Top 1 Percent Is Even Richer Than Surveys Say, ECB Paper Finds

Top 1 Percent Is Even Richer Than Surveys Say, ECB Paper Finds - Yahoo Finance

The oft-cited line that the top 1
percent of U.S. households lay claim to 30 percent of all wealth is
probably an understatement, according to a European Central Bank working
paper.

Incorporating
"missed" data on rich households pushes the share of wealth held by top
earners up to between 35 percent and 37 percent, wrote Philip Vermeulen,
a senior economist at the ECB. That's higher than the 34 percent
suggested by the 2010 U.S. Survey of Consumer Finances data from the
Federal Reserve. 

Biggest Bank Fines | The Economist

Daily chart: Fine times | The Economist

Americans Losing Confidence in All Branches of U.S. Gov't - Gallup poll

Americans Losing Confidence in All Branches of U.S. Gov't:



Americans' confidence in all three branches of the U.S. government has fallen, reaching record lows for the Supreme Court (30%) and Congress (7%), and a six-year low for the presidency (29%). The presidency had the largest drop of the three branches this year, down seven percentage points from its previous rating of 36%.

These data come from a June 5-8 Gallup poll asking Americans about their confidence in 16 U.S. institutions -- within government, business, and society -- that they either read about or interact with.

While Gallup recently reported a historically low rating of Congress, Americans have always had less confidence in Congress than in the other two branches of government. The Supreme Court and the presidency have alternated being the most trusted branch of government since 1991, the first year Gallup began asking regularly about all three branches.

But on a relative basis, Americans' confidence in all three is eroding. Since June 2013, confidence has fallen seven points for the presidency, four points for the Supreme Court, and three points for Congress. Confidence in each of the three branches of government had already fallen from 2012 to 2013.

Global Home Price Values - Bespoke Investment Group

Bespoke Investment Group -  Global Home Price Values

"UK and the United State are actually the least interesting housing
markets out there! Below is a chart of 11 developed-market home price
indices indexed to 100 as of Q1 2000.  The data is taken from the Dallas
Federal Reserve's analysis of global home prices, and uses the real prices of homes: prices adjusted for inflation using the PCE deflator for each country in question."









"Germany and Japan stand out on the chart as consistent losers when it
comes to home price appreciation.  Neither market jumped off the line in
2000 - unlike virtually every other economy - and in Japan that
deflationary downward trend is constant.  The differences are part
cultural, part economic.  In Japan, housing is viewed much more as
consumption than investment, and local zoning restrictions in markets
like Tokyo are often over-shadowed by the government's focus on constant
building and re-building, creating more turnover and density in housing
structures.  In Germany, the rental market is much more active and home
ownership rates are lower; the German tax code also doesn't have a
deduction for mortgage interest like many other developed economies."

U.S. Healthcare Ranked Dead Last Compared To 10 Other Countries - Forbes

U.S. Healthcare Ranked Dead Last Compared To 10 Other Countries - Forbes:

It’s fairly well accepted that the U.S. is the most expensive healthcare system in the world, but many continue to falsely assume that we pay more for healthcare because we get better health (or better health outcomes). The evidence, however, clearly doesn’t support that view.

For this year’s survey on overall health care, The Commonwealth Fund ranked the U.S. dead last .

1. United Kingdom
2. Switzerland
3. Sweden
4. Australia
5. Germany & Netherlands (tied)
7. New Zealand & Norway (tied)
9. France
10. Canada
11. United States

Latest S&P/Case-Shiller Housing Numbers

Bespoke Investment Group  - Updated S&P/Case-Shiller Housing Numbers

Below is a look at how far home prices still are from their all-time
highs made during the housing bubble that peaked in 2005.  While the two
composite indices are still 20% from their all-time highs, 2 of the 20
cities have actually already taken out their bubble highs -- Dallas and
Denver.  Boston and Charlotte are the next closest to their prior highs,
while San Francisco is just 15% away.  Given how far San Francisco
prices fell during the bursting of the bubble, the fact that it's now
just 15% away from new highs is pretty remarkable.  The social
media/Internet craze of the last few years has definitely inflated
prices significantly there.





As you can see below, San Francisco's home prices are up the most off of
their housing-bust lows, gaining 54% at this point.  Las Vegas has
bounced the second most off its lows at +46%, but as you saw in the
chart above, Vegas home prices are still 44% from their prior highs.  At
the bottom of the list below is New York, which has now seen home
prices bounce just 8% off of their lows.  There are certainly pockets of
the New York area that have seen big jumps in prices, but the
Case-Shiller data shows that the area has underperformed on the bounce
back compared to other cities.

Americans Say Big Business Helps Overseas, Less So at Home

Americans Say Big Business Helps Overseas, Less So at Home

Americans see large U.S. companies as having a more positive effect
overseas than they do domestically. While 66% of Americans believe that
large U.S. companies do a good job creating good jobs for citizens in
other countries where they do business, far fewer, 43%, say the
companies do a good job of creating jobs for Americans.

6 Years After the Financial Crisis Hit, The Big Banks Are Still Committing Massive Crimes

The Big Picture : 6 Years After the Financial Crisis Hit, The Big Banks Are Still Committing Massive Crimes

= A great compilation of the crimes of Big Banks by Barry Ritholtz =

"Here are just some of the improprieties by big banks over the last century (you’ll see that many shenanigans are continuing today):

    Laundering money for terrorists (the HSBC employee who blew the whistle on the banks’ money laundering for terrorists and drug cartels says that the giant bank is still laundering money, saying: “The public needs to know that money is still being funneled through HSBC to directly buy guns and bullets to kill our soldiers …. Banks financing … terrorists affects every single American.” He also said: “It is disgusting that our banks are STILL financing terror on 9/11 2013“. And see this.  This has been going on for decades.  For example, Bank of America funneled massive amounts of money to BCCI – itself connected with the CIA – and, according to the US Senate Foreign Relations Committee on Terrorism, Narcotics and International Operations, BCCI in turn funneled huge sums of money to Bin Laden and other terrorists)

    Financing illegal arms deals, and funding the manufacture of cluster bombs (and see this and this) and other arms which are banned in most of the world

    Handling money for rogue military operations

    Laundering money for drug cartels. See this, this, this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis). A whistleblower said: “America is losing the drug war because our banks are [still] financing the cartels“, and “Banks financing drug cartels … affects every single American“. And see this.  This is actually a decades-old practice)

    Funding the Nazis (while we’re referring to funding the original Nazis many decades ago, the U.S. is now backing the neo-Nazis in Ukraine, and banks are undoubtedly involved in some of the support)

    Launching a coup against the President of the United States (an old – but vital – story)

    Engaging in mafia-style big-rigging fraud against local governments. See this, this and this

    Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here

    Manipulating aluminum and copper prices

    Manipulating gold prices … on a daily basis

    Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts

    Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)

    Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car

    Cheating homeowners by gaming laws meant to protect people from unfair foreclosure

    Committing massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing

    Manipulating the hundred trillion dollar derivatives market

    Engaging in insider trading of the most important financial information

    Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this

    Engaging in unlawful “frontrunning” to manipulate markets. See this, this, this, this, this and this

    Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this

    Manipulating corporate bonds through derivatives schemes

    Otherwise manipulating virtually every market

    Participating in various Ponzi schemes. See this, this and this

    Charging veterans unlawful mortgage fees

    Helping the richest to illegally hide assets

    Cooking their books (and see this)

    Bribing and bullying ratings agencies to inflate ratings on their risky investments

    Violently cracking down on peaceful protesters

The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.

Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud. See this, this and this.

Even the bank with the reputation as being the “best managed bank” in the U.S., JP Morgan, has engaged in massive fraud. For example, the Senate’s Permanent Subcommittee on Investigations released a report today quoting an examiner at the Office of Comptroller of the Currency – JPMorgan’s regulator – saying he felt the bank had “lied to” and “deceived” the agency over the question of whether the bank had mismarked its books to hide the extent of losses. And Joshua Rosner – noted bond analyst, and Managing Director at independent research consultancy Graham Fisher & Co – notes that JP Morgan had many similar anti money laundering laws violations as HSBC, failed to segregate accounts a la MF Global, and paid almost 12% of its 2009-12 net income on regulatory and legal settlements.

But at least the big banks do good things for society, like loaning money to Main Street, right?

Actually:

    The big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this)

    The big banks have slashed lending since they were bailed out by taxpayers … while smaller banks have increased lending. See this, this and this

    Virtually all of the banks’ profits comes from taxpayer bailouts. For example, 77% of JP Morgan’s net income comes from taxpayer subsidies

    The big banks are looting, killing the economy … and waging war on the people of the world

    And our democracy and republican form of government as well

Indeed, top experts say that fraud caused the Great Depression and the 2008 crisis, and that failing to rein in fraud is dooming our economy.

We can almost understand why Thomas Jefferson warned:

    And I sincerely believe, with you, that banking establishments are more dangerous than standing armies ….

John Adams said:

    Banks have done more injury to religion, morality, tranquillity, prosperity, and even wealth of the nation than they have done or ever will do good.

And Lord Acton argued:

    The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.

No wonder a stunning list of prominent economists, financial experts and bankers say we need to break up the big banks."

War Is Peace, Freedom Is Slavery, and Ignorance Is Strength | The Big Picture

War Is Peace, Freedom Is Slavery, and Ignorance Is Strength | The Big Picture

"American Public Turns Anti-War … Warmongers Desperately Reply, “But War Is GOOD for Us!”



The American people are now overwhelmingly opposed to more war in Ukraine, Syria, Iran and elsewhere.


Those who get rich from war (the military-industrial complexers and big banks) and their lackeys are desperate to reverse this trend.


As such, they are resorting to more and more outlandish justifications for war.


For example, Ian Morris has written an entire book arguing that war is the best thing ever, the only thing which has lifted us out of poverty and barbarianism. And – yes – he even says that war brings peace.


David Swanson provides a must-read dismantling of Morris’ book.

Morris writes this week in the Washington Post:

War has not only made us safer, but richer, too.

In reality, security experts – conservative hawks and liberal doves alike – agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this and this. So it doesn’t make us safer.


And there is now overwhelming evidence that war is horrible for the economy, and makes us poorer


Morris continues:

Thinkers have long grappled with the relationships among
peace, war and strength. Thomas Hobbes wrote his case for strong
government, “Leviathan,” as the English Civil War raged around him in
the 1640s.

In reality, Hobbes was an authoritarian who argued – just like (1)
the leading Nazi legal scholar and philosopher who created the
justification for “total war” to destroy those labeled an “enemy” of the
Nazi state (Carl Schmitt), (2) Machiavelli, and (3) the father of the Neoconservatives (Leo Strauss) – that the public should be intentionally whipped into a frenzy of fear so that they would be willing to give up their rights and cede their freedoms to the sovereign.


Indeed, Morris accidentally reveals that he is cut from the exact same cloth when he states:

People almost never give up their freedoms — including, at times, the right to kill and impoverish one another — unless forced to do so.

In other words, freedom bad … authoritarian leader good.


Morris writes:

Since 1914, we have endured world wars, genocides and
government-sponsored famines, not to mention civil strife, riots and
murders. Altogether, we have killed a staggering 100 million to 200
million of our own kind. But over the century, about 10 billion lives
were lived — which means that just 1 to 2 percent of the world’s
population died violently. Those lucky enough to be born in the 20th
century were on average 10 times less likely to come to a grisly end
than those born in the Stone Age.

In other words,  War Is Peace, Freedom Is Slavery, and Ignorance Is Strength."

Wall Street Has Always Been Corrupt Or About To Be Corrupted | Zero Hedge

Wall Street Has Always Been Corrupt Or About To Be Corrupted | Zero Hedge

Review of  Michael Lewis' "Flash Boys"

"The smartest guys in the room are figuring out ways to steal you blind
in the financial markets, pilfer your personal information, spy on your
electronic communications, and censor your right to free speech by
taking away your ability to communicate freely on the internet."

"The technology being peddled to the masses by mega-corporations is
designed to keep people amused, apathetic, distracted and uninterested
in thinking critically."

"Those who haven’t been brainwashed by media propaganda or amused to
death by technology, are kept in check by thousands of laws, statutes,
and regulations, enforced by millions of government bureaucrats and
police state thugs. Technology is used by the state as a means of
control, surveillance, censorship, and bilking the populace of their
wealth. .. And while the government is keeping you under their thumb, Wall Street shysters are stealing you blind."

" ...Flash Boys ... revealed about the inner
workings of Wall Street, the wasting of human intelligence on
technological schemes to defraud the public, and the utter level of
corruptness in the government agencies supposed to protect the public
from the vultures in the financial industry feasting on the carcasses of
dupes who still believe the “stocks for the long run” drivel
regurgitated incessantly by the bimbos and slime balls on CNBC. The
concepts of right and wrong, moral and immoral, honesty and dishonesty,
and truth and lies are all purposefully blurred in shades of grey by
those in power, in a blatant attempt to maintain and expand their vast
wealth, immense power and complete governing control.


Michael Lewis focuses on our warped, rigged financial system, but his
insights apply across the board to our entire society. Our economic,
financial, political, regulatory, and judicial systems are all rigged.
This serves the interests of the Deep State, Invisible Government,
Oligarchs, Owners, or whatever other term you choose to describe the
obscenely wealthy minority controlling this country. The existing
establishment will never willingly change the system because it serves
their myopic gluttonous interests."

"The average person believes the stock
market is run on free market principles, with willing buyers and
sellers paying and receiving the most efficient price with regards to
their transactions. The American people have put their trust in
gargantuan bureaucratic government agencies, funded with their tax
dollars, to protect their interests and fight for their rights in the
financial marketplace. They innocently believe a private bank – The
Federal Reserve – owned and controlled by the Too Big To Trust Wall
Street Mega-Banks, is actually enforcing regulations and looking out for
the best interest
of the small investor. They evidently haven’t been paying attention for
the last fourteen years, as the Federal Reserve has purposefully
created bubble after bubble with ridiculously low interest rates, money
printing on an epic scale, encouraging complete deregulation of banks,
inciting speculation, and ignoring criminal behavior by their Wall
Street owners."

