Da Yanks Ain't Nuttin'

Murderer's Row, EM08, or,
Shitheads Who Don't Care about YOU.
Face it, a Pimple on their Ass Gets More Attention than You.










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NYT at:
http://www.nytimes.com/2009/10/17/business/economy/17wall.html?th&emc=th
Bailout Helps Fuel a New Era of Wall Street Wealth

By GRAHAM BOWLEY
[with my wise ass remarks, cogent commentary and always insightful views here added for entertainment]
Published: October 16, 2009

Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses.
[Christian Bale! Christian Bale! Paging Christian Bale!]

Many Americans wonder how this can possibly be. [Now THAT is indeed a tragedy, that "many Americans" don't even have a clue as to how we got here.] How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes?

It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.

Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year.

[CUE: Christian Bale replete with dripping sarcasm meltdown voice, pumped through a pa and directed at Lloyd Blankfein and Jamie Diamond but for the public to hear - "Hey, everybody, the entire country's in a meltdown, but who receives a 'benefit'? The criminals! Oooooooh GOOD FOR YOU!!!!]

So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza. [Substitute "theft" for bonanza. Also, given these shitheads have raped the economy and then been monetarily rewarded, OF COURSE logic dictates that they should be less regulated.]

“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending,” said Gary Richardson, a research fellow at the National Bureau of Economic Research. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.”

[Welcome to slavery, EM08 style. Here's something for the geniuses in American mass media to ponder; why is it that when we give/lend bailout billions to auto companies, we OWN them, but if it's TARP bailout money somehow it's different and we don't own anything of the superbanks...? At least if the freshly conglomerated superbanks are going to be raking it in and able to do so with MY money, then I get a piece of it. Gamblers are all-too familiar with this principle that's as old as casinos - it's called "staking."]

Not all banks are doing so well. Giants like Citigroup and Bank of America, whose fortunes are tied to the ups-and-downs of ordinary consumers, are struggling to turn themselves around, as are many regional banks. [Citigroup deserves every bit of flame from hell it gets. Karma? My guess is that some kind of a deal will go down - possibly TARP Part Deux; Vegas has TARP 2 at 7 to 5, o&e's @ 3/31/09 cuz they wanna see how the Xmas season does - that will alleviate the pressure on BofA that the Merril fiasco brought. And I'm not just talking getting rid of John Thane's office accoutrement....]

But the decline of certain institutions, along with the outright collapse of once-vigorous competitors like Lehman Brothers, has consolidated the nation’s financial power in fewer hands. The strong are now able to wring more profits from the financial markets and charge higher fees for a wide range of banking services. [THERE'S THE BOTTOM LINE IN PLAIN ENGLISH - A BIT LATE BUT...]

“They are able to charge more for all kinds of services because companies need banks and investment banks more now, and there are fewer strong ones to help them,” said Douglas J. Elliott of the Brookings Institution.

[Huh. The country's on its knees, and you charge MORE. And how many puppies did you kill today?]

A year after the crisis struck, many of the industry’s behemoths — those institutions deemed too big to fail — are, in fact, getting bigger, not smaller. Why are you copying me...? Guess it's true what they say about flattery.] For many of them, it is business as usual. Over the last decade the financial sector was the fastest-growing part of the economy, with two-thirds of growth in gross domestic product attributable to incomes of workers in finance. [In all seriousness, that is an astounding figure]

Now, the industry has new tools at its disposal, courtesy of the government.
[AND OUR MONEY]

With interest rates so low, banks can borrow money cheaply and put those funds to work in lucrative ways, whether using the money to make loans to companies at higher rates, or to speculate in the markets. Fixed-income trading — an area that includes bonds and currencies — has been particularly profitable. [Courtesy of uncle scam, the superbanks not only have conglomerated, they go into action based upon a weakened market due to competitor elimination. They don't think about lending and investing in the sense of what's good for the economy, they think about it in terms of margin - strictly. Happy now?]

“Robust trading results led the way,” said Howard Chen, a banking analyst at Credit Suisse, describing the latest profits.

To prevent a catastrophic financial collapse that would have sent shock waves through the economy, [I'M CURIOUS, WHAT DO YOU CALL WHAT WE HAVE NOW, TEA AND CRUMPETS...?!?!?!] the government injected billions of dollars into banks. Some large institutions, like Goldman and Morgan, have since repaid their bailout money. [SEE: Christian Bale voice quote above] But most of the industry still enjoys other forms of government support, which is helping to stoke profits.

