Thursday, July 16, 2009

Rabid Congress Shreds Paulson

Congress got their chance today to grill Paulson for his actions last fall as Treasury Secretary. His intimidations, threats, interference with the free market, and intentional misperceptions with regards to Ken Lewis, TARP, stimulus, bailouts, Bank of America, Merrill Lynch, Lehman Brothers, etc. were repeatedly brought up and questioned. And grill him they mostly did, as they should have, at least the parts that we were allowed to see… The media’s treatment of this hearing was beyond sickening. CNBC continuously broke from coverage not only to bring useless updates on the current collapse of CIT, or an untimely interview with JPMorgan’s CFO to express how stupidly awesome their last quarter was (when ignoring all the derivative losses they no longer need to report, of course), but CNBC also, and repeatedly, broke in to let Kudlow or some other media shill defend Paulson and admonish Congress for their treatment of Paulson. They even had a former fed governor, McTeer, come on to agree with Kudlow’s defense of the man who oversaw this historic financial debacle. Is any of this any surprise? No, not at all unfortunately. We are more than familiar with CNBC’s ultra biased slant on their reporting of business. But today was a new low, a far more reaching new low when you thought they were already as low as they could get.
-Chris Mullen,

Rep. Jordan on CSPAN's "Washington Journal"
Representative Jim Jordan had probably the best five minutes of allotted time with former U.S. Treasury Secretary Henry Paulson before a House of Representatives Oversight subcommittee this morning. is an interview with Susan Swain in which Jordan discusses the Oversight hearing and his thoughts on the Bank of America/Merrill Lynch deal.

Highlights of Former U.S. Treasury Secretary Henry Paulson before Congress

This is MUST SEE TV! See Rat Fink Henry Paulson squirm before Congress like no other has before him. Mr. Paulson has elevated stammering speech to a new level. PRICELESS! To watch the Paulson Wigglefest in it's entirety, follow the links below:

Paulson Hearing: AM Session

Paulson Hearing: PM Session

International Forecaster
Goldman Sachs is in big trouble, but the media refuses to dig and get the same story the alternative media has dug up. As usual the SEC is looking in a different direction, as far away from the real action as possible.

The latest allegation is front-running their own client orders, never mind everyone else’s. As we reported earlier they are using a government created program. A good question is are they front-running for both themselves and the government, which might make it semi-legal? Of course nothing ca be semi legal. It is either legal or it isn’t. Goldman has been confronted on the issue and refuses to answer detailed questions, just saying, “your suggestion that we monitor our website to facilitate front-running is untrue and offensive.” Unfortunately, this confirms our worst suspicions. If we were using the Goldman 360 portal for trading we’d stop until we at least investigate to make sure we were not being cheated. Where may we ask is the SEC? Camping out on the moon most likely. This episode is just beginning. This is another example of cross corruption and arrogance by both our government and Goldman.

By: Jim Willie CB,
So Goldman Sachs was allegedly caught with their clever Ultimate Insider Trading software, whose handy Unix boxes monitor trade orders at the New York Stock Exchange. The secured information was then in microseconds used to create rafts of computer trade orders intended to snatch pennies per trade but with hundreds of millions of shares, enough to log beaucoup profits at quarter’s end. Yes, GSax has plenty of expertise, just maybe not the legal kind. They might have taken insider trading to a new level worthy of the history annals. They supposed smarter than genius cadre really screwed up when they admitted the code and the trade program could be used to manipulate markets. So the public and authorities must believe that the venerable Goldman Sachs could gather illicit trading profits, had the capability to gather illicit trading profits, but did not gather illicit trading profits. Finally, the masses have some evidence of how GSax has managed to beat the market consistently. They appear to have front-run the NYSE stock market, and brazenly defy the prosecutors because they might exert considerable control over them. Thanks to their strong control of most USGovt financial apparatus, the FBI helped to contain the problem. The only trouble is that London and Germany have their hands on the software, and might actually reveal its inner workings. One can only hope they reveal more about it than exploit its usage further. Is this a trade secret issue or a crime secret issue? You decide! One might wonder if GSax might become too distracted and preoccupied with managing the leak, so that they take their eye off the five game fields they attempt to control. One colleague claims the Powerz are stuck managing bigger and heavier and more numerous balls in a vast juggling act bound to end.

Putting the Gold in Goldman
By Eric J. Fry
Meanwhile, back at the former Treasury Secretary's old stomping grounds, business continues as usual…or rather, as UN-usual.

Despite the enormous volatility besetting all major financial markets during the last two years, Goldman Sachs has steadily increased its risk exposure, as measured by value-at-risk (VAR) – a widely utilized risk metric. VAR, as presented in Goldman’s quarterly reports, displays the firm’s probable maximum loss per trading day. During the recent quarter, Goldman’s daily VAR established a new record high for the firm of $245 million.

One might have imagined that last fall's stock market collapse, coupled with the near-implosion of the financial system, would have reduced Goldman's appetite for risk just a smidge. But the VAR data tell the exact opposite story.

Goldman upped its risk exposure, even while borrowing billions of dollars from the government. And by the way, Goldman's VAR did not merely increase in absolute terms, it also increased relative to the size of the company’s shareholder equity. In other words, no matter how you slice or dice the numbers, this swashbuckling financial firm has been ramping up its risk exposure.

The USDollar is vulnerable here and now, as a new wave of bank losses is imminent from numerous types of mortgages along with some basic types. Let’s see if the grapevine is correct, that the USDollar will begin to see a trashing initiative starting this weekend, out of Asia. They must be impatient beyond description. This autumn is expected to see some rather tumultuous events unfold, as the US financial structures are breaking across most of its ramparts even as loyalty to it is fading like a mist. There will be no return to the US of yesteryear, only a tragic march.
-Jim Willie CB

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