Eliot “Slowhand” Spitzer & His Many Sugar Daddies
This is not another tirade against Eliot Spitzer, the man who slunk out of the New York Governor’s Mansion to the sound of champagne corks popping up and down Wall Street. As I said at the time in an interview with Neil Cavuto on Fox Business News, I am familiar enough with the culture of Wall Street to know that if we said, “Let he who is without sin pop the first champagne cork,” it would be a dry town.
Instead, it is a tirade against Eliot Spitzer, the man who sacrificed principle to get into to the Governor’s Mansion, a fellow who always acted from ambition and not integrity.
To ease into this, I will pose the reader a question. I note that the crusade for which Eliot Spitzer first made his name was a campaign to root-out conflicted research on Wall Street. Jim Cramer has often written (with no detectable irony) of this heroic Spitzerquest. For example, Cramer wrote in his 2002 book, You Got Screwed!
“The actions taken by the federal government subsequent to the prodding by elected officials such as Eliot Spitzer, the attorney general of New York, who got the ball rolling, certainly helped clarify conflicts, and even shed harsh light on the most revolting of them.”(You Got Screwed!:
Why Wall Street Tanked and How You Can Prosper, Simon & Schuster, 2002, page 5).
In keeping with his tough-guy-looking-out-for-you shtick, however, Cramer added that “…within weeks of those actions, the complex of interests that kept you in the dark about how the stock market really works was right back in action.” (You Got Screwed! Page 5.)
Similarly, in Cramer’s latest book, he writes:
“Eliot Spitzer, the New York State attorney general, ended that game when he determined that analysts were no more honest than movie critics who are employed by the movie companies themselves.” (Jim Cramer’s Real Money: Sane Investing in an Insane World, New York, Simon & Schuster, 2005, page 134).
The odd thing about these statements is that, as should be obvious from the post “Jim Cramer is a Complicated Man“, Mr. Cramer is the single most conflicted journalist-money-manager in the history of Wall Street. In fact, the concept of “journalist-money-manager” was invented to describe Jim Cramer, as before his rise to prominence US financial journalism still had editors with integrity. Yet while Spitzer “got the ball rolling” looking high and low for conflicts, “and even shed light on the most revolting of them,” he overlooked Jim Cramer and everyone in Cramer’s circle, without exception. Why is that?
The short answer is that Eliot Spitzer has had a unique relationship with Jim Cramer for three decades. It started when they became roommates and friends at Harvard Law. It continued throughout Spitzer’s subsequent career. Through it all theirs has always been much more than a casual schooldays’ friendship: Cramer has worked hard to aid Spitzer, both financially and professionally, and it appears that this good will was reciprocated.
This essay will explore the implications of their bond.
The Thug Also Rises
Cramer’s cronies have always been Spitzer’s biggest contributors. Nick Maier describes a fundraiser Cramer threw when Spitzer first pursued the Attorney General’s office:
“We invited every broker who covered us to that party, kept track of who came, and, most important, noted who contributed to Eliot’s campaign. The smart brokers made sizable donations and were rewarded for it. (Trading with the Enemy, page 33).
Early on, this connection between Cramer and Spitzer proved troublesome for Cramer. According to Cramer, from 1995 to 1997, Cramer & Co. yielded consistently high returns for investors. In 1997 Jeff Berkowitz was invited to be partner, and the fund became Cramer Berkowitz. 1998, however, was a crisis year for the fund. The melt-down of Long Term Capital Management had led to double-digit declines in the fund’s positions.
“Then, one day in early September, I got a call from one of my biggest investors, Eliot Spitzer, who was making his second bid for New York State attorney general. When Eliot studied with me at Harvard Law he had seen how driven I was and how much I loved the stock market. When I set up the fund he had come in as a partner early on and I had made the man a ton of money. Now the papers were saying that Eliot might be violating campaign finance disclosure laws by getting hidden money from his family. That was a total crock and I knew it, as I had made a boatload for Eliot. But there was only one way to refute his charge and it was to open up the fund. It was an emergency.” (Confessions of a Street Addict, page 186).
Cramer opened up the fund so Spitzer could withdraw. Many of Jim’s other investors chose the opportunity to withdraw as well. With help from Karen the fund did finish up for the year, but still disappointing relative to the averages.
Yet such occasional hiccups could not outweigh the great synergy that existed between the financiers in Cramer’s orbit and the Attorney General of the state where they did business. After Spitzer was elected to the position of Attorney General in 1998, he pursued a variety of targets. He started with conflicted researcher, but expanded his efforts to take on immensely powerful targets, such as AIG and Hank Greenberg, Marsh & McLennan (there targeting Hank’s son Jeffrey), and bond insurers such as MBIA and Ambac. As I will explain, however, Spitzer did not “take them on” in a way that would have been recognized as legitimate in any previous era.
The misdeeds upon which Spitzer focused were generally industry practices that extended beyond living memory. Some of these were obvious evils (e.g., conflicted research on Wall Street). Some were arcane probable-evils (e.g., the way Marsh Mac created insurance quotes for D&O insurance). And some were “evils” worthy of Talmudic dispute: for example, if in some negotiation the firm on the other side of the table offers you highly attractive terms, and you accept, is it your responsibility to approve of, or even know, the accounting method that other company uses to reflect the deal on its own books?