Goldman Sachs and its perennial rival Morgan Stanley were allowed to transform themselves into old-fashioned bank holding companies. That switch gave them access to cheap funding from the Federal Reserve, which had been unavailable to them. [Wow...]

Those two banks and others like JPMorgan were also allowed to issue tens of billions of dollars of bonds that are guaranteed by the Federal Deposit Insurance Corporation, which insures bank deposits. With the F.D.I.C. standing behind them, the banks could borrow the money on highly advantageous terms. While some have since issued bonds on their own, they nonetheless enjoy the benefits of their cheap financing.

[What a concept; raising capital while someone gives you 100% insurance. That's not even gambling, it's... a no-lose situation.]

Granted, banks are also benefiting from a stabilizing economy. Stocks, corporate bonds, even risky corporate i.o.u.’s — have all rallied from their bear market lows, some spectacularly so. The Dow Jones industrial average has soared 50 percent this year, and touched 10,000 this week for the first time since the crisis.

["Stabilizing." What kind of moron says this economy's "stabilizing???] The fear that gripped the markets earlier this year, when doomsayers predicted a second Great Depression, has largely dissipated. ["The markets." Listen, since when were "the markets" the key to figuring out economics? In fact, as we've seen with John Stossel's dart throwing monkey who beat the pundits, it's in some ways a very bad measure.]

Banks that had marked down the value of the assets on their books during the dark days of the crisis are now enjoying a rebound in the value of many of those assets.

[And the taxpayers who had their money stolen so that banks could even be in the position to enjoy a "rebound"... besides holding the bag and left in the dust, when's their rebound coming...?]

“Confidence has returned,” said Shubh Saumya, a financial services specialist at the Boston Consulting Group. “Some of the assets that bankers wrote down last year in the midst of the crisis, now they have got some of that back.”

[Substitute "confidence" for "rebound in the quote above, re-word to fit grammar, insert here.]

As the number of banks has dwindled, the survivors are moving into the void left by rivals that are either dead or limping and unwilling to take risks.

A big reason for Goldman Sachs’s blowout profits this year has been the willingness of its traders to take big risks — they have put more money on the line while other banks that suffered last year have reined in such moves. Executives say there are big strategic gaps opening up between banks on Wall Street that are taking on more risks, and those that are treading a safer path.

["Christian Bale! Paging Christian Bale!"]

Banks that have waded back into the markets have been able to exploit large gaps in the prices of various investments, a feature of the postcrisis financial markets. The so-called bid-ask spreads — the difference between the price at which banks are willing to buy things like bonds, and the price at which they are willing to sell — are roughly twice what they were two years ago.

Still, the newfound success is largely limited to the big securities houses on Wall Street. [WOW - WHAT A SHOCK...] This week, Citigroup and Bank of America reported losses from credit card delinquencies and mortgage defaults — a sign of the lingering pain on Main Street.

Greenspan: "Can't Truss it!"

No less than A to da G has come out and said the super banks should be broken up - waaaaaaaay after the fact, of course, but I still give props even though he himself must shoulder responsibility for some of the hyper-valuation in the run-up to EM08.

Once again, it's amazing that the press has evidently lost all sense of irony; the Obama administration's hit team very plainly created the game in which the banks stole our money and further conglomerated - despite the "too big to fail" buzz word fear-mongering. To date, I've heard no media outlet, from WSJ to HuffPo cite this.


Bloomberg, at:
http://www.bloomberg.com/apps/news?pid=email_en&sid=aJ8HPmNUfchg

Greenspan Says U.S. Should Consider Breaking Up Large Banks

By Michael McKee and Scott Lanman

Oct. 15 (Bloomberg) -- U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.

Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.

“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.

“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.

Fed officials have suggested imposing a tax or requiring higher capital ratios on larger banks to ensure the firms’ safety and reduce some of the competitive advantage from the implied subsidy. Greenspan said that won’t work.

“I don’t think merely raising the fees or capital on large institutions or taxing them is enough,” Greenspan said. “I think they’ll absorb that, they’ll work with that, and it’s totally inefficient and they’ll still be using the savings.”

