Financial fuckery thread

[Cain]

No comment needed on this:

http://thinkprogress.org/politics/2011/08/18/298485/exclusive-goldman-sachs-vp-changed-his-name-now-advances-goldman-lobbying-interests-as-a-top-staffer-to-darrell-issa/

Has Rep. Darrell Issa (R-CA) turned the House Oversight Committee into a bank lobbying firm with the power to subpoena and pressure government regulators? ThinkProgress has found that a Goldman Sachs vice president changed his name, then later went to work for Issa to coordinate his effort to thwart regulations that affect Goldman Sachs' bottom line.

In July, Issa sent a letter to top government regulators demanding that they back off and provide more justification for new margin requirements for financial firms dealing in derivatives. A standard practice on Capitol Hill is to end a letter to a government agency with contact information for the congressional staffer responsible for working on the issue for the committee. In most cases, the contact staffer is the one who actually writes such letters. With this in mind, it is important to note that the Issa letter ended with contact information for Peter Haller, a staffer hired this year to work for Issa on the Oversight Committee.

Issa's demand to regulators is exactly what banks have been wishing for. Indeed, Goldman Sachs has spent millions this year trying to slow down the implementation of the new rules. In the letter, Issa explicitly mentions that the new derivative regulations might hurt brokers "such as Goldman Sachs."

Haller, as he is now known, went by the name Peter Simonyi until three years ago. Simonyi adopted his mother's maiden name Haller in 2008 shortly after leaving Goldman Sachs as a vice president of the bank's commodity compliance group. In a few short years, Haller went from being in charge of dealing with regulators for Goldman Sachs to working for Congress in a position where he made official demands from regulators overseeing his old firm.

[Cain]

More ratings agencies shennanigans...this time at Moody's:

http://www.businessinsider.com/moodys-analyst-conflicts-corruption-and-greed-2011-8

A former senior analyst at Moody's has gone public with his story of how one of the country's most important rating agencies is corrupted to the core.

The analyst, William J. Harrington, worked for Moody's for 11 years, from 1999 until his resignation last year.

From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody's issued during the housing bubble.

Harrington has made his story public in the form of a 78-page "comment" to the SEC's proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody's processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.

The primary conflict of interest at Moody's is well known: The company is paid by the same "issuers" (banks and companies) whose securities it is supposed to objectively rate. This conflict pervades every aspect of Moody's operations, Harrington says. It incentivizes everyone at the company, including analysts, to give Moody's clients the ratings they want, lest the clients fire Moody's and take their business to other ratings agencies.

Moody's analysts whose conclusions prevent Moody's clients from getting what they want, Harrington says, are viewed as "impeding deals" and, thus, harming Moody's business. These analysts are often transferred, disciplined, "harassed," or fired.

[Cain]

More on Issa's staffer and his family background

http://exiledonline.com/war-nerd-dc-update-transylvania-goes-to-dc-and-lies-its-head-off/

Here's what Simonyi/Haller said when they pressed him on the name change:

"My mother, whose maiden name is Theodora Maria Theresia haller-koi gr Haller (in the U.S., Dora Haller), married Imre Gabor Simonyi and took his name. Her father Alfred haller-koi gr Haller was killed in Budapest in 1944 by fascists as he attempted to prevent children from being conscripted into the military. Prior to his return to Hungary in 1944, he served under Regent Miklos Horthy, as a Hungarian diplomat stationed in England supporting the British in opposition to Germany. His last request was that if Theodora marries, her husband and children would carry on the Haller name."

There are a lot of funny bits in that little one-paragraph melodrama Peter wrote, but the funniest of all is this line: "...He served under Regent Miklos Horthy, as a Hungarian diplomat stationed in England supporting the British in opposition to Germany." That is what is technically called a flat-out lie. One thing you can tell about Peter from this story: He thinks Americans don't know a thing about European history. And he's probably right, since a lot of the reader comments to this big lie called it "a touching family story." Whoo-ee! It's a story, all right. About as accurate as Rambo's version of Nam.

Miklos Horthy was "Regent" of Hungary from 1919 to 1944. If he was "supporting the British," it was a well-kept secret. If only Hitler had known that about his pal Miklos, he might not have posed with him in quite as many photo ops, where you can see the Fuhrer and the Regent shaking hands, strolling together, taking a little ride in a convertible together, just generally lovin' up a storm, as Jerry Lee would say.