Novel were the misdeeds were for which Spitzer pursued his quarries, and more novel yet was his method. It is a truism that, as former New York Chief Justice Sol Wachtler put it, a good prosecutor “could get a grand jury to indict a ham sandwich.” It is also a given that no financial firm can withstand a criminal indictment: individuals of a financial firm may be indicted, but since it is the business model of financial firms to say, “Give us X now and trust us to give you Y in the future,” a criminal indictment is more or less an order to shut their doors.
Put these two facts together, and it means that it is within the power of every prosecutor to wake up on any given morning and destroy any financial firm in his jurisdiction. How? Here is one of several ways: at the end of each quarter every financial firm has to make thousands of estimates, estimates which in the light of hindsight may prove to be on balance accurate (or even conservative), but some of which will surely prove to be in error. Thus, if a prosecutor can indict a ham sandwich, think how easy it is to indict a firm whose books will, at any given time, always contain estimates some significant fraction of which are false. There are others ways, but its all basically the same idea: financial firms are uniquely ill-suited to be recipients of criminal indictments, and if a prosecutor looks hard enough he can indict …. the proverbial ham sandwich.
Thus every Attorney General is always in a position to destroy any financial firm in his or her jurisdiction. Most people who reach the level of Attorney General have the maturity not to abuse that vast power. Spitzer exercised it with abandon. For example, he went public with allegations of criminal misconduct against Hank Greenberg, the legendary CEO of AIG. Spitzer refused to negotiate with AIG until Greenberg stepped down from the company he had built. Given the dynamic described above, that demand is extraordinary: it is a negotiation where Spitzer was able to force the other side to cave without having anything on him. Spitzer’s power to end Greenberg’s career came not from any legal acumen, but was simply intrinsic to his position as AG: he threatened the destruction of a financial firm by bringing a criminal indictment, thus giving a good leader only one alternative. If you ever wanted to know what a thug would look like as an Attorney General, that’s it. That’s what one would look like.
Months after Greenberg stepped aside, Spitzer’s criminal allegations against Greenberg quietly fizzled out.
The previous example is not, alas, a one-off. In fact, the hallmark of Attorney General Spitzer’s reign was precisely the kind of headline-making bullying that would make the US Chamber of Commerce describe Attorney General Spitzer’s methods as, “the most egregious and unacceptable form of intimidation we’ve seen in this country in modern times.” That “form of intimidation” often bore the flavor of someone who had seen too much TV.
An example of that came in Spitzer’s dealings with the John Whitehead, the former chairman of Goldman Sachs, one of the most highly respected men in modern Wall Street history, and in my view, the kind of man the industry ineeds (that is, heavyweight players who keep the game straight, or at least reasonably straight, by keeping Young Turks in check: other than a few old-school guys like Ken Langone, such men are in short supply these days on Wall Street). John Whitehead had the temerity to write a Wall Street Journal op-ed (”Mr. Spitzer Has Gone Too Far“) that made the simple point that in America, people are innocent until proven guilty. That included Hank Greenberg:
“Something has gone seriously awry when a state attorney general can go on television and charge one of America’s best CEOs and most generous philanthropists with fraud before any charges have been brought, before the possible defendant has even had a chance to know what he personally is alleged to have done, and while the investigation is still under way.”
The day this editorial appeared, Spitzer called Whitehead (a retired octagenerian) and said:
“Mr. Whitehead, it’s now a war between us and you’ve fired the first shot. I will be coming after you. You will pay the price. This is only the beginning, and you will pay dearly for what you have done.”
Whitehead’s account went unchallenged by Spitzer.
The Many Sugar Daddies of Eliot Spitzer
Jim continued to support Spitzer in his re-election campaigns, even after he (Jim) left Cramer Berkowitz. For example, this 2003 New York Post article describes a huge fund-raising event for Spitzer that Cramer helped to organize (I beg the reader to please read this closely, as I will suggest two mental notes about this paragraph):
“Among some of the biggest donors to the day’s event were: hedge fund giant James Chanos, president of $1 billion hedge fund Kynikos Associates; Titan Advisors fund-of-funds chief George Fox and Jeff Berkowitz, manager for the hedge fund Cramer Berkowitz (co-founded with Street.com’s Jim Cramer); real estate mavens Edward and Howard Milstein; developer Donald Trump; class action attorney Melvyn Weiss… Weiss, whose own work in pursuing financial fraud has been bolstered by Spitzer’s prosecutorial zeal, was quick to point out that Spitzer’s work has made him more than a few enemies on Wall Street.” (Jenny Anderson, “Fundraising for a Fund Crusader,” New York Post, December 12, 2003).
The first mental note concerns this: “Among some of the biggest donors to the day’s event were: hedge fund giant James Chanos, president of $1 billion hedge fund Kynikos Associates.” Please stick a pin in the name, “James Chanos.”