‘Really Arbitrarily’

The former Fed chairman said while “just really arbitrarily breaking down organizations into various different sizes” goes against his philosophical leanings, something must be done to solve the too-big-to-fail issue.

“If you don’t neutralize that, you’re going to get a moribund group of obsolescent institutions which will be a big drain on the savings of the society,” he said.

“Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those who should be shrinking, it undermines growing standards of living and can even bring them down.”

To contact the reporter on this story: Michael McKee in New York at mmckee@bloomberg.net; Scott Lanman in Washington at slanman@bloomberg.net
Last Updated: October 15, 2009 10:50 EDT

Altered Readymade: I Sing the Bank Monolithic

Well, I hate to say it, but here we are at death's doorstep - the era of the super banks. When in 1998, Sandy Weill successfully merged his Travelers Group with Citicorp, it was unprecedented for a financial services company in scope and size, bringing together banking and insurance (in "violation" of the Glass Steagall Act of 1933). As gigantic as Citigroup was, there was no way that Weill or any economist could have foreseen what was coming in 2009.

Much like 9/11 paved the way for Cheney to bomb and invade Iraq, EM08 is the petri dish spawning the new super banks. Thus, my worst fears have come true. Conglomeration by the elites - watch out...


Two Giants Emerge From Wall Street Ruins

NY Times

JPMorgan Chase posted a $2.7 billion quarterly profit on Thursday, showing its turnaround.

jp: Yeah, with our money.

By GRAHAM BOWLEY
Published: July 16, 2009

A new order is emerging on Wall Street after the worst crisis since the Great Depression — one in which just a couple of victors are starting to tower over the handful of financial titans that used to dominate the industry.

On Thursday, JPMorgan Chase became the latest big bank to announce stellar second-quarter earnings. Its $2.7 billion profit, after record gains for Goldman Sachs, underscores how the government’s effort to halt a collapse has also set the stage for a narrowing concentration of financial power.

“One theme here is that Goldman Sachs and JPMorgan really have emerged as the winners, as the last of the survivors,” said Robert Reich, a professor at the University of California, Berkeley, who was secretary of labor in the Clinton administration.

Both banks now stand astride post-bailout Wall Street, having benefited from billions of dollars in taxpayer support and cheap government financing to climb over banks that continue to struggle. They are capitalizing on the turmoil in financial markets and their rivals’ weakness to pull in billions in trading profits.

For the most part, the worst of the financial crisis seems to be over.

jp: Yeah, right. Over thirty states are on the precipice, with Cali - the 6th largest economy in the world - leading the way. Record debt to other countries, record trade deficits, the alt-A and option arm mortgages re-setting, health care a ticking time bomb, credit card debt at a trillion dollars, unemployment well over the "officially" stated 10%, and no end in sight. To say the worst is over is criminal and a lie. Buckle up, people. As we can see in the era of the super banks, we're only at the beginning of this shit storm.

Yet other large banks, including Citigroup and Bank of America, are still struggling to return to health. Both are expected to report a more profitable quarter on Friday, but a spate of management changes and looming losses from credit cards and commercial real estate have thwarted a stronger recovery.

And then there are the legions of regional and small banks that are falling in greater numbers across the country. While many have racked up large losses, they stand to bleed more red ink if the recession wears on. Fifty-three have failed this year, and the Federal Deposit Insurance Corporation is girding for scores to follow.

jp: This is just wrong. Think about it; you're a small credit union who didn't go in for all of the mortgage CDO trickery that the big banks and AIG shitheads gambled on, and yet you stand there and watch as uncle scam throws billions of dollars at them. What kind of message is that sending...?

Uncertainties over the economy mean that Goldman and JPMorgan may be enjoying a fragile dominance, industry experts said. JPMorgan reported big declines in its consumer business on Thursday, and it has set aside more than $30 billion to cover future losses from surging credit card charge-offs and mortgage and home equity losses.

“Nobody is through this until unemployment turns around,” said Moshe Orenbuch, a Credit Suisse banking analyst.

jp Unemployment is just one element. There are many more as cited above.

And if regulation being considered in Washington is passed, banks would face new limits on the amount of their own capital they may trade. That could limit the profits that banks like Goldman and JPMorgan make from their trading businesses, and level the playing field, experts say.

Other former Wall Street stars like Morgan Stanley, which was hurt more by the crisis and has avoided taking big risks in the new era, may also rebound and begin to take on old rivals.

