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Good Morning
Late BFF last night:
Citizens Business Bank, Ontario, California, Assumes All of the Deposits of San Joaquin Bank, Bakersfield, California
San Joaquin Bank, Bakersfield, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Citizens Business Bank, Ontario, California, to assume all of the deposits of San Joaquin Bank.
…
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $103 million. Citizens Business Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. San Joaquin Bank is the 99th FDIC-insured institution to fail in the nation this year, and the tenth in California. The last FDIC-insured institution closed in the state was Affinity Bank, Ventura, on August 28, 2009.
NEW YORK (MarketWatch) — Harrods, the U.K. luxury department store, said it started selling gold bars Thursday, just when gold prices repeatedly hit new record highs. The store announced that it has joined with a Swiss refiner to offer fine gold bars. It also supplies major gold coins, including Sovereigns, Krugerrands, Eagles, Maple Leafs, and Pandas. Harrods said it will buy back any gold that its customers have previously purchased directly from the store, subject to current market prices. Gold futures have risen in seven out of the past eight weeks. They rose more than $60 in the first six sessions of this month, and hit a new record high above $1,070 an ounce Wednesday
#3 20% premium?
http://finance.yahoo.com/tech-ticker/article/355983/%22Astonishing%22-That-Big-Banks-Are-Taking-Taxpayer-Money-Writing-the-Rules-Warren-Says;_ylt=Atojs4opmpq1Y83pzNBJu8Zk7ot4;_ylu=X3oDMTE2YXQxY3RwBHBvcwMxBHNlYwNhcnRpY2xlTGlzdARzbGsDYXN0b25pc2hpbmd0?tickers=^DJI,^GSPC,XLY,XLP,XLF,jpm,gs
Elizabeth is still plugging away…
Tech Ticker
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ8HPmNUfchg
“Greenspan Says U.S. Should Consider Breaking Up Large Banks”
Huh? Greenspan says….
I think it is safe to say Greenspan is doing his best to rewrite history to change his legacy. Good luck with that.
Alan Tried. America Died.
5 – Wonder if everyone just stopped paying their mortgage loans and credit card bills. I could see a revolt like that happening either through organization or anarchy. would that have any affect on the banks?
Grim – I saw that short sale in The Reserve dropped their ask down to $550k down from OLP of $755k. I wonder if anyone who lives in that building is actually still paying their mortgage.
BC (last thread)-
Amen. The biggest daylight bank robbery in history. Now, the robbers have set up a Coleman stove and cots inside the vault, as they continue to haul out every last shekel of its contents. Again, all in broad daylight.
Meanwhile, all the bank guards and the customers are glued, drooling, to a cathode ray tube beaming pictures of a failed congresscritter who can’t dance because he has stress fractures in his feet (as if the REAL stress fracture isn’t between his frontal and temporal lobes).
We are so fcuked. One day closer to oblivion.
“Yes they hate Fuld, not the reason. They could have easily saved LEH. Hell, the window was opened the next week and the fed announced they were guaranteeing the cp market a few days later. In reality, they needed to blow someone out to convince Congress that Armageddon was upon us. Right after LEH went down, Hank fell on his knees, begging Nancy P. They knew if LEH went, they could then loot the kitty.
The rest is history.”
Pal of mine got a call from an AC developer yesterday. New high-rise on the Intercoastal, corner unit, 3600sf, full amenities- including boat slip- asking 1.2 mm at the peak.
The new pitch? 550K.
Pal told the developer to call back when he’s ready to take 360K.
Gonna be a long walk home.
yo (3)-
I heard Harrod’s tried to change their motto to “We Buy Gold”, but a check-cashing bodega in North Bergen holds the trademark.
“Harrods said it will buy back any gold that its customers have previously purchased directly from the store, subject to current market prices.”
Cindy (5)-
The net effect of Ms. Warren on stemming the tide of the collapse of everything has been zero. All three branches of gubmint are owned- lock, stock and barrel- by the financial services industry (and other mega-interests).
We will be living in mud huts and trapping vermin for food, and the banks will still be draining the public coffers dry.
No revolution will occur until television is no longer available.
The revolution will not be televised.
Somebody let me know when Harrod’s starts selling hollow-points.
Elizabeth Warren is a nice lady, but she’s about as relevant as a hammer:
“Bowing to political pressure from community bankers, the House Financial Services Committee approved an exemption on Thursday for more than 98 percent of the nation’s banks from oversight by a new agency created to protect consumers from abusive or deceptive credit cards, mortgages and other loans.”
http://www.nytimes.com/2009/10/16/business/16regulate.html?_r=1
Here’s your screaming “sell” signal on the entire US economy:
“The best way to think of GE is as a finance company masquerading as a manufacturing company. This was essentially the business model of GM as well, except GE is better at it.
In reference to the sale of NBC entertainment, Immelt said GE has no need for cash. Of course GE has a need for cash. GE has a total debt of over $500 billion.
Instead of buying back shares at totally ridiculous prices over the years, GE could have and should have been retiring debt. The panic low earlier this year below $6 was on concerns GE would not be able to refinance that debt.
The good news is GE has “90% completed its plans” to refinance its debt.
That relieves the short-term problem, but what about the long-term problem of getting rid of all that debt? Look for GE to continue to sell assets just as announced: Reducing GE capital and NBC universal.
As that happens, one can expect more layoffs and/or voluntary staff reductions by attrition. There is no driver for jobs anywhere as companies and individuals alike seek to reduce leverage and pay down debt.”
http://tinyurl.com/yzwkqbs
E. Warren…bought and paid for?
nom at previous #257″
WTF. . .I was referring to your statement about government credit cards for the poor.
http://www.dailymail.co.uk/news/worldnews/article-1220664/California-set-ban-energy-guzzling-big-screen-TVs.html
14 – Clot “No revolution will occur until television is no longer available.”
LOL
Schwarzenegger set to ban “energy-guzzling” big screen TVs in California
Face it folks. It’s over.
19 – Essex – She is just being ignored. She was hired by Congress yet they ignore her.
#24 Cindy – I like her too but she was hired solely to provide political cover. She never had a chance and she is not the type to make a scene and force people to listen to her, unfortunately. She was way too polite in her hearings. She’s our modern Cassandra only people are not just ignoring her, they can’t hear her.
Louisiana lawyer Daniel Becnel Jr., who represents more than 200 owners of homes containing Chinese drywall, is advising his clients to avoid filing claims with their insurers or they could lose their houses.
“I really believe everybody should have an insurance claim with this,” Becnel said. “But it’s hard to tell somebody to go make a claim, then they lose their policy … This is a nightmare for people.”
http://news.yahoo.com/s/ap/20091015/ap_on_re_us/us_chinese_drywall
17-Clot or anyone else – Can you read this article and help me out here.
