Habayeb, 37, was chief financial officer for the AIG division that oversaw AIG Financial Products, the unit that had sold the swaps to the banks. One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar, according to people familiar with the matter. [...]
After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public. [...]
The New York Fed’s decision to pay the banks in full cost AIG -- and thus American taxpayers -- at least $13 billion. [...]
The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article.
Goldman Sachs is the most prominent of several multibillion dollar siphons suckling the US Treasury.
At the time the New York Fed was run by a genius called Tim Geithner, who has since become Obama's Treasury Secretary.
Unless we investigate and prosecute, we are also guilty.
Q. On the Internet, I read Mr. Wells described as some sort of “huckster” who steals money from widows. What’s that about?
A. It’s absurd. An anonymous blogger has focused on one investor out of more than 200,000. While we will not comment on any specific investor, the fund in question was a mid-1980s Wells limited partnership – and a particular class of partnership units. (For the record, that Wells fund exists today; unlike many of its contemporaries, it survived changes in tax law and the real estate downturn of the mid-‘80s. It is nearing the end of its life cycle, and will be returning proceeds to investors.)
My response: It's not absurd. That widow took the time to write a long letter to me — I did not solicit her story — and quite obviously from their response it's clear they never paid her back. So nothing new there... they took her money and are trying to dismiss it as a "mid-1980s" thing, because taking money from widows was obviously standard operating procedure way back then.
Q. That same blog says Leo Wells “has never fully repaid investors in any of his funds over the last 20 years.” True?
A. This is simply not true. Most Wells funds, including Wells’ flagship REITs, are designed as long-term income investments to be held for a number of years, and are not traded on the stock market. But our REITs have clearly stated redemption procedures, and more than 10,000 investors have asked for – and received – redemption of their shares. Additionally, last year Wells REIT sold more than $700 million in properties from its portfolio and returned the proceeds to REIT investors.
My response: "That same blog" was not the origin of this claim. The quotation “has never fully repaid investors in any of his funds over the last 20 years" is not from me, but is from the Wall Street Journal of August 5, 2004, as I document here. Falsely attributing these words to me, instead of to the most respected business newspaper who actually said it, is just plain lying. The full quotation from the Wall Street Journal is as follows: "In fact, Mr. Wells has never fully repaid investors in any of his funds over the last 20 years." Note, once again, that I did not say this — the Journal did.
The remainder of the Leo Wells Pathetic Defense Page is about how his Christianity is so great. But I vaguely remember something called the Ten Commandments, which includes the commandment "Thou shalt not steal." I notice God did not asterisk the commandment to disclose in the fine print that it would be okay if the theft involved a "mid-1980s Wells limited partnership – and a particular class of partnership units."
Sorry for having to state the obvious, but if the WSJ and Forbes have identified Mr. Wells's empire as questionable, far be it from me to argue with them. Further reading here.
Literally nothing on the Leo Wells Pathetic Defense Page is new. (And I haven't even mentioned the regulatory sanctions — how's that for self-control?) The Wells real estate empire is based on a flimsy facade of fake Christianity. It is an illiquid, overpriced investment of dubious quality and suspicious management. When the Wall Street Journal says, "In fact, Mr. Wells has never fully repaid investors in any of his funds over the last 20 years," investors would be well-advised to stay the hell away.
Hey, Bob Byrd! PR guy for Leo Wells! You're the one who wrote the Leo Wells Pathetic Defense Page — it says so in the page source &mdash can't you do any better?
President Obama reached his much-ballyhooed 100-day milestone last week, but most financial advisers were in no mood to celebrate.
An exclusive InvestmentNews online survey conducted last week found that a hefty 63.9% of advisers did not approve of his overall performance as president. Only 36.1 % of the 1,010 advisers who responded to the survey thought he was doing a good job.
Worse yet, 68.5% said they had either “not too much” or “no” confidence in his ability to fix the ailing economy, while only 31.2% had a “fair” or a “great deal” of faith in his capabilities on that front.
If you think your financial advisor in one of those who have "not too much" or "no" confidence in Obama's ability to fix the economy, ask him if he believes in "correlation." Specifically, ask him (and more than 90 percent of them is a "him") if he believes there is a correlation between a Democratic president and a healthy stock market and a Republican president and a lackluster stock market. Ask him who was better for the economy — Clinton or Bush Junior.
