imbecility from a cat, Paul Krugman, who at times can almost corner the market in it. 



Friday, June 8, 2012

A weekly view of former darling #Netflix, ticker $NFLX. Might be worth watching here.


Monday, May 21, 2012

Just So We're Clear

It is not often you stand witness a significant piece of history. I believe we are spectators right here and now to a monumental event in our country's history. It is the sum of many many parts too numerous to mention but you know them if you've been following events here.

I want to be upbeat, I want to be positive but I continue to look at facts that completely and utterly quash this position. I believe the fraud, the corruption are so endemic as to render our system almost beyond repair. I say this as I believe those in charge realize this quite clearly and are stealing anything and everything that is not nailed down as they realize the ship is sinking.

Check out this Bloomberg story detailing how the JPMorgan Risk Chief Said To Have Trading-Loss History.  Yes the financial terrorist in question, Irvin Goldman, risk chief at JPM was fired back in 2007 by Cantor Fitzgerald LP for money losing bets that resulted in regulatory sanctions at the firm. Read the Bloomberg piece as its an eye opening

This begs the question, so how, after pulling the stunt he pulled at Cantor, can this Goldman character find work again you must be asking, right? I mean, gotta think a loss like that would be a career finisher, right? Well, on Wall St. you'd be wrong because on Wall St. a move like that gets you noticed, it gets you a Tim Geithner-esque promotion. --Sidebar,  remember now, Tim Geithner was head of NY Fed which was charged with policing bank ops in its jurisdiction (Wall St.) when Bear and Lehman blew up to which instead of being fired and ridiculed as incompetent he was (in my opinion to keep his mouth shut) rewarded with a promotion, but I digress.-- Guess it doesn't hurt to pull a lucky sperm club, get out of jail free card out (have a brother-in-law pulling for you) when you need it.  I have not had the time to do a formal investigation but I would hazard a guess that were a doctoral student to do a paper looking deeply at all the financial terrorists who took part in blowing up Bear Stearns and Lehman Brothers, in peddling toxic paper that has infected pension portfolios across the globe that you'd find them still employed on Wall St..... just waiting to blow up.  

I made a plea sometime ago in the post Still Wondering Why I Rail on Ivy League MBA's? which you can take a minute to re-read if you like. Here is a quick snippet of what I wrote then:

"At what point are some adults (how about law enforcement for starters) going to start recognizing the lucky sperm club, trust fund holding, lvy League MBA carrying cockroaches designing these financial cocktails are terrorists and must be stopped.

These financial innovators are nothing more than financial terrorists planting explosives on America's corporate balance sheets. Remember this the next time some shallow, make-believe pundit, like Altucher did this morning, comes on CNBC and tells you corporate America's balance sheets are flush with cash.

Are you still wondering why I rail on these Ivy league MBA's running around like cockroach versions of Dr. Frankenstein?
"

Nothing has changed and I make the plea yet again here today. Trust and confidence in the system is absolutely paramount for the system to function. Trust that when fraud and malfeasance are occurring it will be prosecuted, the perpetrators brought to justice and punished accordingly, their ill-gotten gains disgorged. Without doing so you get a free-for-all, anything goes type atmosphere we are now all witness to.

I yet again, implore the widely viewed elders statesmen of corporate America, the ones invited on financial television to opine regularly. Men like T. Boone Pickens, Ken Langone, Steve Wynn, Wilbur Ross, the list goes on and on. Do you not see what is going on? Don't insult me and tell me you don't because even with my room temperature IQ I can see it. These people are literally destroying the confidence and trust in our financial system. I believe the very foundation that supports our financial system has been hijacked by these financial terrorists for their own personal benefit. Do you not realize there will come a point of no return? Do you not care?

We can take the system back from the crony capitalist thugs but it takes a huge order of onions to do so. It may also involve taking down men you consider your "friends", but are they really friends when they are destroying the capital markets system that has been in place so long. My personal opinion is the issue of 'friends' is the core issue as to why the Langones, Pickens, Rosses et al. refuse to acknowledge what is going on because so many of the perpetrators I am calling financial terrorists are their friends and close associates.





Thursday, May 17, 2012

#GoldmanSachs Fraud Much More Important than JPM losses.

I realize everyone is in a lather over the JP Morgan trading losses, which reports say are still rising, but I want to focus on a bigger issue which is contained in Matt Taibbi's article Accidently Released - and Incredibly Embarassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling'.

Please read thru Matt's piece. You might finally start to understand why I rail on these people. Check out these gems from the piece:

“Fuck the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.

 Lovely. Said it before and will say it again, the Wall St. temple is infested with maggots like this Melz.

We also find out here how Wall Street professionals manipulated public opinion by buying off and/or intimidating experts in their respective fields. In one email made public in this document, a lobbyist for SIFMA, the Securities Industry and Financial Markets Association, tells a Goldman executive how to engage an expert who otherwise would go work for “our more powerful enemies,” i.e. would work with Overstock on the company’s lawsuit."

 “He should be someone we can work with, especially if he sees that cooperation results in resources, both data and funding,” the lobbyist writes, “while resistance results in isolation.”