It sounds as if the exempted banks/credit unions are the smaller outfits. The 150 largest banks, which would fall under the scrutiny of the agency, hold four-fifth of the assets.
“The exemption is for banks with assets of less than $10 billion and credit unions smaller than $1.5 billion.”
Outofstater – What gets to me is that these politicians don’t appear to be worried that they can be voted out.
I imagine they rest assured knowing we are generally too ill-informed.
The Sunday Frontline special that BC posted details for will help. Brooksley Born repeatedly warned that derivatives could blow up and she was summarily dismissed.
http://www.stanfordalumni.org/news/magazine/2009/marapr/features/born.html
“History already has shown that Greenspan was wrong about virtually everything and Brooksley was right. If there is one person we should have listened to, it was Brooksley.”
Maybe we should be listening to Elizabeth today.
http://finance.yahoo.com/tech-ticker/article/355739/Wall-St.-Is-Winning-Elizabeth-Warren-%22Speechless%22-About-Record-Bonuses?tickers=XLF,FAS,FAZ,JPM,GS,BAC,C
More from Elizabeth…
Paulson – TARP – Bait and Switch
Will we ever know what happened to our money? Probably not. We didn’t ask on the front end. Paulson said here ya go…I’m not asking and you don’t have to tell.
Everybody have a great weekend. Going to an unbelievable, qt, event tonight.
Down the shore everything will be all right.
Disclaimer- Not pertaining to our shore guy.
Schumpeter says:
October 16, 2009 at 7:54 am
I may not make it four more years here.
Told my son to pay careful attention in Spanish class this year.
Still think Chile’s the spot.
Ha. Clot, i was totally ready to pounce on Chile and bash it … and then i just spent 30 mins reading about the place … and it seems like you made a good call.
won’t you be my neighbor?
stater (24)-
By the way both Warren and Volcker are ignored and marginalized, one could get the impression that they are both paid shills…a sort of hired chorus to provide a canned counterpart to the pre-planned conspiracy to drain every bit of our nation’s wealth and give it to banks.
strumpet: after this “screed”, I will open describe mish as a hack…..clown hack….desperate for attention and willing to say anything to get it….
18.Schumpeter says:
October 17, 2009 at 9:00 am
Here’s your screaming “sell” signal on the entire US economy:
“The best way to think of GE is as a finance company masquerading as a manufacturing company. This was essentially the business model of GM as well, except GE is better at it.
In reference to the sale of NBC entertainment, Immelt said GE has no need for cash. Of course GE has a need for cash. GE has a total debt of over $500 billion.
Instead of buying back shares at totally ridiculous prices over the years, GE could have and should have been retiring debt. The panic low earlier this year below $6 was on concerns GE would not be able to refinance that debt.
The good news is GE has “90% completed its plans” to refinance its debt.
That relieves the short-term problem, but what about the long-term problem of getting rid of all that debt? Look for GE to continue to sell assets just as announced: Reducing GE capital and NBC universal.
As that happens, one can expect more layoffs and/or voluntary staff reductions by attrition. There is no driver for jobs anywhere as companies and individuals alike seek to reduce leverage and pay down debt.”
I should have read it before reacting….he presents the tired and well worn as some kind of cutting edge analysis……GE had a business advantage akin to Fannie/Freddie and they used it for years to great effect. Hindsight can make you appear as a genius and Mish seems to revel in this sort of analysis.
Interactive 3Q foreclosure chart:
http://money.cnn.com/news/storysupplement/economy/foreclosures/index.html
For conspiracy theorists….
Paulson = Cheney
Goldman Sachs = Halliburton
3,000 (+ military + Iraqis) deaths = Hundreds of millions of lives gloablly disrupted around the world
Apples = Apples
Maybe because someone you know well passed away (RIP), but you should not lose objectivity. Again, sorry for going here….
286.BC Bob says:
October 16, 2009 at 11:50 pm
Chi,
Do you actually think before you type?
2,900 innocent people were killed on 9/11. The architect’s of a flim flam bubble, ponzi scheme had it blow up in their face. Where are the dots connected?
Apples and oranges? Try apples and soybeans.
#281 previous thread james
I don’t don’t think its me you will be fighting. I will be standing behind the gvmt letting them fight you for me.
#284 previosu Ketle1
“there are plenty of examples of poor parents who have highly valued education and personal advancement and support/drive their children to learn and excel, allowing them to move up in the socioeconomic food chain.”
and unless they got scholarships, they did it through the free Education resources given to them. They didn’t have the choice to pay out of pocket.
Q: Let’s say you were one of the smart (stupid?) ones who put down between 10-20% in 2007 when you bought the house you thought you’d retire in.
but then, due to unforeseen circumstances (health, job), things turned sour.
Anyone know if the banks are more amenable to working with you on lowering payments? (As opposed to somebody with no skin in the game?)
Trying to help advise someone.
#285 previous Kettle1
Does that mean Texas should seceed?
Stnadardising services at a federallevel will result in smaller gvmt.
Clot [11],
It’s really simple. Why did they hate Fuld? Bergabe and Hank were furious when Lehman rebuffed WB, a plan structured by HP. Now 2 tigers/egos at war, DF just underestimated his foe.
During the same time frame, Congress rejected the initial TARP plan. HP is F-Ing furious and basically says F-You DF. Now back to the war room, you draw up the determined outcome and then backtrack. Akin to winning a war/battle before first shots are fired. Win the damn thing and figure out who gets trampled to get to the vault.
They were smart enough to know that someone had to be chopped. Subsequently, they did backtrack and the target was Lehman. Why Lehman, not AIG, Goldman, etc. It was creative/selective destruction.
Chi is absolutley right, they could have saved Lehman. However, there was a war to win and Lehman was their pawn.
The same weekend that the strings were pulled on Lehman, BAC purchased ML. Soon after the treasury guaranteed mm’s, the SEC banned short selling and Goldman and MS were “converted” to commercial banks. Does anybody really think that this was created on the fly? Lehman would also habe been converted.
Subsequently, Armageddon rolled out the red carpet and passed the baton to HP. He was not prepared to fail a 2nd time.
Lo and behold Tarp is passd, taxpayers take over AIG and Goldman receives 100 cents on the dollar.
Now, if anybody thinks that this was not the determined outcome before Lehman was used as their pawn, they are either gullible or naive.
You better ask a ton of questions before you load the gun. In addition to this, you better have the answers before you shoot your bazooka.
Schumpeter says:
October 17, 2009 at 8:49 am
Somebody let me know when Harrod’s starts selling hollow-points.
Dr. Dre would be impressed.
