Friday, October 30, 2009


(Michael Jackson's Thriller)

Sing Along:

It's Midnight this late October night and the night is full of Banksters and Politicos, Lurking in the Dark.
Under The Moonlight, You See A Sight That Almost Stops Your Heart.
You Try To Scream, But Terror Takes The Sound Before You Make It.
Debt Markets Start To Freeze, As Horror Looks You Right Between The Eyes,
Your Paralyzed

You Hear The Door Slam, And Realize There's Nowhere Left To Run.
You Feel The Cold Take Hold, And Wonder If You'll See a Bear Run
You Close Your Eyes, And Hope That This Is Just Imagination,
But All The While, You Hear The Bailout Ghouls Creepin' Up Behind
You're Out Of Time

They're Out to Get You, There's Demons Closing In On Every Side.
They Will Possess You, Unless You Change The Number On Your Skype.
Now Is the Time for You and Your Trading Quants to huddle Close Together
All Thru The Night, It'll Save You From The Terror On The Reuter Screen,
It'll Make You See:

(narrated by Vincent Price)
Darkness Falls Across The Land, The Asian Trading Day Is Close At Hand.
Bottom Feeders Crawl In Search Of Blood To Foreclose on Your Neighborhood
And Whosoever Shall Be Found Without The Soul For Economic Bust
Must Stand And Face The Hounds Of Subprime Hell, And Rot Inside AIG's Bankrupt Shell.

The Foulest Stench Is In The Air The Funk Of 700 Billion Bailout Bucks
And Shortselling Ghouls From Every Trading Room Are Closing In To Seal Your Doom
And Though You Fight To Stay Alive Your Net Worth Starts To Shiver
For No Investing Mortal Can Resist The Evil Of The TARP Bailout Thriller

'Cause this Is Thriller, TARP Bailout make or break Night
and No-ones Gonna Save You from the Beast about to Strike.
You Know its Thriller, TARP Bailout Thriller Night
You're fighting for Your Monetary Life inside a Killer, Thriller.

Thriller, TARP Bailout Night
'Cause I can thrill you More Than Any Market Ghoul Could ever try. (Thriller, Bailout Night)
So Let Me Hold You Tight And Share A Killer, Chiller, Fiscal Massacre
Thriller Here Tonight.

'Cause this Is Thrille,TARP Bailout Thriller night
It Will Thrill You More Than Any Ghoul Could ever dare try
Any Ghoul could ever Dare Try

Monday, October 26, 2009


BANZAI7 NEWS--Hank Greenberg, who built the American International Group into a systemic hydrogen bomb sitting on top of an impenetrable maze of on- and offshore companies, is at it again.

Even as he has been lambasting the government for its handling of A.I.G. after its near collapse, Mr. Greenberg has been quietly building up a family of insurance companies that could compete with the blackhole known as A.I.G.

Greenberg is reportedly disappointed that his previous systemic Frankenstein did not take the whole system down last September and wants another go.


BANZAI7 NEWS--Forbes reports, despite a year of high-minded rhetoric, President Obama has actually changed almost nothing--aside from cutting a few bankers' pay--about America's financial system. For better or worse, Congress again takes up the issue this week. But don't expect much to happen until the Democrats charged with moving the ball synchronize their efforts to craft new legislation.

The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type a given text, such as a comprehensive package of legislation reforming the financial services industry.

Thursday, October 22, 2009


BANZAI7 NEWS--"People want to work here, but they want to be paid fairly," said Scott Silvestri, Bank of America's spokesman, who defended the bank's pay practices, saying it has strived to align shareholder interests with compensation.

Silvestri said Feinberg's rulings will put Bank of America at a competitive disadvantage with competitors who are not under the thumb of the pay czar -- and that the bank's employees are already being lured away.

Mr. Silvestri is absolutely right that overpaid investment banking employees might be lured away.

Perhaps this the promising start of a "shadow bust up."


Eugene Robinson, Washington Post

"Deregulation allowed the financial marketplace to devolve from an institution that served the overall economy -- by allocating capital most efficiently to the companies that could put it to best use -- into an institution whose primary mission was to serve itself.

The vast over-the-counter trade in instruments known as derivatives, nominally worth a staggering $600 trillion worldwide, is largely an exercise in make-believe. Firms make highly leveraged investments in exotic securities whose true value is opaque. Then they hedge these investments by buying insurance against potential losses, although the insurer doesn't have a fraction of the money it would need to make good on all its promises.

All this investing and hedging generate huge transaction fees and big profits, which can be skimmed off the top each year. Everything's fine, until there's some disruption in the real economy -- a downturn in the housing market, say. If the disruption is severe enough, the web of make-believe deals starts to unravel. At which point the government steps in and bails everybody out."


BANZAI7 NEWS--American International Group Inc.’s highest paid executives in the unit blamed for pushing the insurer to the brink of collapse haven’t returned bonuses as they’d promised, according to the Obama administration.

Four of five managers in AIG’s Financial Products unit that are under the jurisdiction of pay master Kenneth Feinberg didn’t make good on pledges to return the bonuses as of August, Feinberg said in documents released today. The fifth employee hadn’t made any promise, Feinberg said.

American International Group Inc. Chief Executive Officer Robert Benmush sought to assure reneging employees they won’t be forced by the Obama administration to return salary they’ve already collected.

Pay master Kenneth Feinberg “specifically has advised us that he is not requiring any retroactive salary adjustments,” Benmush said in a memo to staff yesterday.

Whew! Thats a relief.

How about this:

The Chamber of Nigerian scam artists has pledged to return all proceeds received from email campaigns. Somali pirates have also pledged to return ransom proceeds received in the past 6 months.


BANZAI7--U.S. Senator John McDouchebag has introduced legislation that would block the U.S. Federal Communications Commission from creating new net neutrality rules, on the same day that the FCC took the first step toward doing so.

McDouchebag on Thursday introduced the Internet Freedom Act, which would keep the FCC from enacting rules prohibiting broadband providers from selectively blocking or slowing Internet content and applications. Net neutrality rules would create "onerous federal regulation," McDouche said in a written statement.

The FCC on Thursday voted to begin a rulemaking process to formalize net neutrality rules. The rules, as proposed, would allow Web users to run the legal applications and access the legal Web sites of their choice. Providers could use "reasonable" network management to reduce congestion and maintain quality of service, but the rules would require them to be transparent with consumers about their efforts.

McDouche, an Arizona Republican, called the proposed net neutrality rules a "government takeover" of the Internet that will stifle innovation and depress an "already anemic" job market in the U.S.


Douche Lord: Someone who is such a Douche bag that douche bag doesn't sufficiently describe their level of douchebaggery.
(Source: Urban Dictionary)


BANZAI7 NEWS--A new lawsuit alleges that convicted swindler Bernie Madoff financed a cocaine-fueled work environment and a "culture of sexual deviance". Apparently, Madoff's office was called the North Pole, which lends a whole new meaning to the phrase "Snow Job."