But for now, Goldman Sachs and JPMorgan are surging. “The stronger players are positioned to take advantage of the crisis and they will dominate clearly in the near term,” said James Reichbach, the head of Deloitte’s United States financial practice.

JPMorgan’s renewed strength, like Goldman’s, comes as it vaults ahead of longtime rivals, especially in investment banking, including bond and equity trading, and underwriting debt to help companies issue shares and bonds. Traders took advantage of big market swings and less competition to post big gains in fixed-income and equities.

Michael J. Cavanagh, the chief financial officer at JPMorgan, said its profit and fees from this business were “a record for us in a quarter and a record for anybody at any firm in any quarter.” The bank, he added, was “so very proud of those results.”

jp: Enabled and accomplished with our money.

It has also profited from the demise of weaker banks to enlarge its market share in mortgages and retail banking. On Tuesday, as the CIT Group, a lender to many small businesses, negotiated with the government to avoid collapse, JPMorgan signaled that it was watching.

“It would be an opportunity for us in these states if CIT was unable to continue lending to borrowers,” Tom Kelly, a spokesman at Chase, was quoted by Dow Jones Newswires as saying.

jp: There you go; out with the small, in with the big bully jerkoffs.

And revenue from the retail bank Washington Mutual, which JPMorgan acquired last fall, is starting to help earnings. Morgan is also profiting from its government-assisted purchase of Bear Stearns last year. JPMorgan is now No. 1 globally in equity and debt capital markets, according to Dealogic.

Amid the surge, Jamie Dimon, JPMorgan’s chief executive, has cemented his status as one of America’s most powerful and outspoken bankers. He has vocally distanced himself from the government’s financial support, calling the $25 billion in taxpayer money the bank received in December a “scarlet letter” and pushing with Goldman Sachs, Morgan Stanley and others to repay the money swiftly. Those three banks repaid the money last month.

jp: How much interest did we get?

Yet JPMorgan’s transformation into one of the industry’s strongest players is underpinned by the shelter it received from the government: The bank used the money as a cushion until it was able to raise new capital. “There is no doubt all of us benefited from the government help — all of us,” said a senior executive at another Wall Street bank.

A spokesman for JPMorgan said the bank accepted aid at the request of the government but would not comment beyond that.

jp: Why would you comment on free money bilked at gunpoint from innocent people who have no say?

Few banks have undergone such a turnaround.

jp: Of course; that's what conglomeration is all about, dummy. The mantra was, "Too big to fail," and yet what does uncle scam do? HE GOES ALL IN WITH BIGGER BANKS, OF COURSE! Ladies and gentlemen, welcome to bizarro world, where up is down.

Only a few years ago, JPMorgan was struggling after years of poor management and a failure to digest a series of big acquisitions. But under Mr. Dimon, it cut costs and strengthened its balance sheet.

The payoff began last year. With the industry teetering on the verge of collapse, JPMorgan snapped up Bear Stearns in March 2008 and Washington Mutual last fall in two government-assisted transactions. Clients say that its growing dominance has given it more leverage to charge for lending and other services.

jp: That's key; uncle scam HELPED them conglomerate. After all, if uncle scam was anti-conglomeration, there would have been anti-conglomeration stipulations on the TARP funding to begin with. Ostensibly - but not stated precisely, and that's key - the TARP funding was to be used to provide credit. Well, that went out the window in a nanosecond after receivership.

After aggressively lobbying to repay its taxpayer money, Mr. Dimon has also been driving a hard bargain over the repurchase of warrants the government received from the bank last autumn in exchange for taxpayer support. JPMorgan is now planning to let the Treasury Department auction off the warrants to private investors after the two sides failed to agree on a price.

jp: ??? Who are these private investors??? That was OUR money, and now these warrants are going to be sold off without any kind of disclosure? What do we get, a jar of vaseline?

Mr. Dimon is also gearing up for a series of battles in Washington. One is over tighter regulations for derivatives, a business where the bank generates lucrative fees as one of the industry’s largest players.

Another is the creation of a new consumer protection agency, which could threaten the profitability of the bank’s mortgage and credit card businesses if it introduces tougher regulations.

JPMorgan’s stock has risen 20 percent since early March. It closed Thursday at $35.76.

Eric Dash and David Jolly contributed reporting.