The second mental note concerns the absence of critical thought exhibited by the New York Post in publishing this sentence: “Weiss, whose own work in pursuing financial fraud has been bolstered by Spitzer’s prosecutorial zeal…” How do we know that Melvyn Weiss’ work has been, “pursuing financial fraud”? Because Weiss said so? In fact, three years later, Melvyn Weiss was charged by the US Department of Justice with taking part in a now-notorious $200 million kick-back scheme involving one of the most powerful law firms in the United States, Milberg Weiss Bershad & Schulman (as of a few days ago, all three of Weiss, Bershad, and Schulman are convicted felons, as is their former partner, Bill Lerach) Thus, with the benefit of hindsight (or critical thought) it would have been more accurate for the New York Post to say, “Weiss, whose own work in practicing financial fraud…”
However, that would have been poor form of the New York Post, the piano player in the bordello that is the New York financial industry. That is why, as I will demonstrate in a later piece, the New York Post is for folks who move their lips while reading People Magazine.
Connections among Spitzer and Cramer’s cronies, such as Marty Peretz, no doubt proved calming on what may have been otherwise bleak and unhappy occasions. For example, in 2003 Spitzer’s office opened an investigation into an ailing hedge fund controlled by Gotham Partners Management. Shortly thereafter, Gotham closed down the fund, and no charges were filed. The fund’s principle investor was Marty Peretz. (Henny Sender and Gregory Zuckerman, “New York Examines research by Gotham Partners on MBIA, The Wall Street Journal, January 10, 2003.) In fact, in a turn-around which has become a standard operating policy against any who try to expose this group, Spitzer began an investigation in MBIA.
By 2005 this coziness between the Attorney General Crusader and hedge funds was an open secret. For example, The New York Observer eloquently explained in January, 2005):
“The ‘hedgies,’ as they’re sometimes called, love Eliot Spitzer. While Wall Street bankers have tended to steer clear of his campaign - in part because of a state law prohibiting contributions by any corporations that sell bonds to the state, in part because they’re still peeved about his crusade against corrupt stock analysts - hedge-fund managers seem to have Spitzer headquarters on speed-dial. Some of these guys, like Kynikos Capital’s James Chanos, always pop up on Democratic host committees (what else are they supposed to do with their $10 million year-end bonuses?). But others, like Stanley Druckenmiller… are genuine converts to the Spitzer cause.
“And why not? While the Attorney General brought his prosecutor’s wrath down on Canary Capital - a hedge fund tied up in the mutual-fund market-timing scandal - he has, thus far, left hedge funds largely alone. As the hedgies are fond of saying, Mr. Spitzer seems to ‘understand’ hedge funds. After all, some of his best friends are hedge-fund managers, and for many years he was a loyal hedge fund investor, reaping what his good friend James Cramer described in his book, Confessions of a Street Addict, as a ‘boatload’ of money from the Cramer-Berkowitz fund.
“But, perhaps most compelling, Mr. Spitzer’s tactics have been good for hedge-funders’ wallets…
“And, like so many of their breed, the hedgies know a good investment when they see one. ‘It’s a lot like investing,’ said Keith Rosenbloom, a Spitzer fund-raiser who runs ComVest Investment Partners, a $1.4 billion fund-of-funds. ‘When you find an investment that’s really special, you’re supposed to bet more on that one if you really understand it. This is a guy who is really special-and you try to back the guys who are really special.’”
Allying yourself with the wealthiest and most powerful people in your state, many of whom (as Deep Capture is demonstrating) are scofflaws, while donning the mantle of a reformer: that’s some gig.
Governor Spitzer: Tous ca change
Politically astute American know the initials “AG” do not, in fact, stand for “Attorney General”, they stand for “Aspiring Governor”. When New York Aspiring Governor Spitzer set out on the utterly predictable course of turning himself into New York Governor Spitzer, his “hedgie” friends were there for him. As The New York Times put it:
“ALBANY, Jan. 25 - Eliot Spitzer has not angered everybody in the business world.
“In fact, Mr. Spitzer, New York State’s attorney general and the front-runner in the polls for this year’s governor’s race, has taken contributions from some of the biggest names in hedge funds, venture capital, real estate and commodities in building a $19 million war chest for his campaign nine months before the election.
“That figure exceeds the $16.3 million that Gov. George E. Pataki had raised at this same point in 2002, when he enjoyed the formidable fund-raising powers of incumbency. In Mr. Spitzer’s case, his campaign finance filings suggest the influence of his actions as attorney general on political donations in the race for governor.” (Danny Hakim, “Filings Show Spitzer’s Allies in Big Business,” New York Times, January 26, 2006)
Then, less than two weeks later, The New York Times explained that “Spitzer Campaign Getting Money From Sources Spitzer Disavows” (Michael Cooper, February 7, 2006):
“ALBANY - In his run for governor, Attorney General Eliot Spitzer has called for ending the ‘pay-to-play culture that exists in Albany’ and pledged not to accept contributions from anyone with business pending before his office. But in Albany, where campaign donations gravitate toward power, Mr. Spitzer’s early lead in the polls has translated into contributions from lobbyists and special interest groups in amounts that are usually not seen except when incumbents are running.