Harkens me back to uber imbecile and on the take Fredric Mishkin and his deal with the Icelandic Chamber of Commerce. Ah how nice. Yes I am so naive as to how things work. Well, rather than go into a diatribe on that subject I will for all simply leave the experts alone on the art of 'greasing the deal' and simply suggest look around at what we are reaping as a harvest. Look up Jefferson County for a primer.

just wait till we find out the arrangement Wall St. has had with the likes of ministry of propaganda outlets CNBC or Bloomberg. Of course you'd have to be a tin-foil-hat-wearing conspiracy theorist to suggest something as hair-brained as that, right? Moving right along:

Here, the plaintiff’s motion refers to an “exhibit 96,” which refers to “an email from [Goldman executive] John Masterson that sends nonpublic data concerning customer short positions in Overstock and four other hard-to-borrow stocks to Maverick Capital, a large hedge fund that sells stocks short.”

So in addition to buying Washington, owning the regulators, front-running clients, coppering their trades, selling toxic paper blah, blah blah we can now add revealing nonpublic customer position data to favored market participants to the list. Gotta give these thugs credit, they're thorough.

So we can wail and knash our teeth over the bailouts, about the pyschopaths this has created but that is only a symptom of the underlying problem. Think how you would gamble in Vegas were all your losses backstopped and you were re-supplied with fresh cash at all times and you have an idea as to how Goldman and Morgan operate. And yes, this is the raison d'etre for what is happening in commodities like oil etc..... taxpayer funded free money to gamble with.


For me the document dump by Goldman is the real issue. but It is more than a total disregard for the rule of law. It is a culture of lawlessness with a complete lack of enforcement of said laws with perks and cash to regulators and politicos. It is standard operating procedure on Wall St. and in many corporate boardrooms. The lack of 'consequences' for actions has led to a pandoras box of unintended ones.



Friday, May 11, 2012

World of Finance is A Facade.

Great interview you can see on CNBC entitled Grant Blasts Fed Again with Jim Grant editor of Grant's Interest Rate Observer. Pay attention to what he says people, he's spot on!

Wednesday, May 9, 2012

In France 49 is the Lucky Number

Interesting read today from Businessweek's Greg Viscusi and Mark Deen on Why France has so many 49-employee companies. I wonder how many focus groups, market studies, socio-economic spreadsheets it took (and paid for by French taxpayers) to come to the the number 49?

Check out some of these gems from the article or as I like to call them; yet more gifts of genius from the elite, went to the best schools, purported "smartest guys in the room" (aka trough feeders):

"according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons." 

or this one...
There are now 2.9 million people out of work in France, almost 10 percent of the workforce and the most in 12 years. “For the 100 employees we have in France, we have 10 employee representatives, for whom we have to organize weekly meetings even when there is nothing to discuss,”

Viscusi and Deen finish off the piece with this:

The bottom line: With 2.9 million people out of work—the worst joblessness in 12 years—France may need to overhaul its rigid labor laws.

Gee, ya think?
Too bad authors Viscusi and Deen cannot be more candid like saying:


The bottom line: with 2.9 million people out of work- the worst joblessness in 12 years-France needs to give its collective head a shake, purge these useless laws from its books, tell the lawyers and union lobbies who own politicians to stick their heads where the sun doesn't shine while at the same time turfing these genius- 'I know better' because I went to Insead-bureaucrats in Paris. Of course that would never get past the editor or the front door politically because we lack the required backbone period.


Monday, May 7, 2012

The Emperor is Naked: David Stockman

The cats over at the Gold Report have a great interview with David Stockman, which you can read here, a fellow I admire for his honesty and his ability to speak without a telepromter in front of him. Make sure you check out his investment model at the end of the interview. Well worth the time spent my friends.

Morning Read

Your daily dose of economic reading.

Friday, May 4, 2012

FLEECEEMOL is the Answer

FLEECE-EM-OL (avaritia maximus) is the only prescription medication clinically proven to treat Deficient Net Worth Disorder (DNWD). In all but the most severe cases (ie. Jon Corzine). I believe this new drug can really jump start our economy boosting consumer confidence.

Unlike Reachemol which treats DFD, Deficient Popularity Disorder, Fleeceemol will increase you net worth big time! So much so that people will not only like you they will grovel at your feet on major financial network television, instead of shunning you like an Old Testament leper. Yes all this with few side effects!

Now I had my doubts about Fleeceemol given its claims to:

Increase net worth
Boost bundling abilities to buy politicos and regulators
Become more attractive on the trophy wife circuit
Write financial policy
Win senatorial and gubernatorial elections
Spread belief you're doing God's work
Brainwash you that crony-capitalism is free market capitalism

Sure sounds good I thought. Then I worried about those dreadful side effects which include:

Narcissism
Trophy wife exit fees
Obsessive art collecting
Early onset of mid-life crises
Headaches associated with legions of grovelling yes men
Muppet-phobia

For those unaware both Fleeceemol and Reachemol are fictitious drugs but I encourage big pharma to get on this wagon now!! Why work hard, why have an ethical standard, why run the risk of getting drummed out when overnight you can cook the books, hide the losses in SIV's or offshore entities, front run, obfuscate and outright lie all with one tiny little green pill?