Fish Bite

I'm an admirer of Professor Stanley Fish's, and have to post this. It speaks to the way huge corporations now dominate our lives with the bullshit they mete out and get away with on the basis of their power. As a consumer, it's the near-end result of being dominated by the biggest bullies in business history.

At the end of his piece there's a comments section, and I threw up my lot, typos and all, about the bad decision "we've" made in letting corporate America conglomerate down to this unprecedented power. In the above paragraph above (That's a joke for you, Professor Fish), I said, "As a consumer, it's the near-end result of being dominated by the biggest bullies in business history." I said "near-end" for a reason; because what we're currently witnessing in the financial sector is, in one sense, the endgame of huge financial corporations -- benignly called "institutions" by some -- running amok. They, their lobbyists, their armies of lawyers they deploy, and the politicians who are in their back pockets don't care about you, me, us at all, as George Carlin said. That means it's gonna get a lot worse and a lot uglier, for instance, as those "Alt-A" and "option ARM" mortgage loans, approved by the ratings companies, reset.

And I hope you understand that although I think this is the endgame, it means for this phase. What the hell comes next is either one of or a combo of three things, as I see it:

1. A "cooling down period," where auto CEOs will drive hybrids and go on photo ops, then a return to "business as usual" when they feel like it.
2. More conglomeration.
3. A makeover, but not an overhaul. This means that cosmetics will be applied but the basic fundamentals of big capital, distinct and differentiated here from capitalism, will still be there.

There's actually a fourth choice which is true capitalism, which would be a revolution, but that's not going to happen and I wouldn't bet on it. The reason and historical evidence are pretty overwhelming if you ask me, but if you take the example of yet another crisis in our laps, healthcare, there are very good reasons why if I had to bet I'd say that we will never enjoy a single-payer plan. Of course it's money, and I've talked about it before, but succinctly, the healthcare industry's owned by three huge sub-industries: HMOs, pharmaceutical and insurance companies, any of which is a huge presence on the Hill via lobbyists and armies of lawyers. With all three of them acutely interested in maintaining the status quo, forget it, it's like me trying to play Kobe Bryant. So, if I had to bet I'd say it's going to be number three, the cosmetic makeover, which equates to business as usual.

Anyway, without further ramblings, here's a great deconstructionist speaking plainly about a huge corporation.

Oh, and sorry for the bad title pun, Professor Fish. You've probably heard them all.

From the NY Times Opinion page

December 28, 2008, 10:00 pm
The Return of the Old Grouch

When you live in two places and decamp from one to the other every six months or so, there are any number of things that have to be done. (I know that at least 50 readers will want to rebuke me for complaining about problems only the privileged can have, but perhaps we can agree to get past that.) Closing the house, switching the mail, storing the porch furniture, suspending cable service, draining the pipes. But the one that gives me a headache even before I attempt it is the phone call to AT&T, or, rather, the 20 phone calls to AT&T.

The first obstacle, of course, was getting through to someone. The prompts did not correspond to any of my concerns, but finally, after pressing a number of zeros, I was rewarded with the voice of a live person who said, “With whom do I have the pleasure of speaking with?”

Visions of Lily Tomlin’s Ernestine the telephone operator danced in my head, but I bit my tongue and made my simple request.

“I’ve been away for some time and my services were reduced. I’d like to have them restored to what they were when I left in June.”

It turned out that this was not possible. Even though I had paid to retain my phone number, I was going to be treated as a new customer, which meant that I would have to answer a bunch of questions and decline services I had never had. After much back and forth I signed up for a package that included voice mail.

I should have quit when I was (somewhat) ahead, but I couldn’t resist returning to the greeting, with its double and ungrammatical “with.” I explained that the second “with” was superfluous, as the second “to” would be if the offending question had been, “to whom am I speaking to?”, or the second “about” if the question had been “about what are you worrying about?”

Somehow that didn’t make much of an impression on her. She said that her instructions were to greet callers in that way and that she would continue to do so. I replied that it was scandalous that a multi-billion-dollar world-wide telecommunication corporation would order its employees to commit an egregious (and comical) grammatical error millions of times a day.

She said, “I’m sorry you feel that way.”

I lost it. It has nothing to do with feelings, I ranted. It is a factual matter as to what is and is not syntactically correct.

She changed the subject by informing me that the social security number I had given when she asked for it was not the number she had on record. I asked her to change it, but she pleaded incapacity: “No, I can’t do that. I’ll connect you to the department where they can.”