“When Mr. Spitzer held a gala fund-raiser that added $5 million to his campaign in December, the invitation, which listed some big donors along with members of the host committee, read in places like a who’s who of powerful Albany lobbyists…. The contributions highlight the sometimes blurry line that the campaign is trying to walk as it claims to hold itself up to a higher ethical standard in the area of campaign finance while still raising millions of dollars in a state where lobbyists and special interests are among the most reliable donors.”
Again: allying yourself with the wealthiest and most powerful people in your state, many of them scofflaws, while being portrayed as a reformer. Some gig indeed.
The Comeuppance of the Slowhand
As I said at the outset, I am not going to dwell on the Client #9 aspect of this story. I object to our society’s stigmatization of women such as “Kristen.” I was once friendly with a truly fine woman who was, she revealed in time, a high-price escort. One day she showed me her Rolodex (and she did, in fact, have a Rolodex, an old-fashioned, sit-on-the-desktop Rolodex). It had thick paper stock cards that were intended for individual entries. I would estimate that to 60-75% of them were stapled business cards of Managing Directors of upper-crust Wall Street financial firms, along with a smaller number of cards discretely embossed with the names of the white-shoe law firms which service such financiers (discretion precludes me from mentioning the names of any of these firms, but the ones that jump to the mind of the reader conversant with Wall Street are, in fact, the ones I mean). Incidentally, this was true even though the gal lived and worked a long way from New York.
Thus, Wall Street’s Spitzerschadenfreude strikes me as hollow and disingenuous as… most everything else about our financial Power Elite. If anything, women such as “Kristen” should be embarrassed at being exposed entertaining men of standing in “polite society” while “polite society” mouths hypocritical platitudes about them.
Instead, I will burden the reader with two requests.
The first request is that the the reader consider the possibility that the career of Eliot Spitzer reveals more to us about the topsy-turvy, Alice-in-Wonderland world we inhabit than we are likely to see for a long time. Mr. Spitzer became AG due in large part to the guidance and financial support of Jim Cramer and his hedge fund cronies. As Attorney General, Spitzer made a name for himself pursuing conflicted research on Wall Street while never touching Cramer, who embodies the most clear-cut, deepest conflicts between journalism and money management that the financial world has ever seen. Spitzer augmented this reputation pursuing insurance companies like AIG and MBIA over deeply ambiguous financial arcana worthy of Talmudic debate, but never touched the hedge funds who regularly, on a day-to-day basis, as their very business model, manipulate stock prices, rob Americans of their chance to invest in a fair capital market, and (in the case of one) openly brag about it in books and on TV. Spitzer ran for Governor on a campaign of, “The Sheriff of Wall Street is going to put an end to the pay-to-play ways of Albany,” while to his gubernatorial campaign were donated greater funds than his “pay-to-play” predecessor had raised as an incumbent, and in that campaign Spitzer’s strongest support came from the hedge fund cronies to whose industry Attorney General Spitzer had given hall passes.
Did I miss anything?
Thus to me, Spitzer’s downfall is the least interesting part of his story. The career of Eliot Spitzer was always a sluttish thing. The real question with which it confronts us is: what is the state of our public discourse that it would ever see Eliot Spitzer as admirable? Even as he pursued clear evils (such as conflicted analysts on Wall Street) were there any who doubted he did so out of ambition and a desire for headlines? Is Eliot Spitzer what a righteous man looks like to our present age?
In sum, how shabby has our public discourse grown that Eliot Spitzer could be outed over a secret tryst with “Kristen”, but not over the many with whom he slept around openly, for years, in the bordello of New York financial circles?
The second request is that the reader please remember the name “James Chanos” and the firms mentioned above: AIG, Marsh & McLennan, MBIA, and Ambac.
Posted in 1) The Players |
April 6th, 2008 at 1:07 pm
I often tell people about beating the desk and screaming on 8/12/05 when you did the “Miscreant’s Ball” teleconferance. I’ll be damned if I didn’t do it again.
But, for all your genius, for all your hard work, you couldn’t have done it with out them. Their own greed,their own hubris, that is what is allowing you to shine that light, and it is truly delicious.
What a marvelous job you have done all by yourself. You are to be admired and honored by all men who believe in a fair fight.
Now you’re going to come back and say, “well, I couldn’t have done it without……..”
Be quiet and take your bow. You are just one hell of a man in my book. You gave hope where there was none, and you are delivering Justice when it seemed the inmates occupied the Warden’s office.
April 6th, 2008 at 1:55 pm
Anyone want to wager that Spitzer gets a job with a hedge fund out of this?
April 6th, 2008 at 2:11 pm
Why did I enjoy this article more than all your other efforts?
I saw Spitzer on tv with Cramer and Spitzer was AG and threatening JOSB. I certainly thought that he was out of line even discussing prosecution of anyone in that forum.
A lot of people were upset with C. Cox the other day and how he was playing his cards close to his chest. I saw him as being ethical and not defamatory as Spitzer had been… helping tank a known Rocker short.
Spitzer getting knocked out before going for the White House is one of the best things that could have happened. We are better off getting him castrated from public office than 10 other ordinary crooked politicians. Thank goodness for our puritanical attitude about prostitutes. If he hadn’t been caught for his pXXXX chasing, we would have had him making decisions solely for his elite donors.