This is recommended reading from Nomi Prins who is a former Goldman Sachs MD. The main point to be taken is that Wall Street has availed itself of Trillions of dollars of Federal largess in TARPISTAN. TARP is one component of the overall scheme (see chart). In today's news we see that the Federal pay czar is chopping executive comp at the bailout basket cases that were unable to pay back their TARP injections. But this is a limited subset of the banks that continue to populate the FEDERAL REPUBLIC OF TARPISTAN. Banks that will be doling out billions in December. Banks like Goldman Squid.



Imagine a couple living in a three-bedroom house outside the Twin Cities. Call them Joe and Katie Hazzard. The Hazzards own a small off-track-betting (OTB) business and have some investments and a mortgage on their house. But business is terrible (no one has extra money to make bets); Katie recently lost her job; their investments have hemorrhaged value; and they can't make their mortgage, car or credit card payments. So they ask their local bank for a loan. "No dice," says the bank. "We can't give you money to pay your debts because you're no longer a good credit risk for us." That's more or less what happened to the banks last fall: they couldn't and wouldn't lend to one another.

So the Hazzards go to the Federal Bailout Bank, which says, "Here's some money. Do with it what you want, and someday down the road, if and when you're out of the woods, you'll have to pay us back with a little bit of interest." That's roughly what the $700 billion TARP was: a direct injection of capital to purchase preferred shares, which is really more like extending a loan than making the investment the government said it was, with some very light strings attached.

But then Joe says that the handout isn't enough. It turns out that not only does he own a gambling business; he has a bit of a gambling habit. Joe made big money in previous years betting on the New England Patriots to win the Super Bowl and figured he couldn't go wrong placing the same wager again. But then Tom Brady injured his knee last year, and Joe got creamed. Inveterate gambler that he is, he's doubled down on the Patriots this year, but he won't be paid off (if, that is, the Patriots win) until later in the year. But Joe has a boatload of outstanding gambling debts he needs to pay now.

So the Federal Bailout Bank decides it'll help out. To cover the truly pressing debts (the bookie is about to send over some goons with baseball bats), the bank will just write a check. That's what the Fed did to back the losses of AIG's credit default swaps and other businesses, and what the Fed and Treasury did together by providing protection to Citigroup in the event that more of its toxic assets lost value. The money--$1.4 trillion--was structured as a loan, but it's a bit unclear how it will ever be paid back.

Here is the link:

Her new book, It Takes a Pillage, looks like a must read.


I believe in jobless recoveries.

I believe the DOW is undervalued at 10,000

I believe Timmy Geithner and Larry Summers are not Wall Street bag men.

I believe that American Banks are trying to help distressed homeowners get out of debt.

I believe that Wall Street firms still put women on pedestals.

I believe that credit default swaps are critical risk management tools best left unregulated.

I believe in unfettered free markets and financial self regulation.

I believe the Dotcom business model.

I believe in moron hazard.

I believe Glen Beck actually cries on camera.

I believe everything on Fox News and CNBC.

I believe the Heene family are being targeted by the Helium Balloon Lobby.

I believe Twitter will make money sooner than Facebook.

I believe ATM machines are smarter than bank tellers.

I believe Congress is not a corrupt racketeering enterprise.

I believe the LTCM blow up was an unexpected Black Swan event.

I believe hedge funds are transparent and better left unregulated.

I believe Chinese goods are safe and environmentally friendly.

I believe Sarah Palin is safe and environmentally friendly.

I believe Rush Limbaugh is widely misunderstood.

I believe the GOP will rise up and reclaim its rightful title as the party of idiots, sexual deviants and bigots.

I believe the Health Insurance Industry has America's best interests at heart.

I believe private inequity is the best way to restructure efficient businesses.

I believe markets police fraud.

I believe Bernie Madoff.

I believe Ivan Boesky was framed.

I believe flash orders, insider trading and high frequency trading are good for Wall Street.

I believe that Alan Greenspan is a wise economic sage.

I believe the Jints will meet the Jets in this year's Superbowl.

I believe bankers are underpaid and under appreciated.

I believe Dick Fuld was framed by naked aliens disguised as naked short sellers.

I believe AIG will pay it all back.

I believe 2 big 2 fail means 2 dumb 2 know better.

I believe Hank Paulsen never had a conflict of interest.

I believe everything Lloyd Blankfein says. Really I do.

I believe JP Morgan is a perpetual hall of Saints.

I believe that whats good for Goldman Bozos is good for Goldman Bozos.

I believe Wall Street will make sure Ronald Reagan finally does succeed in making America what it once was...



BANZAI7 OPINION--I thought AIG's latest Emergency CEO Robert Beanmush was the biggest tone deaf douche bag swinging around Wall Street these days. Watching Goldman Squid's performance this past week, I am having second thoughts.

The Right Dishonorable Lord Griffiths' (Vice Chairman of Goldman Squid International) remarked:'We have to accept that inequality is a way of achieving greater opportunity and prosperity for all'. This jolly good fellow just might be the new King of Wall Street douche bags.

Not a very savy thing to say in the middle a popular backlash.

There is so much being written and produced about Goldman Squid at this moment you would think that the marching orders would be to lie low instead of low lie.

Here are two more intriguing writings


Sooner or later, the Financial Crisis Inquiry Commission, created by Congress to investigate the causes of the recent and ongoing financial crisis, will no doubt examine the technical aspect of the financial collapse — low interest rates, credit default swaps, derivatives, cheap mortgages that ballooned and other factors that almost wrecked the global economy.

Probably among the many things the commission members will not do, however, is read “The Origins of Totalitarianism,” the 1951 book by the German-born political theorist Hannah Arendt, which at first glance would seem to be utterly detached from a crisis that took place more than three decades after the author’s death.


The prospect of Goldman Sachs awarding record bonuses in the wake of the financial collapse has the potential to incite a broad-based populist backlash, argues Martin Sieff. He explores how Wall Street has roused the public's ire in much the same way as did war profiteers in 1920s Weimar Germany.

But, like the folks at Monkey Business Blog, this is my favorite piece of scholarly economic punditry:

Wednesday, October 21, 2009


BANZAI7 NEWS--If your wondering while crude oil prices have doubled since last Winter, despite a huge fall off in demand, here is a view published in Business Week:


"It's been reported widely this year, starting with Der Spiegel's article on July 28, that the excess liquidity put into the system by central banks worldwide, money that was supposed to be put into consumer and business loans, has once again been used for speculation and quick paper profits in stocks and commodities, including oil.

As Washington irony goes, this is a new high-water mark: They've printed money to save our financial institutions, claiming it's there to stimulate a recovery. Yet much of that newly minted money is being used against consumers and small business owners. The money that's supposed to save them in new loans is instead increasing their energy costs through speculation, to the point of devaluing corporate earnings and personal incomes and prohibiting other purchases.

The sad truth is that if oil costs have more than doubled during a period when so little economic growth was taking place, you have to wonder how high the oil market will rise next year, when a real recovery has the chance of taking hold. In that statement lies the fact that this recovery will be stopped again."


