Inspiring, Up-and-Coming Politician Cheats On Wife. In Other News, Dog Bites Man.

Drudge is pimping some idiotic story about how Obama had an affair with one of his staffers back in 2004.  True?  Probably.  Do I give a shit?  I would have a hard time caring less.  I have my own reasons for disliking Obama: the health care “reform” bill; letting Timmeh and Larry Summers near the levers of power; the joke of a financial “reform” package that he’s pushing; opening up offshore drilling (nice timing BTW!); etc. etc. etc.  In all honesty, if this cheating story turns out to be true, I might have a little more respect for him – at least I’ll know that he’s not a complete zero.

People are flawed, in fact pretty much everybody is completely fucked up in one way or another.  It’s human nature, it’s always been that way, and it will always be that way – not a goddamn thing we can do to change it.  But there are things that, as a society we can do to make lives better.  For example, I’m all for a broad social safety net, and I think that Social Security and Medicare are, for the most part good programs.

But there is one function of government that it even more important: standing against the forces of oligarchy and their attempts to skim, steal, or otherwise plunder the national wealth.  Teddy Roosevelt knew that, so did Franklin Roosevelt.  But for decades, the United States has not had anybody pulling the levers of political power on behalf of the real lower and middle classes – which I define as about the bottom 95% of the income distribution.  Instead, the goal of the political elites has been to increase the “financialization” of the economy – which is just a cute term for blowing debt-financed asset bubbles and increasing household leverage (aka debt).

Have no illusions, that is real and vicious class warfare against the poor and the middle class.  While what’s been going on is obvious to those paying attention, Wall Street’s utter contempt for real people now has been put to paper (or pixel) in an angry little screed that’s making the rounds on Wall Street:

We are Wall Street. It’s our job to make money. Whether it’s a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn’t matter. We would trade baseball cards if it were profitable. I didn’t hear America complaining when the market was roaring to 14,000 and everyone’s 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I’ve never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.

Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are.

Go ahead and continue to take us down, but you’re only going to hurt yourselves. What’s going to happen when we can’t find jobs on the Street anymore? Guess what: We’re going to take yours. We get up at 5am & work till 10pm or later. We’re used to not getting up to pee when we have a position. We don’t take an hour or more for a lunch break. We don’t demand a union. We don’t retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we’ll eat that.

For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We’re going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I’ll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.

So now that we’re going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we’re going to stop buying the new 80k car, we aren’t going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We’re going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.

The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it’s really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.

We aren’t dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply…will he? and will they?

This isn’t some trader “going rogue,” these guys actually believe this shit.  Read, and then re-read this email, it’s all here, the “we work so much harder than you mentality,” “we make your summers off and landscape businesses possible,” “we push up the value of your 401k,” the fundamental misunderstanding of what real people make, I mean seriously, does anyone get double time and a half?  In the real world 85k is a hell of a lot of money, or at least it would be if serial killer Alan Greenspan hadn’t caused household debt levels to spike to unheard of levels.  That’s what made Wall Street’s go-go years possible.  Robert Reich get’s to the heart of the problem:

The paper entrepreneurs are winning out over the product entrepreneurs.

Paper entrepreneurs — trained in law, finance, accountancy — manipulate complex systems of rules and numbers. They innovate by using the systems in novel ways: establishing joint ventures, consortiums, holding companies, mutual funds; finding companies to acquire, “white knights” to be acquired by, commodity futures to invest in, tax shelters to hide in; engaging in proxy fights, tender offers, antitrust suits, stock splits, spinoffs, divestitures; buying and selling notes, bonds, convertible debentures, sinking-fund debentures; obtaining government subsidies, loan guarantees, tax breaks, contracts, licenses, quottas, price supports, bailouts; going private, going public, going bankrupt.

Product entrepreneurs — engineers, inventors, production managers, marketers, owners of small businesses — produce goods and services people want. They innovate by creating better products at less cost.

Our economic system needs both. Paper entrepreneurs ensure that capital is allocated efficienctly among product enrepreneurs. But paper entrepreneurs do not directly enlarge the economic pie. They only arrange and divide the slices. They provide nothing of tangible use. For an economy to maintain its health, entrepreneurial rewards should flow primarily to product, not paper.