It is amazing that Eliot was dumb enough to spend that kind of money and not just put up a girl on the side. It ain’t smorgesbord, but it ain’t illegal.. and you don’t have a conflict of interest prosecuting one bunch of whores, while letting your own whores screw with protection.
It all depends on who your friends are… and it’s been that way forever. One of my grandfathers turned the other in for a still during prohibition… It was really a mean thing to do when you consider that they both suffered alcoholism at one point or another and the family ties. The Sheriff got the call and made sure that my mother’s father knew there was going to be a raid and that he knew who had turned him in. The Sheriff considered that breach of trust as worse than breaking the law. It wasn’t like my grandfather was selling liquor…and he wasn’t hurting anyone but himself.
The good ole days… back when protection from prosecution (or in Eliot’s case, add persecution and extortion) didn’t have to be purchased with donations to campaigns…
April 6th, 2008 at 2:46 pm
We should thank Dr Patrick Byrne for his endless efforts, I feel sorry for most people for not realizing what a great man is doing for all of us instead of weaning on wall street. thank you
April 6th, 2008 at 3:42 pm
Panerai,
No thanks necessary. If you want to do something for me, just let as many friends as you can know about DeepCapture.com, and post links to these articles on as many blogs and message boards as you feel comfortable doing.
Patrick
April 6th, 2008 at 3:43 pm
This was a very lonely crusade for a long time. I was at in six years when Patrick showed up. The fact that all these folks now are coming out of their houses and looking at the sky says volumes. Now, even the politicians have to pay attention. I’m sure we’ll get to read about it all in a book. But man, I’m so glad it’s almost over. I say ‘almost’, because I know the power of these animals.
April 6th, 2008 at 5:09 pm
Patrick,
Once again you have graced us with another ” better than I could hope for explanation and observations of the slime world of Wall St.”. I again can not thank you enough and could not do anything more than echo the well deserved praises of Lenofus as you are certainly a man that has shoes that will not be filled anytime soon by those who are not willing to go that extra mile and endure the pain of perseverance.I feel fortunate that I have been near you in your uphill battle and have absorbed some of your moral character that has changed my life for the better. One thing that is becoming clearer everyday, and I am older than you, is that no matter how much money, how great the scam, how devastating their powers can destroy their opponents all of these criminals ALWAYS lose. Just look back in history and try to find a winner, they ALWAYS lose. I have and will continue to spread the word. If you talk to Bobo tell him I wish him the best and please write that book.
April 6th, 2008 at 5:17 pm
The sluts of Wall Street have crippled Main Street. Their insider deals have put the U.S. in a recession.
April 6th, 2008 at 6:21 pm
James Chanos? James Cramer?
April 6th, 2008 at 6:27 pm
All this wouldn’t even sale as good fiction it’s all so ugly and unbelievable. How could all this be going on with no check and balance coming into shut it down sooner? I’m far from an expert- more like one that moves their lips while reading the paper, but it doesn’t take a idiot to see wrong as wrong.
Thanks for keeping on Dr.
April 6th, 2008 at 7:04 pm
Just Learning,
So are we all, just learning.
Welcome to the Rabbit Hole.
Patrick
April 6th, 2008 at 7:50 pm
Hey Dr Byrne, Got CMKX?
your thoughts…
April 6th, 2008 at 8:29 pm
Some H.L. Mencken quotes that seem to resonate with Eliot Spitzer…
A professional politician is a professionally dishonorable man. In order to get anywhere near high office he has to make so many compromises and submit to so many humiliations that he becomes indistinguishable from a streetwalker.
(too easy)
Demagogue: One who preaches doctrines he knows to be untrue to men he knows to be idiots.
(crusader)
Every decent man is ashamed of the government he lives under.
(still applies)
April 6th, 2008 at 10:17 pm
These stories you have been shareing and putting together are very interesting. It is unreal that the SEC doesn’t do anything to stop the fraud and illegal activities that go on right under their noses. Even when it is pointed out to them. Even when people like Cramer come flat out and say they are manipulating the market. I think it is awesome that you bring this extremely suspicious activities into the sunshine for everyone to see.
This country needs more people willing to stand up for what’s right than people who just do whatever it takes to line their pockets with other peoples money. You definatly seem to be one of the good guys! Keep it up.
And Thank You
April 7th, 2008 at 7:46 am
Dr. Byrne I hope this is not considered off topic, but I think all should see this
http://seekingalpha.com/article/71331-naked-shorting-comes-full-circle
April 7th, 2008 at 9:42 am
Bravo Pat and speaking of “allying yourself with the wealthiest and most powerful people in your state, many of them scofflaws, while being portrayed as a reformer”
I find it interesting that few have commented on the Clinton’s love of hedge funds—
particularly in regard to what kind of values did mom and dad instill in their daughter Chelsea? Following graduation from Stanford and Oxford, did mom and dad encourage Chelsea to maybe spend a few years helping those in America who were not as fortunate as herself? Or did they suggest to Chelsea to ‘follow the money”? It is more than striking that Chelsea’s first job was with McKinsey & Co, a consulting firm with an eye on maximizing revenues for companies; then quickly moving to Hedge Fund Avenue Capital (with its MO to maximize profits for the very rich).