I don't even know where Peter came up with that "pro-British" lie of his. The British weren't even a factor in that messed-up, landlocked multi-ethnic gangfight. South-Central Europe between the wars—well, it's a lot like South-Central LA back in the day, except a whole lot bloodier and more confusing. Basically it's pretty much the way Eastwood describes his killer past in Unforgiven: Nobody remembers much of it, they were drunk most of the time–the main ingredient for a war in those parts is slivovitz, or anything else if you can't get that, including hair oil and wood alcohol—and they shot a lot of people. And hanged a lot of people. And raped a lot of people. Hungarians, Germans, Slovaks, Rumanians, Croats, Serbs, Ukranians, with the Jews and Gypsies hiding in the bushes trying to sell a little booze and not get lynched—Did I leave anybody out? If so, they're lucky, because nobody was a hero in that mess. Primitive warfare with superb German or Czech weapons; you can imagine how that went. Killing everyone in the village before you leave—standard practice. Avoiding combat, torturing civilians until they tell you where their last side of bacon is—a day at the office. Raping every female before you bayonet them and go—part of the job. .

When the totally worthless, sleaze-ridden Austro-Hungarian Empire collapsed after Germany surrendered, some ethnic gangs rose in the rankings and others sank. The Hungarians lost out big, because as the second-meanest and biggest gang in the Empire (after the Germans), they'd had a sort of little-brother status that allowed them to beat up all the other ethnics lower than them. By local standards, believe me, that was a good deal.

But their big brothers, the Germans, lost out, so they lost too. In 1920, thanks to the Treaty of Trianon, which was the B-League version of the Treaty of Versailles that did such a good job of pacifying Europe, Hungary had lost three-quarters of its old territory and about two-thirds of its population. What was left was a core area, a Hungarians-only district—and that's what's now "Hungary" on the map.

You'd think that'd be fine, since those tribes couldn't live with each other. Why not split up? Well, remember the Balkans in the 1990s. A bunch of Hungarians got left behind in the parts that were grabbed by all the other ethnic gangs, and that drove the homeland Hungarians crazy. Crazier than before, I mean, because the truth about Europe before 1945, the one key truth nobody wants to hear, is that they were all, and I mean all, from London to Moscow, bloodthirsty creeps, totally out of their minds. The only difference is that they weren't all as good at war, or not at the same time anyway, and the ones who were more in the mood grabbed what they could, when they could.

The Goldman Sachs-turned-Darrell-Issa-staffer Peter Simonyi/Haller's hero, Miklos Horthy, was a classic specimen of South-Central European strongman between the wars. A fascist, absolutely. Not the worst of them, but a fascist all the way, in that half-comedy way the smaller European dictators had, from Mussolini on down. His title was a punchline in itself: "Admiral Miklos Horthy." Admiral? Take another look at Hungary on the map; Admiral of what? Turns out Horthy had been an Admiral in the Austro-Hungarian navy, which was another punchline in itself.

[Cain]

Can't believe no-one has decided any of the previous stories are worth commenting on, but I'm going to continue to plug away at "ratings agencies and Wall Street favourites in collusion over downgrades of sovereign debt and insider trading" with this piece.

http://antifascist-calling.blogspot.com/2011/08/new-leaks-reveal-insider-tips-on-s-us.html

Last week, AntiSec cyber-guerrillas (a loose alliance amongst individuals affiliated with LulzSec and Anonymous) released a 1GB cache of emails filched from security contractor Vanguard Defense Industries (VDI).

Previously Anonymous and LulzSec have wrapped their keyboards around defense grifters Booz Allen Hamilton, ManTech International, NATO, the Department of Homeland Security, the FBI, InfraGard (a "public-private" security alliance amongst corporate heavy-hitters and the Bureau), the CIA, the Arizona Department of Public Safety, the Arizona Counter Terrorism Information Center (a so-called "fusion center" staffed by cops, federal agents, private contractors and the U.S. military), the Bay Area Rapid Transit agency (BART), Britain's Serious Organised Crime Agency, PBS, Fox News, and repressive governments such as Egypt, Tunisia and Zimbabwe.

Their latest campaign targeted VDI, a Texas-based firm, which specializes in the "development and deployment" of Unmanned Aerial Systems (UAS, killer drones). VDI "draws on specialized experience of senior aerospace engineers, former military special operations officers, military instructor pilots as well as retired Senior Executive Service Federal Agents," claiming their "background and operational knowledge has afforded us the unique vision to provide a platform that will extend the security and response capabilities of any organization," according to a blurb on their web site.

