I know a great joke. Unfortunately, I’ve learned that some people don’t get it without a preface.
So here’s the preface: In the 1950’s there was a school of psychology called “Behaviorism”. Behaviorists turned away from the “internal states” that had been the concern of psychology since its inception, regarding them as mental constructs whose explanation invoked unscientific mysticism. Behaviorists instead proposed a new “scientific” paradigm and mission: to describe “the organism” in terms of inputs to and outputs from a Black Box whose inner workings need not be explained. If you have seen 1950’s grainy black-and-white films of BF Skinner teaching pigeons to spin around and peck buttons, and chickens learning to perform simple tasks, you have seen Behaviorism in action.
So here’s the joke: Two professors of behaviorist psychology have sex. When they’re finished they light up cigarettes. One says to the other, “So…. That was good for you. How was it for me?”
It’s a great joke. For those who still missed it, the point is that the professors were so wrapped up in their theory (in this case, the denial of internal states), that they could not experience what was right in front of them. They had to filter their data through the theory to which they were committed before they could experience it.
Sometimes such commitments bind their holders so strongly they forget that what they are committed to are just paradigms. For example, Richard Feynman told a story about how, in 1895, the chairman of the Harvard Physics Department discouraged new graduate students from starting PhD’s on the grounds that all the questions of physics had been answered, with the exception of two problems. Those two problems were the photoelectric effect and the problem of black-body radiation. Their subsequent investigation spawned relativity and quantum mechanics, shattering the classical Newtonian paradigm to which the Harvard department chair had been committed.
Modern finance theory is dominated by two pillars: the “Capital Asset Pricing Model” (or “CAPM”) and “Efficient Market Theory” (or “EMT”). CAPM is a model that says, Market participants will bid the price of a financial asset up and down until its return and its volatility satisfy a certain equilibrium equation. Efficient Market Theory evolves alongside of CAPM to say, Prices have already been so bid to reflect all publicly available information.
An implication of Efficient Market Theory is that, since securities are already priced to reflect all publicly available information, it is impossible to beat the market without having inside information. While for some years the leading edge of finance theory has been nibbling away at EMT, it is no exaggeration to say that it is still the dominant paradigm of modern finance, and that every MBA program in American universities teaches EMT as the core of finance theory.
By happy accident I was exposed to EMT by its greatest counterexample, Warren Buffett. I was 14 when he impressed upon me the ridiculousness of EMT. He loved the fact that it was taught in business schools, he said, for it made his job “like playing bridge with people who have been told it doesn’t help to look at the cards.” Later, I was fortunate also to know Dr. Kenneth Arrow (one of the founders of general equilibrium theory, and the originator of Arrow’s Impossibility Theorem, a tidy social choice proof he did over a weekend when he was 26 for which he later won the Nobel Prize). Dr. Arrow also ridiculed Efficient Market Theory, saying, “Believing in EMT is like believing you can’t find a $20 bill in the street because if it were there someone else would have picked it up already.”
Mr. Buffett and Dr. Arrow warned me about the intense dogmatic belief in Efficient Market Theory among finance professors. Mr. Buffett compared their profession to a Mayan priesthood whose practitioners had invested years in learning the arcane language of their priest craft (or as he put it with regard to finance professors, “had gotten their Ph.D.’s learning how to talk to each other in Greek letters”). He pointed out how natural it was for priests to defend the hard-won skills which set them apart from ordinary mortals.
Mr. Buffett has beat the market so handily, for so many years, that his success is an affront to Efficient Market Theory. Naive EMT proponents at first discounted Buffett’s success: give enough chimpanzees coins to flip, and one of them is going to get 10 heads in a row, they said. This led to Buffett’s famed response, “The Superinvestors of Graham-and-Doddsville“, first delivered in a talk at Columbia University, and then reprinted as an Appendix to The Intelligent Investor.
Buffett’s partner, Charles Munger, has had this to say on the subject:
“Now let’s talk about efficient market theory, a wonderful economic doctrine that had a long vogue in spite of the experience of Berkshire Hathaway. In fact one of the economists who won — he shared a Nobel Prize — and as he looked at Berkshire Hathaway year after year, which people would throw in his face as saying maybe the market isn’t quite as efficient as you think, he said, ‘Well, it’s a two-sigma event.’ And then he said we were a three-sigma event. And then he said we were a four-sigma event. And he finally got up to six sigmas — better to add a sigma than change a theory, just because the evidence comes in differently. [Laughter] ….
“…what made these economists love the efficient market theory is the math was so elegant. And after all, math was what they’d learned to do. To the man with a hammer, every problem tends to look pretty much like a nail…”
Finance professors and economists have missed the boat on stock manipulation schemes such as naked short selling because they are confined by the straight-jacket of their theory to the point that they cannot experience what is right in front of them. When confronted with data showing the existence of naked short selling, they answer that any manipulative effects are impossible. Their addiction to EMT locks them into a worldview that maintains, There is an ocean of capital out there ready to pour in and correct any mispricing, so mispricing cannot exist. This worldview prevents them from understanding the effects of stock manipulation schemes such as naked short selling.
