They can't say he didn't warn them.

Video of Patrick Byrne sounding the alarm on Wall Street, as long as three years ago.

  1. My first reaction is to delight in the axiom that ‘we told you so’. However, my next thought immediately displaces that with the unbelief that this travesty was allowed to occur unabated for an extensive time within our financial system. The system is truly broken and tainted.

  2. I don’t think Dr Bryne was specific enough on TV do you?

    Patrick used words like: systemic failure, massive meltdown, enormous losses,egregious greed beyond and worldcoms or enrons,they were kiddies picnics by comparison!!

    The journalists all reacted ‘exactly’ as was predicted.

    The lawyers took the bait everytime

    The cockeyed analysts took dictation

    Truly a remarkable scam.

    Who is the mastermind ?

  3. All that’s missing for a SNL sketch is for Dr. Byrne to talk about a massive economic meltdown, as he does, while the journalists get a manicure.

  4. Byrne: “…when it comes down, it’ll make Enron look like a tea party.”

    Shocked Bloomberg interviewer: “That’s a pretty powerful thing to say. Enron was a $100B + company.”

    Byrne: “This is bigger.”

    Bigger? Yeah, like 10 times bigger. And that’s just so far. I’d say the good Dr. Byrne nailed that one good. Any way to hogtie these bozo “media puppets” with their eyelids open and make them watch this on an endless loop? (Except maybe Cavuto….he seemed to sense something was up.)

  5. Shame on them..

    Msg. 34345 of 34345
    Jump to msg. #
    Lehmans – What is 2.5 billion bonuses between Friends. How they get this money is beyond me???
    Fury at $2.5bn bonus for Lehman’s New York staff

    By David Prosser
    Monday, 22 September 2008

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    Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.

    The revelation sparked fury among the workers’ former colleagues, Lehman’s 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.

    A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman’s US business, a deal agreed by American bankruptcy courts over the weekend.

    Barclays is paying $1.75bn for the US operation of Lehman and is keen to retain its best staff. It said it had made no promises to individual staff members about how much they will receive but that the bonus fund would be paid out. In addition to the $2.5bn cash pool, Barclays is also in negotiations with about 30 executives it considers to be Lehman’s best assets and plans to offer them contracts worth tens of millions of dollars. British employees of Lehman described the bonus payments as a “scandal” as they waited anxiously yesterday to see whether a deal could be struck with buyers circling the bank’s European operations.

    Many of Lehman’s UK staff are particularly angry about the US payouts because it has emerged that in the days running up to the bankruptcy, some $8bn in cash was transferred out of the account of the bank’s European business into accounts at the New York head office.

    There is no suggestion any of this cash was used to supplement the bonus fund, but partly as a result of the transfers, PricewaterhouseCoopers (PWC), the administrator to the European business, initially found it impossible to guarantee salaries would be paid. The September wages of thousands of European staff were only secured in the middle of last week, when PWC negotiated a £100m loan to fund the payments. PWC wrote to Lehman Brothers’ head office in New York last week, requesting the repayment of the $8bn, but a spokesman said yesterday that the administrator had received no formal response.

    The row will increase pressure on the Government to tackle perceptions that City pay is out of control. Speaking on The Andrew Marr Show on BBC1 yesterday, Gordon Brown said Britain would review financial services awards following the credit crisis. “There’s been a great deal of irresponsibility,” the Prime Minister said. “There’s an element of the bonus system that is unacceptable.”

    However, Adair Turner, who formally takes over today as chairman of the Financial Services Authority, the UK’s chief City regulator, warned it would be very difficult to police individual pay deals.

    “I think it would be really exceptional in any industry to have direct regulation on what different people are paid, I don’t think that’s appropriate and I don’t think that would be workable,” he said.

    “What is appropriate for regulators to do, is the need to ask searching questions about the nature of people’s remuneration and to ask questions of institutions as to whether they are paying out bonuses before they are really sure whether the profits are really there.”A spokesman for the TUC said the US payouts were unfair. “It looks like those that will suffer the most from the Lehman Brothers’ collapse are those at the bottom of the corporate chain while many of those at the top will be looked after,” he said.

    Critics of the UK’s attitude towards City pay also pointed out that the US has much stronger litigation laws. For example, advocates acting for Lehman creditors in the US said over the weekend that they might sue Richard Fuld, the investment bank’s chief executive, who was paid $34.4m last year, in an attempt to force him to return some of the money.

  6. Patrick this should verify the statements and or assumptions made about a certain Investment Bank on investorvillage by “The Turtle”
    New world on Wall Street
    Goldman Sachs and Morgan Stanley to face more oversight from the Federal Reserve. Change provides more funding and opens door to more mergers.
    By Tami Luhby, senior writer

    NEW YORK ( — And then there were none.

    Federal regulators converted Wall Street’s remaining stand-alone investment banks – Goldman Sachs and Morgan Stanley – into bank holding companies Sunday night.

    The move allows Goldman and Morgan to scoop up retail banks and to streamline their borrowing from the Federal Reserve. The shift also is aimed at removing them as targets of nervous investors and customers, who brought down their former rivals Bear Stearns, Lehman Brothers and Merrill Lynch this year.

    But it also puts Goldman and Morgan under the Fed’s supervision, increasing the agency’s regulatory oversight and possibly forcing them to raise additional capital.

    And it brings to a close the era of the Wall Street investment bank, a storied institution that traded stocks and bonds, advised mergers and showered lavish bonuses on its executives.

    “The separation of investment banking and commercial banking has come to an end,” said Bert Ely, an independent banking consultant.