So maybe daughter Chelsea is a fitting icon for what the Clinton’s really believe–
“allying yourself with the wealthiest and most powerful people in your state, many of them scofflaws, while being portrayed as a reformer” ?
In fairness to Chelsea, she obviously has a right to choose the life and lifestyle she wants. But with Hedge Funds now controlling much of America and America’s destiny…her choice perhaps says a lot about the direction America is moving in and the values that really matter?
Meanwhile Pat, God bless your energy, values and spirit!
April 7th, 2008 at 11:44 am
Don’t you have a company to run or something?
Spitzer got what was coming to him. Perhaps he got far less than what was coming to him.
I don’t see how your 10 page epistle on his background sheds new light on the mans ill deeds, discredits him further, or, most importantly, helps your P.O.S. company finally turn a profit.
April 7th, 2008 at 12:00 pm
Guy…Hell is hot! Don’t go there.
April 7th, 2008 at 3:22 pm
rondoc,
Should I interpret that as a threat?
I wasn’t really sure if this was a forum for people to express their ideas, or just a soapbox for those suffering from megalomania.
-Guido
April 7th, 2008 at 3:49 pm
So, Dr. Byrne My question to you would be: How will this make a difference in your war?
And I say your war since it seems players have named you their General, in that every Colum that mentions these issues have your name attached some where.
Is this the beginning of the end for this issue?
Have They (the decision makers for the laws governing this practice) seen enough that the changes needed will be implemented soon?
Or will that take years after everyone sees the need for change?
Okay I concede that’s more than one question, but then again, I’ve already stated I can be caught moving my lips when I read.
April 7th, 2008 at 4:19 pm
Dr. Byrne, please check your Overstock email. Thank You.
April 7th, 2008 at 4:25 pm
Just Learnin
IMO getting the opposition put in jail would be a major coup for us. Showing everyone who follows The Big Bad Cramer what a liar he is would draw ALOT of eyes to the problem. If Cramer is such a brazen crook people might start asking themselves “what about my broker”.
Plus one of the first laws of warfare is to take out the enemies Command and high value targets. Cramer seems to me to fit both to a T.
And pretty soon ALOT of people might start asking the SEC WHY they didn’t get him ALOT sooner.
Keep spreading the word…
April 8th, 2008 at 7:14 am
Guy,
Just a comment on how the universe (God in my world) seems to work these things out.
If your evil.
If I misjudge from where you come ignore it.
If not, if your on the evil side of human life and effort, work it out in you own mind and in that case dead soul. All things have a payday.
If you disagree on evil always losing eventually, well then just play away and find out for yourself. Feel free.
That’s all. No threat from me, just a belief.
That my opinion!
April 8th, 2008 at 9:51 pm
Guy - Patrick’s choice to educate others, including yourself incidentally, to the clandestine realities in life seems like a worthy hobby for a CEO of a major corporation to partake in…
Or maybe you’re used to them posturing for phony causes, political feigning, sound bite imagery and providing form to corporate America with no substance…
Actually, I think Patrick would be better serve us all if he dedicated his free time to becoming a scratch golfer.
April 9th, 2008 at 3:58 am
A few years ago when Patrick bought the naked short issue to the media the Senate Banking Committe had a meeting wherein Senator Bennett (God bless his soul) said this “He who sells what is’nt his’n must buy it back or go to prison” He said this to Chairman Donaldson ( then SEC Commish)This day with the help of people like Patrick , Dave Patch, Bob o’Brien et al will come to pass, and maybe a lot sooner than people think. And all the rhetoric spewing by the few here will be a thing of the past.
April 9th, 2008 at 12:06 pm
Sean….Until a widely read expose is done on all the Congress as well as Senatores who like Eliot Spitzer have the hand in the till I don’t have much faith in Government doing much.
When the time of massive loses start to roll through joe sixpacks IRA’s as well a everyone else inthe markets….when it is oo lae and the pain is bad enough and wide enough then people will focus….although it will be too late for them to ever get the money back….then all those who now would rather ignore what is going on will suddenly want to know everything that has happened to wipe them out.
When that happens you will likely see people in the streets looking for blood…And getting it.
At that point the corrupt people in Government, as well as the Banksters may need a very secure hiding place, a very long ways from the where the public will have any abiliity to get their hands on them.
April 9th, 2008 at 6:21 pm
Guy, would you feel more comfortable if Patrick spent his time on a yacht, catching a Marlin, or playing golf for 6 hours, rather than attempting to educate the public about problems that have DIRE consequences for our economy. We are being victimized by financial terrorism.
The country is being brought to its knees by the destruction of the capital markets through naked short selling, manipulation of the media, the destruction of the value of the dollar, and the middle class of this country, which , last time I looked was the heart and soul of this country. Personally I am grateful for Patrick’s efforts and as an American, you should be as well. Are your comments about Overstock being a POS company based on your owning stock? . If so, consider that OSTK is a company with 800 mm in revenue and a relatively low market cap. Also consider, that OSTK shares have been manipulated to the down side. As a shareholder, I am glad that our CEO is spending his spare time trying to fix a system that has more loopholes than a 200 year old sweater.