“Let it Ride”
Chi I’d take Mish’s advice over your bloviated analysis any day of the week.
End of day, Jack Welch destroyed that company and he was celebrated by Wall Street all the while he was destroying the company.
Moreover take a look at their earnings this past quarter and you’ll see you are deluding yourself re any sort of upcoming recovery. In a word their sales were sh*t.
“Soon after the treasury guaranteed mm’s, the SEC banned short selling and Goldman and MS were “converted” to commercial banks.”
BC,
You forgot to add American Express getting converted too as pay back to Buffet for his “support” of Goldman via their preferred stock deal/endorsement.
They completely circled the wagons and covered their @sses at the taxpayers expense. The last thing Paulson would want is Goldman going under on his watch. The last thing Buffet would want is to have his “Oracle of Omaha” reputation go down the sh*tter when he’s in his f’g 80’s when Berkshire is so heavily invested in AMEX and BAC.
Cindy –
Elizabeth Warren, Meredith Whitney, Brooksley Born.
Getting the picture? Perfectly reasonable women taking perfectly logical and reasonable positions being pushed aside and marginalized by the cozy little mens club protecting their own.
I was particularly dismayed by the descriptions of Born as “difficult” and other typical misogynistic epithets.
Makes me want to borrow Clots bazooka.
Chi,
I have to get going. I’ll keep it short.
I don’t speculate on 9/11 conspiracies. Not my gig. You can slap it all day with that one.
My apples/soybeans analogy pertained strictly to the fed actions post 9/11 and post 2007 bubble. As you are well aware two completely different scenarios. I agree the fed did the right thing post 9/11. Why? The bond market did the work, the fed simply followed; subsequent repos and open market operations. It was strictly monetary policy; no qe, no fiscal policy.
Unfortunately, the fed never stopped after the initial shock of 9/11. They kept rates too low/long. Also, ultra low rates were not enough. In 2004, AG sent Bergabe to meet with the BOJ and the yen carry was created. No need to rehash the consequences of this.
Post 2007 bubble is completely different. The fed, now, is not simply following the bond market. They became the bond market, the agency market, the auto market, the ins market. Monetary policy was not enough. As a result they have ventured into unprecedented, unchartered waters. Successful? Let’s revist in 2014-2015. After all, AG was named Time man of the year in 1998. Now he lives in Switzerland and a good part of his portfolio is invested in foreign currencies. HMM?
Comparing these two periods is like comparing Bob Gibson to Tim Wakefield.
I actually feel sorry for Warren if she actually believes she was hired to get to the bottom of anything.
kettle1 says:
October 17, 2009 at 8:53 am
“PGC
The states are the biggest flaw in this system of Gvmt.
The states arrangement works better in a heterogeneous society as it allows different groups to adjust local rules to better fit their culture/ideas while still being part of the whole. ”
Ket -Totally disagree and back PGC on this one.
The argument you are making here could be replaced word for word to defend the feudal NJ system of autonomous towns and we know how bloated and inefficient that is.
In addition, why on earth defend a system that segregates the like minded? One of the biggest problems a large society faces is the self-segregation of like-minded individuals, an effect we are seeing multiplied on the internet. We lower exposure to different points of view, limit our personal experience and exaggerate extremes. There is tons of research to support this.
Chi -on the victim issue –
People are sh!t. All people.
Majority picks on the minority, rich pick on the poor, powerful on the weak, Hutu on Tutsi, Japanese on Chinese and on and on.
The biggest mistake we can ever make is assume that only “other people” are capable of being so garbage. That absolves us of responsibility and allows us/anyone to assume the mantle of “victim”. A mantle frequently used to perpetrate future horrors.
People are sh!t. We are all people. We are all capable of sh!t given the right circumstances. If you are not a direct victim, never wear the mantle and ensure you do the best you can to never make others victims.
BC,
The funny thing is that I am in the city this weekend.
Well we are coming to the end of 2009, any thoughts on prices in our area for 2010?
lower
Balloon boy circus to continue with the family making a “big announcement”:
http://m.usatoday.com/845874/news/;.wap2
We are truly going to be the laughing stock of the world once we are completely broke…..
43.Dissident HEHEHE says:
October 17, 2009 at 11:16 am
Chi I’d take Mish’s advice over your bloviated analysis any day of the week.
Wonderful…kissy..kissy to you as well…
#51 Oh I knew that. Just wondering what other tricks our politburo will pull of their hats to try and stop the decline.
House prices lower property taxes higher.
[20] morpheus
Oh. Sorry. But you gotta link up a bit better than that, otherwise I will assume an unlinked comment refers to my last comment.
BTW, with respect to govvie credit cards, you do realize that was sarcasm?
[20] morpheus
Double my bad. You were referring to the credit card link. Serves me right for replying on a blackberry
[280][prior thread] PGC
You call BS? I’m going to go out on a limb here and postulate that this is coming from someone who likely majored in a subject where the highest politics or economics course you took probably started with the number 1.
I’m sorry but your rejoinders were lame, inasmuch as they toss out some anecdata of dubious relevance as proof that my statements were fallacial. Even your snark was lame. Watch Maddow for a few nights to get it down.
You are probably a decent person, and I will concede that blogs don’t lend themselves well to reasoned discourse and analysis, but, in the words of one of your heroes, arguing with you is like arguing with a table leg.
[49] lisoosh,
Yeah! You go girl (dude?)
Tsk tsk comrade….
My favorite arguments are settled the old fashioned way. Impossible on the interweb unfortunately.
comrade at 57:
Yes, I know it was sarcasm. Usually your comments are not that sarcastic. It seemed to me to be . . .unusual.
anyhow, got to go back to work and fight this cold which BTW started a few hours after my flu shot on Wed. That is weird
drinking lots of ginger tea. Usually helps a lot.
I was just invited to take a survey and do a 9 to 12 week program for insight on how the unemployed spend their time. They’ll even give me a $20 gift card for completing the 1st questionaire.
Let’s see what do I do with my time?, Hang out at a doom and gloom blog, apply for jobs and never hear anything back, work on my chinese, watch kids shows with the kids, cook, check out the teachers and moms when dropping off the kiddies at school, oh and hang out at the beach. Here’s me in my thong.
http://www.chinasmack.com/wp-content/uploads/2009/10/man-thong-beach-china-04.jpg
Well safe….been there and done that. Misery loves company.
I mean… I really feel for all of you that don’t own a house. Really. We are so f*cked in NJ and people are so f*cking stup1d I can’t really grasp or comprehend it. Why is anyone… anyone even thinking about buying a house in this area? $559,000 asking price for a double wide. A blah house in a blah town with outrageous taxes. I think if I do sell, I’m gonna tack $150,000 on top of the average comp for my house in my area. I’m gonna do that because I may just hook some dolt whose reasoning is so assinine and inept, that it just may work. Fuck1ng unreal.
http://www.realtor.com/realestateandhomes-detail/Caldwell-Boro-Twp_NJ_07006_1112456185
#64:
MY EYES. . MY EYES. THE PAIN!!! IT HURTS!!