While VDI touts their ability to offer "support" to the "military, local, state and federal law enforcement as well as the private sector," the firm also offers "a full scope of consulting services independent of our aerial technology."

That "unique vision" however, didn't prevent AntiSec from spiriting away thousands of emails from VDI's Senior Vice President Richard T. Garcia, a former FBI Assistant Director in Los Angeles who recently left a well-paid position as Global Security Manager for the environment-killing Shell Oil Corporation (can you say Niger Delta?) for "greener" pastures.

A press statement from AntiSec announced that the leak "contains internal meeting notes and contracts, schematics, non-disclosure agreements, personal information about other VDI employees, and several dozen 'counter-terrorism' documents classified as 'law enforcement sensitive' and 'for official use only'."

"Vanguard Defense Industries," AntiSec writes, "manufactures unmanned 'ShadowHawk' drones which cost $640,000 and are equipped with grenade launchers and shotguns. ShadowHawks are currently in use by law enforcement, military, and private corporations deploying them in the US, the Horn of Africa, Panama, Columbia [sic], and US-Mexico border patrol operations. These emails contain contracts, schematics, non-disclosure agreements, and more. Additionally we found evidence of a Merrill Lynch wealth management advisor giving private advance notice to Garcia about upcoming S&P US credit rating downgrades."

Improper Disclosures

In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

Investigative journalist Steve Ragan, writing at The Tech Herald (the publication that broke the story on Anonymous's HBGary hack) informs us that "the U.S. Securities and Exchange Commission was investigating whether there was any sort of insider trading done by S&P employees before the downgrade was official. The story hinged on comments made to the paper by sources close to the investigation itself."

"On the day S&P cut the U.S.'s credit rating" Ragan writes, "Wall Street was flooded with downgrade rumors. These rumors started earlier in the day while trading was active. It turned out they were true."

According to Bloomberg News the SEC "is scrutinizing the method Standard & Poor's used to cut the U.S.'s credit rating and whether the firm properly protected the confidential decision, according to a person with direct knowledge of the matter."

Reporter Joshua Gallu wrote August 14 that SEC staff are "looking into whether certain market participants learned of the downgrade before its announcement."

Downplaying speculation that S&P employees may have breached SEC rules by leaking sensitive information to privileged clients, The New York Times, as is their wont, claimed "it is arguable whether S.&P.'s announcement on Aug. 5 of the rating change was all that confidential, given the speculation about it."

"Assuming information about the downgrade was confidential," the Times pontificates, "it must also be material, which means a reasonable investor would consider it important. This seems to be an easy element to establish because the wild gyrations in the market on the first trading day after the downgrade shows how investors viewed it."

But Cook's email to Garcia didn't arrive in his in-box "on the first trading day after the downgrade" but nearly four months earlier, long before July's political shenanigans over raising the federal debt ceiling, the ostensible reason why S&P downgraded America's credit worthiness.

Maxine Waters (D-CA), wrote to SEC chairwoman, cover-up specialist Mary Schapiro, demanding that the commission "conduct an investigation into whether S.&P. selectively disclosed information related to the U.S. government debt downgrade to any financial institutions, and whether any institutions that had that nonpublic information traded on that information prior to the official announcement."

It appears that Cook's email to Garcia would confirm that S&P insiders did just that, providing information to Merrill Lynch and one can assume other financial firms.

Throwing cold water on charges that the rating's agency acted improperly, the Times argues that "even if if the S.E.C. finds that the information was improperly disclosed, proving insider trading will be difficult."

Why might that be?

According to the Times, "while S.&P. and other credit rating agencies are required to adopt policies to prevent such disclosure, it is questionable whether just leaking information violates any federal regulations, even if it breaches a corporate confidentiality policy."

In case anyone is still naive to believe anyone involved in high finance would never commit such crimes

http://ca.finance.yahoo.com/news/Report-Deutsche-Bank-capress-4040264273.html?x=0

SEOUL, South Korea - A report says four employees of Deutsche Bank AG and its South Korean brokerage unit have been indicted on charges of manipulating stock prices and unfair trading.

Yonhap news agency reported Sunday that the alleged improper trading triggered a sudden plunge in Seoul's benchmark stock index last November and resulted in illegal profits of about $41 million.

Yonhap says prosecutors indicted three employees with the bank's Hong Kong office and a fourth with Deutsche Securities Korea.