BANZAI7 NEWS--Morgan Stanley might be back in the black, but its latest results demonstrate the earnings gap remains wide with rival Goldman Sachs Group Inc.

The biggest realignment of Wall Street since the Great Depression has caused both investment banks to pursue very different structures--and that's caused a rift between their results. For instance, Morgan Stanley posted a profit of $757 million during the third quarter while Goldman secured $3.19 billion.

Morgan Stanley has chosen to be cautious about the risks it takes with its own money, and diversify through the recent deal to take a controlling stake in Citigroup Inc. (C) brokerage Smith Barney.

Goldman revved up risk and cashed in on trading distressed debt and other markets, raking up blockbuster profits.

WB7: The difference between MS and the Goldman Squid Gang, Morgan Stanley gets it.


FELIX SALMAN REUTERS: The secret Paulson-Goldman meeting wasn’t the only time that Hank Paulson treated his buddies at Goldman Sachs especially well while at Treasury. In fact, it wasn’t the only time he did so before he got the now-famous waiver.

A bit further on in the Sorkin book, while Paulson is trying to work out what should be done with an imploding Lehman Brothers, we find this:

If all that weren’t enough to deal with, [Lehman president Bart] McDade had just had a baffling conversation with [CEO Dick] Fuld, who informed him that Paulson had called him directly to suggest that the firm open up its books to Goldman Sachs. The way Fuld described it, Goldman was effectively advising Treasury. Paulson was also demanding a thorough review of Lehman’s confidential numbers, courtesy of Goldman Sachs.

McDade, though never much of a Goldman conspiracy theorist, found Fuld’s report discomfiting, but moments later was on the phone with Harvey Schwartz, Goldman’s head of capital markets. “I’m following up at Hank’s request,” he began.

After another perplexing conversation, McDade walked down the hall and told Alex Kirk to immediately call Schwartz at Goldman, instructing him to set up a meeting and getting them to sign a confidentiality agreement.

“This is coming directly from Paulson,” he explained.

In many ways, this is worse than Paulson’s meeting with Goldman’s board: in this case, Paulson is forcing Lehman to open its books fully to a direct competitor, for no obvious reason. And in this case it’s not at all obvious that Paulson got a sign off from Treasury’s general counsel before doing so.

WB7--Watch the Goldman Sting video, we don't make these things up.

Frontline on Derivatives Wild West

BANZAI7 OPINION--This report by Frontline details how Messrs Greenspan, Rubin, Geithner and Summers spearheaded the regulatory void that led to the meltdown. If this does not get your blood boiling, take your checkbook and write a check covering your life savings payable to Wall Street USA.

Forget about Goldman Sachs' bonus bonanza, why is D-O-U-C-H-E-B-A-G Larry Summers President Obama's chief economic advisor? Why, why, why, why.........

Frontline – The Warning: Who Knew About the Looming Financial Crisis?

Posted using ShareThis


Tuesday, October 20, 2009


MOTHER JONES--According to a new book on the financial meltdown by New York Times reporter Andrew Ross Sorkin, in June 2008, Paulson, who was the chairman of Goldman Sachs before joining the Bush administration, held a secret meeting in Moscow with the board of directors of his former employer. The problem for Paulson—then and possibly now—was that after he had been nominated in 2006 to the Treasury post he had signed an ethics letter vowing to stay clear of potential conflicts of interest with Goldman Sachs and promising not to take any action that might affect the firm's ability to cover his multimillion-dollar pension.

As Sorkin recounts the episode, Paulson and the Goldman Sachs board happened to be in Moscow at the same time. Learning of this coincidence, Paulson asked his chief of staff, Jim Wilkinson, to set up a meeting. Wilkinson was not happy about this. "For fuck's sake!" he thought, according to Sorkin. Paulson told him that the meeting could be considered a social gathering, but as Wilkinson worked out the details with the Goldman Sachs crowd, he asked that the session remain confidential. And the event was not placed on Paulson's official calendar.

When Paulson and the firm's execs got together at the Moscow Marriott Grand Hotel, the Treasury secretary gave the Goldman Sachs crew his read on what was happening with the economy and his department's effort to prepare for handling failed banks. He also previewed for them an important speech he would soon deliver. That is, he privately shared his views on matters of direct interest to his old firm. And as Sorkin points out, Paulson had at this point never provided such a briefing to any other company (except for once "briefly dropping by" a cocktail party for the board of BlackRock).

In September 2008, as the economy imploded, Paulson obtained an ethics waiver that would permit him to deal with Goldman Sachs. But at the time of the Moscow meeting, he was still covered by his original ethics agreement.


BANZAI7 NEWS--U.S. Treasury Secretary Timothy Geithner said on Tuesday it is "deeply offensive" to the public that financial firms recently on the brink of failure are able to pay massive bonuses to their executives.

Talk is cheap Timmy boy.


BANZAI7 NEWS--Bumper payouts to bankers should be seen as part of a longer term investment in London's economy, the vice chairman of Goldman Sachs International told a debate on ethics at St Paul's Cathedral on Tuesday.

Defending lavish bonuses expected at the U.S. investment bank, Brian Griffiths said he was not "ashamed" of his bank's compensation package, which has inflamed the bonuses debate.

The British public should "tolerate the inequality as a way to achieve greater prosperity for all" Griffiths said at the public meeting examining what role morality should play in the marketplace.

Griffiths said that if bonuses were capped the industry's highest fliers would leave London's financial services sector for other countries.

WB7: Like Libya, North Korea, Zimbabwe or Frankfurt.

Brian Griffiths:

Post Script:

Boris Johnson the Mayor of London wrote in the Telegraph:

London real estate agents cannot believe the wheelbarrows of dosh that are suddenly crashing through their doors. Savills says the number of buyers from the financial services sector has risen by 48 per cent in the third quarter of this year, purely in the expectation of yet another ginormous Christmas bonus.

A knuckle-cracking realtor in Knight Frank's Kensington office says he has never seen anything like it: email after email from the boys and girls at Goldman Sachs. ''We did our first Goldman's deal in June,'' he tells the Financial Times, ''and we are now doing five times as many for its employees as for any other bank.''

How can they pretend the world hasn't changed? What blindness, what deafness, what Asperger's afflicts them? The banking sector now stands in a completely different relation to the wider public. Their interests, and the interests of the community, have been intertwined by state intervention, and they need to show they understand that.

WB7: Looks like the Goldman Bankers in London have taken Squid Blankfart's order to maintain a low profile straight to their local real estate brokers.


“People say I’m old-fashioned and banks can no longer be separated from nonbank activity,” Paul Volcker said, acknowledging criticism that he is nostalgic for an earlier era. “That argument,” he added ruefully, “brought us to where we are today.”



The Federal Reserve announced Tuesday that it had named Patrick M. Parkinson, an expert on financial markets, to be the director of its division of banking supervision and regulation.

Mr. Parkinson, is an economist who has been with the Fed since 1980.

“As an economist with deep expertise in financial markets, Pat Parkinson will be an important asset at a time when we are focusing on a multidisciplinary approach to banking supervision and regulation,” the Fed’s chairman, Ben S. Bernanke, said in a statement.

