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Eurozone Update – Greece ? Italy ? Spain ? Portugal ? … Maybe – or ?

8:00 am in Uncategorized by cmaukonen

Euro - flickr creative commons

The on going and deepening economic crisis in Europe once again has come to the for front in at least a few media outlets.  Now before I go any further let me point out what has been going on in reality – at least according to Richard Wolff.  He has given a good synopsis of the situation in a number of his presentations on the economy.

The European Central bank – funded primarily by Germany, France and Belgium – has been “bailing out” various peripheral countries.  Mainly Greece, Spain, Portugal and Italy. But where is the money going ? Well back to the big banks in Germany, France, Belgium and Switzerland.   That’s where. In other words it has been and continues to be a stealth bailout of these big banks, mostly by Germany.

And Germany is keeping this part quiet since Merkel and all know damn well that the German people would not put up with this if they knew this was what was really going on.  I suspect they do however and this is why this item from Ives Smith over at Nakedcapitalism is not and should not come as a big surprise.  She gives a good rundown on the situation – as linked to by Faster – and what it may mean.  Beginning with this revelation.

Data point one. One of my colleagues studied in Germany, has extensive, high level political and economic contacts there, and reads the press daily. He also describes his sang froid as “somewhere between that of a Chinese sage and a dead animal.”

Needless to say, he not prone to overstatement or overreaction and also has a propensity to makes Delphic remarks.

He said the Eurozone is over. In pretty much those words, a simple sentence, no caveats or conditionals. I nearly fell out of my chair. This apparently reflects the German recognition as a result of the Italian elections that they will not be able to surmount domestic opposition in Italy and potentially other periphery countries and would rather pull the plug than continue funding their trade partners. He said there was a fair bit of discussion of Germany leaving the Eurozone after the election. I quizzed him on how they thought they could do that, since the new DM would presumably trade at a big premium to the Euro. We discussed that the likely outcome would be further labor “reforms”. Maybe I am naive, but I don’t see how this would not undercut an critical German strength, that of the good, if also sometimes combative, relationship between German workers and management. My source finally said widespread recognition of the existential impasse at most a couple of months away. He’s never this definitive.

Germany throwing in the towel ? If Merkel’s Christian Democrats do as badly in the upcoming elections as it has been doing in the local elections recently, this is a good bet.  Since they have been footing the bill for most of this themselves. Not something that has proven popular with the German people one bit.

And with Italy in a dead lock politically,  the ministers of Portugal fearing for their safety and the police and firefighters refusing to enforce evictions in Spain – the likelihood of the enforced austerity programs IE bank bailouts  continuing apace grows dimmer and dimmer.

Greece is on the verge of exploding and imploding all at once. And other countries are taking notice. As Ives says.

Thus Greece for the Germans served pour decourager les autres, to show what would happen if you let your debt levels and finances get as badly out of whack as Greece has. But that might have backfired. Citizens in periphery countries now suffering high unemployment might decide they’d rather take more pain now and gain control over their destiny rather than face being broken later on the Trokia’s rack.

As I said, I don’t have an answer here. I’ve long thought the technocrats underestimated the risk of democratic revolt. Those tail risks are bigger than you think! The European elites beat back that threat in Greece, but Italy may (stress may) prove to be different.

Not to mention Spain and Portugal…among others.  It has been said in the past by other economists that the Euro was a bad idea poorly implemented and not really thought through . I tend to agree. I also think that Merkel’s loyally to the banks and her conservative ideology has been laid bare to the German people through all of this. Not good for her or her party and I see no way she can come out looking good.

So what does this mean for us ? Well according Ives sources in hedge funds circles, happy days are here again. But we have seen this kind of denial and naive exuberance before from Wall Street and even the FED and Treasury under Bush.  Even in the late 1920s just before the market crashed. And we actually had a manufacturing base back then.

I could be wrong but I suspect an unraveling of the Eurozone would lay bare a lot of uncomfortable realities concerning these masters of finance both in Europe and here.