#66 morpheus,
Was is the stretch marks of the purple pimples that you didn’t like? LMAO
More Bad Math/Bad Economics at the Post
Given the quality of the economics reporting, parents would be well-advised to prohibit their children from reading the Washington Post so that they don’t get confused on basic arithmetic concepts. The Post doesn’t want more stimulus and is willing to say anything to push its case.
The lead editorial tells readers that: “government has managed to blunt the recession, but at a cost — a higher national debt burden, which future Americans must pay off by working harder and saving more than they otherwise would have.” Actually, future Americans will own the debt that will be paid off. This is not a generational issue, it can be a distributional one.
There is a point that some of the debt is held by foreigners. This will be a burden on the country, but the issue here is the trade deficit, not the budget deficit. If we had no government debt, but foreigners bought up $4 trillion of private capital in the United States, it would pose the same burden on future generations as if foreigners bought up $4 trillion of government debt. Remarkably, the Post is not concerned about the trade deficit and the burden it poses on future generations and actually does not want the cause of the deficit — the over-valued dollar– to be fixed.
The Post also gives the bizarre argument that:we should wait on further stimulus because “the government still hasn’t run through half of the $787 billion in tax cuts and spending increases enacted this year.” Of course, for those of us who passed our third grade arithmetic class this argument is just plain silly.
The stimulus is already being disbursed at its maximum rate and therefore having its full impact on the economy. The additional spending will provide no further boost.
To see this point, imagine my rich uncle promises to give me $2,400 over two years in installments of $100 a month. I may originally be slow to change my consumption, but after 3 or 4 months I will likely have fully adjusted my spending in accordance with this monthly gift of $100. Once I have reached the 8th month, I will almost certainly be at my maximum spending rate, even though two thirds of the gift is yet to come.
This is where we stand right now. We have spent close to 40 percent of the stimulus with more than 60 percent yet to come, however the rate of spending will not be increasing from this point forward. Therefore, it will provide no further net boost to the economy. People who write editorials for major newspapers should understand this fact.
It is worth noting that the Congressional Budget Office (CBO) projections showing a 10.2 percent unemployment rate for 2010 and a 9.1 percent rate for 2011 include the impact of the stimulus. Perhaps the Post’s editors know something that CBO doesn’t, in which case they should share this information with their readers.
–Dean Baker
#32 Schump – Yes, a Greek chorus, foretelling doom.
#49 ‘soosh – I remember hearing a story long ago about the trial of Adolph Eichmann. Correct me if I’m wrong, but I believe the Mossad captured him and took him to Israel to stand trial for war crimes. One of those testifying against him fainted on the the stand and when he revived he was asked what had happened. He replied that he had looked over at Eichmann at the defense table and saw that he was not a monster, but just a man and at that moment he realized that if this ordinary looking man could commit such atrocities, then any of us, including himself could.
“nO Depression”
http://online.wsj.com/article/SB125581121032292239.html?mod=article-outset-box
John Mauldin on “critical state”, good read:
http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/10/02/another-finger-of-instability.aspx
Appreciate your response…thx
49.lisoosh says:
October 17, 2009 at 11:40 am
Chi -on the victim issue –
People are sh!t. All people.
Majority picks on the minority, rich pick on the poor, powerful on the weak, Hutu on Tutsi, Japanese on Chinese and on and on.
The biggest mistake we can ever make is assume that only “other people” are capable of being so garbage. That absolves us of responsibility and allows us/anyone to assume the mantle of “victim”. A mantle frequently used to perpetrate future horrors.
People are sh!t. We are all people. We are all capable of sh!t given the right circumstances. If you are not a direct victim, never wear the mantle and ensure you do the best you can to never make others victims.
I generally like most people. And then there is the odd exception. **** em.
Chi,
“The biggest mistake we can ever make is assume that only “other people” are capable of being so garbage.”
Did a lot of research on the nazis and Milgram and you are absolutely right about this. Any group of people, with a decent motivator, can turn on a dime. There are examples of this at every major sporting event. Even fashion is one step away from fascism. I know it sounds extreme, but when I hear the anti-immigrant rantings or the racism spoken about the election of Obama, it really opens ones eyes.
Study Milgram. It’s all right there.
Isn’t it funny how everyone thinks their own school system is the best, their own parenting skills are the best, their own political vies are the only correct ones, their race or culture are the best and their country is number one.
“Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has.” – Margaret Mead
“Russia ready to abandon dollar in oil, gas trade with China”
http://en.rian.ru/russia/20091014/156468599.html
moderation?
always something around here.
SAS
Some people live it. I do. And it feels freakin’ awesome. Life is a freakin bounty. God bless — have faith. Know who your friends are. And choose the right hill to die on.
Tied 2 – 2 now it’s a ballgame. Jeter up
Nom- girl
Outofstater – Yes
Stu – That was me, not Chi.
Stu – If you like Milgram, look up the Stanford Prison Experiment.
Any particular reason that no one has stepped up the rhetoric here against Rajaratnam and his associates? These are bona fide scum, cheats and Wharton grads….somewhat redundant….
BC Bob-
Did you go to Bruce’s BC Fundraiser at the Stone Pony tonight?
Chi,
Maybe no one’s stepped up because look at how beaten down we all are and then just more of this crap comes out. If you mean how frustrating it is between my wife and I working long hours as a CPA and a nurse to see scumbags like this making more off their planted connections and their inside info than the two of us might make in our lifetime. The other story that has me pissed off is the city of Plainfield CFO who jumped from Dover with a huge settlement. She has her democrat connections or knows the bones in the closet and she’ll be sucking six figure blood out of us with a cushy pension. The game is so frickin rigged.
On the other hand, A-Rod hits a home run and I can forget about these jokers like I’m in a happy place……
danzud,
But isn’t it nice to see a newly resurgent FBI and Justice Dept?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHou7iMlBMN8
Oct. 17 (Bloomberg) — Harvard University’s failed bet that interest rates would rise cost the world’s richest school at least $500 million in payments to escape derivatives that backfired.
Harvard paid $497.6 million to investment banks 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 school’s annual 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.
…
Harvard sold $2.5 billion in bonds in the fiscal year, in part to pay for the swap exit, even as the school’s endowment recorded its biggest loss in 40 years, the report released yesterday said. This is the first time the university has detailed the cost of exiting its swaps.