Zero Hedge Blog reports this example of Mr. Parkinson's astute economic "sight of the board."

Testimony of Patrick Parkinson
Deputy Director, Division of Research and Statistics
Commodity Futures Modernization Act of 2000
Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate

September 8, 2005

The Federal Reserve Board believes that the CFMA has unquestionably been a successful piece of legislation. Most important, as recommended by the President’s Working Group on Financial Markets in its 1999 report, it excluded transactions between institutions and other eligible counterparties in over-the-counter financial derivatives and foreign currency from regulation under the Commodity Exchange Act (CEA).

As the Working Group argued, regulation of such transactions under the CEA was unnecessary to achieve the act’s principal objectives of deterring market manipulation and protecting investors.

Such transactions are not readily susceptible to manipulation and eligible counterparties can and should be expected to protect themselves against fraud and counterparty credit losses.

Exclusion of these transactions resolved long-standing concerns that a court might find that the CEA applied to these transactions, thereby making them legally unenforceable. At the same time, the CFMA modernized the regulation of U.S. futures exchanges, replacing a one-size-fits-all approach to regulation with an approach that recognizes that the regulatory regime necessary and appropriate to achieve the objectives of the CEA depends on the nature of the underlying assets traded and the capabilities of market participants. Together, these provisions of the CFMA have made our financial system and our economy more flexible and resilient by facilitating the transfer and dispersion of risk. Consequently, the Board believes that major amendments to the regulatory framework established by the CFMA are unnecessary and unwise.


At least Mr. Parkinson is not a former employee of Goldman Sachs.


Adam "Agarn" Storch, the 29 year old former Goldman Sachs Vice President who will be the role of the SEC's new COO of Enforcement, was chief derivative signature fraud verifier at Goldman Sachs.

He certainly did a good job verifying AIG's signatures.


BANZAI7 NEWS--How much debt can an industrialized country carry before it ravages its economy and ts

The question looms large in the United States, as a surging budget deficit pushes government debt to almost 50 percent of gross domestic product, and in Europe and developing Asian nations like India. But it looms even larger in Japan.

Gross public debt mushroomed during years of stimulus spending on expensive dams and roads, and this year it passed 187 percent of Japan’s economy.

That debt could soon reach twice the size of the $5 trillion economy — by far the highest debt-to-G.D.P. ratio in recent memory — and the biggest, in real terms, the world has seen. Japan’s outstanding debt is as big as the economies of Britain, France and Germany combined.

Now, a new government that promises an ambitious social agenda is set to issue more debt this year than Japan has ever issued in a single year.

(Source NYT)

“The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger,” said Daisuke Uno at Sumitomo Mitsui, a unit of Japan’s third- biggest bank. “The dollar’s fall won’t stop until there’s a change to the global currency system.”

No wonder the Dollar can't gain on the yen. We keep doing what they do.


BANZAI7 NEWS--Reuters reports a $29 billion trail from the Federal Reserve's bailout of Wall Street investment bank Bear Stearns ends in a partially deserted shopping center on a bleak spot on the south side of Oklahoma City.

The Fed now owns the Crossroads Mall, a sprawling shopping complex at the junction of Interstate highways 244 and 35, complete with an oil well pumping crude in the car park -- except the Fed does not own the mineral rights.

Noah Diggs, who had just successfully concluded a search for work here as a shop assistant, was surprised and somewhat alarmed to learn the U.S. central bank now owned the property.

"That is a bad thing, right?" he said, surveying the empty parking lot on a rainy morning in early October.

Who will buy the oil?


BANZAI7 NEWS--It's not every day the Federal Aviation Administration and the Securities and Exchange Commission has to consider the flight of a silver UFO-looking helium balloon.

"This is unusual," acknowledges Mike the spokesman for the FAA in Washington state, which opened an investigation into the two-hour balloon flight in FAA-monitored airspace. "But we investigate any air incident. The investigation is solely focusing on if we had any violations of our regulatory authority or regulations."

The Securities and Exchange Commission also announced it has also issued a Wells Notice that it intends to recommend that enforcement proceedings be commenced against the Heene family based on allegations of fraudulent and misleading statements and "puffing".


BANZAI7 NEWS--California sued State Street Bank and Trust today for allegedly committing "unconscionable fraud" against the state's two largest public pension funds, and seeks more than $200 million in overcharges and penalties.

Atty. Gen. Jerry Brown contends that the Boston investment banking firm overcharged the California Public Employees Retirement System and the California State Teachers Retirement System by about $50 million for the costs of carrying out foreign currency trades since 2001.

With treble damages and penalties, the suit seeks more than $200 million.

"Over a period of eight years, State Street bankers committed unconscionable fraud by misappropriating millions of dollars that rightfully belonged to California's public pension funds," Brown said in a statement. "This is just the latest example of how clever financial traders violate laws and rip off the public trust."

Its raining thieves...


BANZAI7 NEWS-- President Obama will resume his role as top Democratic fund-raiser in New York on Tuesday, but one group may be conspicuous in its absence.

The Times’s David Kirkpatrick reports that, of the roughly 200 donors attending the event Mr. Obama will headline for the Democratic National Committee, only about a half dozen or so will be from the financial firms that received federal bailout money.

WB7: The best way for the President to generate support for the Democratic party would be to publicly renounce contributions from Wall Street.


Monday, October 19, 2009


BANZAI7 NEWS--German police are investigating a chilli sauce to determine whether it was so spicy that it was capable of causing grievous bodily harm when used in an attack.

Police took a sample of the sauce from a kebab stand in Bremen's central train station after a kebab salesman threw it into the eyes of a customer during a fight over napkins.

"Legally, the question of whether the spiciness of the kebab sauce constituted 'normal' or grievous bodily harm must be addressed," local police in the northern city said on Friday. It is also illegal to use Thai Chili as an additive in hot dog sauce."


BANZAI7 NEWS--The U.S. Chamber of Commerce on Monday said that a press release declaring the group had dropped its opposition to climate change legislation was a hoax.

The fake press release, which declared the Chamber had done an "about-face on climate policy" following the defection of prominent members, was briefly picked up by Reuters and several other media organizations.

But the Chamber sent out a counter-release setting the record straight.

"Acorning undermines our genuine effort to obfuscate the challenge of climate change," spokesman Thomas Call-no-more said. "These irresponsible tactics are a foolish distraction from the serious effort by the Chamber to induce digestive gases."

He said the group would call for law enforcement to investigate.

In related media news, the Bogota Chamber of Columbian Hookers and the Association of Caucasian Street Pimps announced that they have asked law enforcement officials to investigate the duo recently responsible for impersonating a white super fly pimp and Columbian hooker in national Acorn offices.


October 19, 2009

U.S. Chamber of Commerce Announces Free Enterprise Survival Strategy
Internal Conflict Resolves in Commitment To Long-Term Prosperity

WASHINGTON, D.C.-The U.S. Chamber of Commerce is throwing its weight behind strong climate legislation, a spokesman for Chamber President Tom J. Donohue announced today at the National Press Club.