I will give some recent examples of this (because I do not care to embarrass any individuals I will not identify anyone by name):
• Not long ago a sitting commissioner of the SEC made precisely this argument in private: CAPM tells us it should not matter how many shares are trading in the market, phantom or otherwise, as long as the market knows how many have been issued;
• Along the same lines, the current internal party line of the SEC’s Office of Economic Analysis someone objecting to naked short selling must object to short selling, because within legal short selling shares could theoretically be sold-lent-sold-lent, thus creating an infinite number of shares. This objection misses the boat on two counts: the practical constraints of the settlement system would prevent such an infinite chain from developing (and if it did, we might in fact have to reconsider our commitment to the benefits of short selling); besides which, the short seller pays for his position, and by paying that price he injects valuable information into the marketplace, whereas the naked short selling skips paying that price and hence the information he injects into the marketplace is value-less;
• As recently as last June, a high official within the SEC’s OEA was arguing internally that there is no difference between naked shorting and writing a futures contract. He was correct in that a naked short position is akin to a derivative called a “Contract For Difference”. He was wrong in that a naked short position creates a futures contract that is in some sense involuntary, cheats the buyer of rights he thinks he is acquiring (such as the right to vote shares), and has the unusual feature of being able to affect the underlying value of which its value is putatively derivative (write derivative contracts on how much the sun will shine in Florida all you want, and it will not affect the underlying event, but if I sop up all demand for a thinly-traded small cap company by diverting it into what are in effect CFD’s, the underlying event, that is, the stock price, will be affected).
My point is not to descend too far into the arcana of such debates. Instead, it is to suggest that modern finance theoreticians have become misguided because they reason from a foundation of Efficient Market Theory.
A couple of years ago I visited a United States Senator who walked me through arguments the hedge fund’s lobbyists had recently rehearsed to him, arguments holding that, in effect, everything I claimed was going on in the market was theoretically impossible. I said to him, “Sir, they can line up finance professors from here to MIT who say this is impossible. I can line up tough Italian guys from here to Staten Island that say they do it every day.”
Like Newtonian physics, which gives good results on much scale of interest to humans, EMT is useful. It may even be directionally correct, expressing a powerful marketplace dynamic. However, there are corner cases it gets hopelessly wrong. Sadly, over time those corner cases have become a non-negligible corner of the market. And as this has happened the finance professoriate, unable to see what was right in front of its eyes, has stayed busily asking itself, “That was good for you, how was it for me?”
If this essay concerns you, and you wish to help, then:
1) email it to a dozen friends;
2) go here for additional suggestions: “So You Say You Want a Revolution?“
Mary Schapiro should be fired. They need to hire a cop and start arresting people.
The FBI Needs to do a sweep of many DC offices….scary stuff…
FBI searches DC government office, arrests 2
By DEVLIN BARRETT, Associated Press Writer Devlin Barrett, Associated Press Writer – 21 mins ago
http://news.yahoo.com/s/ap/20090312/ap_on_go_ot/dc_office_fbi
Hello Patrick,
I am a writer for Nouriel Roubini’s RGE Monitor. I have been shaking the same tree as you for some time now, to see what comes falling down. The disdain I feel towards our financial world is matched only by the schadenfreude I feel when the criminals are caught, and the knowledgeable onlookers are trapped in the wake!
A while back I read that you felt no ill will towards the wrongdoers of this (the largest financial crime HUMANITY has ever known) situation. I go back and forth on this. Some days I want them flogged… Other days, I realize, this crime is so systemic, that it became “the system”, and the people that operated within it were only doing what has become the new norm (sorta like J-walking, driving over the speed limit or cheating on taxes)
To me there are 3 sets of criminals, “the Orchestrators”, “the enablers”, and “everyone else”. For the orchestrators… they deserve everything they have coming! The Enablers, are an extremely grey area… Too many of these people knew what was going on, and rode the wave, but most were unwillingly/unknowingly part of it. The impossibility of determining who was who here is what leaves me undecided on how to feel about them. As for everyone else… (myself included) we either:
Stood by for too long, knowing something was wrong and not doing anything about it.
Or
We failed to properly educate ourselves to knowing. (or were too indifferent)
Or
We failed to coordinate ourselves to make a difference.
For the “everyone else” our guilt is being repaid with the inheritance of the current and future world. Like it or not, we will live with this sentence, and hopefully learn from it!
So now I ask you, as a fellow drum beater… Do you really feel no “ill will” towards the wrongdoers? Naysayers?
Do you feel vindicated?