The Great American Reset

7:55 pm in Uncategorized by cmaukonen

Scrooge McDuck

There is a lot of talk of getting Paul Krugman as Treasury Secretary. As Dean Baker points out – ain’t gonna happen.

If Krugman were Treasury Secretary we could envision a policy that was focused on creating jobs rather than reducing a deficit that exists almost entirely because of the downturn in the economy.We could also envision a policy that sought to tame the bloated financial sector with a speculation tax that would make much of the creative finance on Wall Street unprofitable. And, we would not have to worry that cutting Social Security and Medicare is the top priority for the Obama administration.

But, Krugman is not on the short list for Treasury Secretary. This list has the names of people who are much more acceptable to Wall Street who, by the way, have been wrong on almost everything important about the economy in the last decade. As a result, we should be very very afraid.

And there is also talk of minting some damn coin to pay off the debt. That ain’t gonna happen either. Just like they keep hoping some bankers and Wall Street executives will do a perp walk. But liberals and progressives hold onto to such hopes like a late stage cancer patient does laetrile and massive doses of vitamin C.

You see none of this was the intention or agenda of Washington from the beginning. We can see that now with the re-inflating of the housing bubble. This time in the rental sector.

Some readers have been asking how one can reconcile positive signs in the housing market with declining rates of homeownership. Indeed, homeownership is falling at an even faster pace than during the 08-10 period….The explanation is that so far a great deal of net demand growth in housing has been in rental units. …This demand for rentals is in fact one of the factors supporting the housing market – for every renter there is a landlord who buys a home.

And as Matt Taibbi points out in his current column in Rolling Stone, it was all one gigantic scam. A lie of biblical proportions.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

It was never the intention of Washington to temporarily save the banks. The whole point was to continue on as if noting had happened. A giant reset button as it were. No fixes, no regulations, nothing. But everything back the way it was and continue this fascist, fraud that has been perpetrated on the American people. The whole thing was a scam. They lied about the health of the banks. They lied about the bail outs being temporary. They lied about the bonuses. Everything.

But this should not surprise anyone. As Oliver Stone points out in his series Untold History of the United States – and as anyone who has read anything by Howard Zinn would know – Washington has been lying to us all along. From the beginning of the industrial revolution at least.

All to keep Wall Street and corporate America in the green. The same fine folks who were supporting Nazi Germany, Fascist Italy and Franko’s Spanish armies with oil, weapons, steel and vehicles prior to and even after our entry into WWII.

There are those who think we have become fascist. Personally I think we always were. It’s just more obvious now and the propaganda more intense.

The Attack of The Blob – Wall Street’s invasion of Washington

12:19 pm in Uncategorized by cmaukonen

Citizens United - DonkeyHotey flickr

This is a review of Jeff Connaughton’s book Payoff: Why Wall Street Always Wins by Matt Stoller. An in-depth review of a look inside Washington and to a large extent, a take down of  more than a few democratic Senators — most notably Joe Biden. By reading this review one would get the impression of it being the work of a disgruntled ex-employee, the author seems to think that it’s is deeper than that. I really cannot do this justice and I am sure Matt Stoller has left out some of the juicier parts.

Telling stories of how Wall Street runs the show and how professional politicians on both sides of the isle make damn sure this does not change. That what you see on CSPAN is an act performed by even the most idealized of the Democratic Party to look as life like liberal as they can. In the theatre this is known as Verisimilitude or the appearance of truth.

The book begins with Jeff’s entry into politics and ends with his complete disillusion with it. The corruption and debasement of our democratic process for primarily the personal gain of those involved.   How attempts at financial reform were thwarted by even the most liberal of senators.

This is a great part of the book, where Connaughton explains the wider circle of influence. “Professional Democrats are not just lobbyists. The term applies to almost all Democrats in the legal, policy, foreign policy, and even national security worlds, each one of whom is trying to climb the greasy pole of power.” These well-paid bureaucrats pass from a public position to a private position, hoping that Team Blue or Team Red wins so they can increase their monetary and political value. But the status quo is paramount, and anything threatening that brings the two teams together (as does, well, cash). This dynamic is well-covered by sociologist Janine Wedel’s Shadow Elite as a core element of corrupt economic organizations, this is a narrative documentation of it.