…
“Substantial losses” in Harvard’s General Operating Account, a pool of cash from which bills are paid, further put pressure on the school, the report said. The net asset value of the account fell to $3.7 billion from $6.6 billion during the fiscal year, according to the report.
…
The annual report provides new details on Harvard’s derivative-related losses. Many were entered into in 2004, said Harvard spokeswoman Christine Heenan. Lawrence Summers, director of President Barack Obama’s National Economic Council, was the university’s president at the time.
A must for every home ,and bunker …http://southjersey.craigslist.org/atq/1425781657.html
http://www.interfluidity.com/posts/1255818765.shtml
Steve Randy Waldman – Interfuidity
“The shortest, best case for financial innovation”
#59 Nom
You’re safe out on that limb a position I’m sure your comfortable. I’ll go one better and say, I did not study any of those subjects in College. I did not have to take 60 credits of GE as standard to make up for the deficits in my education system. The university made sure you had that standard of education before they let you in the door.
As in the past you reach for the stereotype instead of debating the topic. You go for the personal attack and label me with the Liberal media. I have told you in the past, I don’t do snide, sarcasm, yes, snide, no.
If you want a quote from one of my heroes, go have fun with this one.
“Courts of law, and all the paraphernalia and folly of law cannot be found in a rational state of society.”
http://seekingalpha.com/article/167062-who-is-carlos-slim-in-today-s-market?source=email
Simon Johnson
PRESS RELEASE
FRONTLINE INVESTIGATES THE ROOTS OF THE FINANCIAL CRISIS
FRONTLINE Presents
The Warning
Tuesday, October 20, 2009, at 9 P.M. ET on PBS
http://www.pbs.org/frontline/warning
“We didn’t truly know the dangers of the market, because it was a dark market,” says Brooksley Born, the head of an obscure federal regulatory agency — the Commodity Futures Trading Commission (CFTC) — who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country’s key economic powerbrokers to take actions that could have helped avert the crisis. “They were totally opposed to it,” Born says. “That puzzled me. What was it that was in this market that had to be hidden?”
In The Warning, airing Tuesday, Oct. 20, 2009, at 9 P.M. ET on PBS (check local listings), veteran FRONTLINE producer Michael Kirk (Inside the Meltdown, Breaking the Bank) unearths the hidden history of the nation’s worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
“I didn’t know Brooksley Born,” says former SEC Chairman Arthur Levitt, a member of President Clinton’s powerful Working Group on Financial Markets. “I was told that she was irascible, difficult, stubborn, unreasonable.” Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was “clearly a mistake.”
Born’s battle behind closed doors was epic, Kirk finds. The members of the President’s Working Group vehemently opposed regulation — especially when proposed by a Washington outsider like Born.
“I walk into Brooksley’s office one day; the blood has drained from her face,” says Michael Greenberger, a former top official at the CFTC who worked closely with Born. “She’s hanging up the telephone; she says to me: ‘That was [former Assistant Treasury Secretary] Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”… [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'”
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming,” Kirk says. “Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves.”
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
“It’ll happen again if we don’t take the appropriate steps,” Born warns. “There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.”
The Warning is a FRONTLINE co-production with Kirk Documentary Group. The writer and director is Michael Kirk. The producers are Michael Kirk, Jim Gilmore and Mike Wiser. The reporter is Jim Gilmore. FRONTLINE is produced by WGBH Boston and is broadcast nationwide on PBS. Funding for FRONTLINE is provided through the support of PBS viewers. Major funding for FRONTLINE is provided by The John D. and Catherine T. MacArthur Foundation. Additional funding is provided by the Park Foundation. FRONTLINE is closed-captioned for deaf and hard-of-hearing viewers and described for people who are blind or visually impaired by the Media Access Group at WGBH. FRONTLINE is a registered trademark of the WGBH Educational Foundation. The executive producer of FRONTLINE is David Fanning.
pbs.org/pressroom
Promotional photography can be downloaded from the PBS pressroom.
Shiller Index:Housing sentiments going down
UMM/quotes/nls/umm 24.30 -0.20 0.82%
DMM/quotes/nls/dmm 24.97 0.10 0.40%
#85 Being that the articles say the wiretaps quoting her were in 2008, I’m glad they didn’t sweep it under the rug.
84.danzud says:
October 18, 2009 at 12:16 am
Chi,
Maybe no one’s stepped up because look at how beaten down we all are and then just more of this crap comes out. If you mean how frustrating it is between my wife and I working long hours as a CPA and a nurse to see scumbags like this making more off their planted connections and their inside info than the two of us might make in our lifetime. The other story that has me pissed off is the city of Plainfield CFO who jumped from Dover with a huge settlement. She has her democrat connections or knows the bones in the closet and she’ll be sucking six figure blood out of us with a cushy pension. The game is so frickin rigged.
d: we did studies of insider trading and sundry detretus in b-school…I really like this one…clear warning shot….they are going to fry these people…the whole thing is more intended to increase the paranoia among the scum….
Whenever you want clean stock and bond data, you always need to go 30 days before the public announcements because these scum seep into the works.
It is so hard to prove. It is great to see smoking guns.
The end is nigh…..
http://www.nypost.com/p/news/local/manhattan/kids_dope_up_to_get_high_gtNeJJ7lzkwDFcPeEJ8zLJ
Chi – This is all a government effort to restore confidence in the system. YaY we rounded up the crooks and perp walked them on TV so start buying stocks again people. Fact is the Madoffs, and Rajaratnams of the world have always existed and will always exist.
When the good times roll people who know what is “really” going on are less willing to drop a dime on the crooks. It is only when things hit the fan does the government escalate enforcement activities. Raj’s case for example apparently relies on wiretaps which is unusual. Few judges are willing to grant a warrant for a wiretap unless there is very compelling evidence or perhaps the Judge lost a few $$ in the markets?
Either way the government is going to do everything it can to restore confidence, whether it be pulling bonuses from Banking Execs to perp walks and show trials.
ean says:
October 18, 2009 at 11:09 am
Chi – This is all a government effort to restore confidence in the system. YaY we rounded up the crooks and perp walked them on TV so start buying stocks again people.
S: Yay? The guy is richer than all the vilified bozos that are routinely lambasted on these threads. Geithner makes enough money to be this guy’s butler. Did you see the companies involved? IBM, Intel…other companies with named but not charged executives.
I’ve worked with the type of people involved. This stuff is off the charts.
There are memos being drafted across executive offices across North America….Executive E&O policy premiums just went up. Think Chinese Drywall type stuff, but substitute corporate espionage.
This eventually will lead back to some of the banks, since hedgies were involved…….how do you think GS makes money…..somebody has to be Rajaratnam’s couterparty.