Cleaning up this mess is something that no one on Wall Street wanted to tackle because they all make money on the corrupt system and that’s all they care about. But things are changing and now you have SEC Chairman Cox, the new Inspector General at the SEC looking into naked short selling, Barney Frank, head of house finance is also VERY concerned about the lack of enforcement of trading regulations.
So, you still would rather see him on a yacht? (By the way, I doubt Patrick owns a yacht—He has already publicly stated that he would be quite comfortable putting everything he owns in a backpack.
Patrick is NOT a man to walk away from a fight and thank goodness for that.
April 10th, 2008 at 11:57 am
rondoc,
It seems quite close minded of you to equate a disagreement of opinion between us as a sign that I am evil and will end up in hell and that you are good and will end up in heaven or paradise or whatever. Personally, I don’t believe in organized religion (in fact, I believe that it serves as the root of much of the evil that we see in today’s world - perhaps a conversation for another time). I don’t believe in the concepts of heaven or hell either, so this sort of attempt to enlighten me won’t get very far. If ‘god’ is the one who works these things out, he’s doing one hell of a job - I especially admire the work that he’s done in the middle east. Bravo.
landr and rezerch,
I couldn’t agree with you more. I despise CEO’s who spend their fortunes for personal leisure, PARTICULARLY when it is on the companies dime. However, I do draw the line between personal crusade (the immense amount of money poured into the ‘jihad’ and school vouchers in Utah) and charity. Were I fortunate enough to have the means to spend $3+ million on a school voucher referendum in the state of UTAH, I would feel much more comfortable putting those funds towards those who can’t get enough to eat in this world of plenty (see Bono et al.). I particularly make this distinction between the middle/upper class US citizen who MAY be getting screwed by our inadequately regulated financial system (and again, I agree here - the system is broken), but when comparing the US citizen who has the wherewithal to INVEST IN FINANCIAL MARKETS with those who can’t even put food on the table or a roof over their head we’re talking about apples and oranges. The latter is at the bottom of Maslow’s Hierarchy of Needs in comparison with Patrick’s jet that he uses to get from Jihad location A to Jihad location B. I would imagine that his backpack fits on the jet, and I don’t believe that Maslow even had private jets in mind when he created his hierarchy, but I would imagine that they would float somewhere above the pyramid (no pun intended).
I enjoy the friendly rancor - please continue.
Sincerely,
Guy
April 10th, 2008 at 5:34 pm
EVeryone should check this out and read the petition. It exolaines in an excellent way the problem with the SEC and NSS.
….
http://www.thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/692/Default.aspx
Location: Blogs Bob O’Brien’s Sanity Check Blog
Posted by: bobo 4/9/2008 3:34 PM
The NIPC Petition is now loaded and up at the SEC site. You can view it here:
http://sec.gov/rules/petitions.shtml
We need everyone to now write comment letters in support of the petition. Please take out some time and circulate this info to everyone you can think of who is interested in the issue. Post the info on every chat room and message board you can think of. We need to get it some traction, and the best way to do it is to take a few minutes and show support for NIPC, and for the fix proposed in the petition. The SEC can’t just pretend that there are rules allowing it to authorize brokers to unofficially break federal securities laws every day. This needs to stop now, and the mechanism to stop it is to get mobilized, and post a comment. The way to do it is to email them at:
rule-comments@sec.gov
Re: file 4-557 NIPC Rule Petition - Customer Account Rule
Or via the US Post Office to:
Nancy M. Morris, Secretary Securities and Exchange Commission
100 F Street, NE Washington, DC 20549-0609
Regarding file 4-557, NIPC Rule Petition - Customer Account Rule
Please disseminate this far and wide, and take action. We have created a method to effect a meaningful change and stop the fraud. Now the rest is up to you.
April 10th, 2008 at 9:52 pm
Guy Fawkes -
By the way, your blog name is certainly not lost on me. Although if you are against “organized religion” why would your blog name reference one of history’s most fervent Roman Catholic revolutionaries? That would be like me stating I personally don’t believe in global warming and having my blog name be Al Gore…
Anyway…
Common Guy, you can do better than citing “the politics of envy” in your contention and certainly produce a better foundation than retreaded Psychology 101 text book manure included in Maslow’s Hierarchy of Needs. The beauty behind someone like Patrick placing their own earned income into a cause, specifically “school vouchers” is that in reality, they are contributing more to society than simply donating to a charity. Please take a look at The Austrian School’s (specifically Ludwig von Mises) take on the outcome of “if” the voucher policy had passed what would the intended consequences be… Namely giving parents the freedom of choice, bettering education while creating a competitive environment to foster learning and metaphorically speaking, teaching children to fish, as opposed to both a straight “donation” by an individual to some cause (United Way) and maintaining the status quo of “jihadists” like the teachers union’s monopolization of education.