 . . . . .


. . . . .

My favorite Senatorial reaction was from Dianne Feinstein. Dodd, knowing Brown-Kaufman was gaining strength but didn’t yet have enough votes to pass, called a snap vote. Connaughton wrote about the vote that “no one could confuse the issue, or so I thought. But, just before voting, Senator Dianne Feinstein (D-CA) – one of the most liberal members of the Senate — asked Durbin, the majority whip, “What’s this amendment?” According to Durbin, who later told Ted, he replied, “To break up the banks.” Giving the thumbs-down sign, Feinstein said bemusedly: “This is still America, isn’t it?”

The Blob incidentally refers to the Wall Street bankers and traders and lobbyists who call the shots.  Payoff will no doubt be thoroughly trashed and eviscerated by democratic loyalists who insist on looking at their party and politics in general through rose-colored glasses while taking heavy doses of Ecstasy. And as Matt Stoller says in his review here, Connaughton may even have a tough time getting employment selling used Yugos after laying down the gauntlet is this book.

However the insights given here are sure to create a stir assuming people decide to actually read the book. Denial can be a very powerful force and the truth very uncomfortable, regardless of where it comes from.

Wall Street’s Groupies…..

6:58 am in Uncategorized by cmaukonen

Wall Street Trekkers - flickr

Groupies. If you have ever been to a concert, you can spot them. They hang around the groups there. Wangle to get the best seats. First up with the autographs and defend them to the death. The groups music is always the best and the members can do no wrong.

Wall Street has it’s own groupies as well.  They play the market like they are part of the elites. Defend all that Wall Street does. The hang around them and wish they could be one of them but have not the talent or resources. The live in gated communities and drive imported cars and vacation just outside the Hamptons.

They are what Chris Hedges calls The Careerists..

These systems managers believe nothing. They have no loyalty. They are rootless. They do not think beyond their tiny, insignificant roles. They are blind and deaf. They are, at least regarding the great ideas and patterns of human civilization and history, utterly illiterate. And we churn them out of universities. Lawyers. Technocrats. Business majors. Financial managers. IT specialists. Consultants. Petroleum engineers. Positive psychologists.” Communications majors. Cadets. Sales representatives. Computer programmers. Men and women who know no history, know no ideas. They live and think in an intellectual vacuum, a world of stultifying minutia. They are T.S. Eliot’s “the hollow men,” “the stuffed men.” “Shape without form, shade without colour,” the poet wrote. “Paralysed force, gesture without motion.”

Like the musical groupies they have no creativity of their own. No imagination, compassion or passion. They are the Uriah Heeps of society.   The cockroaches, the maggots and the leaches. In the past they were the bourgeois and petite bourgeousie. The enablers and supporters of all that the elites did.

They really have no politics. Some are republicans ,some tea party,  some democrat. What ever suites their purpose at the time since all they really care about is furthering their own agendas.   They will be at the republican and democratic conventions cheering on their favorite performers.  Caring not one bit about what the lyrics say or whether or not they can actually play.

Just as long as they can keep their big fortified houses with their BMWs and indoor swimming pools. Shop at Whole Foods or Macys and attend self help seminars and focus on self actualization.

They will support Romney or Obama – whatever suits their fancy.

Cold War – Hot Profits

5:43 pm in Uncategorized by cmaukonen

"I've found the job where I fit best!" - Artist: George Roppe

Anyone who was here state side during WWII can tell you of the rationing that went on. Everything was rationed. From bread to tires. They can also tell you that no matter what industry you were in, you were doing defense work. WWII took this country from nearly 30% unemployment to 0 unemployment over night. New businesses formed overnight to meet the demands. Struggling businesses like Willys Motors became major contractors.