That was a promise made subsequently by five other people as I was repeatedly transferred to someone who told me, “No, I can’t do that.” Everyone I talked to assured me that within seconds I would be talking to the right person. My last interlocutor took pity on me, and although he too was not the right person, he knew someone in his division who was and said he would talk to him directly. When he came back, it was to tell me that the social security number on record was in fact the one I had given him. The whole thing had been a wild goose chase.

I was more exasperated than relieved, and I made the mistake of re-raising the “with-whom-do-I-have-the-pleasure-of-speaking-with” matter. He listened and suggested that I make a complaint. You mean call another 800 number, I wailed. No, he replied, I’ll do it for you, just tell me what you want to say. I went through the nature of the error, but when I talked about the unseemliness of a major corporation managing to sound pompous and ignorant at the same time, he interrupted me and said that he would not transmit that kind of language. I thought about pointing out that this was a complaint, not a love letter, but I just gave up.

This epic was not over. When I got to Florida after a three-day drive I found that I didn’t have voice mail. I called and was told that there was no record of my having placed an order. I was assured that the matter would be taken care of in 24 hours. It wasn’t. I called back the next day, but a mechanical voice informed me that there was no service on Sunday. (Don’t people make phone calls on Sundays and pay for them?) Finally, on Monday, I reached someone who assured me that I would have voice mail the next day, and he turned out to be right.

But by that time I was beyond caring. I told him that I had decided to write a column about my AT&T adventures and that, in fairness, I thought I should talk to someone in the corporate structure. He said that he would put me through to the right department, but when someone picked up, she identified herself as “Directories.”

What?, I asked.

I’m in advertising, she replied. We send out telephone directories. Do you want one?

I explained what I was trying to do, and she laughed. I laughed, too, the best moment of the experience.

Every weeknight on MSNBC, Keith Olbermann, who never met an exaggeration he didn’t like, names that day’s “Worst Person in the World” (it’s usually Bill O’Reilly). In the same spirit, I hereby nominate AT&T as the worst company in the world. I admit that my evidence for this judgment is scant and anecdotal, but I stand by it anyway.

About Stanley Fish

Stanley Fish is the Davidson-Kahn Distinguished University Professor and a professor of law at Florida International University, in Miami, and dean emeritus of the College of Liberal Arts and Sciences at the University of Illinois at Chicago. He has also taught at the University of California at Berkeley, Johns Hopkins and Duke University. He is the author of 10 books. His new book on higher education, "Save the World On Your Own Time," has just been published.

The Fix

When it rains it pours. By now everyone knows about Madoff's ponzi scheme gone bust, but calling it the biggest theft in history ignores the $700B just handed over on a platter to the banks with no strings attached. In fact, what's tragic is that I heard Chris Dodd himself say that provisions were stipulated for the banks to use the money (in part) for credit. As we all know, that hasn't happened, and the banks instead used and are using the money to go shopping for themselves.

Yup - my bugaboo; further conglomeration.

You think it's bad now that oil, auto, media, and cell phone oligarchs have consolidated, just watch what happens with just a few super banks dominating everything. It's a gambling law: NEVER put all your chips on one bet unless you have "the nuts," the best hand.

Does anyone out there honestly think and can you rationally argue as to how a few super banks is "the nuts," the best possible bet for America...? On the other side of the ledger, that club ("And YOU and me ain't in it," -George Carlin) where the elites sit, they absolutely know what to do: conglomerate!

What's going on is stupefying on a level that would make Marx's and Ayn Rand's heads explode. Well, maybe not Rand's, but you get what I mean.

Long ago, in a financial disaster far, far away, there was a company named Enron who played a game, the game of "now monetize this." And there was a referee, Andersen, to make sure that Enron dotted it's "i's" and crossed its "t's." And there was trickery afoot in Ken Lay's house, and it burned down.

And when the smoke cleared all was revealed - the refs had been in on the fix.

August 31, 2002
Arthur Andersen surrenders its license to practice accounting in the United States. 85,000 people lose their jobs. Nine billion dollars in annual earnings disappears.(1)

Just like the NBA ref who got caught fixing games, the biggest sports story in the past decade in my opinion. Know how much money transacts on Vegas sports books? Some estimate it dwarfs all other forms of gambling.