I am a big fan of your work, and would love the opportunity to collaborate with you in some way in the future. If you ever wanted to reach me to do so, I can be reached @ 718-614-1527
All the best,
Rich Hartmann (a.k.a. Miss America)
Here’s a link to a paper I filed with the SEC yesterday. Note the brilliant design of this fraud and how every little detail seems to be pre-addressed.
http://www.sec.gov/comments/s7-30-08/s73008-92.pdf
Rich. I can’t speak for Dr Jim DeCosta. But those who committed or allowed these crimes has destroyed the LIVES of mom and pops and affected a geneartion of young people. The repsonsibilty is just as serious for the one who performed the crime as the one how allowed it. The POLICE officer aka regulator/inspector is just as responsible as the one who pushed the button for in truth if one could STOP one from pushing a button and avoiding a nuclear collapse is that any different that those who pushed buttons or stood buy and allowed the FINACIAL COLLPASE. Bring them in. Bring those who try to defelct the seriousnes and put them in jail and FILL their positions with the many ethcial people who do their jobs every day while adhering to the law. The voices were LOUD and clear for YEARS. Therefore do as they would in other parts of the world. Stone them, chop their hands off. Stealing is Stealing and FINANCIAL TERROISM is TERRORISM.
@ Fintas… I’m very with you. Trust me. There should be so many heads rolling… but it just won’t happen.
…but I think a great deal of what escalated the severity of where we are now had to do with a large percentage of the industry just following the trend. (unknowing the extent)
For example, a bright kid lands a wall st job after his ivy leugue boot camp. He then learns his companies trading strategy and is on a desk given a certain allocation. Much like a foot soldier being led by your chief, you follow those rules, and try to be the best at it. More often then not though… that foot soldier doesn’t know what the chief knows. That foot soldier is just following orders.
At most of the financial companies that have been willingly or unwillingly part of this, .01% to 5% of the people that work there are chiefs.
The 95-99.9% are just foot soldiers that were either just following orders or oblivious.
It’s the 95-99.9% that I don’t know how to feel about.
Rich H / Miss America
Rich Hartmann,
I know how I feel about the other 95-99.9%. These people are not stupid. Those ivy league educations afford them some form of education and common sense the rest. If you look away at wrong doings for the sake of a job you are just as guilty as the cheifs in my opinion. Our country is going to hell in a hand basket because of the 95-99.9% who looked the other way. Where is responsibility, morals and ethics in all of this? Since when did a Wall Street job trump morals and ethics which should be why you were there in the first place at that job. I say jail them all. Then, maybe then that light bulb will come on a decency will come back into those lives who for a buck lost it.
Rich Hartmann,
I agree 100% with your assertion that 95-99.9% of the foot soldiers are just following orders. That’s true both amongst the abusive market makers pulling the trigger on ANSS trades and the SEC staff.
I’ve interviewed many retired market makers from the bigger market making firms. They don’t know exactly why but they readily admit that for some reason or another they never have to deliver that which they sell. They all admit to making a truckload of money and that it’s better to just follow orders,never “rock the boat” and don’t ask too many questions.
A lot of the SEC staff have the same mantra i.e. just don’t rock the boat or mess with the status quo. They’re not typically making the big bucks yet but they know that if they don’t rock the boat they’ll have their chance to go through that “revolving door” at the SEC to a job on Wall Street that pays 10 times as well.
Their main asset that they carry through that “revolving door” is not their brain as they’d like to think but their connections that remain at the SEC that can be called upon should their new boss get into a regulatory bind.
Lets apply the same 95-99.9% foot soldiers to another job. Lets say a medical job. A man practices as a surgeon/ physician but has never had formal training or was a legitimate licensee. He is taking care of you or your family and to some degree, he seems legit. No red flags to laymen on the street.
Lets say the nurses/hospital staff pick up on something just ain’t right about this doctor. Maybe his knowledge does not seem up to par for someone who attended medical school. They do some checking and find something just did not add up in his credentials. They decide though to not rock the boat for the sake of a job because they are paid well and their suspicions are not confirmed.
This surgeon (faked degree) takes your family member to an elected outpatient surgery only to come out and tell you they died in surgery.
Although this seems impossible, this very thing has happened as this is not a hypothetical situation.
Do the nurses/hospital staff (footsoldiers) hold no responsibility here since they decided to not get involved and try to find answers to their suspicions? Does a person’s health care bear more responsibility on those suspicions than a WS guy who suspects his boss is ripping off people’s money? As in the Madoff case, people who lost it all have committed suicide. So loss of money can lead to cause harm to health just as a fake doctor can.
To me there is no difference. One is just a guilty as the other.