There were factories and corporations making each other’s products to meet the demand of the military. RCA, Stromberg Carlson, and Bendix all making the same radios. Willys and Ford made the Jeeps. Whole towns grew up from nothing to support new ship and arms factories. One could say that nearly every corporation became a wholly owned subsidiary of USA Inc. The technology of the time expanded at a breakneck pace and the war paid for nearly all of it.

When WWII came to an end in 1945 the so called Cold War against what was called Communism began as well as a new war to fight it. Korea and the cold war kept many of these plants humming right along. And new defense systems needed new advances which meant lots of dollars for research and development and nearly all of it paid for by Uncle Sam. Working for a defense contractor – and at that time nearly all the major corporations were defense contractors – meant you could get whatever new and necessary equipment you needed to advance your project. And a lot of this R&D made its way to the products that were sold to the general public as well.

Pretty sweet deal wouldn’t you say? Putting a good part of your research staff’s overhead on the government’s bill. And if the US military stopped being interested, you could also sell it to France or Egypt or Iran or Iraq or Israel or some South American country. And nearly every technical advance we saw had its origin or was advanced in some way through military material need – and I include NASA here . From television – improved for WWII, to computers – ENIAC for WWII became IBM.

Very few people complained about the merger of government and industry except President Eisenhower who used the euphemistic term Military Industrial Complex. Actually a form of codependency, where the US needed this arrangement just as much as industry did.

Reagan attempted to break it up after the fall of the Soviet Union but it was by then far to ingrained and in fact still flourishes as can be seen by this list of the top 20 contractors. Here is a PDF that goes into even greater detail.

And by what we have learned from Matt Taibbi and Yves Smith and others, this compact has been expanded to include the finance arena as well. With the Federal Reserve and Treasury’s union with Wall Street.

To look on this as separate entities to me seems just a but naive. We complain about the revolving door in Washington but to me it simply looks like intra-office advancement. Is it any wonder that there is little interest in Washington to change any of this ? That both parties like the idea of a corporate/government arrangement.

Lite Beer and the Segmentation of America

11:21 am in Uncategorized by cmaukonen

Lite Beer - Flickr Creative Commons

I am not a beer drinker. An neither were any of my parents. My father only really liked one brand in fact and rarely drink that much. I think this is a plus since Finnish people are more likely to go overboard on alcohol than most.

I did find this analysis by Kevin Horrigan in the Stl Today site on how we had a become segmented society all thanks to – not Wall Street – but Madison Av. That’s right the marketing people.

Before there was Lite Beer, there was just beer. There were a lot of different brands, but it was mostly the same: 12-ounce cans of lager or pilsner containing roughly 150 calories. You had to go far out of your way to find something different, like a Heineken or a Guinness.

One nation, one beer. Everyone watched the same TV shows and got their news from (you should pardon the expression) mainstream sources. There were rich people, sure, but they hadn’t yet begun to suck the marrow out of the middle class. The Vietnam War had been fought by enlisted men and draftees alike.

Then came Lite Beer from Miller, test marketed in Springfield, San Diego and Knoxville, Tenn. It was successful enough that Miller hired the advertising firm McCann-Erickson Worldwide to help roll it out nationwide. Pretty soon the “Tastes Great, Less Filling” campaign was everywhere. America’s common culture was doomed.

First came more light beers. And dark beers. And ice beers. And beer with fruit in it. The natural reaction to all of this terrible beer was craft beers and microbrews.

People no longer listened to rock music. They listened to soft rock, classic rock, metal, funk, punk, alternative rock, Christian rock. They listened to classic country and new country and alt country. They listened to R&B and urban and soul and hip-hop and rap.

Along with talk radio and specialty cable channels and focused news and on and on. We have become a nation of focus groups. It’s no longer “How does it play in Peoria”  but “How does it play in a particular suburb of Peoria, Atlanta, Indianapolis……”.  With data mining of all you do on the internet it has become more so and as Sam Smith points out this has permeated our politics as well. Quoting Sally Quinn of the Washington Post.