You tell me…..you know someone is filthy, but all you see is what they do. You don’t know why…..if you were Goldman you make money on it…..is it unethical…from my perspective, only to the extent that you do not disclose to Rajaratnam that you may use his activity as part of research into your own book.
In a lot of ways, Rajaratnam depended on Goldman to trade off his lead, so it would move markets in his favor.
Chi – can’t blame only one prime broker, there is a web of deception whenever it comes to insider info.
All it takes is one person with ethics to drop a dime on Raj, which led to the wiretaps perhaps it was a Goldmanite that dropped the dime?
[61] essex
Sorry, but no one is paying me to be especially accurate.
[63] morpheus
I’m not usually that sarcastic??? Guess I need to ramp it up a bit. I thought I was dripping with sarcasm.
Funny flu shot this year. Felt awful for about 1/2 a day afterward, and had a godawful lump at the injection site that hurt like hell for nearly a week.
[89] PGC
I hear you talking at me. And I suppose you hear me talking at you. Since neither of us can turn “at” into “to”, I think I will leave it at that.
And I think you are a bit too hard on yourself; you do snide reasonably well.
BTW, liked the quote. Don’t have much use for the musings of dead philosophers though. To me, they always stated the obvious.
Comrade:
really you are not that sarcastic. You have some good ideas–love the nompound.
Will incorporate some of those ideas when I buy a house–will try to grow a lot of food on the property. At least as much as I can after I take into account the barley and hops crops!
Hey, have you or anyone on the board done any research on a good wood/coal stove that you can actually use to cook?Need something that heats the house and allows you to cook.
must prepare for peak oil.
[102] morpheus
I did not, but I have heard that old-fashioned wood stoves/ovens for kitchens are still in production and sought-after. Googling that should help.
FWIW, gas will remain cheap for a long time, and having gas delivered to your own storage is easy. In NH, that was how we got our gas. So I would not be inclined to invest in a wood burning kitchen stove unless it was a second stove.
Right now, I am looking for an insert stove for my living room, to convert the fireplace (horribly inefficient) to what will be, in essence, a wood burning stove. Just for heat/looks though, not cooking.
Growing barley and hops. Never thought of that. My problem isn’t the growing though, it’s the malting. I don’t know if I could do that.
As for sarcasm, I guess I am more lightweight than I thought. I try not to be overly cruel on this board, following the mantra of the Gridiron Club.
PGC 89
Do you agree with this idea of Owen’s?
no one is responsible for his will or his own actions, because his whole character is formed independently of himself
[102 morpheus
If you are considering coal, best to do so as soon as possible. I predict that residental coal use will be heavily regulated, if not banned, in the future.
http://rawsep.spaces.live.com/blog/cns!75F6190209FA8416!425.entry
I also expect federal intervention into wood-burning stoves as well, but they will not be banned, nor can they seriously outlaw wood. But they will be taxed, and only certain expensive high efficiency models will be permitted to be sold, if we aren’t there already.
Nom [105]
Wood burning is carbon neutral (in terms of 1 year for straw/other farm waste to decades for hardwoods) as long as it doesn’t contribute to deforestation, so it is more likely to be regulated locally because of smell and soot plus fire safety concerns, than federally.
comrade at 103:
“homebrewer’s garden” has a chapter on malting. Seems easy enough to do. Don’t know how highly modified I could make the malt, but sounds like fun.
However, first I must buy a house in order to acquire land to do such things.
Oh well, back to work.
[90] cindy
The article makes clear that the third group of future buyers of our nation’s assets will be foreigners, and how the Obamanots are uncomfortable with that.
In fact, I posit that Obama made US multinational companies MORE attractive for foreign investors when it announced its tax initiatives. Perhaps that was one reason they have quietly backed off their tax reform efforts.
Why do I say this? I felt that the new taxes would have effectively made american multinationals look cheaper. Faced with new taxes, the stock would be depressed due to diminished earnings. Yet there are foreign buyers with dollars that are losing value that would benefit from acquiring those companies and making them foreign.
Why? There is an implicit tax benefit from taking over the US multinational and making it foreign. Assuming you are either a tax-indifferent party (e.g., sovereign fund) or in a country that doesn’t tax foreign earnings (nearly all of them except us), you have taken the foreign earnings that would be subject to US taxation and made them NOT subject to US taxation.
Obama has made tax burdens to be this decade’s version of the overfunded pension from the 80’s, when raiders took over companies with overfunded pensions, froze and terminated them, gave annuities to the participants (which froze the value to them), and pocketed the difference via a reversion. Free money to the raiders since the pensions were never on the balance sheet. Eventually Congress passed a 50% tax to prevent that.
Back then, the overfunded pension was part of the locked up value. Now, it is the tax burden that can be avoided that is the implicit locked up value, and taking the US company foreign unlocks it.
Oh sure, a company’s earnings in a given country are still subject to taxation there, but by taking the prospect of partial double taxation off the table, and effectively lowering the taxes on the US portion of the business (either to the 30% nontreaty rate, or to the even lower treaty rates instead of the 35% corporate rate), it is easy to see why companies would look attractive if made to be offshore companies. Further, with inversion rules making expatriation uncomfortable, a way around that is to let yourself get bought out by a foreign company (or country).
The law of unintended consequences being what it is, Obama inadvertently triggered what could be a massive shift of corporate ownership from the US to foreign nations, and a corresponding deprivation of tax revenues. No wonder he is backing off whacking the multinationals. Otherwise, we’d be hearing that giant sucking sound.
Morpheus, #102
My grandparents in PA – outside Scranton, in what used to be coal-mining country – had two big cast iron stoves in the basement that burnt coal. They were real beauties. When the house was sold in the 1970’s, one of my cousins took them.
The house had grates in the living room and parlor. You could open the grates and the heat generated by the stoves would rise up. There was another coal-burning stove in the kitchen/family room.
If you look around, you may still be able to find some of those turn-of-the century stoves. They’re probably collectors’ items.
[107] morph
You at the office too?
BTW, what sort of law do you practice?
What happened to the Giants? That was not fun to watch (unless you wanted the Saints to win).
[106] cobbler
I don’t disagree, except that I do think that federal regualation of wood burning is likely.
That is because the cap and trade legislation will push up utility rates and Heating oil costs, thus accelerating wood burning and particulate pollution.
Resulting pollution will result in calls for regulation. Remember, this is a regime that lives to regulate, and congressman want their names on bills. Woodburners will still be a minority. So they are easy targets for regulation.
[111] jim
Yes, I wanted the Gints to lose. Hopefully, the Jets follow suit.
Rapidly becoming a good football weekend. UMass beat UNH and ‘Nova administered a classic beat-down on JMU.