Well I maybe getting my own feelings into this. NAH..but I’ve been fighting the battle all my adult life and THAT is a long time. I was taught right from wrong. I acceped what is right and wrong. Those who are in this business or any other know WHAT IS RIGHT. And they KNOW what is wrong. Whethr a nurse who re uses a needle. A police officer who doesn’t enforce, a helper who is told to put something in incorrectly. A design engineer who knows the design is flawed. The statement of can’t see it from my back yard doesn’t cut it. Or the I’m only doing what I was told to do doesn’t cut it.Or I don’t want to rock the boat doesn’t cut it. The truth is..OH OH..TRUTH and then they say whose version of the truth? We have laws. We don’t need to get into the INTERPRETATION of the law. YOU buy it. You deliver it. YOU do NOT gang up ILLEGALLY. YOU DO NOT spread false rumors for your own gang whether it be re a stock or position or to crucify someone. One does the RIGHT thing and here and now if someone KNOWS who a crook is one spills their gutts or one day asnwer why they didn’t. Now I’ve walked this and KNOW the consequences first hand. We need CHAMPIONS and CRUSADERS.. It’s nice to have the dialogue but most here KNOW. We don’t need to be told. Most in the business KNOW. They don’t need to be told. What we do need are those who will just do it and steam roll over those who will NOT!
I am with you Fintas. I do not think people need to be victims to come to the conclusion people need to do the right thing. It affects us all in some way. People who steal affect us in the prices of goods we buy. L
You think this is a person who didn’t know? Look at what connections get you.
CA Congresswoman Tied to Bank That Received Bailout Funds
By Avi Klein on March 12, 2009 1:58 PM | No Comments | No TrackBacks
U.S. Rep. Maxine Waters has long-standing ties to a Boston-based bank that received millions of dollars in bailout funding, The Wall Street Journal reported today.
According to the report, the California congresswoman and her husband, Sydney Williams, were investors in two California banks that merged in 2002 to become OneUnited Bank.
OneUnited received $12 million from the Treasury Department’s Troubled Asset Relief Program (TARP) in December.
Waters sold her shares in 2004. But according to her most recent financial-disclosure form, dated May 2008, Williams still owned shares whose value was somewhere between $250,000 to $500,000. Williams also served on the bank’s board of directors until last year, and got “interest payments from a separate holding at the bank, also worth between $250,000 and $500,000,” the Journal reported.
Waters’ connection to the bank is important because she is a member of the House Financial Services Committee and has spoken out repeatedly in defense of OneUnited and its executives.
At the height of the banking crisis in September, she made calls to the Treasury Department on OneUnited’s behalf to express her displeasure at the department’s decision to put Freddie Mac and Fannie Mae under federal receivership. OneUnited had significant investments in the two companies, and their collapsed share prices wiped out much of the bank’s capital, leaving it below the level typically needed to qualify for TARP aid.
In addition, The New York Times reported today that Waters also arranged a meeting between OneUnited executives and federal regulators. During the meeting, the company’s CEO “seized the opportunity to plead for special assistance for his bank.”
“Here you had a tiny community bank that comes in and they are not proposing a broader policy — they were asking for help for themselves,” said Steve Lineberry, a former Treasury aide who attended the meeting. “I don’t remember that ever happening before.”
According to Treasury officials at the meeting, Waters did not tell them about her ties to the bank beforehand.
Soon afterward, House Financial Services Committee Chairman Barney Frank inserted language into a TARP bill that was specifically worded to permit bailout funding of OneUnited.
OneUnited has a mixed regulatory history. The Journal reported that the bank received an “outstanding” Community Reinvestment Act rating for its lending efforts in Los Angeles, but “has weak ratings in Massachusetts and failed to meet minimum standards in Florida.”
In October, federal regulators told OneUnited to raise fresh capital, name an independent board, and cease paying for such executives perks as a $6.4 million Southern California beachside house used by its chairman.
We were all given a conscience at birth. Some embrace it, while others suppress it and lose it.
This is good vs. evil. If you have knowledge of wrong doing and choose to look the other way without any conscience, you are no different than the Ted Bundy’s, Jeff Skillings, Adolf Hitlers of the world in my opinion. I had a conversation with a detective which struck a nerve. He said, people will give us information regarding a crime but, then say “but I don’t want to be involved. Leave me out of it. I will not testify.” Then he goes on to say, when this person has been victimized, they scream do something, help me. How ironic. If it is all about you, you want the Calvary to be called in, but when it comes to you helping others, you choose to limit your involvement. I hope our Military does not decide to look the other way one day if another country decides to invade us, or terrorize us with WMD, dirty Bombs or nuke us.
Believe me, I want justice…. But I know people in the industry. Too many people. …and most are OBLIVIOUS!
The Ivy leaguers are the BEST at following orders. They’re far less free thinking then the high school drop out that’s worked his way through! I’ve had plenty work with and for me.
What you have to realize about the 95-99.9%ers is that so much of what they do becomes so compartmentalized within their particular orginization, that they never were able to put the dots together.
If it weren’t for the internet / blogs… they would’ve never known! …bvecause the media wasn’t planning on doing their diligent work, or were schills! It’s people like Mr Byrnes that forced their hands.