"Warren Buffett, king of oligarchs and apologist for the Wall Street
billionaire club, assures the peasants the financial markets are fairer
than ever. If Uncle Warren says it’s so to his girl Becky Quick on
CNBC, how can anyone doubt him? It’s as if the supposedly mathematical
genius billionaire forgot everything he learned in business school."

"

There is $21 trillion worth of U.S. stocks traded every year. Based
upon Katsuyama’s analysis of how much high frequency traders, Wall
Street dark pools, and the stock
exchanges selling access were skimming on virtually every transaction,
he estimated at least $160 million per day was being stolen from stock
investors. That comes to a cool $40 billion per year, at a minimum.
High frequency trading accounted for 25% of all stock trades in 2005. By
2008 high frequency traders accounted for 65% of all trades. They now
account for in excess of 80% of all trading. The Ivy League educated
Wall Street elite insist this extreme level of computer generated
trading provides liquidity and efficiency for the markets. In reality,
the actual trading results of the HFT firms, hedge funds and Wall Street
TBTF banks prove the game is rigged. JP Morgan experienced ZERO
trading loss days in 2013. Goldman Sachs, Morgan Stanley and most of
the mega-banks have had virtually perfect daily trading results since
2010. If they are all winning, who is losing? Guess. Lewis provides
further evidence of “investing” perfection:

“In early 2013, one of the largest
high-frequency traders, Virtu Financial, publicly boasted that in five
and a half years of trading it had experienced just one day when it
hadn’t made money, and that the loss was caused by “human error.” In
2008, Dave Cummings, the CEO of a high-frequency trading firm called
Tradebot, told university students that his firm had gone four years
without a single day of trading losses. This sort of performance is
possible only if you have a huge informational advantage.”

Buffett, the financial “journalists” on CNBC, and all of the
defenders of the Wall Street criminal cabal must have been asleep during
their Stat class in college. The statistical probability of going four
years or even four weeks without a losing trading day is as close to
zero as you can get, unless the game is rigged and you are cheating.
These results were not accomplished due to the brilliance of Wall Street
big hanging dicks and their oversized brains. They were accomplished
by front running stock market orders, bribing stock
exchanges for first access, gaming the system with more powerful
computers, ripping off clients in shadowy dark pools, and keeping the
SEC at bay with promises of jobs and riches if they look the other way.
This was all done under the veil of hyper-complexity designed to
obscure, confuse, and cover-up the truth from unsuspecting investors.


And it is all done “legally” under the auspices of Regulation NMS,
established by the SEC in 2007, to foster both competition among
individual markets and competition among individual orders, in order to
promote efficient and fair price formation across securities markets.
As with almost every government regulation, law, or diktat, the new
method of “protecting” the sheeple created fresh ways to fleece the
sheeple by those who wrote the regulation. See Dodd-Frank and the
Affordable Care Act....When obnoxiously wealthy pricks with the ability to bribe stock
exchanges to place their trading computers on the floor of the exchange
and financially induce the Wall Street banks to funnel trades through
their dark pools in order to know what is happening a nanosecond before
everyone else, and use this information to front run unknowing
investors to generate risk free profits, it’s wrong.
It really is black and white. "

"The bad guys always win and the
good guys always lose on Wall Street. And no one does anything because
they are all on the take."

20 million U.S. families could buy homes, but don’t - MarketWatch

20 million U.S. families could buy homes, but don’t - MarketWatch:

 "Only 13% view home ownership as their “ultimate financial goal”"

"Just 74.4 million American households — less than 65% of the country — owned the homes they lived in during the first quarter of this year, according to a U.S. Census Bureau report this week. That was the lowest level since 1995 and a big drop from 2006, when a peak of 76.5 million households, or 68.9%, were owner-occupied." 

"In fact, the National Endowment for Financial Education released a poll this week that showed only 13% of Americans considered home ownership as their “top long term financial goal,” down from 17% in 2011.

“The American dream has long been associated with the gratification and security of a comfortable home within the picturesque borders of a white-picket fence,” said Ted Beck, president and CEO of the NEFE, which is based in Denver. “However, today the perceived importance of home ownership appears to be waning.”

"Instead, according to the poll, a whopping 50% said that their sole long term financial goal was to save enough for retirement, up from 43% three years earlier, even though most financial planners say owning a home is the best way to build wealth that can be tapped once you retire."

Bank of America to Pay $6.3 Billion to Settle Mortgage Securities Suit

Bank of America to Pay $6.3 Billion to Settle Mortgage Securities Suit - NYTimes.com

"Bank of America is paying $6.3 billion to settle a lawsuit arising out of troubled mortgage-backed securities it cobbled together and sold to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

The bank agreed on Wednesday to pay that sum
to settle a lawsuit filed on behalf of the two government-sponsored
mortgage finance firms by their regulator, the Federal Housing Finance
Agency. As part of the settlement, Bank of America will also repurchase
mortgage securities from Fannie and Freddie that are valued at about
$3.2 billion.

The agreement covers what are known as
private-label mortgage-backed securities sold by Bank of America and its
affiliated entities like Countrywide Financial and Merrill Lynch."

LIBOR: The World’s Most Dishonest Number

LIBOR: The World’s Most Dishonest Number | The Big Picture

"The FDIC has sued 16 of the largest banks in the world plus the
British Bankers Association (BBA) alleging that they engaged in fraud
and collusion to manipulate the London Inter-bank Offered Rate (LIBOR). 
BBA called LIBOR “The most important number in the world.”


LIBOR is actually many numbers that depend on the currency and term
(maturity) of the loan.  The collusion involved manipulating most of
these rates.  A vast number of loans and derivatives are priced off of
these “numbers.”  Estimates of the notional dollar amount of deals
affected by the collusion range from $300-550 trillion in deals
manipulated at any given time.  The LIBOR frauds began no later than
2005 and continued through 2011."

The fact that the FDIC “only” sued 16 of the largest banks in the
world does not indicate that the other elite banks were run honestly. 
The other elite banks were not part of the group that set LIBOR so they
could not join in the cartel.  The LIBOR conspiracy could only succeed
and persist if none of 16 elite banks was controlled by honest officers
and no regulator acted to end the collusion once they became aware of
the collusion (which happened no later than April 16, 2008).  We ran a
real world test of the ethics of the leaders of 16 of the world’s most
elite banks.  The scorecard according to the U.S. government agency that
investigated the matter (the FDIC) reports that each of the leaders
failed.  Our twin emergencies are financial and ethical.


According to the FDIC investigation, the three largest banks in
America (including the world’s two largest banks), the four largest
banks in the U.K, the largest bank in German, the largest bank in Japan
(plus one of the handful of surviving “main banks”), the third largest
bank in France, the two largest Swiss banks, the second largest bank in
Canada, and the second largest bank in the Netherlands conspired
together to manipulate LIBOR and not only lied about it but also covered
up the cartel and the fraud scheme it used.  The 15 surviving banks’
total assets were nearly twice as large as the U.S. GDP as of September
30, 2013."