Insist that he explain this chart, showing that $10,000 invested exclusively under the Democratic presidents of the last 80 years — who covered half that span — would have grown to more than $300,000. By contrast, $10,000 invested in the nearly 40 years of Republican presidencies since 1929 would have grown to a measly $11,733. Print a couple of copies and bring them to his office. Show him that the average annual rise in the S&P 500 under all Democratic presidents of the last eight years was 8.9 percent. The average annual rise rise under Republicans during the same period was 0.4 percent.
If you are unhappy with your financial advisor's rationale for why this is so, or if your financial advisor is unaware of these facts, or if your financial advisor questions the factual nature of this, your next step is simple. FIRE HIM.
This has nothing at all to do with political litmus tests. People who work in financial services seem to self-identify as disproportionately Republican, but to be effective any financial advisor worth his salt should exist exclusively in the reality-based community. The InvestmentNews survey shows that nearly two-thirds of financial advisors choose not to live in reality. Their advice is based on hearsay, belief, and hunches — not the kind of people you want anywhere near your money.
November 5, 1999: ''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.'' [...]
''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''
''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
Decisions made during the final months of the Bush administration created an environment in which the most politically connected investment banks, Goldman Sachs and Morgan Stanley, not only flourished, but saw their competitors laid waste, with firms like Lehman in bankruptcy, and others, like Merrill Lynch and Bank of America, forced to merge in desperate hope of surviving. [...]
The roots of the linkage between Goldman Sachs and AIG go back to the closing months of the Bush administration, as the financial meltdown reached crisis proportions and key decisions were made that are now reaping the whirlwind. Remember who played a key role in deciding to bail out AIG? Henry Paulson, the Goldman CEO-turned George W. Bush Treasury Secretary. Paulson, according to a September 27, 2008 New York Times piece by Gretchen Morgenson, led a team of regulators and bankers in early September to determine what to do with the most severely wounded financial institutions. One of the participants in those meetings was Lloyd C. Blankfein, Paulson's successor at Goldman Sachs.
Out of those meetings came the controversial and heavily criticized decision to allow Lehman Brothers, a Goldman competitor, to go belly up, and to bail out AIG. Starting with $85 billion from the Fed, taxpayers have pumped a total of $170 billion into the giant insurance company. The bailout was crucial to Goldman in that it permitted AIG to pay off its $12.6 billion debt to the firm, $8.1 billion of which was to cover AIG-backed credit derivatives.
The key words above: "during the final months of the Bush administration."
During the final month of the Clinton adminstration, the USS Cole was attacked by Al Qaeda — an event that is still actively criticized as evidence of Democrats' "softness" on terrorism.
During the final months of the Bush administration, Hank Paulson demanded and received $700 billion to save his corporate legacy. The difference between the terrorists during the two administrations is that the terrorists during the Clinton era live in caves in central Asia, while the terrorists during the Bush era were in Bush's cabinet, running the Treasury Department.
GOP soft on terrorists? No way — they are the terrorists, financially speaking. Heckuva job, Hank!
CNBC and the Wall Street Journal are both notorious for presenting opinions that are clearly disconnected from any of the quantitative, reality-based information they manage to report. The Journal's opinion page, always a hotbed of right-wing talking points and ludicrous extrapolations, consistently and systematically ignores whatever objective evidence is there to see on the front page.
Today's WSJ provides the cognitive-dissonance-du-jour. Pieces on the opinion page are hysterically headlined, "Obama's radicalism is killing the Dow," and "Obama repeats Bush's worst market mistakes," but the front page shows the real culprit: the job loss that will undermine the potential for any recovery. This job loss started well before Obama was even a front-runner, and yet the opinion page manages to paint him as some sort of über-villain who brought Wall Street to its dirty, dirty knees within six weeks.
If you have ever gone sledding or skiing, you know there's an inflection point on the hill where gravity will pull you down pretty fast. Look at the chart from today's Journal and tell me with a straight face that it's all Obama's fault. [Blue text is mine; everything else WSJ.]
The financial services industry spent more than $5 billion on political contributions and lobbying from 1998 through 2008, according to a study released today.