I say congrats to him and the like. BEAT THE DRUMS!!!
but the 95-99.9ers… I don’t know how I feel. They have wound up victims too. (they just didn’t know their part)
Rich H / Miss America
When in doubt….become a snitch for the SEC…right, and get the Gary Aguirre Treatment…
Feds might offer bounties for market miscreants
David R. Sands (Contact)
http://washingtontimes.com/news/2009/mar/12/sec-considers-cash-bounties-to-whistleblowers/
The nation’s top market cop is looking for a few good snitches. Securities and Exchange Commission Chairman Mary L. Schapiro told a congressional panel Wednesday that her agency is considering offering cash bounties for the first time to private-sector whistleblowers who help expose financial wrongdoing.
The plan was revealed as disgraced financier Bernard Madoff was preparing to plead guilty to 11 felony counts in a New York courtroom Thursday in connection with a massive Ponzi scheme that went undetected by the SEC and other regulators for more than a decade. Prosecutors this week raised their estimate of the size of the fraud to more than $64 billion.
Mrs. Schapiro told a House Appropriations subcommittee that she is considering asking for the power to offer rewards to whistleblowers in securities fraud cases similar to the bounties given to those who reveal insider-trading violations.
“Right now, the main reward for being a whistleblower is the good feeling you get of having done something important, because we don’t have the authority to pay,” she said, noting that the Internal Revenue Service and other federal agencies already have well-defined reward programs.
“Whistleblowers tend to do a lot of the work for you, hand you something that’s pretty fully baked,” Mrs. Schapiro said. “It would enable us to run with that kind of information and pursue cases in a much more aggressive way.”
Noting that the SEC has about 400 investigators to monitor more than 11,000 investment advisers like Mr. Madoff, she said, “We have to leverage third parties to do our job.”
Mrs. Schapiro, who was confirmed in January, agreed with lawmakers that the SEC’s reputation had taken a major hit because of the Madoff case. Congressional anger boiled over last month when it was revealed that Boston investor Harry Markopolos had supplied SEC officials with a detailed analysis of Mr. Madoff’s fraudulent empire in 2005 but the agency failed to act.
The agency’s top enforcement officer resigned in the wake of those revelations, and the SEC inspector general began an internal investigation into how the Madoff fraud went undetected for so long. Mrs. Schapiro also confirmed reports that the SEC is weighing changes to two rules that critics say have accelerated the global stock market decline and exacerbated losses and capital problems at the nation’s banks.
She said she hopes the agency will put out for public comment within a month a plan to reinstate the so-called “uptick rule,” which forces short-sellers in the market to wait until a stock moves up in price before selling it. Many say concentrated moves by short-sellers – who profit when share prices fall – have pushed down equity market values around the world.
Mrs. Schapiro also said she was in favor of “more judgment in the application” of accounting rules requiring banks to mark their assets to their true market values. House Financial Services Committee Chairman Barney Frank, Massachusetts Democrat, and others say the rigid use of “mark-to-market” rules have forced banks to write off entirely or sell at fire-sale prices troubled assets that they had planned to hold for the long term.
But the SEC chief said she would oppose eliminating the rule altogether.
“Investors have told us that fair value is important to them because it gives them transparency and a real insight into the financial statements. And that’s information they need to make decisions about how to allocate capital,” she said.
Democrats and Republicans on the House panel sparred at times over whether budget and personnel cuts in the later years of the Bush administration had weakened the SEC’s enforcement powers.
“I have to say that the last administration at the SEC was the only agency I ever ran into that we would sit here and say, ‘How much do you need?’ and they’d say, ‘We have enough,’ ” said subcommittee Chairman Jose E. Serrano, New York Democrat.
Mrs. Schapiro said the agency lost 10 percent of its staff between 2005 and 2007 and that it “inevitably affected all of the SEC’s major programs.”
She told lawmakers that she would seek authority to tap a $17 million fund not used by the agency to bolster current operations, and President Obama’s fiscal 2010 budget calls for a 9 percent increase in the agency’s budget to $1.03 billion.
But Mrs. Schapiro agreed with Republicans on the panel that the agency did not need new rules to police the market as much as it needed more personnel to administer the existing rules.
“What I think we really need are boots on the ground,” she said. She also expressed opposition to any plan to fold the SEC into a new “super-regulator” that the Obama administration, the Federal Reserve and lawmakers are now considering to deal with firms that pose a “systemic risk” to the U.S. financial marketplace.
“My concern about a single monolithic regulator is that we need an entity with ultimate responsibility for the protection of the financial system,” she said. “A systemic regulator will always trump an investor protection regulator’s concerns, I fear, and I don’t think that would be good in our market.”