Here are the data on the banks sued by the FDIC

Bank	($ billions, IFRS, as of 9/30/13)
Bank of America Corp	3063^
Barclays PLC	2275
Citigroup Inc	2693^
Credit Suisse Group AG	1643^
Deutsche Bank AG	2420
HSBC Holdings PLC	2723
JPMorgan Chase & Co	3678^
The Royal Bank of Scotland Group PLC	1829
UBS AG	1160
Rabobank	908
Lloyds Banking Group PLC	1409
Societe Generale	1698
Norinchukin Bank	846
Royal Bank of Canada	825
Bank of Tokyo-Mitsubishi UFJ	2469
Total:	29639
Source: SNL Financial

...



"Ethics


Consider the ethical and political implications of what the FDIC
investigation has confirmed.  The entire barrel of apples is rotten. 
Every CEO failed the ethical test, and the ethical bar that they failed
to surmount was set exceptionally low.  That can only happen when a
“Gresham’s” dynamic has been allowed to persist for years because of the
three “de’s” (deregulation, desupervision, and de facto decriminalization). 
Such a dynamic can cause “bad ethics to drive good ethics out of the
markets.”  No one should be able to view the facts the FDIC cites
without a sense of horror combined with an urgent commitment to
transform the industry that has done so much financial and ethical harm
to our nations.  "

..

"Crony Capitalism and Politics


There are two possibilities:  the Obama administration knew for six
years that the world’s largest banks were endemically led by frauds or
the administration learned of that fact recently when it learned of the
results of the FDIC investigation.  The LIBOR scandal became public
knowledge with the Wall Street Journal’s April 16, 2008 expose,
so the Bush administration also knew it was dealing with elite frauds. 
If the Obama administration has long known that fraud was endemic among
the leaders of the world’s largest banks, then its policies toward those
CEO and the banks they control have been reprehensible and harmful.


If the administration has just learned from the FDIC investigation
about the true nature of the CEOs that it has refused to hold
accountable and allowed to retain and even massively increase their
wealth through leading control frauds then we can doubtless expect a
series of emergency actions transforming the administration’s finance
industry policies.  The FDIC lawsuit provides a “natural experiment”
that allows us to test which of the possibilities was correct.


Let’s review the bidding.  The U.S. government, through the FDIC, has
found after a lengthy investigation that the leaders of 16 of the
world’s largest banks conspired together to form a cartel to manipulate
the LIBOR “numbers” and to defraud the public about the scam.  This
should have led the criminal justice authorities to prosecute large
numbers of senior officers of these banks – but none of them have been
prosecuted.  It obviously poses a grave threat to the “safety and
soundness” of the entire financial system.  The endemic frauds led by
elite CEOs demonstrate such a pervasive failure of integrity and ethics
by the leaders of the finance industry that there is a moral crisis of
tragic proportions. "

People Battle to Regain Online Privacy

People Battle to Regain Online Privacy - WSJ.com

"

More people are turning to a new wave of tools that let them cover their footsteps online or let them know who's watching them.

They're
downloading programs that allow them to see how their online activity
is being monitored or who can get access to their social-media
information. They're turning to browsers and search engines that don't
track their queries, and to services that encrypt their messages. Some
may soon opt for a new wave of phones that help hide their activity from
trackers.

The fears about privacy are
widespread. According to the Pew Research Center, half of Americans—up
from 33% in 2009—are concerned about the wealth of personal data on the
Internet.

But growing numbers of people
are also staging everyday rebellions against rampant data mining.
According to the same Pew survey, 86% have taken steps to mask their
digital footprints.

For instance, ad-blocking tools,
which keep ads off your screen and prevent the ad companies from getting
data about you, have become the most popular browser extension on the
Web: More than a quarter of Americans have downloaded them, according to




















Forrester Research Inc"

"DuckDuckGo and other Google alternatives
have seen traffic soar. Since its founding in 2011, for instance,
DuckDuckGo has risen to 4.5 million visits a day. Ixquick, another
anonymous search browser, had 2.5 million users a day in the spring of
2013, before the Snowden disclosures. Now it has five million a day.

Many
users are also looking to protect their email. Encrypted and so-called
ephemeral messaging—texts that disappear seconds after you send
them—have become explosively popular among teens, and have long been
used by security professionals.

But now
people who aren't worried about parents or hackers are seeing value in
these apps. WhisperSystems' free encrypted messaging service has had a
3,000% surge in installs since the Snowden revelations, the company
says."

Revealed: Apple and Google’s wage-fixing cartel involved dozens more companies, over one million employees

Revealed: Apple and Google’s wage-fixing cartel involved dozens more companies, over one million employees | PandoDaily

"Confidential internal Google and Apple memos, buried within piles of
court dockets and reviewed by PandoDaily, clearly show that what began
as a secret cartel agreement between Apple’s Steve Jobs and Google’s
Eric Schmidt to illegally fix the labor market for hi-tech workers,
expanded within a few years to include companies ranging from Dell, IBM,
eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and
London-based public relations behemoth WPP. All told, the combined
workforces of the companies involved totals well over a million
employees."

"Although the Department ultimately decided to focus its attention on
just Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Pixar, the
emails and memos clearly name dozens more companies which, at least as
far as Google and Apple executives were concerned, formed part of their
wage-fixing cartel."

..

"The “effective date” of Google’s first wage-fixing agreements, early
March 2005, follows a few weeks after Steve Jobs threatened Google’s
Sergey Brin to stop all recruiting at Apple: “if you hire a single one
of these people,” Jobs emailed Brin, “that means war.”


Jobs threatened Brin and Google on February 17, 2005; nine days
later, Apple’s VP for Human Resources sent out an internal email to
Apple recruiting,

All,


Please add Google to your “hands-off” list. We recently agreed not to
recruit from one another so if you hear of any recruiting they are
doing against us, please be sure to let me know.


Please also be sure to honor our side of the deal."

"This is just a tiny sample of the “overwhelming” evidence used by
both the Justice Department’s antitrust division, and the District Court
judge in San Jose, to debunk the company executives’ claims that each
had coincidentally implemented identical non-solicitation policies at
the same time, with the same companies, without knowing what the other
side was doing.


From that point on, the secret cartel expanded. Later that year, in
September 2005, eBay CEO Meg Whitman called Schmidt complaining that
Google’s recruiters were hurting profits and business at eBay. Schmidt
emailed Google’s “Executive Management Committee”—the company’s top
executives— summarizing Whitman’s, and “the valley”’s view that
competing for workers by offering higher pay packages was “unfair”:



"Within weeks of Whitman’s call to Schmidt, eBay was placed on a Google
list of “Sensitive” companies, for whom Google placed fewer restrictions
on its recruiters except at the executive recruitment level. It was at
this time that Google began to internally formalize its illegal
wage-suppression pacts—and Schmidt was clearly worried about getting
caught."