And our public policy, for decades, has been committed to ensuring that the pushers of paper, not the developers of products, are not only able, but actually entitled to skim an increasing percentage of the income and wealth of the nation. Not only is the government failing in its most fundamental role of stopping this, it has been enabling and actively encouraging it for decades.  Take a look at this chart which shows that the profits of the financial sector versus the non-financial sector began diverging in the mid-80s, accelerated radically around 2000, crashed back to Earth during 2008, and under Obama’s guidance, spiked back up during 2009.

It is fundamentally backward.  Finance serves one, and only one, purpose and that is to allocate capital in the real economy.  But protecting the finance industry, and encouraging people to leverage themselves and increase household debt levels has become an end in itself, as if there is no real economy, just pushing debt around.  Hey, here’s an $8,000 tax credit so you can overpay for some piece of shit exurban tract house! Praise be consumer credit is finally ticking upward!

So to help the banks, the government encourages as much household debt as possible, but then turns around and doubly fucks us when things go bad.  We have to make it a huge and expensive pain in the ass for consumers to discharge their debt is bankruptcy because otherwise it would be bad for the finance companies!  Much better to allow them to garnish 25% of the wages to pay off the collection companies, even if the supposed “debt” was (miraculously) discharged in bankruptcy, or, hell, never existed in the first place!

Despite owning Congress, getting absolutely every legislative and regulatory blow job possible for 3 decades, these guys pitch a hissy fit at even the most trivial and ultimately useless attempt to reign in some of the worst abuses. I mean, Jesus fucking Christ, if there was any justice in this country 90%+ of the executives on Wall Street would be sitting in prison sleeping with one eye open, but instead we get weak tea “reform” proposals, and another wholesale screw job for the bottom 95% of the income distribution.

With Obama as President (or Bush I and II, Clinton, and Reagan for that matter) you don’t need to imagine what it’s like to live in a banana republic ruled by a handful of oligarchs.  You’re living it.

Slightly Updated

Lloyd, You’re Confusing “America” And “Goldman Sachs” Again

Charles Wilson, the President of General Motors once famously said during congressional hearings that, as Secretary of Defense, he would be able to make a decision adverse to the interests of GM but that such a situation was virtually inconceivable “because for years I thought what was good for the country was good for General Motors and vice versa”.  For decades, Charles Wilson has stood alone as the Platonic ideal of corporate whores and douchebags who have no compunction about plundering the public and the Treasury to serve their corporate ends, because, well, hey if it’s good for us, it’s good for the America.

I doubt I could ever be mistaken for a “fan” of Lloyd Blankfein – If anyone ever put him out of our misery, I’d probably go piss on his grave – but it is hard to deny that this guy has a level of narcissism and grandiosity that is virtually unparalleled, even by Charles Wilson.  Take this comment:

Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker “doing God’s work”

Sarcasm? Hardly, this was an unintended – or perhaps fully intended – bit of honesty.  In other words, fuck you all, I’m touched by god, and will do whatever the fuck I want – sort of a “family” of the financial world.  Because of that, there is nothing surprising about this series of douchetastic calls that Blankfein made to various Goldman clients:

Lloyd Blankfein on Wednesday attacked the Securities & Exchange Commission’s fraud charges in telephone calls to ­clients as Goldman escalated its campaign to stem the damage to the bank’s reputation.

One person who received a call from the Goldman chief said he was told the regulator’s case against the bank was politically motivated and would ultimately “hurt America”

Goldman doesn’t need to consider whether it’s lost its way, or maybe went too far on this trade, it’s unpossible!  It was a Goldman-organized trade and that’s all you need to know, and any attack on the trade is ipso facto an unfair attack on Goldman and therefore an attack on America itself.  I’m surprised he didn’t call the SEC “traitors.”  These guys are so demented, so evil, so disconnected from the reality that they are bad for America – and the World – that there is simply no way to deal with them other than by taking away all their money, and throwing them in a pen.

And, that, would be good for America,

Arrogant Cocksucker Says Half-Wit Cocksuckers Deserve A Break

Stephen A. Schwarzman pukes forth some self-serving and idiotic drivel all over the pages of the Washington Post asserting that Lawmakers’ rush to punish banks threatens recovery.  Well, golly, gee Steve, if you say so it must be true!  Yves Smith over at Naked Capitalism does the world a service by dissecting this garbage so I won’t have to.  My favorite part of her post details her first encounter with Steve-o some 25 years ago:

But what did we get when we presented the idea to Peterson and Schwarzman? We explained why we came to see them. We got 40 minutes (I kid you not, I checked my watch) of name-dropping by Peterson, of all the senior folks he knew in our client’s country. But that wasn’t why our client came to see him; had he bothered to listen, the matter at hand was in the US.