The study, issued by Essential Information, a Washington-based non-profit that seeks to curb corporate influence, and the Los Angeles-based Consumer Education Foundation, a non-profit consumer organization, blames influence peddling for the financial crisis.
Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurers made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists, the study found.
Securities firms spent more than $504 million in campaign contributions and $576 million on lobbying over the period.
Spending by the major New York-based firms was:
The Goldman Sachs Group Inc.: $46 million
Merrill Lynch & Co. Inc.: $68 million
Citigroup Inc.: $108 million
JPMorgan Chase & Co.: $65 million
In addition, Bank of America Corp. of Charlotte, N.C., spent $39 million; the former Wachovia Corp. of Charlotte spent $15.9 million; and Wells Fargo & Co. of San Francisco spent $21.9 million.
Lawmakers and regulators “responded to the legal bribes from the financial sector” by rolling back standards, barring new rules to address “trashing enforcement efforts,” Robert Weissman, director of Essential Information and the lead author of the report, said in a statement.
Only $46 million in bribes from Goldman Sachs? Such a deal!
Hank Paulson's "By Monday I need $700 billion, no strings attached" ransom note last fall — before the election — seems literally a steal. Talk about leverage! A mere $46 million will buy you $700 billion in deleveraging magic, which you can use as a wand to wish away your catastrophic management of the global financial system. Killing Lehman and "saving" AIG was all part of Paulson's plan to secretly save Goldman, Lehman's rival and AIG's pivotal trading partner, which was facing disaster thanks to Paulson's own leadership as former CEO.
(By analogy, you could regard Cheney's whoops-no-WMD adventure in Iraq as a way of secretly saving no-bid Halliburton, which was likewise facing disaster thanks to his own leadership as former CEO. Apparently "public service" is the last resort of Republican CEOs who fuck their companies up so badly that they feel obliged to empty the US Treasury to compensate for their multitrillion dollar errors of judgment and outright chicanery.)
Today's WSJ: "The nation's top 400 taxpayers made more than $263 million on average in 2006, as the stock market was rallying, but paid income taxes at the lowest rate in the 15 years that the Internal Revenue Service has tracked such data, according to figures released Thursday. [...] Of the 400 taxpayers, 31 paid taxes at average rates between 0% and 10%."
Foreign investors plan to spend significantly more money on U.S. real estate in 2009 than they did last year.
A study released today by the Association of Foreign Investors in Real Estate showed that equity investors plan to boost real estate investment activity by 73% in the United States and 40% globally.
“Our investor members have expressed a growing confidence and interest in U.S. real estate,” James A. Fetgatter, chief executive of the Washington-based association, said in a statement. “Their investment plans for 2009 for the U.S. resemble the flight to quality that is creating the demand for U.S. Treasuries.”
The 17th annual study surveyed about 200 of the association’s members, who collectively hold $1 trillion worth of real estate.
Washington topped the list of cities in which foreign investors are most likely to park their cash this year. [...]
The study showed that half of investors’ favorite cities for investing in real estate this year are in the United States.
This differs from a year ago, when five of the top 10 cities were in Asia.
The top U.S. cities were Washington, New York, San Francisco, Los Angeles and Houston.
Investors named apartments as their favorite property type. That was followed by office, industrial, retail and hotel properties.
Also, most investors said that they are having little trouble finding attractive U.S. real estate opportunities.
01-14-06 02:52 PM I actually got some update and found out that it's Spitzer's office doing the investigation not SEC. But I don't know what the scope of the investigation is.
Suddenly Spitzer's dalliances with a hooker don't seem quite as fundmentally important to the financial health of this country.
We need people who understand the system to police it. No matter how sanctimonious or egomaniacal you may find him, Spitzer understands the financial system. If these posts are true, somebody in power was more interested in the the details of Eliot Spitzer's transactions than Bernard L. Madoff's. They were obviously more interested in killing the watchdog than in catching the billionaire burglar.
*Phil Gramm's beloved deregulatory legislation passed in December 2000, the height of the Bush-Gore election controversy. Legislation permitting massive, unaccountable capital leverage for the biggest investment banks passed in August 2004, the height of the Swift Boating of John Kerry.