On the way home … I suddenly realized that this grotesque event signaled the end of power as we have known it. That dinner — which seemed to have more celebrities, clients and advertisers than journalists and politicians — was the tipping point.
Power in Washington used to be centered on the White House, the Congress, the Cabinet, the diplomatic corps and the journalists. Today, all of those groups depend on money for their very existence. The real power lies with the lobbyists, the money-raisers, the super PACs, the bundlers, the corporations and rich people.


That politicians have become nothing more than something to market. Like Lite Beer and Donuts and iPods. That the era of the states man and wise old men of Washington such as Clark Cliffard have been replaced by sound bites and celebrities.

These same bundlers that Sally refers to are the ones who sliced and diced corporate America and sold if off as pieces parts to the highest bidder on the Wall Street equivalent of ebay.

There was a time when most people were on more or less the same page. Now we are simply adds in some niche magazine to be exploited.   With our politicos merely hollow manikins marketed to us depending on the group involved.

Appearing as one icon to one group and a different icon to another.

Out causes and concerns also neatly managed and marketed as well. Be they environmental,  religious, social, economic or political.   Each with their own focus group.   More consumer than a culture. A Walmart nation with cheesy products and cheesy politicians. Willy Lomans in expensive suits.

Consumption! It’s the new national pastime. Fuck baseball, it’s consumption. The only true lasting American value that’s left – buying things! People spending money they don’t have on things they don’t need – MONEY THEY DON’T HAVE ON THINGS THEY DON’T NEED – so they can max out their credit cards and spend the rest of their lives paying 18% interest on something that cost 12.50! And they didn’t like it when they got it home anyway! – George Carlin

And we have bought it hook, line and sinker and have been sold up the river in the process.

How to Occupy Wall Street without tents.

12:00 pm in Uncategorized by cmaukonen

This video is going viral and I just love the concept. HA OWS _ Junk Mail.

Here is the link to the transcript.–Keep-Wall-Street-Occupied-Let-s-Help-This-Go-Viral-

OWS _ Junk Mail.

Eurozone and Greek financial crisis…Day 2

7:09 am in Uncategorized by cmaukonen

50 Drachmae - seriykotik1970

Hi Pups. Well here we go again and I bet you thought this was all taken care of. HA…silly you. But anyway here are the new links to the continuing stories and updates to this situation. From The Guardian and The Athens News.  The questions of the day are, Will the Syriza head Alexis Tsipras be able to form a coalition government and will Greece eventually leave the Eurozone ?

From the Guardian’s blog :

2.52pm: The global market rout of the past couple of days is continuing in America now Wall Street has opened.

The Dow Jones Industrial Average is down 106 points in early trading – another fall of almost 1% – and so there is no impetus for a recovery in Europe. The FTSE 100 is currently down 56 points or just over 1%, France’s Cac is 1.2% lower and Germany’s Dax is down 0.6%. The Athens market is getting off comparatively lightly, down just 0.25% but Spain is really feeling the pain – the Ibex is off 3.2%.

As well as the uncertainty over Greece – will it get a government? will it default on its debts? will it leave the euro? – the state of Spain’s banks is also causing concern to investors.

The Spanish goverment was expected to announce plans to support its banking system on Friday, but the country’s ABC newspaper is reporting [in Spanish] the bailout of Bankia – the third largest bank in Spain – could be announced this afternoon. The report says the government will convert the €4.5bn or so it has pumped into the bank into shares, giving it around 45% of the bank.

Read the rest of this entry →

Did Psychopaths Take Over Wall Street Asylum?: William D. Cohan

10:09 pm in Uncategorized by cmaukonen

Bloomberg is an interesting financial publication. Unlike the Wall Street Journal or the Financial Times,  Bloomberg will quite often have some of the more candid articles. Like this one by William D. Cohan reviewing the work of Clive R. Boddy  that corporations that once were steadfast and reasonable have been take over by those with psychopathic personalities only interested in their own personal gain.