Then he and Schwarzman spent the next 20 minutes talking about Blackstone, and they make it abundantly clear how jealous they were of leveraged buyout king Henry Kravis (at the time, Peterson and Schwarzman were mere advisor types, their looting wealth creating opportunities were far more limited than if they had oddles of investor and bank money to play with).

So in effect, they spent an hour telling us that they really wanted to be doing LBOs, that was SO much better paid than M&A, they wanted to grow up to be Henry Kravis, but since they hadn’t raised the money to do that yet, then yeah, our client’s deal might be worth their while in the interim.

Classic, absolutely classic.  This asshole really is just the walking embodiment of the me-first, client-second entitlement mentality that defines our financial overlords.  But the best thing about Schwarzman’s take is that he’s essentially begging for a return to the good-ole-days of looting followed by bailouts.  And why not?  The bailouts have been a boon to his firm Blackrock:

BlackRock Inc., the biggest publicly traded U.S. money manager, will get at least $71 million in the first year of contracts to oversee assets previously owned by Bear Stearns Cos. and American International Group Inc.

BlackRock is set to receive $45.3 million this year for running the Maiden Lane holdings that the Federal Reserve took over from Bear Stearns, based on contract terms released by the New York Fed. The company will get $25.5 million to manage the Maiden Lane II and Maiden Lane III investments that the Fed purchased from AIG.

I mean, hell, the bailouts of AIG and Bear Stearns have been an absolute cash cow for Blackrock.  Owned by the New York Fed – Thanks Timmeh! – so the “client” doesn’t give a shit if the “assets” are managed properly, and no questions asked about the fees.  What could be better?

This asshole has no reason not to want banks to fail, not to want bailouts, not to want as much off-balance sheet bullshit and high-risk shenanigans as possible.  It’s good for Blackrock’s business!

Rather than give this compromised prick prime real estate in one of the U.S.A.’s papers of record to spout his self-serving nonsense, he should be dragged out of his office and thrown in a guillotine, or at least sent to Guantanamo Bay with Blankfein and Dimon.

Obama Doesn’t “Begrudge” Bankster Bonuses – I Would Like to See Them Suffer Repeated Prison Rape

Always the diplomat and apparently worried that banksters are feeling “buyers remorse” about their purchase of the Democratic Party lock, stock, barrel, Obama has come riding to the defense of Jamie Dimon’s 17 million dollar bonus and Lloyd Blankfein’s 9 million dollar bonus:

Q Let’s talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?

THE PRESIDENT: Well, look, first of all, I know both those guys. They’re very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That’s part of the free market system. I do think that the compensation packages that we’ve seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.

Q Seventeen million dollars is a lot for Main Street to stomach.

THE PRESIDENT: Listen, $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don’t get to the World Series either. So I’m shocked by that as well. I guess the main principle we want to promote is a simple principle of “say on pay,” that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay. The other thing we do think is the more that pay comes in the form of stock that requires proven performance over a certain period of time as opposed to quarterly earnings is a fairer way of measuring CEOs’ success and ultimately will make the performance of American businesses better.

Well, thanks, fucko.

These cocksuckers brought the economy to its knees and have ladled debt onto the middle class to a level unheard of in history.  They are the reason people can’t buy.  They are the reason the economy is in the toilet.  They are the fucking reason that businesses (small businesses, natch!) are dying by the bushel.

I say, instead of giving them multi-million dollar bonuses, they should be sent to Guantanamo Bay.  If you compare the damage done to the global economy by the “financial services” industry relative to the terrorists that knocked down the Twin Towers, it’s not even close.  Even in terms of lost lives, I’d be willing to bet we’ll see well more than 3,000 “excess deaths” from the millions that have lost or will lose their health insurance because of the Dimon/Blankfein depression.

Keep Guantanamo Bay open, let the terrorists go, and make Blankfein and Dimon new prisoners #1 and #2.

My candidate for prisoner #3 is whatever genius came up with this idea:

Credit specialists at Citi are considering launching the first derivatives intended to pay out in the event of a financial crisis. The firm has drawn up plans for a tradable liquidity index, known as the CLX, on which products could be structured that allow buyers to hedge a spike in funding costs.