Texas had some of the cheapest power rates in the country when it zapped most of the state's electric regulations six years ago, convinced that rollicking competition would drive prices even lower.
This summer, electricity there is some of the nation's priciest.
Power costs are rising in the rest of the U.S., but everything is bigger in Texas: On a hot day in May, wholesale prices rose briefly to more than $4 a kilowatt hour -- about 40 times the national average.
Remember the California electricity crisis? That was likewise engineered by the magic formula of deregulators plus Texans — the GOP plus Enron.
The criminal genius of Enron serves as the core business model for Bushian GOP. "When then-Gov. George W. Bush signed the state's deregulation bill in 1999, he assured that 'competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices.' The law, which took effect in 2002, left few restrictions on what power generators could charge and what consumers could pay."
"Reducing monthly rates and offering consumers more choices." Ha ha ha ha ha. Texas reaps what it sows.
With just 20 percent of today's working Americans expected to be financially secure in retirement, we will almost certainly be considering socially sanctioned suicide among our options. In a deeply tragic way, it will be fascinating to see how elder suicide will become ritualized, dignified, and euphemized as our society collectively begins to understand the gravity of the lost Bush decade — investment returns of crucial importance that never materialized. As workers now deplete their Bush-stagnant 401(k) plans to pay for their financial Bush-hardships in gasoline and real estate, there will be even less savings for them to depend upon in the coming decade.
Those who would privatize Social Security, i.e., Republicans, are exactly the ones who cannot produce a viable economy with market returns that would justify such a radical rethinking of America's most successful social program.
Some 25 million U.S. adults with health insurance in 2007 faced financial stress due to insufficient coverage, according to a study from The Commonwealth Fund.
The ranks of the underinsured have increased by 60% between 2003 — when the New York-based health research foundation performed its first analysis — and 2007.
The full results were published today in the Health Affairs journal.
Health care premiums have skyrocketed between 2000 and 2007, rising by 91% compared to only a 24% increase in wages.
Last year, 17.2 million individuals said that their out-of-pocket medical expenses were equal to at least 10% of their family annual income, compared to 8.9 million in 2003.
The study noted that adults with annual incomes below $20,000 were at the highest risk of being uninsured or underinsured,
But people in higher wealth brackets have also been affected: 22 million people with income between $40,000 and $99,999 said they had insufficient coverage, compared to 9 million in 2003.
Meanwhile, seven million people who make more than $100,000 said they were uninsured in 2007, up from one million in 2003.
Although individuals between ages 50 and 64 were most likely to be insured, fewer of them had sufficient coverage, as 65% were fully insured last year, down from 74% in 2003.
You can apply the same logic to gasoline prices, food prices, the US dollar, the trade deficit, energy deregulation, the US Attorney's office, Iraq, you name it — the Republicans touch it, and it gets ruined.
...nearly 30% of all enlisted Marines, rank E-1 to E-4, have financial problems serious enough to affect security clearances. This is causing some security jobs to go unfilled, jeopardizing not only careers, but also the country’s security. Credit scores are part of the criteria used by the military to determine security clearances and over drafts, pay day lending loans, maxed out credit cards, late payments, are all leading to poor credit scores.
But it's okay that Marines are broke because, as Dick Cheney pointed out, they volunteered for this.
A rep affiliated with LPL Financial allegedly stole $5 million from about two dozen people he knew from church and Little League.
The adviser, James J. Buchanan, has been charged with one count of fraud and 14 counts of theft, according to an indictment filed May 12 with the Maricopa (Ariz.) County Superior Court.
Each of those are felony counts.
Mr. Buchanan, who is being held in lieu of a $1 million cash bond, joined LPL of Boston in 2006.
Before that, he was affiliated with Ameriprise Financial Inc. of Minneapolis.
The alleged fraud and theft has been going on since 2001 through April, when he was fired by LPL, according to the indictment.
Maricopa County includes Phoenix and Scottsdale and the surrounding suburbs.
Investigators believe there are numerous victims and an unknown amount of damages.
Court documents paint a picture of Mr. Buchanan committing affinity fraud, a scam that preys upon members of an identifiable group, such as a religious community.
He posed as a certified financial planner, persuading many elderly clients to invest their life savings with him.
