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Posts Tagged ‘bank of america’

The Goldman Gang Rides Again (Part One)

September 11, 2009 (By Mark Faulk)

From “The Faulking Truth Blog”, by Mark Faulk

– At a banking conference in Frankfort, Germany on Wednesday, Goldman Sachs (NYSE: GS) CEO Lloyd Blankfein took what Reuters’ writer Edward Taylor described as a “hard line on bankers’ compensation.” According to Blankfein, “Compensation continues to generate controversy and anger, and, in many respects, much of it is understandable and appropriate. There is little justification for the payment of outsized discretionary compensation when a financial institution lost money for the year. Therefore, I and all other Goldman executives have decided to return 90% of all compensation received over the last ten years, which will make many of us merely rich as opposed to obscenely rich.”

Okay, I made that last part up. Of course, the key phrase in Blankfein’s comments was “when a financial institution lost money,” which exempted Goldman Sachs and fellow mega-banks JPMorgan Chase (NYSE: JPM), Wells Fargo, Bank of America (NYSE: BAC), and Citigroup (NYSE: C), all of whom reported healthy profits in their most recent quarters. Of course, Citigroup and Bank of America made the loin’s share of their profit by selling off assets, but then, a profit is a profit. [entire post]

Tags: 'new york post', aig, bailout, bank of america, citigroup, depression, fcic, goldman sachs, institutional, jpmorgan chase, lloyd lankfein, main street, richard friedman, richard kimball jr, tarp, taxpayer subsidies, wall street, wells fargo, white collar
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Financial Armageddon In Retrospect, Part Two

August 21, 2009 (By Mark Faulk)

From “The Faulking Truth Blog“, by Mark Faulk

“A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.” ~Margaret Mead

Years before SEC chairman Christopher Cox invoked a one-month ban in July of 2008 against naked short selling in 19 battered financial stocks, including Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup (NYSE: C), Lehman Brothers (OTC: LEHMQ.PK), Credit Suisse (NYSE: CS), Merrill Lynch (DOA, as in dead on arrival), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Fannie Mae (NYSE: FNM), and Freddie Mac (NYSE: FRE), an eclectic “small group of thoughtful people” sounded the alarm about a financial system gone horribly wrong. Activist Dave Patch started InvestigatetheSEC.com in late 2003, and in early 2004 I began reporting on financial fraud on my website The Faulking Truth. At around the same time, the late Gayle Essary began to utilize his own forums, Investrend and Financial Wire, to bring greater exposure and an air of credibility to the cause. Others, including Bud Burrell, Bob O’Brien, Rod Young, DeWayne Reeves, Darren Saunders, Mary Helburn, and economists Suzanne Trimbath and Robert Shapiro, worked tirelessly to warn the country about the potential train wreck years before it happened. Efforts to reform our financial markets were further galvanized when Overstock (NASDAQ: OSTK) CEO Patrick Byrne, along with fellow crusaders Judd Bagley, Brent Baker, and Mark Mitchell, joined the rapidly escalating war. Forbes writer Elizabeth Moyer and Euromoney magazine’s Helen Avery covered the scandal for the financial media, but the Wall Street controlled corporate media for the most part either ignored the issue or attempted to discredit those who exposed the corruption.

At first, the focus of stock market reform advocates was something called “naked short selling”, a predatory trading practice used to illegally manipulate stock prices. The fraud appears to have originally been fueled mostly by Canadian brokers and offshore lenders and hedge funds, who victimized small, struggling companies and their investors. They utilized naked short selling and a lending practice that became known as “death spiral financing” because targeted companies were often forced into bankruptcy. The con artists bet against the company and its shareholders by taking advantage of a trading system that allowed them to “sell” shares that they didn’t own, and in many cases, never even borrowed. They could literally destroy the company, and its shareholders, by creating so much negative pressure that the stock eventually collapsed under the weight of the massive selling. But the key to the scheme was the con artists’ ability to short sell the companies’ stock without having to ever acquire the shares to cover their positions. They could buy and sell stock that didn’t exist, shares that were never delivered, in effect creating an unlimited supply of counterfeit stock. [entire post]