Yonhap cited the German bank as saying its South Korean brokerage unit didn't authorize or condone any violation of market regulations.

Seoul prosecutors said they could not immediately confirm the report.

[Adios]

I may not be commenting on these, but be assured that I am reading every one of them. I think this has now gone way beyond conspiracy theory to hard reality.

[deadfong]

I'm new here, but I've been reading this for a while as well. 

Maybe it's too early for my brain - does this bit here:

In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

mean that not only did S&P decide 4 months ago to downgrade the US, but that they already plan to downgrade us again in 2012?  (I also love the arrogance of S&P, that we have to come up with a deficit solution according to their schedule, but I suppose that shouldn't surprise me.)

Also, a side question: could someone more weapons-savvy than me tell me why you'd mount a shotgun on an aerial drone?  I always had the impression that shotguns were more a close-combat weapon.

[Cramulus]

been following closely as well.. I don't know what to say other than *sigh*.

[Don Coyote]

Also, a side question: could someone more weapons-savvy than me tell me why you'd mount a shotgun on an aerial drone?  I always had the impression that shotguns were more a close-combat weapon.

For urban control. Shotguns can also fire less-lethal beanbags and other such rounds for riot control.

Or stun-batons.

[Adios]

Also, a side question: could someone more weapons-savvy than me tell me why you'd mount a shotgun on an aerial drone?  I always had the impression that shotguns were more a close-combat weapon.

For urban control. Shotguns can also fire less-lethal beanbags rock salt and other such rounds for riot control.

Or stun-batons.

Fixed.

[Jenne]

...it's gotten to where...even the political posturing is all just so much orchestration.  The cynical, jaded part of me just doesn't see any of it as real anymore, other than the fact that people are losing ground financially in their daily lives that don't have the sheer luck to be tied to the backs of the bankers and the finance industry.

There's no end to the bullshit.

...and there probably never WAS...we were just all duped into thinking there was.

[Triple Zero]

Can't believe no-one has decided any of the previous stories are worth commenting on, but I'm going to continue to plug away at "ratings agencies and Wall Street favourites in collusion over downgrades of sovereign debt and insider trading" with this piece.

Please do! Like others said, I really don't know what to comment about them, but I've read it all and it's been very good. I don't get this kind of info via my usual news sources.

[Luna]

Chiming in, I have been reading, just don't feel I have anything to add, please continue!

[Cain]

Maybe it's too early for my brain - does this bit here:

In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

mean that not only did S&P decide 4 months ago to downgrade the US, but that they already plan to downgrade us again in 2012?  (I also love the arrogance of S&P, that we have to come up with a deficit solution according to their schedule, but I suppose that shouldn't surprise me.)

That is what it sounds like to me.  A downgrade in response to the policies of one party or another could decide the election. 

Who wants to play kingmaker?  Who's willing to bend over the most to accomodate the ratings agencies and Wall Street?

[Cain]

Obama is, apparently

https://www.nytimes.com/2011/08/22/business/schneiderman-is-said-to-face-pressure-to-back-bank-deal.html?_r=1&ref=business&pagewanted=all

Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general's participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

Not surprising, the large banks, which are eager to reach a settlement, have grown increasingly frustrated with Mr. Schneiderman. Bank officials recently discussed asking Mr. Donovan for help in changing the attorney general's mind, according to a person briefed on those talks.

Schneiderman is the man all the big investment banks are afraid of, right now.  He has stated there was fraud, there was corruption and he intends to prosecute - and he doesn't care how many politically connected friends they may have.

That the Obama administration is taking the banks side against Schneiderman tells you everything you need to know about the Obama administration.

Yves Smith says it best

http://www.nakedcapitalism.com/2011/08/corrupt-obama-administration-pressuring-new-york-attorney-general-to-support-mortgage-whitewash.html

It is high time to describe the Obama Administration by its proper name: corrupt.

Admittedly, corruption among our elites generally and in Washington in particular has become so widespread and blatant as to fall into the "dog bites man" category. But the nauseating gap between the Administration's propaganda and the many and varied ways it sells out average Americans on behalf of its favored backers, in this case the too big to fail banks, has become so noisome that it has become impossible to ignore the fetid smell.

The Administration has now taken to pressuring parties that are not part of the machinery reporting to the President to fall in and do his bidding. We've gotten so used to the US attorney general being conveniently missing in action that we have forgotten that regulators and the AG are supposed to be independent.

[Adios]

The implications behind this are much more far reaching than just the financial sector, aren't they?