I see also that Philly is losing to the hapless Raiders. They can’t get out of their own way in Philly.
Nom [112]
Seriously, wood-burning will never become a major factor even without any regulation. The main reasons are (a) almost impossible to adapt to forced air heating systems which are 90+% of the last 30-50 years construction (b) not enough local fuel in most urbanized areas including NJ, and bringing firewood – even pellets – from faraway kills economics, and (c) supplying enough heat for a 3,000 sf house in winter unless you use pellets and an automated feeding system is a full-time job. Actually, a fireplace (that nobody thinks about regulating) produces much more particulates “per log” than a properly designed stove.
[114] cobbler
I don’t disagree, except I also recall stories on Denver during the energy crisis. When wood burning there took off, it suffered horrible smog. Wood burning was regulated, and the smog abated. There are now cleaner stoves, and I don’t see it as a reach for the feds to say only high efficiency stoves can be sold. We saw it with toilets, after all.
Sometimes history and trends trump economics and reason. You assume rationality where there may be none.
nom,
How about a rabbit burning stove?
http://www.smh.com.au/environment/burning-bunnies-helps-keep-people-cozy-20091019-h3aq.html
Burning rabbits is (a) disgusting and (b) requires more energy than it produces. We are not going with it. Roasting rabbits, OTOH, may have a potential; however, you may want to have them skinned first.
Comrade at 110:
working at home on the laptop.
Go on trial for almost an entire week and it sets you back.
The law I practice? Plaintiff’s practice: PI, premise liability, workers comp, products liability, Title 59, some admin law when we appeal regulations, social security, arbitrations, some appellate practice.
Chi would say that I chase ambulances. I ask you: how can I chase an ambulance when I drive a wrangler? Can’t catch it unless there is at least one foot of snow on the ground. Then I can really smoke it.
Funny thing is when I graduated college, I tried to get a job in the insurance industry. I guess payback’s a bitch or there is some karma in this world.
work for a small firm. When my kid was born, I think I was the only attorney with a baby bouncer in his office on a regular basis.
Now after opening up, I am prepared for the barbs from the regulars on this board. Fire away!!
BTW: spanish proverb: The devil materializes in a church and walks down the aisle. He then stops: to his left is a lawyer. To his right is another lawyer. The Devil smiles and says “Virtue down the middle!”
Now, I will stop working for the rest of the day and concentrate on what really matters: family and beer!
No rabbits but….
Living in Oregon in the 70’s and 80’s we had a Fisher “Baby Bear” (single door) stove for an 1100 sq. ft. house. You could buy a Mama bear or a Papa Bear as well. They had two doors and two knobs to restrict the amount of air you let in.
They were free-standing stoves lined with fire bricks and when the power went out, you could fit a pot and a frying pan on top. You usually kept a cast iron kettle with water because you needed the moisture in the air.
It was meant to be a back-up because we had an oil furnace but for a while there, oil was so expensive that we got used to using the Fisher. It could hold the heat all night if you used oak and dampened it down. The first thing you did in the morning was toss in a few logs though.
Welcome Morpheus
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9IuAtol7MuM
Did anyone post this from Bloomberg?
“Housing, Leading Index Probably Improved: U.S. Economy Preview
A recent utility bill broke down the source of electricity provided.
Coal: 39%
Nuclear: 35%
Oil: 9%
Wind: .002%
Kinds of brings to light the reality vs hopium.
“Yes, I wanted the Gints to lose.”
You ARE an evil New Englander.
I am in the Central NJ area we are seeing prices continuing to drop. A lot of the banks are holding back inventory on their REO properties.
We are still buying houses every month though. I think this is the greatest time to buy in your own backyard!
wow:
found the complete collection of X-Files episodes on-line. Life is good. It is the little things in life that make life worth living. Either that or simple things amaze simple minds!
Morph, I’ve also recently found my newest obsession: catching up on every good movie I’ve missed being married to a man who dislikes movies.
Of course, I can’t enjoy them because of the Catholic guilt. Mulling over how long I’m going to rot in prison for every movie I watch makes me have to do rewinds every ten minutes. I must’ve watched the first ten minutes of Zombieland like six times.
Does anybody remember the name of a movie from about ten years ago, with a blonde-ish male Australian actor (I think) and having a title something to do with “Casino” or “Riveria” or such?
Ronaldinho played well today. Perhaps he has decided to stop guzzling Cognac and partying until all hours and concentrate on football again.
#101 Nom.
So are you picking your ball up and walking of the Debate field?
If so I will leave you with one thought from those dead philosophers
“Every man takes the limits of his own field of vision for the limits of the world.”
Why would watching a movie by yourself make you feel guilty?
Casino Royale was remade a couple of years ago, with Daniel Craig. He is a good James Bond (very dark and troubled), so you should check the others. I liked Quantum of Solace.
maybe that’s it. thanks, Clot, let me go check.
Nope, that’s not the cover.
Maybe not “Casino” in the title. I need to keep thinking. Memory’s gone.
Pat: I don’t know anything about movies, but I googled Guy Pearce and Casino….first hit was Winged Creatures released about 6 months ago.
118.Morpheus says:
October 18, 2009 at 6:13 pm
Comrade at 110:
Chi would say that I chase ambulances.
Morph: no way; you people create clients for me….I happen to have several defendant’s attorneys that are in my BOB; since they are in the business of preventing big payouts, they are not as good as lead generators, but still great minds…
BTW – it appears that Sanchez got a crash course in Meadowlands winter conditions. Once again Wrecks Ryan looked like a rookie coach….stinks…
#104 Kettle
It’s very hard to give a short answer to that, as there are so many facets to the discussion. I’m sure that that statement has been dissected and analysed in many courtrooms, and in public opinion.
This is the only way I can think to answer. Think of the statement “The person took another’s life.” Now consider the question , “Was the taking of life justified? Without context of the first question, the second cannot be answered. So we fill in some context. Two starving street kids fighting over a loaf of bread, one kills the other. Solider on a battlefield, kills an enemy 100 yards away. Battered spouse grabs a knife and kills the abuser. Two addicts fighting for a fix. The list of examples can go on and on, but one thing stays constant. A life is lost. Who determines justification and then who determines jurisdiction for the decision? Does the fact that it happened in another country under a different law change the answer?
Overall, I would say that, yes there is truth in that statement. I think that we are a product of the environment we are brought up in. We do not choose to be born and have not choice in the circumstances of birth and in a lot of ways how we are raised. We depend out outside agents (mainly our parents, gvmt and indepentant entities such as reliegion) to support the growth of our individual self and by extension the laws (moral and legal) that we live by.