    The conversion is but the latest in a series of unprecedented events on Wall Street as it convulses through the global credit crisis. In the past eight days, the federal government announced a $700 billion plan to rescue the financial sector by buying up troubled mortgage assets and an $85 billion emergency loan to insurance titan American International Group. Also, Lehman filed for bankruptcy and Bank of America took over Merrill Lynch.

    Morgan (MS, Fortune 500) and Goldman (GS, Fortune 500), whose shares plummeted last week before the $700 billion bailout was unveiled, will likely avoid those fates with the conversion, experts said.

    “They were afraid they’d get killed if they didn’t [convert],” said Christopher Whalen, managing director of Institutional Risk Analytics. “The Fed is scrambling to take the remaining targets off the radar.”

  7. Greenspan could not wait to remove the ban on banks and brokerages being one. And ole Bill when he was able to get away from a tryst long enough got a paper cut from the speedy careless way he handled the document in his haste to get er signed.

    I hear Glass blasted right out of his vault.His pal just spun a few revolutions.

  8. It is quite apparent that some knew this was coming long ago. Question, What can be done to fix it? It looks like it is too late to do anything proactively.

    We should start making a list of all those who need to be prosecuted for their roll in this mess. Starting with the politicians who spend more time on vacation and raising money from the very groups they are supposed to be overseeing. Lock em Up!!

  9. I think that the perps – all of them – should be forced to make reparations. Give up ALL of the ill gotten gains, and roll over on EVERYONE involved, or do BIG JAIL TIME.

    America needs the money, and the information….. NOW There is no time for waffling, or inuendo…get the money they stole, force the settlement of all failed trades, get rid of the SEC, and find out each and every person who was nvolved in the fraud and make them give up EVERYTHING.

    No compromise

  10. SEC Approves Amended Order Requiring Reporting of Short Positions by Certain Investment Managers

    Washington, D.C., Sept. 21, 2008 — The U.S. Securities and Exchange Commission today approved amendments to its emergency order of September 18 (Release No. 58591) requiring that certain institutional money managers report their new short sales of certain publicly traded securities.
    Additional Materials

    * Amended Order Requiring Institutional Money Managers to Report New Short Sales
    * Form SH (revised)
    * Form SH Instructions (revised)

    In addition to making technical amendments, the revised order also provides that the information disclosed by investment managers on new Form SH will be nonpublic initially, but will be made available to the public via the Commission’s EDGAR website two weeks after it is electronically filed with the Commission.

    The amended order will take effect at 12:01 a.m. EDT on Monday, Sept. 22, 2008.

    Under the order, covered institutional money managers will be required to report any new short selling in all equity securities, except options, that are admitted for trading on a national securities exchange or quoted on the automated quotation system of a registered securities association. If any new short sales are effected on September 22 through September 27, the managers are required to submit a report on new Form SH to the Commission on Sept. 29, 2008. These managers are already required to report their long positions in these securities on Form 13F.

    The Commission may extend the emergency order beyond its current effective period of 10 business days if it deems an extension necessary in the public interest and for the protection of investors, but will not extend the order for more than 30 calendar days in total duration.

  11. This really is the moment of “the emperor has no clothes” realization for a lot of people. The corruption is becoming more difficult to conceal as things spiral out of their control, as demonstrated in this article

    Interior: Losses ‘Probable’ at Oil Office

    In congressional testimony today, Interior Department officials acknowledged that it is “probable” they would have uncovered financial losses with further investigation of a drug, sex and conflict-of-interest scandal involving employees at a Denver-based oil royalty office. However, the officials said the beleaguered royalty-in-kind program had turned a corner and needed to be continued.

    Earl E. Devaney, Interior’s inspector general, said the environment in the royalty office is now “decidedly different.”
    ~~~~~~~~~~~~~~~~~~~~~~oh yes, I’m sure…

    I used to work for an oil company, it was a frat-boy corporate culture, just like this administration.


    The SEC’s new rule: Don’t ‘short’ anymore, don’t tell
    6:53 PM, September 21, 2008

    The Securities and Exchange Commission on Sunday clarified its new temporary rule requiring big investors to report their short positions in stocks.

    You can read the details here, but the bottom line is that the rule seems less punitive than some investors had feared.

    For starters, the short-sale information won’t be made public when it’s filed with the SEC. The agency will wait for two weeks after it receives the data to make it available (on the EDGAR website) for all to see.

    Secseal What’s more, investors will only have to disclose short positions they take beginning on Monday (Sept. 22). They won’t have to report previously held positions.

    So if you don’t short anymore (bet on falling stocks), you won’t have to file anything with the SEC. Sounds like a great way to reduce the selling pressure on stock prices, albeit artificially.

    The SEC disclosure rule targets only the biggest investors — those managing $100 million or more. And the agency isn’t interested in their short bets unless they’re substantial: The rule exempts money managers from reporting any short position that amounts to less than 0.25% of a company’s outstanding shares, or is worth less than $1 million.

    The first short-sale disclosure forms will be due to the SEC on Sept. 29 for short sales effected this week. The public will see those first reports on Oct. 13.

    By then, the SEC disclosure rule could be history: It’s set to expire on Oct. 2. The SEC says it could extend the rule, but that it won’t be in effect beyond Oct. 22 in any case.

    The disclosure rule, first reported on Wednesday, is separate from the SEC’s decision on Friday to ban shorting altogether in 799 financial stocks.

    So we’ll never find out which big investors were heavily shorting financial issues in recent weeks, leading up to the government’s seizing of Fannie Mae and Freddie Mac, the collapse of Lehman Bros. Holdings Inc. and the near-collapse of American International Group.

    Isn’t that all we really wanted to know?

    Photo: SEC seal on the agency’s headquarters in Washington. Chip Somodevilla / Getty Images

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