"Schmidt was then asked if Google sales executive Omid Kordestani could share “with Ebay/PP the rules as they pertain to them?”


Schmidt responded:

“I would prefer that Omid do it verbally since I don’t
want to create a paper trail over which we can be sued later? Not sure
about this.. thanks Eric”

Google’s HR head at the time, Shona Brown, agreed with her boss, in lower-case ee cummings syntax:

“makes sense to do orally. i agree.”

A year later, by the end of 2006, Google upgraded eBay to its “Do Not
Cold Call” list, joining OpenTV, Nvidia Technologies, and Intuit along
with the original five companies."



...

"For now, it’s enough to try to absorb what all of these
cross-company, cross-industry secret labor-fixing agreements mean. Most
labor stories about wage theft and corporate abuse tend to focus on
low-wage earners and the most disadvantaged. Certainly it strains one’s
sensibilities to compare an exploited low-wage worker in the fast food
or retail industry to tech engineers and programmers, who are far better
compensated, live more comfortably, and rarely worry about putting food
in their children’s mouths.


In terms of pathos, there is no comparison; minimum wage earners are
struggling to survive, and nearly all of the well-educated,
privileged-born people in the media world agree that tech industry
workers are all a bunch of overpaid misogynist libertarian bros, a caricature
that makes it perfectly fine to hate the entire class, and impossible
to consider them as political comrades stuck in the same predicament as
the rest of the non-multimillionaires in this country.


What’s more important is the political predicament that low-paid fast
food workers share with well-paid hi-tech workers: the loss of power
over their lives and their futures to the growing mass of concentrated
power in Silicon Valley, whose tentacles are so strong now and so great,
that hundreds of thousands of workers around the globe—public relations
and cable company employees in the British Isles, programmers and tech
engineers in Russia and China (according to other documents which I’ll
write about soon)—have their lives controlled and their wages and
opportunities stolen from them without ever knowing about it, all the
while being bombarded with cultural cant about the wisdom of the free
market, about the efficiency of free knowledge, about the need to take
personal responsibility and to blame no one but yourself for everything
that happens in your life and your career."

U.S. banks enjoy "too-big-to-fail" advantage: Fed study

U.S. banks enjoy "too-big-to-fail" advantage: Fed study - Yahoo Finance

"A landmark study by Federal
Reserve economists found that large U.S. banks enjoy a "too-big-to-fail"
advantage in financial markets, confirming the suspicions of many Wall
Street critics more than five years after the financial crisis.

The
series of research papers, published on Tuesday by the U.S. central
bank's influential New York branch, suggests the biggest and most
complex banks benefited even after the financial crisis from lower
funding and operating costs compared to smaller firms. The researchers
used data through 2009.

The biggest banks also, Fed economists found, can take bigger risks than their smaller peers.

While
the study did not pinpoint the reason big banks borrow more cheaply,
Wall Street critics say it is because investors believe the U.S.
government would again rescue them in a panic, despite new rules adopted
in the wake of the 2007-2009 crisis and aimed at avoiding future
bailouts."

U.S. banks enjoy "too-big-to-fail" advantage: Fed study

U.S. banks enjoy "too-big-to-fail" advantage: Fed study - Yahoo Finance

"A landmark study by Federal
Reserve economists found that large U.S. banks enjoy a "too-big-to-fail"
advantage in financial markets, confirming the suspicions of many Wall
Street critics more than five years after the financial crisis.

The
series of research papers, published on Tuesday by the U.S. central
bank's influential New York branch, suggests the biggest and most
complex banks benefited even after the financial crisis from lower
funding and operating costs compared to smaller firms. The researchers
used data through 2009.

The biggest banks also, Fed economists found, can take bigger risks than their smaller peers.

While
the study did not pinpoint the reason big banks borrow more cheaply,
Wall Street critics say it is because investors believe the U.S.
government would again rescue them in a panic, despite new rules adopted
in the wake of the 2007-2009 crisis and aimed at avoiding future
bailouts."

Credit Suisse to pay US$885m over bonds

Credit Suisse to pay US$885m over bonds - Taipei Times

"Swiss bank Credit Suisse agreed on Friday to pay US$885 million to settle US charges it sold shoddy mortgage bonds to Fannie Mae and Freddie Mac ahead of the financial crisis.

Credit Suisse will pay about US$651 million to Fannie and US$234 million to Freddie, said the US Federal Housing Finance Agency (FHFA), the conservator of the two companies rescued by government during the 2008 financial crisis.

The FHFA said the settlement resolves all of its claims in two lawsuits against Credit Suisse.

The claims alleged that Credit Suisse misrepresented the quality of billions of dollars of mortgage-backed securities it sold to Freddie and Fannie during 2005 to 2007."

U.S. schools plagued by inequality along racial lines, study finds

U.S. schools plagued by inequality along racial lines, study finds - latimes.com:

"Two-fifths of the nation's public school districts offer no preschool programs, and most of those that do offer only part-day programs. Black students account for less than a fifth of those in preschool across the nation but make up almost half of the students who are suspended from preschool multiple times.

Those results from the first comprehensive survey in nearly 15 years of civil rights data from the 97,000 U.S. public schools show they remain marked by inequities."

One in Four Mississippians' Struggled to Afford Food in 2013

One in Four Mississippians' Struggleed to Afford Food in 2013 _ Gallup:

"For the sixth consecutive year, Mississippians were the most likely in the U.S. to report struggling to afford food. In 2013, 25.1% report there was at least one time in the last 12 months when they did not have enough money to buy the food they or their families needed. Residents in West Virginia, Louisiana, and Alabama were also among the most likely to struggle to afford food. Residents of Alaska, New Hampshire, and Minnesota were among the least likely to have this problem."

"In 16 states, at least one in five residents said they struggled to afford the food that they or their families needed at least once in the past 12 months. In seven states, less than 15% of residents reported the same struggles in 2013."

 

Two-thirds of those who live paycheck to paycheck aren't poor, study finds

Two-thirds of those who live paycheck to paycheck aren't poor, study finds - MarketWatch

"It’s not just the poor who live paycheck to paycheck.


A study from Greg Kaplan and Justin Weidner of Princeton University and Giovanni Violante of New York University
finds that two-thirds of the 38 million American households who consume
all their disposable income every pay period aren’t poor.


The study, released at a Brookings Institution event, found that
these so-called wealthy-hand-to-mouth are older than their poor
paycheck-to-paycheck counterparts, have higher incomes (about $50,000)
and hold substantial illiquid assets (also around $50,000 on average),
like real estate. The poor who live paycheck to paycheck have median
incomes around $20,000.


However, these people only tend to stay in this situation for about
2.5 years, unlike the poor who tend to stay for long periods of time.


It’s not just a U.S. phenomenon: Canada, Australia, the U.K.,
Germany, France, Italy and Spain also have more non-poor
paycheck-to-paycheck households than poor ones, though the percentage
varies across countries.


The authors say the findings are important for policymakers when they craft stimulus programs.