Tags: accountablility, bank of america, bankruptcy, bob o'brien, brent baker, bud burrell, christopher cox, citigroup, collapse, congress, corruption, counterfeit stock, credit suisse, darren saunders, dave patch, death spiral financing, delta airlines, dewayne reeves, economy, elizabeth moyer, euromoney magazine, fannie mae, forbes, fraud, freddie mac, free enterprise, gayle essary, global crossing, goldman sachs, hedge fund(s), helen avery, investigatethesec.com, investrend financialwire, j.p. morgan chase, judd bagley, lehman broyjers, mark mitchell, market collapse, martha stewart, mary helburn, merrill lynch, morgan stanley, naked short selling, netflix, obama, overstock.com, patrick byrne, regulators, robert shapiro, rod young, sec, stock manipulation, susanne trimbath, taser, the faulking truth, wall street, washington, white house
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Financial Armageddon In Retrospect, Part One

August 15, 2009 (By Mark Faulk)

From “The Faulking Truth Blog“, by Mark Faulk

After years of spreading the word on The Faulking Truth (http://www.thefaulkingtruth.com) for the last five and half years, this is my introductory post for Investrend Weblogs for FinancialWire(tm). Thanks to Todd Essary, Investrend’s CEO, for the opportunity, and for taking up the cause of stock market reform that his father Gayle Essary championed so courageously for so many years.

“A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.” ~Margaret Mead

It began when Bear Stearns began to fall apart at the seams in March of 2008, triggering the SEC’s first emergency weekend meeting in over 30 years. Over the next few months, all of America, in fact, the entire world, watched in trepidation as our financial markets unraveled like a slow motion train wreck, one that the vast majority of Americans had been oblivious to until it was too late. Over the next few months, the train wreck began to pick up speed, prompting SEC chairman Christopher Cox to invoke a one-month ban on July 15, 2008 against naked short selling in 19 battered financial stocks, including Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup (NYSE: C), Lehman Brothers (OTC: LEHMQ.PK), Credit Suisse (NYSE: CS), Merrill Lynch (DOA, as in dead on arrival), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Fannie Mae (NYSE: FNM), and Freddie Mac (NYSE: FRE). The emergency rule, designed to eliminate the illegal downward manipulation of those companies’ stock prices, stated that no one could short sell stock in those companies unless they had “borrowed or arranged to borrow the security” and that they settle the trade on the required settlement date. Of course, as usual, even that rule imposed absolutely no penalties for anyone who violated the rule.

It proved to be too little, and decidedly too late. On September 15, 2008, our economy officially imploded: Lehman Brothers filed for Chapter 11 bankruptcy (its stock now trades for less than a nickel a share), Bank of America took over troubled Merrill Lynch, and AIG (NYSE: AIG) sought $40 million from the federal government under the guise of being “too big to fail” (the following day they received $85 billion from the fed, setting off what would become the largest government bailout of private sector businesses in history). And Washington Mutual was teetering on the brink of collapse.

What a difference a day makes. On September 19, the SEC enacted another temporary ban, this one prohibiting short selling of 799 financial firms. Why short selling was considered a crisis in those particular firms but was deemed okay in other publicly-traded companies remains a mystery, but it didn’t matter. The markets continued to tank, with the Dow eventually losing over 60% of its value by March of this year. [entire post]

Tags: aig, bank of america, bear stearns, chapter 11, christopher cox, citigroup, collapse, corruption, credit suisse, fannie mae, faulkingtruth.com, financial crisis, freddie mac, gayle essary, goldman sachs, j.p. morgan chase, lehman brothers, manipulation, mark faulk, market reforem, merrill lynch, morgan stanley, naked short selling, sec, the fed, washington mutual
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Company Failure Can Pay Investors More Than Success

July 11, 2009 (By Susanne Trimbath, Ph.D.)

From “Outside The Ivory Tower”, by Dr. Susanne Trimbath

Back in March, I wrote a piece for NewGeography.com called Burnin’ Down the House (www.newgrography.com/users/susanne-trimbath) on the financial crisis. I used data on derivatives outstanding made available by the Depository Trust and Clearing Corporation for publicly traded credit default swap contracts and compared that to the market value for public companies based on recent closing stock prices. In case after case, there are more derivatives than there are underlying assets — meaning you could buy all the equity to take control of a company, drive the company into default, and profit from the derivatives payoff. [entire post]

Tags: aig, apple, bailout, bank of america, boeing, citigroup, credit default swap, default, DTCC, general electric, google, junk bond, palm, sprint ntextel, taxpayers, wells fargo, yum!
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