I swear…if I worked at IBM, I would murder this guy if I ever saw him again…..you have a company busting it’s a$$ and really doing well in a bad environment…pure POS…
WSJ
BUSINESS
OCTOBER 19, 2009
Moffat Viewed as ‘Classic IBM Executive
By WILLIAM M. BULKELEY
Within International Business Machines Corp., Robert W. Moffat Jr. was known as a “quintessential IBMer,” rising to Big Blue’s top echelons by relentlessly cutting costs to boost profits. To the rest of the world, he is becoming known as one of the highest-ranking executives to be embroiled in an insider-trading scandal since Wall Street was rocked by such schemes in the 1980s.
The 53-year-old IBM veteran, a senior vice president and a close confidant of IBM Chief Executive Samuel Palmisano, was arrested last week and accused of leaking sensitive data as part of an insider-trading ring that prosecutors say is the biggest in a generation, netting charges against six people.
An affidavit in the federal case, based on wiretaps, alleges that Mr. Moffat gave inside information about IBM and its partners to Danielle Chiesi, who worked for New Castle Partners, a former Bear Stearns Cos. hedge fund that was spun out last year. He allegedly told her confidential details about coming earnings for IBM and Sun Microsystems Inc., as well as plans for Advanced Micro Devices Inc. to sell its semiconductor factory to an Abu Dhabi fund.
According to affidavits, New Castle made more than $1 million trading on some of the information. Ms. Chiesi allegedly shared tips with Raj Rajaratnam, the billionaire partner at hedge fund Galleon Group, who prosecutors say was at the center of the ring. Ms. Chiesi and Mr. Rajaratnam were also charged Friday, along with three others.
At IBM, based in Armonk, N.Y., and in nearby Ridgefield, Conn., the suburb that is home to Mr. Moffat and dozens of other IBM managers, the news shocked current and former associates.
Rosabeth Moss Kanter, a Harvard Business School professor who examined IBM in her recent book “Supercorp,” said, “It is astounding given IBM’s emphasis on a values-based culture.”
Kerry Lawrence, a white-collar criminal attorney in White Plains, N.Y., who is representing Mr. Moffat, said his client “was shocked by the charges and hopes for a favorable outcome.” Mr. Lawrence also said “the government didn’t allege he profited” from the alleged scheme.
Mr. Moffat couldn’t be reached for comment, and IBM spokesman Edward Barbini declined to comment on Mr. Moffat’s future at IBM, where he is in charge of computers and semiconductors. Mr. Barbini said Mr. Palmisano wasn’t available to comment. AMD and Sun declined to comment.
Mr. Moffat was charged with conspiracy to commit securities fraud. The affidavit filed by FBI agent Diane Wehner doesn’t accuse him of making money from his tips. Ms. Wehner also didn’t suggest Mr. Moffat’s motive, although she said she believes Mr. Moffat and Ms. Chiesi “are friends.”
The affidavit purports to recount a conversation in which Ms. Chiesi, 43, refers to getting information from Mr. Moffat when she sees him “on f…ing Sunday at my Mom’s house.” As stated in the complaint, they allegedly had dinner together in September 2008, when he assured her IBM would meet earnings expectations.
Ms. Chiesi’s attorney, Alan Kaufman, said in an interview Saturday that his client had been doing her job and did nothing illegal.
Ms. Chiesi, was arrested at 6 a.m. Friday at her Manhattan apartment. She spent the weekend with her mother and friends. A person who on Saturday answered a phone identified as belonging to Ms. Chiesi said, “I’m Danielle’s mother. She’s the most honest human being in the whole world,” declining to speak further or make Ms. Chiesi available for comment.
Mr. Moffat, “was the classic IBM executive from the cookie-cutter school of management training,” according to one former associate. Mr. Moffat continued to carry on the company’s tradition of wearing a white shirt to work, even though a ban on colored ones was lifted two decades ago. He was sometimes mentioned as a possible successor to the CEO.
A track star as an undergraduate at Union College in Schenectady, N.Y., Mr. Moffat joined IBM in 1978 in the finance department. In 2000, he became head of the troubled PC division. Within 18 months, Mr. Moffat arranged to outsource its desktop-manufacturing business in North Carolina and Scotland. Three years later, he managed the sale of the rest of the PC business to China’s Lenovo Inc.
According to the FBI’s affidavit, Mr. Moffat called Ms. Chiesi’s phones shortly after wiretaps on her began in August 2008. One conversation was about AMD’s turnaround plans. The affidavit alleges that after that call, Ms. Chiesi said that without such information, “I wouldn’t touch it [AMD stock] with a f…ing 10-foot pole.”
On Jan. 20, Ms. Chiesi allegedly told an unnamed “cooperating witness” that she was buying IBM stock based on information from Mr. Moffat that its results would be better than expected. New Castle made $500,000 on trades related to that information, the affidavit said.
New Castle also bought hundreds of thousands of shares of struggling Sun, which IBM was secretly negotiating to buy, after Mr. Moffat allegedly started telling Ms. Chiesi about its condition.
According to the affidavit, on Jan. 26, Ms. Chiesi told an alleged conspirator that Mr. Moffat told her Sun’s revenue and earnings would be better than expected. The next day, New Castle bought 784,000 shares, most of which it sold over the next two weeks after Sun reported and its stock jumped 8%. New Castle made $900,000 on the transactions, the affidavit said.
FYI – it was a big deal to get a cooperating witness and a wiretap. From what I understand, you need a warrant to do this action, and sufficient cause is difficult to justify to a judge.
” If you like Milgram, look up the Stanford Prison Experiment”
Lisoosh,
Indeed. That is an example I have used many times over the years.
I just want to say that I really like this site very good idea.
All human psychology can be wrapped up in two sentences:
Pull the lever. Get the pellet.
Oy! The IOC picked the one city seeking the Olympics that makes Chicago seem like Maybury:
(CNN)
Some 2,000 police officers patrolled the streets of Rio de Janeiro Sunday after a bloody confrontation between rival drug gangs and authorities that killed 14 over the weekend, including two police officers.
Two suspected drug traffickers were killed and four were arrested in Sunday’s operations by Rio de Janeiro’s military police, the official news agency Agencia Brasil reported.
But the atmosphere in general appeared calm in the slum known Morro dos Macacos in northern Rio, where the day before crossfire between two gangs left 12 dead, including two police officers who died when their helicopter was shot out of the sky. Residents had also set eight buses on fire during the clashes in an attempt to divert the attention of police
snip
113:Nom, since we’re on the subject, Go Sox!
Shore, doesn’t that helicopter shooting count as an Olympic qualifier?
Maybe it could be added to the shooting evens, or even a great new triathalon. I know I’d watch.
127: Pat, one Guy Pierce move from @ 10 yrs ago is “Memento”. One of my favorites.
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