The other finding that may be startling is that a third of all households do live paycheck to paycheck."

Big banks finish paying $20 billion in mortgage settlement

Big banks finish paying $20 billion in mortgage settlement, report says - The Washington Post:

"The nation’s largest banks have met their obligations to provide relief to struggling homeowners under the $25 billion national mortgage settlement, the landmark agreement to clean up shoddy foreclosure prac­tices.

On Tuesday, the court-appointed monitor of the settlement said Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial had all completed their requirements to offer various types of aid to borrowers, including allowing them to refinance or lowering the balance of their loan.

The mortgage serv­icers had to provide $20 billion in relief to
borrowers with different types of aid assigned different credit toward
that figure. While they ponied up a total of $50 billion to assist more
than 600,000 families, only $20.7 billion of that money was counted
under the settlement. "

What the collapse of the Ming Dynasty can tell us about American decline

What the collapse of the Ming Dynasty can tell us about American decline - The Week

"Why did the Ming allow itself to become isolationist, stagnant, and
backward-looking? Historians are divided, but the leading explanation is
what historian Ian Morris calls the "paradox of development," and Mark
Elvin calls the "high-level equilibrium trap." Simply put, when a
country thinks it's in a golden age, it stops focusing on progress.


America shows signs of falling into this trap. We tell ourselves
robotically that we have "the best health-care system in the world,"
when in fact it underperforms most other rich countries. We gape and
gawk when we first travel to Japan or Switzerland and find that all the
trains run perfectly on time — not to mention the fact that there are
trains in the first place. We ignore our sky-high infrastructure costs
and grumble about potholed roads, never pausing to wonder why West
Europe and East Asia don't have these problems. We tell ourselves that
we're the "land of the free," ignoring the fact that in Japan you can
drink a beer in the park without getting arrested. We say that anyone in
America can get rich, ignoring the fact that economic mobility is lower
here than in almost any other rich country."

Before Crisis, Ukrainians More Likely to See NATO as a Threat - Gallup poll

Before Crisis, Ukrainians More Likely to See NATO as a Threat:

Ukraine's staunchest support during its recent crisis has come from countries in NATO, which, paradoxically, Ukrainians as recently as last summer were still more likely to consider a threat (29%) to their country than as protection (17%). But Ukrainians were most likely to view it as neither (44%).





Although Ukraine pursued NATO membership under pro-Western President Viktor Yuschenko, most Ukrainians never warmed to the idea. More Ukrainians saw NATO as a threat than as offering protection during the pursuit and have continued to feel this way even after the country ended its membership bid in 2010 under President Viktor Yanukovich. Dropping the bid may have neutralized the threat for many Ukrainians, with at least four in 10 or more likely to see NATO as neither protection nor a threat since that time.

U.S. Criticized for Lack of Action on Mortgage Fraud - NYTimes.com

U.S. Criticized for Lack of Action on Mortgage Fraud - NYTimes.com

"Four years after President Obama promised to
crack down on mortgage fraud, his administration has quietly made the
crime its lowest priority and has closed hundreds of cases after little
or no investigation, the Justice Department’s internal watchdog said on
Thursday.

The report by the department’s inspector general
undercuts the president’s contentions that the government is holding
people responsible for the collapse of the financial and housing
markets. The administration has been criticized, in particular, for not
pursuing large banks and their executives.

“In cities across the country, mortgage fraud crimes have reached crisis proportions,” Attorney General Eric H. Holder Jr. said at a mortgage fraud summit in Phoenix in 2010. “But we are fighting back.”

The inspector general’s report, however, shows that the F.B.I.
considered mortgage fraud to be its lowest-ranked national criminal
priority. In several large cities, including New York and Los Angeles,
F.B.I. agents either ranked mortgage fraud as a low priority or did not
rank it at all.

..."

Middle Class Protesting Venezuela Shortages Drive Poor to Maduro - Businessweek

Middle Class Protesting Venezuela Shortages Drive Poor to Maduro - Businessweek

"For bus driver Jorge Polo, the
protests in Venezuela’s capital city are an irritation, not an
attraction.


Every day, Polo has to navigate around the protesters’
makeshift barricades in the wealthy parts of Caracas. He is
never tempted to join them and blames hoarders -- and the
demonstrators themselves -- for the soaring cost of living and
mounting shortages.


“What’s going on down there in the valley is not our
fight,” Polo said, while drinking a beer in the slum of Petare
overlooking eastern Caracas. “It’s rich people trying to get
back lost economic perks. The slums won’t join them.”


After a month of protests, the demonstrations in Caracas
remain confined to wealthier areas with limited support from the
poor. Many residents of Petare say President Nicolas Maduro
should be given more time to turn around the economy after
taking over following the death of Hugo Chavez a year ago. For
now, the protesters are only making life harder, Polo says."

Life as a Retail Worker: Nasty, Brutish, and Poor

My Life as a Retail Worker: Nasty, Brutish, and Poor - Joseph Williams - The Atlantic

"After veteran reporter Joseph Williams lost his job, he found employment
in a sporting-goods store. In a personal essay, he recalls his
struggles with challenges millions of Americans return to day after day."

"Mop the floors in the bathroom, replace the toilet paper and scrub the
toilets if necessary. Vacuum. Empty the garbage. Wipe down the glass
front doors, every night, even if they don’t really need it. It was all
part of the job, done after your shift has ended but without overtime
pay.    "

"I imagine the unstated objective was to send another subtle message
about employee theft: Someone is always watching, even when you take out
the trash."

"Of course, I had no idea what a modern retail job demanded. I didn’t
realize the stamina that would be necessary, the extra, unpaid duties
that would be tacked on, or the required disregard for one’s own
self-esteem. "

Wealth Inequality and Stock Market Gains | House of Debt

Wealth Inequality and Stock Market Gains | House of Debt

"For the past couple of years, the quarterly release of the Federal
Reserve Flow of Funds data has been cheered because it has shown a sharp
rise in household wealth, particularly of financial assets. We agree
this is good news, but the aggregate headline numbers are incomplete."


"It is crucial to think carefully about the distribution of
these wealth gains."


"An indisputable fact is that the distribution of financial assets is
heavily skewed to the rich. In fact, the top 20% of the wealth
distribution owns over 80% of the financial assets in the economy! So
when the aggregate Flow of Funds data show a rise in financial asset
values, it is important to remember that the rise primarily benefits the
rich. Here is the fraction of total financial assets held by the top,
middle, and bottom quartile of the U.S. population in 2010."

"If stock market wealth is concentrated among the very rich, who are less
likely to spend out of an increase in wealth, rising stock market
wealth will have a  smaller impact on spending. Indeed, research suggests that the effect of increases in stock market wealth on spending are weak.

o while the aggregate headline number on household wealth is important,
we must remember who in the population is getting richer.  "

Robust bonuses: Big bucks back on Wall Street

Robust bonuses: Big bucks back on Wall Street

Wall Street bonuses hit their highest level since 2007.