Years ago. I leanred to find out what the POLICY was and then find out if they really meant it. Meaning is it just paper or does it matter. Then I would find that ANGEL that I could go to or count on. The rest was just fortitude. You see if you can get it to those who do care then others will help. Here and now there aren’t many who have not been affected. Except some are in damage control versus tell em the truth. THE TRUTH is we were let down by many. When one travels across a bridge they shouldn’t have to wonder is it safe. Did that inspector do his job. Now should we wonder if that enforcement agent did the verson of see no evil, hear no evil and speak no evil. Patrick appears on Cavuto awhile back and Neil does the superficial questioning. Oreilly does he’s for the working folk but does his version of Front running and let me show you how to go after a CEO for Political reasons. While doing so others pile on. And if this was ten years ago I’d say no one was watching. BUT here and NOW. CMON. JPM..and again CMON. SPX 500 and CMON. There is NO excuse. Whistle blowers..believe it or not they will soon be in. WHY? The masses are PISSED and infuriated. Make no misatake about such. Those who do will learn the hard way. History proves such and this time is not different. So here is what I continue to do. I send them the info. I DOCUMENT. I pass it along to all I know. I DOCUMENT and like one says those snowflakes do matter. ASK CRAMER about DOCUMENTATION. Here and now SHAPRIO is soon to learn the lesson. There are a few media types that do know how to go for the kill. IF any know feed them INFO. There are agents who are just. FEED them the info. There are CEO’s that are honest. FEED them the info. DITTO SENATORS, CONGRESSMAN. IT does require one thing. One does it. I did it long ago somewhere I will not mention. MY agent was another who had access to the stroke. And in a heartbeat I went from 2 YEARS of trying to get a GROUP to do the right thing to OVER NIGHT.. the HOW COULD YOU DO THIS. To which I responded. The question isn’t why I did what I did. The question is WHY DIDN’T YOU DO YOUR JOB. It really is simple. HANG IN THERE… WE ARE THE PEOPLE and THERE ARE MANY WHO DO CARE. JUST FIND THEM!
This book is a must read, often quoted at sanitycheck. It helps explain why the politicians don’t want to fix this settlement problem.
http://www.camaradart.ro/biblioteca/carti/Carroll_Quigley__Tragedy_And_Hope.pdf
“…[T]he powers of financial capitalism had another far-reaching aim, nothing less
than to create a world system of financial control in private hands able to dominate the
political system of each country and the economy of the world as a whole. this system
was to be controlled in a feudalist fashion by the central banks of the world acting in
concert by secret agreements arrived at in frequent private meetings and conferences. The
apex of the system was to be the Bank for International Settlements in Basle,
Switzerland, a private bank owned and controlled by the world’s central banks which
were themselves private corporations….
If you understand the private control of the banking and clearance system and because of it, control of both political parties, then it becomes easier to understand why they are so quick to bailout banks, but so slow to crack down on their toxic excesses, including failure to deliver.
http://www.camaradart.ro/biblioteca/carti/Carroll_Quigley__Tragedy_And_Hope.pdf
Hundreds of years ago, bankers began to specialize, with the richer and more
influential ones associated increasingly with foreign trade and foreign-exchange
transactions. Since these were richer and more cosmopolitan and increasingly concerned
with questions of political significance, such as stability and debasement of currencies,
war and peace, dynastic marriages, and worldwide trading monopolies, they became the
financiers and financial advisers of governments. Moreover, since their relationships with
governments were always in monetary terms and not real terms, and since they were
always obsessed with the stability of monetary exchanges between one country’s money
and another, they used their power and influence to do two things: (1) to get all money
and debts expressed in terms of a strictly limited commodity—ultimately gold; and (2) to
get all monetary matters out of the control of governments and political authority, on the
ground that they would be handled better by private banking interests in terms of such a
stable value as gold.
Here’s an Idea……
Get your tea bag ready to be mailed, on April 1, 2009 to the address shown below.
Subject: Tea Party
There’s a storm abrewin’. What happens when good, responsible people keep quiet? Washington has forgotten they work for us. We don’t work for them. Throwing good money after bad is NOT the answer. I am sick of the midnight, closed door sessions to come up with a plan. I am sick of Congress raking CEO’s over the coals while they, themselves, have defaulted on their taxes. I am sick of the bailed out companies having lavish vacations and retreats on my dollar.. I am sick of being told it is MY responsibility to rescue people that, knowingly, bought more house than they could afford. I am sick of being made to feel it is my patriotic duty to pay MORE taxes. I, like all of you, am a responsible citizen. I pay my taxes. I live on a budget and I don’t ask someone else to carry the burden for poor decisions I may make. I have emailed my congressmen and senators asking them to NOT vote for the stimulus package as it was written without reading it first. No one listened. They voted for it, pork and all.