The alleged fraud began to unravel in March, when one victim reported to the Maricopa County sheriff that she had been defrauded of $200,000 after Mr. Buchanan pleaded with her to keep quiet, court documents show.
“Most of the victims reported that they invested with money with Buchanan because he was revered as an honest Christian man,” said an addendum to the case filing.
“Buchanan was a board member with his church, and offered help to many people in his membership.”
Some of the investors’ money went into Mr. Buchanan’s personal bank account, the addendum said.
Mr. Buchanan also allegedly stole $1 million from his church, the Christ Life Church of Tempe, Ariz.
One victim was a retired police officer who Mr. Buchanan talked into taking early retirement based upon the returns he promised the officer would realize on his investment.
In the investment world we have observed smooth-talking Christian thieves before, notably Leo Wells of Wells Real Estate and Wells REIT. Showy Christians distract you with great displays of their high-toned morality for one purpose: to get their hands on your wallet.
If my financial advisor or banker made a big show of his Christianity, I would withdraw my funds immediately.
Criminal court filings in California and Florida highlight the ways in which UBS -- and other banks -- worked with California real-estate developer Igor Olenicoff to establish shell companies used to avoid paying taxes.
For more than a decade, between 1992 and 2007, Mr. Olenicoff moved nearly $500 million between banks in London, the Bahamas, Switzerland and Liechtenstein using the names of at least six corporate entities, including ones named Sovereign Bancorp Ltd., National Depository Corp. Ltd. and Guardian Guarantee Co. Ltd. [...]
About a week later, in what appears to be one of the first transactions with UBS, Mr. Olenicoff instructed Barclays PLC to move $89 million to an account at UBS. More transfers took place in 2002, including the movement of $60 million to a Danish shell corporation with an account at a Liechtenstein bank that court documents don't identify.
Q Jeff Gannon. How did he get a White House pass, or what kind of credentials did he have?
MR. McCLELLAN: Just like anyone else who comes to the White House.
Q Hard pass?
MR. McCLELLAN: No, he had never applied for a hard pass. He had a daily pass. I think he's been coming for --
Q Was he coming for --
MR. McCLELLAN: Hang on. I think he's been coming for more than two years now.
Q Under what name?
MR. McCLELLAN: Sorry?
Q Under what name?
MR. McCLELLAN: Well, you have to get cleared. You have to -- just like anybody else that comes to the White House, you have to have your full name, your Social Security number and your birth date. So you have to be cleared just like anybody else.
Q So he was being cleared under James Guckert, or whatever his name is?
MR. McCLELLAN: My understanding, yes.
Q Okay, and how did he get picked to get a question asked at the last news conference?
MR. McCLELLAN: He didn't. The President didn't have a list. The President didn't -- he was in the briefing room. There are assigned seats in the briefing room. We didn't do any assigning of seats, and the President worked his way through the rows, and called on people as he came to them. He doesn't know who he is.
Q Were you aware that he had another name?
MR. McCLELLAN: Was I aware? I had heard that. I had heard that, yes, recently.
Q But did you know during all this time that he really wasn't Jeff Gannon?
MR. McCLELLAN: I heard at some point, yes -- previously.
Jeff Gannon: In your denunciations of the Abu Ghraib photos, you've used words like "sickening," "disgusting" and "reprehensible." Will you have any adjectives left to adequately describe the pictures from Saddam's rape rooms and torture chambers? And will Americans ever see those images?
Scott McClellan: I'm glad you brought that up, Jeff, because the President talks about that often.
How air-conditioned is Houston? Consider this: While highs are in the 90s outdoors, chilled workers smuggle space heaters into their offices.
"They're everywhere," says Heat Throat, my informant. A free-lance paralegal, she works with several downtown law firms. Often she brings a space heater and hides it under her desk — just like most of the office's other female workers. [...]
One time, a big firm's managing partner asked to borrow her space heater to warm his own office. "I hated to let it go," she says. "But he's a managing partner, so what can you say?"
"I'm amazed by the number of people who come in looking for heaters in summer," says Pauline Berry, who works at Southland Hardware on Westheimer.
Wait until Texans find out there have been major discoveries up north where the human brain apparently still functions. Thermostats and, when they fail, cardigans.