"We believe that strong climate legislation is the best way to ensure American innovation, create jobs, and make sure the U.S. and the world are on track to reduce global carbon emissions, and to provide for the needs of the American business community for generations to come," said the spokesman, Hingo Sembra.

The new position is an about-face on climate policy for the Chamber, which previously lobbied against government action. The shift comes after the defection of several prominent members of the Chamber, including PG&E, Apple, PNM Resources, and Exelon.

"We believe the Kerry-Boxer Clean Energy Jobs and American Power Act is a good start towards strong legislation," noted Sembra, adding that such legislation "should include a stiff carbon tax and correspondingly strong incentives for industries we wish to foster."

"A carbon tax means less need for legislating by Congress, a surer business environment for companies, and a simpler, competition-friendly mechanism for reducing carbon than the bill's current cap-and-trade approach," said Sembra.

The Chamber announced an immediate moratorium on lobbying and publicity work opposing climate legislation.


SEEKING ALPHA--"Visualize a car engine. When there is enough motor oil, the pistons are firing up and down rapidly and the system runs efficiently. When the oil dries up, the engine begins to deteriorate. It’ll go for a little while longer. And it’ll become much more violent and volatile each time it fires. Invariably the engine seizes up and fails.

What we see in many aspects of the system right now are pistons that are firing violently. First a crash in the stock market. Then trillions in bailouts. Then an historic and massive stock market swing in the other direction. We see individuals speaking out in public, on the airwaves and on personal blogs en masse about one topic or another. Whether it is rep-on-Obama or dem-on-Bush bashing, there are extreme levels of divisiveness and heated, sometimes violent clashes. The system is moving into extreme peaks and troughs at a much more rapid pace now than anytime in the last 50 or more years.

We are in the opening stages of the Greatest Depression, a term coined by Trends Forecast founder Gerald Celente. The next stage, as Mr. Celente has said, will be “like nothing we've ever seen in our life time.”

Go to:


BANZAI7 NEWS--Fraud is increasing twice as fast in financial services as in other sectors, with North America particularly hit hard by the financial crisis, a survey of senior executives released on Monday shows.

Kroll, a risk consulting and security unit of Marsh & McLennan Cos, said 53 percent of financial services respondents reported a higher level of fraud, compared with only 27 percent in other industries.

The survey was conducted by a unit of The Economist Group, which publishes the magazine The Economist.

SWEET CHARITY: WALL STREET STYLE (God Bless the Philanthropist)

BANZAI7 NEWS--Morgan Stanley and Goldman Squid, used to duking it out in the financial markets, are now vying in the area of charity.

Goldman last week said it had donated $200 million to the Goldman Squid Foundation, its charitable arm, in what was widely seen as an effort to help quell public outrage over its growing bonus pool.

Morgan Stanley, traditionally Goldman's closest Wall Street rival, on Monday unveiled its latest charity initiative -- one aimed at feeding hungry children around the world.

"Let us throw the most favorable light on the situation. As it is easy to be generous with other people's money...[a Wall Street banker's ill gotten fortune], may sometimes constitute a gift, which one of these great capitalists turns over, with loud report, to a University or theological seminary, or to some other charity. He hands it over as a sort of conscience fund, to give him a fresh start in more Wall Street enterprise of the same kind, and the world looks on and says: "This is indeed true charity, God bless the philanthropist!"

Perhaps that very night, while an old lady was sobbing by her little cot, the fortune which she and her husband had toiled so long and hard to earn, flashed in the tiara of diamonds from the head of a rich banker's wife at the opening of the Metropolitan Grand Opera--diamonds, wondrously beautiful, dazzlingly brilliant, crystalized human tears. If you could go around that row of parterre boxes and write the history of all those pearls and all those rubies and all those diamonds, it would compose a tragedy that would make your heart bleed.

What an enchanting scene is the opening night of the Metropolitan Grand Opera!"

Franklyn C. Keyes, Esq. 1902


BANZAI7 NEWS WATCH--Renown Financial News Publication "New York Post" reports that Steve Schwarzman's mighty Flintstone buyout firm is having a tough time raising money for a new leveraged buyout fee fund, according to people familiar with the matter.

Sources tell The Post that despite hopes of raising a fund as large as $20 billion or more, Flintstone's tally thus far has reached at most $9 billion since fundraising began in early 2008. Seven billion dollars of that was achieved by July 2008. While in one sense the slow going represents an embarrassment for the high-profile Schwarzman and his private-equity firm, it's also a hit to Flintstone's bottom line, because the bigger a fund is, the more money it collects on fees and commissions from profits.

WB7: In this environment, if you ain't got fees, what you got? LBOs?

Schwarzman's got be licking his chops over Goldman Squid's moves. After all, $9 Billion is mere chump change compared to the coin the Squid boys have been moving up and down the NY/DC corridor since last September. Blankfart sucked that much out of Hank Paulsen in a caphalopodic nanosecond.

Schwarzman thought he was the Master of the Universe, but the Squid boys are Masters of Disaster.


BANZAI7 NEWS--Last week the House Financial Services Committee passed the Over the Counter Derivatives Market Act of 2009. Michael Greenberger, a University of Maryland law professor and an expert in derivatives, criticized the House bill. “While I know there was a good-faith effort to improve the regulation, the plain language of the legislation can only be read as a Christmas tree of decorative gifts to the banking industry,” he said. “And this is being done when people acknowledge the unregulated O.T.C. derivatives market was a principal reason for the meltdown.”

Here is the Bill:
Over-the-Counter Derivatives Markets Act of 2009
Unless you want to do serious damage to your frontal cortex, don't try to read it.

This political football is on its way to the House Agricultural Committee where committee scientists will attempt to ascertain if it can be used as a biofuel substitute instead of pig feed.

For some reason the Banking Lobby still hates it. They want to keep as much as possible unstandardised and off exchange. Why? To maximize their "edge" of course. In this case "edge" means ability to charge exorbitant fees and ability to trade in an opaque OTC haze. Here's how they are stirring a panic. By telling derivative purchasers like airlines, refineries, manufacturers with foreign currency and interest rate exposure and, oh yes, AIG, that the new rules would require them to put up collateral (so called "margin")to cover their counterparty liability. Something that Hank Paulsen and Ben Bernanke forced Uncle Sam to do on behalf of AIG last year.

Need we say more?


"Public officials "if in league with market manipulators and speculating in Wall Street should be compelled by law to forfeit the office which they thus prostitute to private gain."
Franklin C. Keyes 1902

BANZAI7 NEWS--Money Morning reports: Financial disclosure forms revealed last week that some of U.S. Treasury Secretary Timmy Geithner's closest aides earned millions of dollars a year working for top Wall Street firms.

That finding alone would not likely be enough to cast doubt over Geithner's ability to take the lead in reforming the financial system. But this isn't the first time the Treasury Secretary has come under fire for maintaining close ties with Wall Street, while failing to look out for the interest of the average American.