"The average bonus paid to securities industry employees in New York
City in 2013 grew 15% to hit $164,530 in 2013, according to estimates
released Wednesday by New York State Comptroller Thomas P. DiNapoli.
That includes cash for the current year and compensation deferred from
prior years.

That is the third biggest bonus on record, says
DiNapoli. The other two stand-out years: 2006, when workers gleaned
$191,360 and 2007, when they gained $177,830."

Silicon Valley boom eludes many, drives income gap

Silicon Valley boom eludes many, drives income gap - Yahoo Finance:

"Silicon Valley is entering a fifth year of unfettered growth. The median household income is $90,000, according to the Census Bureau. The average single-family home sells for about $1 million. The airport is adding an $82 million private jet center.

But the river of money flowing through this 1,800-square-mile peninsula, stretching from south of San Francisco to San Jose, also has driven housing costs to double in the past five years while wages for low- and middle-skilled workers are stagnant. Nurses, preschool teachers, security guards and landscapers commute, sometimes for hours, from less-expensive inland suburbs.

Now the widening income gap between the wealthy and those left behind is sparking debate, anger and sporadic protests.

"F--- the 1%" and other rants were spray-painted last month on walls, garages and a car in the Silicon Valley town of Atherton, home to many top tech CEOs that Forbes magazine last year called the nation's most expensive community. In Cupertino, security guards rallied outside Apple's shareholder meeting on Feb. 28 demanding better wages. "What's the matter with Silicon Valley? Prosperity for some, poverty for many. That's what," read their banner."

"Buditom, also 44, said the reality of working for some of the nation's richest companies has sapped his belief in the American dream. For the past four years, he has been living in his sister's apartment, commuting an hour in stop-and-go traffic for a $13-an-hour security job.

"I'm so passed over by the American dream, I don't even want to dream it anymore," said Buditom, who emigrated from Indonesia 30 years ago. "It's impossible to get ahead. I'm just trying to survive.""

"From the White House to the Vatican to the world's business elite, the growing gap between the very wealthy and everyone else is seizing agendas. Three decades ago, Americans' income tended to grow at roughly similar rates, no matter how much they made. But since about 1980, income has grown most for the top earners. For the poorest 20 percent of families, it has dropped.

A study last month by the Brookings Institution found that among the nation's 50 largest cities, San Francisco experienced the largest increase in income inequality between 2007 and 2012. The richest 5 percent of households earned $28,000 more, while the poorest 20 percent of households saw income drop $4,000. To the south, Silicon Valley's success has made it a less hospitable place for many, said Russell Hancock, president of Joint Venture Silicon Valley, an organization focused on the local economy and quality of life."

"Once a peaceful paradise of apricot, peach and prune orchards, the region is among the most expensive places to live in the U.S. Those earning $50,000 a year in Dallas would need to make $77,000 a year in the Silicon Valley to maintain the same quality of life, according to the Council for Community and Economic Research; $63,000 if they moved from Chicago or Seattle.

Housing costs are largely to blame. An $800-a-month, two-bedroom apartment near AT&T's Dallas headquarters would cost about $1,700 near Google's Mountain View headquarters. Dental visits, hamburgers, washing machine repairs, movie tickets — all are above national averages.

Five years ago, Sacred Heart was providing food and clothing for about 35,000 people a year. This year it expects to serve more than twice that. On one brisk morning recently, families, working couples, disabled people and elderly lined up out the door for free bags of food, just miles from the bustling tech campuses."

"While some are struggling to survive, others are fighting back.

Twice in December and again in January, activists in San Francisco, where recent tax incentives have lured Twitter, Yelp, Spotify and other firms, swarmed privately run shuttle buses that ferry workers for Google, Facebook and other tech companies from the city to work. Tires were slashed, rocks hurled. Signs taped to the buses read: "Gentrification & Eviction Technologies: Integrated Displacement and Cultural Erasure" and "F--- Off Google."

Last month, as protesters beat drums outside, former Daily Show member and comedian John Oliver mocked the tech elite during an annual awards ceremony in San Francisco that honors startups and Internet innovations. "You are no longer the underdogs," he told the audience. "You're pissing off an entire city, not just with what you do at work, but how you get to work. It's not easy to do that."

The crowd roared with laughter, and he went on.

"I heard the latest design for your buses is to use tinted windows but reverse, with the tint on the inside, the reason being, 'Look, I don't mind if the peasants see me, but I would rather not see them, hmm?'"

Fewer laughs followed that one."

"Activist Sara Shortt of the Housing Rights Committee of San Francisco said the protests weren't intended to target the workers themselves.

"We're going after the bus as a symbol, a very palpable symbol, of the dramatically growing income divide in our city," she said. "Frankly those gleaming white buses with their tinted windows are a slap in the face to the rest of us who are waiting for the public bus or riding our bicycles down the bike lanes competing with these mammoth vehicles."

"A few prominent figures in the tech elite have fanned flames on the issue of income disparity. Greg Gropman, CEO of the tech startup AngelHack, ridiculed San Francisco in a now-deleted Facebook post in December: "Why the heart of our city has to be overrun by crazy, homeless, drug dealers, dropouts, and trash I have no clue."

A month later, in an open letter to The Wall Street Journal, venture capitalist Tom Perkins likened what he called "the war on the one percent, namely the 'rich'" with fascist Nazi Germany: "Kristallnacht was unthinkable in 1930; is its descendent 'progressive' radicalism unthinkable now?""

When Regulation Threatens, Bankers Predict Doom For Main Street - ProPublica

When Regulation Threatens, Bankers Predict Doom For Main Street - ProPublica

"Collateralized loan obligations, as the acronym is known, are bundles
of loans, usually made to junk-rated companies. They use the same
techniques as collateralized debt obligations, which were often made up
of subprime mortgage investments and were the rotten core of the
financial crisis. C.L.O.’s caused billions in losses for banks during
the market panic of 2008, but most recovered strongly and memories
faded. Junk-rated companies rallied, and C.L.O.’s roared back.


Under the Volcker Rule, which prevents banks from making speculative
investments or owning large pieces of hedge funds or private equity
firms, some C.L.O. holdings might be prohibited. Some C.L.O.’s own
securities or bonds, and those are considered more speculative. (In a
regulatory quirk, bonds and loans get different regulatory treatments.)
Some C.L.O.’s give certain investors the ability to remove the manager
that makes the C.L.O.’s investment decisions. That could be construed as
a form of ownership control, which would bar banks from participating
under a strict construction of the Volcker Rule.


The banking industry has been making loud noises about how the
uncertainty could have dire consequences. As with the TruPs ruckus, the
big banks have defended their interests in the name of smaller and more
sympathetic entities. According to the banking lobby and its friends in
Congress, any threat to the C.L.O. market is actually a dagger pointed
at midsize businesses, which will have trouble finding capital as a
result. In written testimony to the House subcommittee, a United States
Chamber of Commerce representative expressed “serious concerns that the
regulators had failed to take into account the impact of the Volcker
Rule upon the capital formation of Main Street businesses,” adding
ominously that “it may only be the first wave of capital formation
problems that may crop up as a result of the Volcker Rule.”