O.K. folks, here it is. You may think you are just one voice and what you think won’t make a difference. Well, yes it will and YES, WE CAN!! If you are disgusted and angry with the way Washington is handling our taxes. If you are fearful of the fallout from the reckless spending of BILLIONS to bailout and “stimulate” without accountability and responsibility then we need to become ONE, LOUD VOICE THAT CAN BE HEARD FROM EVERY CITY, TOWN, SUBURB AND HOME IN AMERICA. There is a growing protest to demand that Congress, the President and his cabinet LISTEN to us, the American Citizens. What is being done in Washington is NOT the way to handle the economic free fall.
So, here’s the plan. On April 1, 2009, all Americans are asked to send a TEABAG to Washington , D.C. You do not have to enclose a note or any other information unless you so desire. Just a TEABAG. Many cities are organizing protests. If you simply search, “New American Tea Party”, several sites will come up. If you aren’t the ‘protester’ type, simply make your one voice heard with a TEABAG. Your one voice will become a roar when joined with millions of others that feel the same way. Yes, something needs to be done but the lack of confidence as shown by the steady decline in the stock market speaks volumes.
This was not my idea. I visited the sites of the ‘New American Tea Party and an online survey showed over 90% of thousands said they would send the teabag on April 1. Why, April 1? We want them to reach Washington by April 15. do it? I will. Send it to; 1600 Pennsylvania Ave. Washington , D.C. 20500 .
Forward this to everyone in your address book. Visit the website below for more information about the ‘New American Tea Party’. I would encourage everyone to go ahead and get the envelope ready to mail, then just drop it in the mail April 1. Can’t guarantee what the postage will be by then, it is going up as we speak, but have your envelope ready. What will this cost you? A little time and a 40 something cent stamp.
What could you receive in benefits? Maybe, just maybe, our elected officials will start to listen to the people. Take out the Pork. Tell us how the money is being spent. We want TRANSPARENCY AND ACCOUNTABILITY. Remember, the money will be spent over the next 4-5 years. It is not too late.
This article barely scratched the surface, and didn’t deal with the real problem (NSS), but it’s a start for the mainstream press:
http://news.yahoo.com/s/realclearpolitics/20090312/cm_rcp/profit_patriotism_and_bear_rai
I was quite pleased with the reaming that Jon Stewart gave to Jim Cramer this evening on the The Daily Show with Jon Stewart. It is laughable the spin that Cramer trys to apply to a video interview of himself [from which Jon repeatedly pulls clips to play, obviously embarrassing Cramer to the point of squirming] describing illegal activities that he routinely employed as a hedge fund manager, to illegally manipulate stock prices.
The show will be re-broadcast several times tomorrow, and the interview is available online… watch it! you’ll be glad you did.
Here is the link!
http://www.thedailyshow.com/
The actual interview was done on March 12th 2009 and is the most telling interview that I have ever seen that will expose the Financial Media for what is really is.. A FRAUD!!!
http://images.google.ca/images?hl=en&q=buffet%20rothschild&um=1&ie=UTF-8&sa=N&tab=wi
http://tinyurl.com/cxu3lg
Cramer admits CEO’s lied to him, like he never did? I have a gut feeling Cramer is fearing the feds here. I’ll bet he has already turned snitch and is cooperating with authorities after striking a deal. Kinda like that Crazy Eddie guy did to his cousin….I wonder if Jim called up Sammy for some advice?
http://thesanitycheck.com/Portals/0/cramersubpoena1.jpg
http://thesanitycheck.com/Portals/0/cramersubpoena2.jpg
There’s a lot to read here, but at least read the overview comment by the guy that scanned the book in.
http://www.camaradart.ro/biblioteca/carti/Carroll_Quigley__Tragedy_And_Hope.pdf
When you read it, so much makes sense and falls into place. Written in 1966, it predicted much of what’s happened to our clearance system.
This book should be standard reading in every high school.
To over complicate any system shows vast ignorance…….. and to attempt to cover for all future events and mistakes is futile when everyone is expecting everyone else to cover.. complete impossibility and stupidity for all layers. Finally, we must remind ourselves that fruad destroys any system — no matter how good or bad. Never expect others to work for you forever…
I took a course in Rational expectations Economics 20 years ago. Well, they concluded that you cant make profit in stocks. Since Goldman, bear, merrill, leman, LTCM, CITI, AIG, etc etc are all bankrupt, they were right- you cant profit in stocks. The professor also told us you cant make profit in housing ownership; since then we have the greatest losses in mankind in real estate. I listened to the Professor and therefore have invested nothing into stock and real estate and avoided any losses. Did they not learn this at Harvard MBA school? or were they too drunk and high to learn the Professors teachings?
In reality, you can make money in stocks and real esstate by commiting fraud and other crimes (mortgage fraud, stock manipulation,etc). Especially today with taxation at 50%, you can only make excessive returns with criminal activity. Ie circumventing “da Law”. Reminds me of Ali G: “what iz barely legal?”..”what iz dis ting called da laws?”