Also, I’m sure you’re aware that lower class citizens are affected MORE by financial market manipulation than middle/upper class echelons in society. Most have 401k or pension dollars invested in mutual funds they have no clue about and don’t have the benefit of diversification into other assets to build for retirement. So in essence, their ENTIRE retirement savings becomes part of this charade.
Guy - I’ll leave you with this… If Bono is your standard bearer of selflessness (which doesn’t exist), please read all the articles critical of him for his tax havens across the globe to avoid paying taxes in Ireland which has one of the highest poverty levels of virtually any industrialized nation in the world. He’s one of the biggest hypocrites out there!
http://www.slate.com/id/2152580/
Rock on Patrick!
Brevity being the soul to wit, I must admit, I have none. (kudos to me, that rhymes)
April 11th, 2008 at 10:58 am
landr-
I’ll keep this brief since I’m rather busy today.
1) I support revolution against the status quo in general - especially when that status quo serves those whose pockets are gorged on the backs of the proletariat. I recognize that Guy Fawkes was a Roman Catholic, but couldn’t care less since he stood, spoke and acted on that which he believed. Perhaps I should have chosen a communist leader, but would Che Guevara be original these days (posters of him that hang in dorm rooms across America look cool and all, but…)? Would I come across as anti-American if I chose Hugo Chavez (I’m not)? (These are examples… don’t take them to heart or so literally) So, sorry for the confusion - I’m a complicated man.
2) Blah, blah, blah… Sorry if I offended you with my psych 101 references, but I think that Maslow was onto something, no matter how basic his reasoning may seem to someone as astute as you. That said, I think that you would agree that if someone can’t feed or house their family, than I’m sure they couldn’t give a damn about their 401k. The lack of charitable funding goes far beyond our nation of plenty.
3) Selfishness is human nature. Bono is not my ’standard bearer for selflessness’, but rather simply an example. Perhaps Bono does do unique things with how he distributes his money per tax loopholes - most wealthy people do (or at least I would, were I a wealthy person). Sometimes paying taxes above and beyond a certain level isn’t the best way to make a difference in the state of the world. I haven’t had time to read your slate article. I know that slate is renowned for its journalistic integrity and accuracy. However, the last I read, the Irish economy was on the rebound as an up and coming European tech hub, while the whole of Africa was suffering from malnutrition, homelessness, genocide, civil war, and a whole array of nastiness that I’m sure that neither you nor I can either imagine or comprehend while we spend our time blogging away in front of our plastic and metal boxes.
Happy Friday,
Guy
April 11th, 2008 at 7:27 pm
Guy - You seem like a nice enough dude but I will agree with you and admit, you are a complicated guy… Patrick’s worked hard to build overstock.com from nothing which currently employs over 800 people… Ya know, pays them a living wage with benefits and keeps them from being or becoming part of the proletariat class. Your first post on this blog refers to his hard work and labor which EMPLOYS (freely negotiated labor and compensation fairly based on that agreement) as a POS company. Then you cite some of the most despicable human beings of our generation, such as Che and Hugo, as examples of virtue?
Wow.
I’m surprised you’re apprehensive to choose Che Guevera as your standard bearer because it may offend our sensibilities in viewing you as not original. How about the fact that he was a cold blooded murderer and international terrorist who trained and motivated Castro’s death squads that mass murdered tens of thousands of innocent people (men, women and children). He would simply shoot you in the head if you didn’t agree with his version of communism.
What a hero.
When I see those posters or t-shirts, honestly, I literally get sick to my stomach.
Guy - Please, I want to say this with all sincerity without trying to patronize your beliefs. It’s impossible to conversate or debate with a communist as their basis of reality is so screwy, it becomes silly. I’m done.
April 11th, 2008 at 9:04 pm
Well Guy I must respond to you one last time. Can’t seem to help myself.
Guy…No God.
rondoc…God Yes!
Guy….No Judgement by any higher power…ever.
rondoc….Certain judgement for what we do by a Superior power.
Guy….Patric wasting his time.
rondoc…Patric doing well.
Guy….No hell or punishment by any higher Power..ever for doing any evil…since he admits to no higher Power.
rondoc…Yes a hell or concept of punishment forever for doing evil, by a higher power..God.
Just our own opinions and beliefs. One of us may be right. Which would make the other was wrong. So what difference would it make?
Guy right… Guy, or rondoc no problem.
rondoc right….Guy unspeakable problem… rondoc no problem.
Finnished with Guy. No more to say.
Go Patric, you are making me proud to be human…Quite a change from what so many humans are causing me to feel these days!
April 20th, 2008 at 6:45 pm
[...] ‘Eliot “Slowhand” Spitzer and His Many Sugar Daddies’ by Patrick M. Byrne [...]
May 26th, 2008 at 7:42 am
[...] The New York state Attorney General Eliot Spitzer was a corrupt finger-puppet (subsequent events have confirmed the corruption, and I am waiting for anyone in the press to see the “finger-puppet” [...]
June 22nd, 2008 at 4:38 am
Michael Steinhardt, Marc Rich, Elliot Spitzer..just those few names goes to show that behind these men are extremely powerful interests the pinpointing of which gets people evicted from polite society
July 1st, 2008 at 6:56 pm
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