Indeed, disclosure of Geithner's phone records showed that the Treasury Secretary has had Wall Street firms on speed dial for the duration of the crisis, and a government watchdog group recently blamed him more than any other government official for the oversized bonuses that were paid out to financial firms that received taxpayer bailouts.

Together, these revelations have undermined confidence in Geithner's ability to be a dynamic force in pushing for the financial regulatory reform he's promised

The advisors who came under scrutiny last week included Lewis Alexander, a former chief economist at Citigroup Inc., Mark Patterson, a former lobbyist for Goldman Squid Inc. (NYSE: GS), and Matthew Kabaker, who earnings millions of dollars at private equity firm Flintstone Group LP.

Because these advisors work as so-called consiglieri, they don’t require Sydicate confirmation, yet they still help oversee the $700 billion banking bailout and influence financial regulatory reform, including limits on executive pay.

Critics, including those in President Obama’s own cabinet, contend that this presents a conflict of interest. (WB7: How can that be?)

"The influence of money and lobbies on Washington has reached a shameful level,” Paul Volcker, chairman of the newly formed Economic Recovery Advisory Board, told the financial daily Il Sole 24 Ore. “Not to mention the fact that, since many Treasury nominees have not been confirmed by Congress, Geithner is surrounded by private advisors. Eight months into the new administration, the Treasury does not yet have a staff of [its own] officials. And this raises the question of using informal advisors who come from Wall Street. It should not happen."

Note: Other high level financial positions held in the Obama administration by former Goldman Sachs executives are Neel Kashkari, heading the TARP bailout; Mark Patterson, Chief of Staff for Treasury Secretary Timothy Geithner; Gary Gensler, top executive at the Commodity Futures Trading Commission; and finally Goldman has its top lobbyist, Michael Paese, Rep. Barney Frank's top aide, who is the chair of the House Financial Services Committee.


BANZAI7 NEWS--A high-profile sex abuse case that was set to start Monday against Delaware's Catholic Diocese of Wilmington and a former priest will be delayed after the church filed for moral bankruptcy protection.

The moral bankruptcy filing late Sunday automatically delays the case in Kent County Mother Superior Court, the first of eight consecutive abuse trials scheduled in Delaware.

"This is a painful decision, one that I had hoped and prayed I would never have to make," said the Rev. W. Francis Malooney, the bishop of the diocese, on the diocese's Blog.

Malooney said the decision was made "after careful consideration and after consultation with my close advisers and counselors" and that he believed "we have no other choice." He said "filing for Chapter 11 offers the best opportunity, given finite resources, to re-screw victims of sexual abuse by priests of our Diocese."

Sunday, October 18, 2009


BANZAI7 OPINION--By now most of you are no doubt aware of the Galleon insider trading bust that hit the news on Friday. "Insider trading" is a pernicious activity and it is good that the Feds are being vigilant about it. So we can all feast on the tabloid news that will be generated by this sensational bust.

However, as we watch Wall Street basking and luxuriating in the billions and billions and billions of dollars of trading profits financed by the United States Treasury, there are broader issues to ponder.

Insider trading is just one characteristic of a larger phenomena, playing on an opaque and slanted playing field, better known as "edge" or "gaming the system."

Trading on non-public "inside" information is a patently illegal activity that is as old as the book. But it is just one manifestation of "trading with an edge." Trading with an edge goes on on Wall Street 24/7. Its the only real game to play. What do I mean by edge? Its simple. I know something you don't know and I use it to my advantage.

Is that a crime. Not necessarily, provided I have not paid a kick back to some inside "tipper" to get an illegal tip. But it points to the real game of "gaming the system".

Gaming the system is where the action is. There are so many ways to game the system you could write 20 books. Guess what, there are already 10,000 books and there are new ones being written as you read. That's American capitalism.

Some people speculate, they blindly follow the herd. They put their money down and watch the wheel spin. Those are the suckers who always lose to the house.

Other people, like good old Warren Buffet, spend their time doing hard research, finding bargain investments and earning their money the old fashioned way. But as we now all know, even Warren loses a billion or two. There is plenty of research to show that there is no such thing as "Alpha". In the long run, nobody beats the market, except Bernie boy.

So that leaves gaming the system as the only viable alternative. Now if you want to make billions and billions and billions (and billions) of dollars of trading profits day in and day out. You better have a good game. You can read the papers and hear about the game every day: "high frequency trading", naked shorting, technical arbitrage, credit default swaps, synthetic CDOs, synthetic CDOs (squared), unlocking value, SIVs, dark pools, asset montisation, shadow banking, TARP, TALF...yadda yadda yadda.

You may need to be a squid egg head to know how to play the game. But you don't need a college degree to understand what is really going on. In order to thrive on Wall Street, you must trade with an edge. There are many ways to get the edge and houses like Goldman Squid and JP Morgan obviously have their fair share of it. Even good old Warren now knows where to put his money, Goldman Squid.

GOOD FOR THEM! America is beautiful for Wall Street's captains of capitalism.

But let them get it fair and square. Not through political cronyism, influence peddling, backroom deals, technical convolution, opacity, Enroning and all other manner of investor predation and financial depredation. If they can't do it fair and square then there is really no difference between what they do and what Bernie Madoff did and what Mr. Billionaire Rajanumnum has apparently been doing until early Friday morning.

So here we are reading the pundits as they harangue about Wall Street's scandalous bailout encore performance and watching Congressman Barney numb nuts attempt to pass Swiss cheese disguised as financial reform legislation for President Obama.

The bank lobby industrial complex is having a field day and the foxes will not give up the chicken coop without a fight.

It is just not good enough.

Americans are suffering. They are getting fired, foreclosed, hosed, snowed and egg rolled.

How much of this is it gonna take before someone, like our beloved President or perhaps even you Mr., Mrs. and Ms. reader, finally says:

I am sick and tired and I'm not gonna take it any more!

In 1902, Franklin Keyes, a prominent Wall Street lawyer once said: "Wall Street speculation fosters a ring of idle gamblers, parasites upon society, who prey upon the fortunes of the honest and industrious; such people are a menace to the legitimate business interests of the country and an element of danger to the republic."


BLOOMBERG NEWS--Every weekday at 8:35 a.m., Galleon Group's 70 analysts, portfolio managers and traders pack into a conference room on the 34th floor of the IBM Building, a gray- green polished granite skyscraper on New York's Madison Avenue. Tardy arrivals are fined $25.

At the head of the table, Chief Executive Officer Raj Rajaratnam fires off questions to the staff of his $3.7 billion hedge fund firm: Which companies' margins are peaking? What would change your mind about this stock? What's the risk of that company failing to win an expected contract? The 52-year-old billionaire expects his analysts to have an edge: better information than anyone else, say people who have attended the meetings.

U.S. prosecutors allege that Rajaratnam's own edge was illegal.

Coming soon: "The Ghost of Franklin Keyes"


BANZAI7 NEWS--Shoppers in a Wisconsin grocery store got an unexpected surprise when a 125-pound black bear wandered inside and headed straight for the beer cooler.