Monday, April 23, 2012

Only on Wall Street

Over the weekend I came across a piece from Pam Martens entitled MF Global: The Untold Story of the Biggest Wall Street Collapse Since Lehman. I want to share 2 items from Pam's fantastic piece. Her opening and her closing which pretty much sum up everything this rotten, perverted diseased crony capitalist system of ours is all about.

 Her opening:

"Only on Wall Street can you bankrupt a company; misplace $1.6 billion of customers’ money; lose 75 percent of shareholders’ money in two weeks; speed dial a high priced criminal attorney and get a court to authorize the payment of your multi-million dollar legal tab from the failed company’s insurance policies; have regulators waive your requirements to take licensing exams required to work in the securities and commodities industry; have your Board of Directors waive your loyalty to the firm; run a bucket shop out of the UK; and still have the word “Honorable” affixed to your name in a Congressional investigations hearing."

 and her closing:

"There is an old saying by Wall Street cynics: “Where are the customers’ yachts?”  Today, the public can’t even find out where are the customers’ funds."

 
The mainstream media will repeat on this only when their masters allow them to which most probably equates to the expiration of the statute of limitations. I want to thank the numerous individuals like Pam (She has a great site Wall Street on Parade.com) and countless others on the net and blogosphere who have the backbone to stand up and report and document this lawlessness. Just as Matthew Lee the whistle blowing accountant at Lehman did regarding their fraudulent book cooking and was summarily terminated. I know not which is more disheartening, the fact Mr. Lee was fired for having integrity or that he remains unemployed to this day as all around him the thugs, thieves and go-along-to-get-along yes men and women have "landed on their feet" unscathed.

These developments around us are so preposterous as to almost defy credulity. I realize Tacitus quote "Crime once exposed has no refuge but in audacity" but this is getting ridiculous now. I have said it before and will repeat it here again, the history books will not be kind in what they have to say about us and what has transpired. The only thing I wonder is whether they will be more critical of the audaciousness of the criminal class oligarchy or the apathy of the masses who stood for it.

Monday, April 16, 2012

Glass Theatre Analogy Revisited.

While on the topic of market volume some of you may remember the Glass Theatre Analogy piece I came across last summer and shared in my piece So Where Do We Go From Here? Here is is below as it bears repeating again.


“The biggest problem, getting back to Galbraith, is that in the process of facilitating sellers, all the new technology does not produce any buyers. I know most will disagree with that, but keep in mind that demand is a state of mind. It runs away at the first sign of trouble. Put another way, the same emotions that motivate sellers cause potential buyers to hold off. Sell is preordained, but buying requires a complex greed analysis. Which leads me to my “glass theater analogy.” We are all familiar with the most common analogy for panic: when someone yells “Fire!” in a crowded theater. The problem, of course, is that there are 50 rows of seats, but just two aisles leading back to two doors on the back wall. Grown men and women may trample small children to escape getting fried.

There are a couple of problems extending that analogy to the stock market, so I made some changes in my “glass theater analogy”. The biggest problem in the market is that, even if you choose the aisle seat, last row, you can’t escape unless you can find someone to take your seat. As Galbraith pointed out so many years ago, you can’t be a seller unless someone else will buy. (What a dirty little secret!). Another big problem, considering the speed of the technology today, is the basic transparency. It’s as though the back wall of the theater were made of glass, and all the potential patrons can see what’s happening inside. It’s right there on their screen! Who is going to take your seat when they can see the carnage going on in there? Which leads me back to last week’s mysterious plunge. First of all, remember that reading Alan Abelson the Saturday before the 1987 Crash, he indicated we had already had it with the 230-point drop the week before. The newspapers last weekend sounded a bit like a post mortem too. “The SEC is trying to get to the bottom of it.” I can save them the trouble. What do you expect when your weapon has a seven cartridge magazine in the butt compared to a single load, wad and ball. You get 1000 points in 15 minutes. Wait until the human nature kicks in again someday, in a big way. It might become 5000 points. You could retrace this bear market rally in a hurry."


Caveat emptor.

Tuesday, April 10, 2012

Earnings: Reported vs Operating?

Its earnings season again. Regular readers know my antipathy for 'operating earnings' as opposed to the reported variety. Previous posts such as Cheaper Than They've Been In Two Decades huh? outline the lengths Wall St. will go to paint a rosy picture. Wall St. loved reported earnings until the late 90's when it stopped justifying their bullish stance on stocks so they switched to the more favourable operating. Wall St. loved GAAP (Generally Accepted Accounting Principles) until the housing bubble popped and very few of the banks were left solvent using its time honored rules so the banks bought a few more congressman and senators and had the rules altered (remember FASB 127 aka mark to market?)

Just as reported was switched to operating, mark to market was switched to mark to fantasy or as the boys over at Comstock are wont to say GDAP or Generally Deceptive Accounting Principles.

Please take a moment and read this latest piece from Comstock Why Valuation Doesn't Insure Against a Significant Market Decline. If anything it might help you sort through the garbage spewing from the mouths of the shameless shills on the pom pom network (CNBC).