Like the TruPs fight, and countless other similar Washington
showdowns, this skirmish is largely about preserving a market for the
largest banks. Just three “too big to fail” banks — JPMorgan Chase,
Citigroup and Wells Fargo — account for 71 percent of bank C.L.O.
holdings, according to Better Markets, the banking reform group. And the
large banks get fees from creating the deals.


And so banking interests have massed their forces to preserve this
business. At the House subcommittee hearing last week, four industry
representatives counterbalanced a lone professor from Georgetown Law School, Adam J. Levitin, who was tasked with defending Dodd-Frank.


Professor Levitin’s testimony made clear what the central public concern is here: The C.L.O. market hides embedded systemic risk.
When banks sponsor C.L.O.’s by creating and marketing them, they imply
that they back them without actually doing so. Investors rely on this
implied guarantee because banks have bailed out comparable affiliated
entities in the past. Ultimately, Professor Levitin argued,
taxpayer-funded deposit insurance backstops the banks making these
potentially speculative investments — exactly the thing the Volcker Rule
is supposed to end."

Big Company CEOs Just Aren't Worth What We Pay Them - Forbes

Hmm.. this is from Forbes! A good piece...

Big Company CEOs Just Aren't Worth What We Pay Them - Forbes

"It isn’t every day that academic research comes along to tell you
something you really wanted to hear and that you suspected was the truth
all along? In this case it’s about the long running debate around top
executive pay.


A recent paper by J. Scott Armstrong of the Wharton School
and Philippe Jacquart of France’s EMLYON, seem to have finally
established that paying top dollar simply doesn’t get a better job done.
And, in fact, it might actually get a worse one done.


According to Armstrong and Jacquard, while there is plenty of
evidence that financial incentives can be effective in motivating people
to do mundane and boring tasks, individuals do the more interesting and
challenging stuff…well, because it’s interesting and challenging.


Perversely, they say, very large financial incentives may actually
hinder top performance. The paper argues there  is strong evidence that
individuals can become fixated on incentives and either become limited
in their thinking, unable to digest and adopt new ideas or alternately
become convinced that they will achieve the goal automatically so do not
need to try as hard as they might otherwise. Whatever the outcome,
every other stakeholder from the more modestly earning employee to the
corporate stockholder loses out.



And finally the research also suggests that we might not really be
getting the brightest and best talent at the top because the tools and
processes used to identify candidates are either limited or downright
faulty. There is simply too much emphasis on past performance, personal
recommendation, unstructured interviewing, an unwillingness to ask
really difficult and searching questions and that more dangerous
selection criterion of all – gut instinct. Worryingly, it seems that the
headhunters and in-house recruiters charged with hiring occupants of
the corner office may be relying too much on perception and too little
on good, hard facts. The paper points out that CEOs who win prestigious
industry awards constantly out-earn those that don’t. Yet the stocks of
the companies the award winners head up consistently underperform in
comparison to those of their less publicity hungry peers. Perhaps
because the latter spend their time running their businesses well
instead.


So far, so good. I’d never quite got the fact that a CEO might be
worth several hundred times the average person working for them (around
380 times, according to estimates from the AFL-CIO as recently as 2012.)
But what do we do about it?


Unlike many academics, who might shy away from coming up with a
solution, EM Lyon’s Jacquart is one willing to give the obvious if
uncomfortable answer – namely that current incentive models need to be
abandoned and overall executive pay should be reduced. And he’s also
ready with a counter to those who will doubtless argue that this will
make it impossible to recruit the right people and bring major banks and
corporations crashing to the ground. “Yes, of course this may make it
more difficult to recruit very senior individuals from outside an
organisation, at least in the short term. However it would force
businesses to focus more on the development of the talent it already
has, the talent that is more likely to be more loyal to and
understanding of its aims, goals and methodologies.”


As the old Bob Dylan lyric goes, “Don’t follow leaders.” And if
Messrs Armstrong and Jacquart are right, don’t pay them quite so much
either."

Musk, The Rent Seeker, Posing as Visionary - streetwiseprofessor.com

Musk, The Rent Seeker, Posing as Visionary - streetwiseprofessor.com

"It was about the fact that all of his companies were heavily dependent
on government subsidies and support.  This support socialized the
potential losses, and allowed Musk (and other major investors, notably
Goldman) to capture the upside.  My point was if his products and
business models were so great, he could succeed on his own, by
attracting private capital."

"...SpaceX, his  space launch venture.  Inevitably, this company is
dependent on government contracts, given that a very large fraction of
space launches carry government payloads.  This is something different
from Solar City and Tesla, where the government is providing subsidies
but not receiving any product or service in return.  But still, it means
that Musk depends crucially on cultivating government support.
 Government contracting-especially big ticket contracting-is hardly a
pristine activity.  A firm does not succeed or fail at it primarily on
the basis of the superiority of its product, but instead on the basis of
its ability to influence politicians and bureaucrats.  And a lack of
scruple is often a feature not a bug in that regard.
SpaceX
was  looking for a commercial launch site, and  seeking state subsidies
in order to build it.  The company has been playing states off against
one another, looking for tax benefits."

"Cynically, Musk focused on one of the poorest parts of the
state-Brownsville-and dangled the prospect of a mere 600 jobs, in
exchange for  $20 million dollars or so in tax benefits.  Some of which
will come from the taxpayers of that very poor community.  And sadly,
the state legislature has succumbed."

"

The poorest people in Brownsville will not benefit the slightest from
the SpaceX venture.  But he and his lobbyist successfully importuned
the state and county to take taxpayer money and give it to SpaceX by
invoking their poverty.  It was utterly cynical for a billionaire to
extract tens of millions from Texas taxpayers in the name of the poor
Mexican Americans of Brownsville.


I know this is the way the game is played.  And that’s the problem:
the game is cynical and wrong.  It is mere rent seeking.  Musk is
particularly appalling because he is a rent seeker posing as a
technological visionary.  His businesses all depend on extracting rents
from the government, which he pockets.


But he has a cult of personality that portrays him as some towering visionary genius."

Credit Suisse Admits Guilt in Settling With S.E.C. - NYTimes.com

Credit Suisse Admits Guilt in Settling With S.E.C. - NYTimes.com

"Credit Suisse on Friday became the latest big bank to admit wrongdoing to the Securities and Exchange Commission, striking a deal over its failure to comply with a cardinal rule of the financial industry.

The bank, based in Zurich, was accused of
advising clients in the United States without first registering at the
S.E.C. Credit Suisse paid $196 million to settle with the federal
agency, which requires banks and other firms that offer investment
advice to comply with basic registration rules.

“The broker-dealer and investment adviser
registration provisions are core protections for investors,” Andrew J.
Ceresney, director of the S.E.C.’s enforcement division, said in a
statement.

While the penalty is significant, the
admission of wrongdoing underscored the importance of the case. It is
the fifth such admission since the S.E.C. — in an important reversal —
modified its longstanding policy of letting defendants settle without
“admitting or denying” wrongdoing."