The bear stopped Thursday night at Marketplace Foods in Hayward, about 140 miles northeast of Minneapolis, sauntering through the automatic doors and heading straight for the liquor department.

It calmly climbed up 12 feet onto a shelf in the beer cooler and sipped brewskies for about an hour while employees helped evacuate customers and summoned a taxi to drive the bear home.


United States Securities and Exchange Commission
100 F Street
N.E.. Washington, DC 20549-9303

The Securities and Exchange Commission tapped Goldman Sachs Group Inc. executive Adam Storch on Friday to serve as the agency's first-ever chief operating officer of the enforcement division.

Larry Storch played Corporal Agarn in F Troop.

SEC Motto: Where the Hakowie?



Saturday, October 17, 2009



BANZAI7 NEWS--Billionaire Hedge Fund Manager Raj Birdienumnum has been nominated to receive the Ivan Boesky Award for Excellence on Wall Street. Birdienumnum was apparently aided and abetted by former Bear Stearns executives who spread best practices following the demise of their former employer.


Friday, October 16, 2009


BANZAI7 NEWS--Harvard University, the world’s richest school, paid almost $500 million to investment banks to escape interest-rate swaps that backfired, according to the school’s annual report released today.

Harvard paid $497.6 million during the fiscal year ended June 30 to get out of $1.1 billion of interest-rate swaps intended to hedge variable-rate debt for capital projects, the report said. The university in Cambridge, Massachusetts, said it also agreed to pay $425 million over 30 to 40 years to offset an additional $764 million in swaps.

Q:What does this have to do with us lowly non-harvard graduates?

A: President Obama's chief economic advisor Larry Summers

During Summers' presidency at Harvard, the University entered into a series totaling US$3.52 billion of interest rate swaps, financial derivatives that can be used for either hedging or speculation. By late 2008, those positions had lost approximately $1 billion in value. This forced Harvard to borrow significant sums in distressed market conditions to meet margin calls on the swaps. The decision to enter into the swap positions has been attributed to Summers and has been termed a "massive interest-rate gamble" that ended badly. (Source Wikipedia)

As Treasury Secretary to Bill Clinton, Larry Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act): "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Summers said. "This historic legislation will better enable American companies to compete in the new economy."

Many critics, including President Barack Obama, have suggested the 2007 subprime mortgage financial crisis was caused by the partial repeal of the 1933 Glass-Steagall Act.

Larry Summers:

I am saddened to have to ask is this question. Is there anyone on President Obama's crack economic team who is not tarnished with Wall Street poop?


BANZAI7 NEWS--A 29 year old Goldman Sachs executive has been named the first chief operating officer of the Securities and Exchange Commission's enforcement division.

The market watchdog agency said Friday that Adam Storch (pronounced like d-o-r-k), vice president in Goldman Sachs' Business Intelligence Group, is assuming the new position of managing executive of the SEC division. His job at Goldman was checking to see if contracts might be fraudulent. This means he was the guy making sure Joe Cassano actually initialed the last page of all those credit default swaps with AIG.

The announcement came as the president's chief economic adviser, Lawrence ("Douche Bag") Summers, visited New York and said Wall Street has a "duty" to accept regulatory reform and Washington has a duty to hire ex-Goldman Sachs executives."

Obviously, this is the only person the world who qualifies for this job. Are these people as tone deaf as Robert Beanmush? This guy was playing GI Joe with his sisters Barbie dolls when Bernie Madoff was busy learning how to fabricate client statements on his Atari 600. No doubt, Dork's start date will shortly follow Goldman Sachs' 2009 bonus pay day.

Does anyone know if Storch's position at Goldman has been filled?


These are rather interesting photos. Two defeated, but larger than life men.


BANZAI7 NEWS--Calvin Trillin wrote a cute Op Ed for the NYT this week. The subject was how Wall Street went wrong. His suggestion, the "smart guys" suddenly arrived on the street and the good old dummies running the banks were too dumb to understand the new financial technology, except that it made loads of kwan.

Here is WilliamBanzai7’s explanation. Three events coincided to create the perfect financial storm on Wall Street,

(1) the collapse of the Soviet block obviated the need for physicists in the “Star Wars” program,

(2) the advent of personal computing and

(3) the release of the movie “Revenge of the Nerds”.

"The Nerds sold me naked!!!"

The rest is history.


NY POST--"It's been a steep drop for former Merrill Lynch chairman and CEO Stanley O'Neal, who was ousted in 2007 after his company had amassed a big portfolio of toxic mortgages. O'Neal, who used to fly in corporate jets or in first class, was spotted Wednesday sitting with the budget travelers in coach on a Northwest Airlines flight returning from a drug deal in West Palm Beach to LaGuardia."


BANZAI7 NEWS-To facilitate Lloyd Blankfein's call for transparency, is launching the Goldman Project, an ongoing attempt to track and publicize the multi-million second homes, $50,000 cars, $500 bottles of wine, and ostentatious living that Uncle Sam is subsidizing.


"And we need your help: Are you Facebook friends with a Goldmanite who just posted photos of his lavish bachelor party? Post them to our fancy new tag page, #GoldmanProject, or e-mail them to us. Are you a realtor who just sold a $4 million duplex a Goldman banker? Is your ex-boyfriend Goldman banker planning a year-end trip to Cabo to blow his bonus wad? Shoot us an e-mail. Likewise, if you catch any references to Goldman employees living large in the media, post them to #GoldmanProject to keep a running clipfile."


BANZAI7 NNEWS--The 6-year-old Colorado boy thought to have floated off in a giant mylar bubble has raised questions whether it might have been a family stunt to draw attention to the latest financial bubble.

During a live interview on CNBC, Falcon Heene said he heard his Dad yelling that the DOW hit 10,000 as he hid in the rafters of their garage. At the time, there was a frantic effort by the FED to deflate the bubble safely.

Falcon's father asked, "Why didn't you come out?" The boy answered, "You had said we needed to show the world how all bubbles must burst."

Thursday, October 15, 2009


BANZAI7 NEWS--Businesses that received federal contracts from stimulus spending reported creating or saving about 30,000 jobs, according to figures released Thursday.

Not surprisingly, the reports also suggest that the program has been particularly beneficial for the Washington region.

Washington has also benefited from a boom in banking, healthcare and anti-environmental lobbyng.


(Happy Days Are here Again, Milton Ager)

So long sad times
go long bad times
Wall Street's rid of you at last
howdy gay times
cloudy gray times
you are now a thing of the past

Happy DOW is here again
the skies downtown are clear again
so let's sing a song of cheer again
happy DOW is here again

All together shout it now
there's no one
who can doubt it now
so let's tell the world about it now
happy Dow is here again

Wall Street's cares and troubles are gone
there'll be more bonus loot from now on
from now on

happy DOW is here again
the skies downtown are so clear again
so let's sing a song of cheer again
happy times
happy nights
happy days
are here again!


BANZAI7 NEWS--Alan Greenspam at the Institute of Inflatable Love Dolls said:

“If they’re too big to fail, they’re too big.”