Be careful about the Quigley / NWO obsessive / “secret Illuminati” stuff. Most of that is Russian disinfo, meant to make you turn on Western institutions and destroy them. In fact, the Red Mafiya connections reveal the direction one ought to pursue:
The Kremlin, and, with the advent of the SCO, The Forbidden City.
I am no economics maven or financial genius but . . .
The economic shenanigans and the travesty the securities markets have wrought, along with the other nonsense that the former administration (Bush) imposed on the country was well advertised, he campaigned on it from the get go, cloaked it in excellent cheer and la de da and the country bought it like kids lined up for candy. I recall an article in the Atlantic Monthly around the time Bush was first in power, which described how blithely and blatantly the deck had been stacked to favor thievery and an anything goes attitude on Wall Street and wherever else the security markets are extant. Bush placed an SEC commissioner as the head of the agency who was totally anti-regulation, had proven his favor for the corrupt, downright thieving transaction practices that have led to the current big sag in the economy. This economy has been f . . . ed. Deliberately and with greed and croneyism aforethought. Bush threw out a sensible regulator as head at the SEC in favor of a laissez faire at best and likely deliberately encouraging financial chicanery amounting to robbery head of the SEC. It was as blatant and obviously and patently wrong as the baiting and tormenting of Iraq and the trumped up invasion and demonizing of Saddam Hussein. But that is another issue, but too leads to the conclusion that the country doesn’t listen to issues but just goes along with someone who is in some way pretty or otherwise sounds convincing to the barnyard philosopher who is a sucker for easy answers and sophistry. Yes this is a rich rich country and the capitalist gang who took it over have benefited from it inordinately to where they actually get millions and millions and even billions of dollars, and say well because most people are doing ok with their puny share that the system works great. In fact any freaking system would have worked well given the rich resouces of this country. Communism Soviet style probably would have even looked pretty good here. We need to fundamentally revamp this system, put some teeth into rules against people manipulating the system beyond its intended reach or depth.
I recently went to a graduation ceremony at Northwestern University in Evanston. About 40% of the grads had majored in “economics”. What the hell are they teaching our exalted college grads and “elite” business school people? I thought these people were supposed to be producing, creating grand things, putting us on the right track as trusted keepers of the complex economic veldt. Instead they give us a constant bombardment of vapid misleading advertisements for their products, constantly screaming give me your money until we buy some stupid shit just to shut them up. There is your exalted Wharton or whatever MBA at work. Give me a break. And the telemarketers – need I descry on that? Hey, write back to me and tell me what it is you know.
yowza1@myway.com
Pat
The joke is actually about Watson’s methodological behaviorism (which describes most modern experimental psychologists) NOT Skinner’s radical behaviorism which embraced internal states as behavior worthy of study, even though the technology mostly did not exist in his heyday for observing internal states and still is in its infancy.
Rich,
http://www.marketoracle.co.uk/Article14326.html
It isn’t just the insiders, the regulator had to be involved in this according to Mike Stathis. His story then gets into harassment of him for bringing this to the regulator.
What everyone misses is that this disaster was SET UP years ago. Ask yourself : who made tons of money ??? The hedge funds and those behind them,led by the FED, as it has done at least three times in the last 110 years.
Note that the FED is a private organization owned/controlled surrepitiously by the 300 most wealthy families in the US, who dont pay taxes (family trusts ).
Note that three of the four main regulators were dead set against putting controls on hedge funds since 2000.
Gee…why ?? They controlled HUGE moneys and ran the Market.
Note,then,in 2007 the SEC (crooks ) got rid of the uptick rule in short selling !!!…which then made it easy to drive a stock down. With the rule you could only stop a stock from rising.
Add naked short selling where you just sell stocks without having to borrow stock to do so and you have an unbeatable technique to drive the market down !!!
Madoff, the former head of NASDAQ , even got the SEC to allow naked shorting (wink ) for him (even called it the Madoff Rule).gee,…what if the funds were short in various ways and then sent the stock market down drastically.
What a way to make gigantic PROFITS without impunity
Then there was the shill,Greenspan, who knew EXACTLY, what was going on,when he made that remark,the irrational exuberance of the market. He did what he was told to do !!!
And the Democrats,Pelosi and Frank, telling us over and over that Fannie Mae and Freddie Mac ( who paid them handsomely in lobbhyinfg fees )were just fine,thank you,when they were actually bankrupt. And Paulsen in March of 08 that the economy was doing very well,thank you, when he KNEW the opposite was true.He is NOT that stupid .
And note the incestuous relationships of Wall Street top money men gaining power in the White House. How convenient.
The regulations were in place (except for hedge funds ) but the regulators and the politicians worked together and IGNORED the rules and let the crooks take charge to do their dirty work.
Will we ever find out who really made a killing ??
NO.
Obama just keeps hiring them. The wolves are controlling the hen house!!!!!!!!!!!!