Yep, Andersen was the REAL story of the fall of Enron. So what does this have to do with Bernie-Boy Madoff? Well, where in the hell were the refs, that is, the SEC???

Michael Ocrant wrote a story in 2001 for MARHedge, which covers the hedge fund industry, about how some traders, money managers and financial consultants questioned Madoff's record of 72 winning months in a row. "When I spoke to them about something not being right … they were adamant — there's no way this could be real," says Ocrant, now at Institutional Investor. "There's no one in history with that kind of results." [sic] He says Madoff smoothly dismissed the questions when he interviewed him at the time. "You could see why people would trust him, particularly since he'd been running a successful business for years."(2)

That's seven years ago that people in the industry knew. Now, if you're a watchdog, shouldn't you at the very least be reading and keeping up with industry trades? And if nothing else, a winning streak of 72 months long is statistically highly improbable. Realistically speaking, it's impossible.

But here's where American capitalism has taken a cue from show biz, of all things. The glitz, the glamour (think Trump, "Lifestyles of the Rich and Famous") and the talking heads, both high and low. Shit, it even has its own channels such as CNBC and Bloomberg thanks to cable's wild west channel fest. In movies it was Hedda Hopper on through to Rona Barrett to Pauline Kael and Noel Burch. The corollary body in finance are the analysts (and journalists, too). Now consider this:

In 1975, deregulation of brokerage commissions opened up a Pandora’s box of competition for securities analysts. Suddenly discount brokerages abounded and took business from investment banks. As trade commissions declined, brokerage firms had diminished resources to fund analyst services. As a result, stock analysts relied less on brokerage fees for income and more on investment banking fees. They began to be judged more for their investment banking skills than their insights or analysis, and this is how what many regard as a systemic conflict of interest was born.(3)

In regards to the mortgage debacle, one thing stands out: the credit rating agencies, such as Standard & Poor's and Moody's. In other words, the analysts, or referees, this time in the form of credit raters. Because while there are barely six AAA rated companies in America such as Microsoft, ADP and GE, the way over-leveraged financial products containing toxic mortgages (some of these "products" leveraged over TWENTY times!) that eventually blew up and caused the house of cards to collapse were being rated AAA, the top blue chip rating.(4)

Bottom line? The present-day game of American capitalism's rigged and, surprise, it's not in your favor. How do we know? Easy; the refs are in on the fix.

NOTES
1. From the PBS series Independent Lens and their page on Enron: The Smartest Guys in the Room. This is from the sub-section, "Enron Timeline: 2002." Despite Andersen's shredding a ton of Enron related documents when under the gun, the fix appears in yet another incarnation, this time as judges. On May 31, 2005, the U.S. Supreme Court overturns the conviction of the Arthur Andersen accounting firm for obstructing justice by shredding thousands of Enron documents. Andersen’s top Enron accountant withdraws his guilty plea when prosecutors drop their case.

2. Financial world still amazed over Madoff's downfall
By David Lieberman, Pallavi Gogoi, Theresa Howard, Kevin McCoy and Matt Krantz, USA TODAY 12/15/08

3. From the PBS series Independent Lens and their page on Enron: The Smartest Guys in the Room. This is from the sub-section, "How the Stock Market Works."

4. 60 Minutes this past Sunday ran a frightening story on the next wave of mortgages set to default, the ones just above the absolute shit sub-primes that we are now experiencing.

The trouble now is that the insanity didn't end with sub-primes. There were two other kinds of exotic mortgages that became popular, called "Alt-A" and "option ARM." The option ARMs, in particular, lured borrowers in with low initial interest rates - so-called teaser rates - sometimes as low as one percent. But after two, three or five years those rates "reset." They went up. And so did the monthly payment. A mortgage of $800 dollars a month could easily jump to $1,500.

Now the Alt-A and option ARM loans made back in the heyday are starting to reset, causing the mortgage payments to go up and homeowners to default.

A Second Mortgage Disaster On The Horizon?
60 Minutes: New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default
December 14, 2008 broadcast

Set Sail...

This is for all of my ranting and raving on subjects that... I want to rant and rave about.

"Deep Thoughts"? Kinda. Sorta. Sometimes. Maybe.

A theme? Hmmm, maybe, inequality. But if I stray, so be it.