BANZAI7 NEWS--Mother Jones Magazine Reports: A day after Mother Jones exposed the US Chamber of Commerce's inflated membership number, the Chamber quietly backed off the figure in its public statements. At a Washington press conference Wednesday morning unveiling the Chamber's Campaign for Free Enterprise, Chamber officials repeatedly cited a membership of 300,000. That's a tenth as many members as the Chamber claimed a day earlier, when a press release for the Washington event said the Chamber represented "more than 3 million businesses and organizations of every size, sector, and region."

And, yes Thomas Donahue:

What Was Cooking at AIG FP?

BANZAI7: The FT reports that AIG’s “retention bonuses” went to hundreds of employees in the insurer’s troubled financial products unit, including a kitchen assistant who received $7,700 in March, a US government report will reveal on Wednesday.



BANZAI7 NEWS--Despite the Dow hitting 10,000 and hopes for an economic recovery, the third quarter shows that the foreclosure plague is still spreading.

Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter.

"They were the worst three months of all time," said RealtyTrac spokesman Rick Sharga.

Is the economy doing what the DOW tells you it is doing? What does your gut say?


BANZAI7 NEWS--Bruce Wasserstein died last night at the age of 61.

This was a banker who earned his pay. He was a staunch advocate of quality over quantity. His model was lean and mean. You will not find his name associated with the Subprime fiasco or the excess associated with supermarket banking.


Many will speak of what Mr. Wasserstein did.

Here is what he did not do:

He didn’t try to build a monolithic giant in pursuit of personal vanity.

He didn’t lie to his shareholders.

He didn’t try to game the system.

He didn’t need and didn’t ask for a handout.

He didn’t whine.

He did what he loved to do, not what he would do to make a fast buck.

He didn’t live long enough.

That’s quite a list that few of the other captains of Wall Street can match.

Condolences to Mr. Wasserstein’s family.

Wednesday, October 14, 2009


BANZAI7 NEWS--Is it time to start pondering Uncle Sam's coming Minsky moment?

"A Minsky moment is the point in a credit cycle or business cycle when investors have cash flow problems due to spiraling debt they have incurred in order to finance speculative investments. At this point, a major sell off begins due to the fact that no counterparty can be found to bid at the high asking prices previously quoted, leading to a sudden and precipitous collapse in market clearing asset prices and a sharp drop in market liquidity."
(Source: Wikipedia)

Time to break out Minsky's paper again. Hmmm, haven't read it since Spring 2008.


(Spinning Wheel, Blood, Sweat & Tears)

What goes up must come down
Bloated asset bubbles got to spin around
Talking about coming trouble it's a crying sin
Ride a leveraged pony
Let the asset bubbles spin

You got lots of paper profits, and you, you got a paper profit home
Spinning asset bubbles, get your broker on the phone
Forget about your troubles and you, you never learn
Ride a leveraged pony
let the spinning markets burn

Did you find a directing sign
on the old subprime highway?
Would you mind a financial reflecting sign
Just let it shine within your mind
And show you the colors that are real

Minsky's next moment is waiting just for you
Ponzi finance scheming is spinning true
Drop all your troubles, by the river side
Catch a leveraged pony
On the spinning asset bubble ride

Something is waiting just for you
Ponzi finance wheel is spinning true
Drop all your troubles, by the river side
Ride a leveraged pony
Let the asset bubbles fly


BANZAI7 NEWS--One of Hong Kong’s largest developers announced Wednesday that it had sold the worlds skinniest apartment for 439 million Hong Kong dollars, setting a record, just hours after the city’s chief executive warned that the city could be facing a real estate bubble.

The developer of the "Conduit Road 39" building in Hong Kong announced that a 6,158-square-foot duplex apartment in the building has sold for $56.5 million.

The deal, valued at the equivalent of $56.6 million, set a record price per square foot for Hong Kong, and the developer, Henderson Land, said it was not aware of a higher figure’s having been paid anywhere else in the milky way.


Reuters Reports: Las Vegas Sands (LVS.N), which is seeking to raise up to $2.5 billion by listing its Macau assets on the Hong Kong stock exchange, could launch its initial public offering by late November, the South China Morning Post reported on Wednesday.

The issue would follow Wynn Macau's (1128.HK) successful market debut last week, which showed that appetite for leverage bloated gambling stocks was strong despite over ripe valuations.

This time is different....



CNN-Since being named AIG's chief executive in August, Robert Benmosche's brashness has unnerved board members and raised the ire of Congress.

According to numerous news reports, Benmosche has done everything from requesting corporate jets for personal use to saying he was prepared to tell Congress to "stick it where the sun don't shine."

"We call that chutzpah," said Rep. Brad Sherman, D-Calif. "He's determined that the federal government will continue to shovel money at him, his counterparties and shareholders. But why would we allow that?"

Unidentified board members spoke to Wall Street Journal reporters early last month, saying that Benmosche had overstepped his bounds and AIG Chairman Harvey Golub would have to rein him in.


BANZAI7 NEWS--The U.S. health-care overhaul that emerged yesterday from the Senate Finance Committee after a month-long debate won support from every health industry group except insurers, who said the failure to require all Americans to get coverage will drive up premiums.


BANZAI7 NEWS-- Joe Nocera NYT reports: “There has not been a case made that there is an enforcement problem with banks,” Edward Yingling, the head of the American Bankers Association, said last week. “There is a problem with enforcement on nonbanks.”

The following documents are linked in Nocera's NYT article.

J.P. Morgan Chase Sub Prime Flyer

And Ladies and Gentlemen, Ed Yingling:


BANZAI7 NEWS-NYT reports the following email exchange between two Bank of America Directors at a Board Meeting to discuss the Merrill acquisition.

“Unfortunately it’s screw the shareholders!!” Charles K. Gifford wrote to a fellow director in an e-mail exchange that took place during the call.

“No trail,” Thomas May, that director, reminded him, an apparent reference to the inadvisability of leaving an e-mail thread of their conversation.

Here are 60 Second Wall Street Lawyer's Board Meeting Email Tips: How to avoid Andrew Cuomo's key word filter.

Avoid the words: Holy Shit, God help us, Screw the public, You did what?, Get Barney Frank on the line, Its not enough, We're indemnified, D&O Insurance, bonus buttload, Delaware law, douche bag.


Use fewer than five zeros when describing corporate losses: Example: 5,000 instead of 50,000,000,000,000

Stay away from extra punctuation: (-$$$$$$$$$$$), %@#*!!!!!!!

Don't use this toll free number: 1-800-BAIL OUT

Stay away from anything with a sexual or pharmaceutical reference: Example: We're f%$cked, What's Lewis been smoking?

Don't use: As will be seen on CNBC

Avoid phrases like 50% off, deep discount or "free" when describing company assets

Avoid the phrases: For your eyes only, delete after reading or this can't be possible

Avoid misspellings which may indicate a state of disbelief and shock: Kan they sew me?

Follow all laws pertaining to text messaging in limousines.