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

As a result, Boddy argues in a recent issue of the Journal of Business Ethics, such people are “extraordinarily cold, much more calculating and ruthless towards others than most people are and therefore a menace to the companies they work for and to society.”

How do people with such obvious personality flaws make it to the top of seemingly successful corporations? Boddy says psychopaths take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.” Such circumstances allow them to ascend through a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders.”

Not just business but politics as well.

Until the last third of the 20th century, he writes, companies were mostly stable and slow to change. Lifetime employment was a reasonable expectation and people rose through the ranks.

This stable environment meant corporate psychopaths “would be noticeable and identifiable as undesirable managers because of their selfish egotistical personalities and other ethical defects.”

For Wall Street — a rapidly changing and highly dynamic corporate environment if there ever was one, especially when the firms transformed themselves from private partnerships into public companies with quarterly reporting requirements — the trouble started when these charmers made their way to corner offices of important financial institutions.

Then, according to Boddy’s “Corporate Psychopaths Theory of the Global Financial Crisis,” these men were “able to influence the moral climate of the whole organization” to wield “considerable power.”

They “largely caused the crisis” because their “single- minded pursuit of their own self-enrichment and self- aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

A number of them were also responsible for totally trashing the companies they took over and then sell off what was left. Like RCA and Westinghouse to name just two.  What is necessary not just for corporate America – but for anyone who may get into a position of power to make sure they have the emotional, mental and moral criteria to hold such power. I have also seen people of this type in University positions and even NGOs. Anywhere they can use their talents to rise to the top.

In closing his short essay, Boddy recognizes that the theory is relatively untested and would benefit from “further development and research” into the “personalities and moral reasoning aptitudes of the leaders” of the companies that got into serious trouble in the financial crisis.

In an e-mail correspondence with me, he said his article has been warmly received and has been downloaded 9,440 times in the past 90 days. “Apparently this is a lot for an academic article and it is more than the next four most-downloaded papers combined,” he wrote.

He also has a prescription for how to prevent psychopaths from getting into positions of power on Wall Street and elsewhere.

“Anyone who makes decisions that affect significant numbers of other people, concerning issues of corporate social responsibility or toxic waste, for example, or concerning mass financial markets or mass employment, should be screened to make sure that they are, at the very least, not psychopaths and at most are actually people who care about others,” he wrote.

Makes sense to me.

Makes sense to me as well.

Where in OWS are they ? The missing.

11:39 pm in Uncategorized by cmaukonen

“The real owners are the big wealthy business interests that control things and make all the important decisions. Forget the politicians, they’re an irrelevancy. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the statehouses, the city halls. They’ve got the judges in their back pockets. And they own all the big media companies, so that they control just about all of the news and information you hear. They’ve got you by the balls. They spend billions of dollars every year lobbying ­ lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else.” - George Carlin

As one lady put it on an episode of Bill Mahr “You cannot separate class from race in America.  The preponderance of black people in this country are disproportionately poor.”  Not only that those in power – those with the money – do not care about those who are poor. And in fact they hate the very idea of those much less well of than them getting anything from the government IE taxes that they pay. Especially those who are minorities.  And it really does not matter one bit what they call themselves politically either.

But it’s not just those who we refer to as the 1% who are responsible. They have lap dogs to do their bidding as well.  The so called professionals. The doctors and lawyers and executives and college professors and engineers and software house computer programmers etc. All very OK with the systems the way it is. All perfectly willing to support and kiss the rear ends of these 1%.

How many of them do we see at OWS ? What Ward Churchill called “Little Eichmanns” .  These people are just as responsible as their masters for the injustice and inequality since they are willing to support it for their own personal agendas.   To many call themselves liberal but are in name only.  All too willing to through those who they feel are beneath them under the bus so long as their 401Ks do not take a hit and their corporate masters keep them on until retirement.  People are calling what we have an Oligarchy.  I prefer to call it tyranny of the rich.

When I see these people out there with the unemployed and homeless and poor, then I will see something really positive. Until such time, these corporate lap dogs are as much the enemy as their CEO bosses.