That's it. Nothing witty, incisive, curmudgeonly, smarmy, post-post-modern... yet. Instead, I'll take a note from my sista Van in Can, and for now give you a capsulized "What JP's about"in the form of a Top 10 off the top of my head...

1. I love to laugh and run the gamut - self-deprecating, political, toilet/animal house, cerebral thinking person's (I guess Carlin and Bruce), to the classics - Foxx, Carlin - and the neo-classics - Rock, Lawrence, Tucker, Chappelle. Huge Stern fan, altho I know he's problematic at times, he is consistently entertaining - from a male gaze pov certainly - and delivers the most incredible interviews beyond anything out there. Just listen to his interview with Jose Canseco regarding his book, "Juiced," if you don't believe me.

2. Movies. I was born in Hollywood, right on Sunset Blvd. So in a away I am a true child of "The Business," but don't believe the hype. Surf to my blog on filmmaking at: http://sibmovies.blogspot.com/ to see what I mean.

3. I like entrepreneurship. Entrepreneurs distinguish themselves from business people. Can you think of how they do this?

4. I'm really against the corporatization of the world. EVERYTHING is SPAM SPAM SPAM, SPAM THIS, SPAM THAT. Geezus, I feel like I live in Hawaii. What next, a brand for homeless people? What about: "Disenfran: For the unlucky in all of us..."

5. Sports - Hoops, football, boxing, UFC, tennis. Greatest athletes: Ali, Magic, Jordan, Isiah Thomas, Jack Tatum, Ilie Nastase, John McEnroe. Special mention: Royce Gracie getting an opponent to tap out while turned upside down. (He did it with an arm bar) Most under-rated: Larry Holmes.

6. Politics - I should keep up more, but I like it. But I don't like what's going on these days...

7. Reading - Avid reader. Don't read fiction anymore, although my fave novel is "Invisible Man." Fave entrepreneurial story: J.B. Strasser's and Laurie Becklund's, "Swoosh: The Unauthorized Story of Nike and the Men who Played There." If you want to get really pissed, check out David Cay Johnston's, "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else." And the "liberal media" tag? Doesn't apply - Johnston's a registered Republican. Gotcha!

8. Related to #4, mass media - more accurately, the relationship between mega-corporations, mass media and consumers, and how that defines free flow of info on a mass scale. Seven mega-corporations now control the vast majority of mass media worldwide: Film, music, television, radio, Internet, newspapers, books, and magazines. They are: AOL-Time Warner, Viacom, Walt Disney, NBC/Universal, Sony, News Corp, and Bertelsmann. Of note, the wireless industry is considered by many to be the next media pipeline, and is now exhibiting the same pattern of consolidation with the recent acquisition (as of February, 2004) of AT&T Wireless by Cingular Wireless, creating the largest wireless entity yet. Later, Sprint and Nextel merged as a result of the market pressures. Also noteworthy is the fact that as of midyear, 2004, Vivendi Universal became NBC/Universal and in reality a General Electric company. Thus, a mega-corporation was assimilated by another, larger entity. Readers are urged to seek out a copy of the PBS produced segment of “Frontline,” entitled, “The Merchants of Cool,” one of the best documentaries on marketing in the modern age that explains the relationship between mega-corporations, mass-media and consumers. For more, see:
www.pbs.org/wgbh/pages/frontline/shows/cool

9. I like the gals at www.snarkywood.com - cruel and chicken-haided as they come, more often than not funny.

10. I tried to avoid this because it's trite. Oh well. Some of my fave flicks: Il Conformista (perennial top 3 feature film), The Eye of the Storm (PBS), Thirst (PBS), Lone Wolf and Cub (series), Zatoichi (series), That Obscure Object of Desire, A Place in the Sun, Giant, The Wild Bunch, Junior Bonner, Vertigo (the Hollywood studio system's most intensely personal film) The Godfather, Network, Chameleon Street, Willy Wonka & the Chocolate Factory (financed by Quaker Oats Co.!), The Seven Faces of Dr. Lao (Yes, Tony Randall's in yellow face), Chinatown, Brian DePalma's Scarface, Stranger Than Paradise, Ghost Dog: The Way of the Samurai, Nightmare on Elm Street, Taxi Driver, New York New York,The King of Comedy, Raging Bull,

Bonus item - #11. - My dad was born in Hawaii, and I have relatives there. I love tikis.

Ok, I gotta post this or else it'll never get "borned"...