****

However, there is concern from academic circles that the counterparty risks involved in such a product could create moral hazard.  Chris Rogers, chair of statistical science at Cambridge University, said the only participants able to sell CLX-based products would probably be those who are too big to fail.

Who’s the counterparty, you ask?  It’s pretty much guaranteed to be governments, central banks, and taxpayers all over the world.  Talk about a sophisticated looting instrument!

Motherfuckers.

Wednesday, February 10, 2010 // Citigroup Plans “Crisis Derivatives” Proving that it has learned nothing from the arrogance of Chuck Prince and Citi’s subsequent demise, Citi plans crisis derivatives. Credit specialists at Citi are considering launching the first derivatives intended to pay out in the event of a financial crisis. The firm has drawn up plans for a tradable liquidity index, known as the CLX, on which products could be structured that allow buyers to hedge a spike in funding costs. Like the untraded US rates liquidity index (USRLI), the CLX is constructed as a sum of the Sharpe ratio – deviations from the mean divided by volatility – of various market factors, such as equity volatilities, Treasury rates, swap spreads, corporate bond swaption-implied volatilities, and structured credit spreads. Citi will make the CLX tradable by using fixed historical values for the mean and volatility parameters, eliminating the need for costly recomputation from lengthy time series. Although the design of the index serves as a proxy measure for liquidity, Terry Benzschawel, a managing director of quantitative credit trading strategy at Citi in New York and head of the team researching the product, says it also tracks more traditional measures such as bid-ask spreads, trading volumes and the USRLI. He compares the potential impact of CLX to that of the interest rate swaps market. “The great thing about the index is that it hedges your funding costs while being very simple to trade. I believe it will reduce the systemic risk in the industry, akin to how the advent of swaps means people don’t worry about interest-rate exposures any more – they just pay a fee to hedge it,” he says. Chris Rogers, chair of statistical science at Cambridge University, said the only participants able to sell CLX-based products would probably be those who are too big to fail. “This is basically a kind of insurance product. The main issue is: how good is the party issuing it? If it’s going to be paying out huge numbers in the event of a crisis, will it be able to meet it obligations? Insurers can buy reinsurance for their liabilities, but the buck has to stop somewhere – there’s a limit to how much a private insurer can pay out. Only the government can cover unlimited losses,” he says. The last thing we need is another product few will understand, and fewer still use for actual hedging rather than speculation. Don’t we have enough derivatives already? Please remember there always has to be someone on the other side of the trade. Think everyone will be hedged properly? I don’t. In fact I guarantee you they won’t. This product will be offered by those too big to fail. They will collect premiums on selling the product until it blows up. Crisis derivatives are yet another reason for many to scream for the reintroduction of Glass-Steagall, to separate banks from speculative trading. I do not care if banks blow up providing that taxpayers do not have to bail them out. However, unless there is clear, distinct separation of banking from trading, such products heighten risk of another bailout. The treasury (taxpayers) already guarantee $300 billion of Citigroup assets. We do not need more garbage or speculation on Citi’s balance sheet for taxpayers to underwrite. Nor do we need the derivative king, JPMorgan Chase, betting on systemic collapses. I asked my friend “HB” to chime in on this product. He writes … This is yet another example that shows fundamental conceit. Systemic risk is not lowered by the introduction of new derivatives, it is heightened. The risk doesn’t go away after all, it is just shifted. Moreover, since derivatives need speculative participants to provide trading liquidity, they actually ADD to overall systemic risk. That Citi would introduce such a product is a huge sign that the bottom is not in, and another huge crisis is coming. Mike “Mish” Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Citigroup Plans “Crisis Derivatives” Posted by Michael Shedlock at 11:01 AM …. Print …. Email To sign up for a free copy of our Monthly Client Newsletter, please register your email address at the bottom of the Sitka Pacific Commentary Page. Buy Gold and Silver Online at GoldMoney The Best Way to Buy Gold and Silver // <![CDATA[ postcounter = postcounter+1; if (postcounter <= footerstoshow) { document.writeln(" "); document.writeln(""); document.writeln(""); document.writeln(" "); document.writeln(" "); } // ]]> // Disclaimer:The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions. Comment Guidelines: Comments should be succinct, constructive and relevant to the story. We encourage engaging, diverse and meaningful commentary. Comments that include personal attacks, racial, religious, or ethnic slurs are not permitted. We continuously review and remove any inappropriate comments. 80 votes Comments (64) Newer Post Older Post Home Subscribe to: