Usually not a good sign to receive a letter from the FDIC

Usually not a good sign to receive a letter from the FDIC
Usually not a good sign to receive a letter from the FDIC, originally uploaded by swanksalot.

My bank got eated!

Shot with my Hipstamatic for iPhone
Lens: Helga Viking
Film: Float
Flash: Off


Saving account, I think it held something like $400. Guess my retirement plan is shot now. According to the letter, if I don’t take action in the next month, they will just send me a check for the full amount. Whoo hoo. Birthday is coming up, maybe I’ll spend it on an iPad.

Also, especially in the enlargement of this photo, my fingers look like elephant legs. I guess I’m not a young man anymore.


Plotters on Wall Street

Frank Rich writes:


But in the 16 months since that other calamity in downtown New York — the crash precipitated by the 9/15 failure of Lehman Brothers — most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. Fluent as we are in Al Qaeda and body scanners, when it comes to synthetic C.D.O.’s and credit-default swaps, not so much.

What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks — secure that it can keep the bonanzas while we get stuck with the losses.

[Click to continue reading Frank Rich – The Other Plot to Wreck America –]

Continuing to Talk

In an ideal world, the corporate media would be investigating this crime wave as breathlessly as they hyped the underpants bomber or the Balloon Boy. Why aren’t they? Collusion? Lack of intelligence? Lack of trust that viewers can understand complex issues? All of the above? The US Congress is so wimpy that they won’t consider investigations with teeth unless public outcry reaches deafening crescendos, and the public is only silently weeping at the moment. I doubt there are any public officials with the intestinal fortitude of Ferdinand Pecora in today’s Washington.

The last time Washington enacted sweeping financial reform, more than 75 years ago, the catalyst was a cigar-smoking, Sicilian-born immigrant named Ferdinand Pecora.

A former New York prosecutor, Pecora was the last in a series of investigators hired to examine the causes that led to the stock market crash of 1929 for the Senate Committee on Banking and Currency. In early 1933, the newly-elected Democratic president, Franklin D. Roosevelt, gave the bulldog lawyer his blessing to dig deep into the excesses that had plunged the nation into the Great Depression.

The result was a relentless investigation, 12,000 pages of transcripts that laid bare abuses on Wall Street and failures of Washington to adequately regulate the nation’s financial system. Pecora’s efforts provided a basis for reforms that would alter Wall Street and maintain relative stability in the banking industry until the recent crisis. These included legislation that for the first time regulated the sale of securities and helped establish the Federal Deposit Insurance Corp. and the Securities and Exchange Commission.

For all the differences between then and now, there also are whispers of familiarity: Abuses on Wall Street. The blind eye of Washington. An economy in crisis. A new and eager administration calling for reform, and efforts by those with v

[Click to continue reading Ferdinand Pecora Ushered In Wall Street Regulation After 1929 Crash –]


Short Selling and Wall Street

Matt Taibbi points out a strange occurrence that happened in the last year that George Bush was in office

National Bank of Pakistan

Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — “like buying 1.7 million lottery tickets,” according to one financial analyst.

But what’s even crazier is that the bet paid.

At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history.

The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. This trader was either the luckiest guy in the world, the smartest son of a bitch ever or…

Or what? That this was a brazen case of insider manipulation was so obvious that even Sen. Chris Dodd, chairman of the pillow-soft-touch Senate Banking Committee, couldn’t help but remark on it a few weeks later, when questioning Christopher Cox, the then-chief of the Securities and Exchange Commission. “I would hope that you’re looking at this,” Dodd said. “This kind of spike must have triggered some sort of bells and whistles at the SEC. This goes beyond rumors.”

Cox nodded sternly and promised, yes, he would look into it. What actually happened is another matter. Although the SEC issued more than 50 subpoenas to Wall Street firms, it has yet to identify the mysterious trader who somehow seemed to know in advance that one of the five largest investment banks in America was going to completely tank in a matter of days. “I’ve seen the SEC send agents overseas in a simple insider-trading case to investigate profits of maybe $2,000,” says Brent Baker, a former senior counsel for the commission. “But they did nothing to stop this.”

The SEC’s halfhearted oversight didn’t go unnoticed by the market. Six months after Bear was eaten by predators, virtually the same scenario repeated itself in the case of Lehman Brothers — another top-five investment bank that in September 2008 was vaporized in an obvious case of market manipulation. From there, the financial crisis was on, and the global economy went into full-blown crater mode.

[Click to continue reading Wall Street’s Naked Swindle : Rolling Stone]

Strange indeed. Strange also that the case hasn’t gotten as much news coverage as say Tiger Woods hitting a fire hydrant near his house.

Film Suggestions

Michael Moore, Capitalism’s Little Tramp

“Slacker Uprising” (Michael Moore)

Despite his films’ faults, I still enjoy Michael Moore’s movies. Am looking forward to seeing his latest.

Bruce Headlam pens a back-handed review, full of constructions like:

In the United States Mr. Moore’s conservative critics may decry his popularity, but his films and best-selling books are far more popular outside the country, especially in Britain, elsewhere in Europe and in Japan. In such places Mr. Moore has become a kind of anti-cultural ambassador — the prism through which a large part of the world views the United States.

But a film that flatly concludes that capitalism is evil is certain to put him at odds with most of the left wing in his own country, and even with President Obama, who gave a speech the next day on Wall Street on the need to reregulate, not replace the financial industry.

[Click to continue reading Film – Michael Moore, Capitalism’s Little Tramp –]

Really? Most of the left wing is on the side of the bankers? And your evidence is? Have you ever actually talked to someone who calls themselves a Liberal, outside of your normal circles?

Anyway, the Liberal typing up this blog concurs with Mr. Moore: Capitalism unchecked is a beast that destroys us and our planet. Of course it also enables us to have a luxurious lifestyle, but criticism of an ideology is not the same as a hatred. Just ask the workers of the Republic Window company who held a sit-in not too long ago.

There are fewer of the trademark Moore stunts in “Capitalism,” a sprawling 126-minute film that tries to connect data points across the economy, including the bailout, financial deregulation, privatized juvenile detention centers, the collapse of the American auto business (again), “dead peasant” insurance policies, Goldman Sachs’s influence in Washington, the crash of a commuter jet in Buffalo, the Florida condo market and an old-fashioned sit-in at a Chicago door-and-window factory.

In part the stunts are harder to pull off for a famous, rabble-rousing filmmaker. But at the movie’s heart is the original footage Mr. Moore’s shooters made of workers inside the occupied factory in Chicago (his was the only crew let in during the five-day strike) and of homeowners being evicted. Mr. Moore retains an ear for ordinary speech that is uninflected by the exigencies of morning talk shows or “SportsCenter” clichés.

because, as the Chicago Tribune noted, unchecked capitalism encourages greed, and theft:

After Republic Windows and Doors abruptly shuttered its North Side plant last winter, some of the 200 union workers who lost their jobs peacefully refused to leave for several days, demanding wages they’d earned and becoming a national symbol of the economic crisis.

On Thursday Cook County prosecutors made a startling allegation: The sudden plant closing was all part of a monthslong plot by the head of Republic Windows to loot the business, steal key manufacturing equipment and set up a new operation in Iowa.

After a judge hit former chief executive officer Richard Gillman with a whopping $10 million bail, he was led away to Cook County Jail while wearing a pin-striped suit, white collared-shirt and a dazed expression.

Prosecutors laid out their case in an unusually detailed 56-page filing. Gillman and two other undisclosed executives abandoned Republic Windows’ crushing debt, stole its assets and secretly trucked the equipment from the plant to the new operation in Red Oak, Iowa, the charges alleged.

But that operation failed, too, just a month and a half after it started, leaving hundreds of employees from both Chicago and Iowa out of work and devastated.

All told, Gillman and the others defrauded company creditors who were owed at least $10 million and stole more than $200,000 cash from Republic Windows, prosecutors alleged.

[Click to continue reading Republic Windows CEO charged in plot to loot the company —]

Business politics

Sinclair Broadcast Group nearing bankruptcy

Clear Channel is in a bit of financial trouble, and apparently so are their cohorts in “Republican-slanted news is the only news people want” category, Sinclair Broadcasting. Good, I hope they both become nothing more than a footnote to future histories of the George Bush administration.

Lonely Zenith

you’ll remember Sinclair Broadcast Group as the TV group that carried the anti-Kerry smear documentary in prime time, just before the November 2004 election. You may also remember them for the infamous “The Point” editorial segments during their stations’ newscasts — featuring the right wing rantings of corporate management.

Perhaps you even recall their experiment in “central casting” — firing most of the news departments at their local stations, and instead running “local” newscasts from all over the country out of a central studio in Baltimore.

Well, it now appears that Sinclair is on the verge of bankruptcy

Five years ago, Sinclair was also the darling of the right for running that anti-Kerry documentary on all 58 of their stations, and for conservative editorials on all of those stations as well. Those who saw ever greater consolidation as the road to maximizing corporate profits were enamored of Sinclair’s experiment with producing “local” newscasts for their stations from a central studio at corporate headquarters in Baltimore.

Unfortunately for Sinclair, viewers were unimpressed by “local” newscasts that were produced hundreds or even thousands of miles from home — and tuned out in droves. And the right wing editorials created negative publicity for Sinclair’s stations. Ultimately. the central studio for producing newscasts was shut down, and the right wing editorials were cancelled. And the group has, by and large, floundered in mediocrity ever since. So far as I’m aware, none of Sinclair’s 58 stations is a market leader, and few are even in the top three — when you run a group on the cheap and attempt to push a national agenda onto your local stations, the result is predictable: poor ratings and a weak identity in your local markets.

As a result, Sinclair was poorly positioned for dealing with the advertising downturn of the past 18 months.

[Click to continue reading Daily Kos: Sinclair Broadcast Group nearing bankruptcy]

Bwa-ha-ha! Couldn’t happen to nicer corporations1

  1. and by nicer I mean of course the opposite. Sinclair Broadcasting is just scum, plain and simple. []
Business Suggestions

Fools Gold

“Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe” (Gillian Tett)

According to Gillian Tett (by way of New Yorker columnist John Lanchester), our current financial meltdown started because of the Exxon Valdez oil spill.

first bore fruit when Exxon needed to open a line of credit to cover potential damages of five billion dollars resulting from the 1989 Exxon Valdez oil spill. J. P. Morgan was reluctant to turn down Exxon, which was an old client, but the deal would tie up a lot of reserve cash to provide for the risk of the loans going bad. The so-called Basel rules, named for the town in Switzerland where they were formulated, required that the banks hold eight per cent of their capital in reserve against the risk of outstanding loans. That limited the amount of lending bankers could do, the amount of risk they could take on, and therefore the amount of profit they could make. But, if the risk of the loans could be sold, it logically followed that the loans were now risk-free; and, if that were the case, what would have been the reserve cash could now be freely loaned out. No need to suck up useful capital.

In late 1994, Blythe Masters, a member of the J. P. Morgan swaps team, pitched the idea of selling the credit risk to the European Bank of Reconstruction and Development. So, if Exxon defaulted, the E.B.R.D. would be on the hook for it—and, in return for taking on the risk, would receive a fee from J. P. Morgan. Exxon would get its credit line, and J. P. Morgan would get to honor its client relationship but also to keep its credit lines intact for sexier activities. The deal was so new that it didn’t even have a name: eventually, the one settled on was “credit-default swap.”

[From Outsmarted: Books: The New Yorker]

I haven’t read the book yet, but I ordered it after reading these sentence:

The value of Gillian Tett’s book is in the level of detail with which she tells the story, concentrating on the specific sequence of inventions and innovations that made it possible. Tett, a Financial Times reporter who covered the credit markets, was one of the few people to have seen the implosion coming. A critical factor was that she has a Ph.D. in social anthropology—a “hippie” background, as one banker told her, intending no compliment. It helped her focus on what she calls “social silences” in the world of banking.

Midas Touch

Bankers and their greed, but of course, greed with consequence for all of us.

There was one final component to the J. P. Morgan team’s invention. The team set up a kind of offshore shell company, called a Special Purpose Vehicle, to fulfill the role supplied by the European Bank for Reconstruction and Development in the first credit-default swap. The shell company would assume $9.7 billion of J. P. Morgan’s risk (in this case, outstanding loans that the bank had made to some three hundred companies) and sell off that risk to investors, in the form of securities paying differing rates of interest. According to J. P. Morgan’s calculations, the underlying loans were so safe that it needed to collect only seven hundred million dollars in order to cover the $9.7-billion debt. In 1997, the credit agency Moodys agreed, and a whole new era in banking dawned. J. P. Morgan had found a way to shift risk off its books while simultaneously generating income from that risk, and freeing up capital to lend elsewhere. It was magic. The only thing wrong with it was the name, BISTRO, for Broad Index Secured Trust Offering, which made the new rocket-science financial instrument sound like a place you went to for steak frites. The market came to prefer a different term: “synthetic collateralized debt obligations.”

John Lancaster’s article is fascinating, give it a read before the Rapture takes your neighbors away…

Advertising Business

Cat Fight Emerson vs Bud

St. Louis cat-fight!

Taj Mahal

Emerson, one of St. Louis’ largest companies, is apparently steamed at what it thinks is rough treatment at the hands of Anheuser-Busch. The Ferguson-based manufacturer of cooling equipment, network power products, appliances and tools plans to boycott Anheuser-Busch products to protest stingier payment policies and what it claims are Anheuser-Busch’s cutbacks in funding for local non-profits.

In an internal memo obtained by Lager Heads, Emerson sounded off:

“With the InBev acquisition of Anheuser-Busch we have seen negative things happening in the St. Louis community and in regard to Emerson doing business with InBev. InBev payment terms with Emerson have now been stipulated as 120 days – take it or leave it!”

Before being taken over by InBev, A-B typically settled its accounts in 30 days. Emerson, an Anheuser-Busch supplier, is evidently mad at the change. It’s not alone, but this is the most interesting response – by far- to Anheuser-Busch’s new way of dealing with suppliers.

[Click to continue reading Emerson to boycott Anheuser-Busch | Lager Heads | STLtoday]

DDB Chicago has both petulant companies as clients, as Jeremy Mullman reports:

DDB, Chicago, finds itself in exactly that awkward position today following a report in the St. Louis Post-Dispatch that Emerson, an engineering conglomerate, has instructed its divisions to boycott Anheuser-Busch products in response to A-B’s new insistence on making vendors — including Emerson — wait 120 days for payments. Emerson also included among its reasons what it described as A-B’s cutbacks in funding to local nonprofits, including the United Way and the Girl Scouts.

The orders were contained in an internal memo obtained by the newspaper. “With the InBev acquisition of Anheuser-Busch, we have seen negative things happening in the St. Louis community and in regard to Emerson doing business with InBev,” the memo reads. “Effective immediately, we will not use Anheuser-Busch InBev products at the Emerson World Headquarters complex, Winfield Conference Center, on Emerson planes, or in Emerson suites at Busch Stadium (Cardinals), Scottrade Center (St. Louis Blues & concerts), and Edward Jones Dome (Rams).

“We want all divisions to comply and not purchase or stock any Anheuser-Busch InBev products. We suggest you use Coors, Miller, Modelo or Heineken products.”

[Click to continue reading Coors Light at Busch Stadium? – Adages – Advertising Age]

I’d be annoyed too if all invoices were paid after 120 days – that really would mess up our cash-flow. A few years ago we did a large marketing program with a major financial corporation, and because they paid their invoices within 60 days, we had to take out a bridge loan with a local bank just so we could stay afloat. Turned out ok, but money was more liquid a few years ago. Four months is a long time to hold someone’s money before paying it.

Business Chicago-esque

Streetwise Magazine May Be Forced To Shutter

A shame StreetWise can’t get a bailout from the federal government: they actually help people. StreetWise sells each issue to the vendors for $0.75, the vendors resell for $2.001, and keep the change.

Streetwise Headquarters

StreetWise, the weekly Chicago magazine for the homeless, has fallen victim to a hobbled economy and could be forced to close its doors by June if it cannot replace hemorrhaging foundation support, its managers say.

A shutdown would end 16 years of publication and put at risk a non-profit publication that employed homeless Chicagoans as writers and vendors.
“We’ve been in trouble for a long time, but now we’re feeling like we can’t dig ourselves out so easily,” said StreetWise executive director Bruce Crane.

Trying to stem the tide, the publication has switched from a weekly newspaper to a magazine, changed the makeup of its board and slashed staffing, services to the homeless and costs. The organization has sought to replace lost income with stepped up fundraising and grant-writing, and expanded its efforts to seek out advertisers.

Nevertheless, the savings and new funding sources are not enough to cover the loss of major foundation support that has kept the publication afloat in the past.

“If we get no grants, no economic stimulus funds, if nothing else would happen, we’d be 45 days from going out of business,” said StreetWise board vice chairman Pete Kadens.

[Click to continue reading Magazine sold by homeless may fold – Chicago Breaking News]

There are some dudes who have become veritable icons on the streets of Chicago, hawking StreetWise from the same corner for years.

Ironically, on the same day, Janie Lorber of the New York Times reports that circulation is up, at least in other cities (StreetWise is not mentioned).

Newspapers produced and sold by homeless people in dozens of American cities are flourishing even as the deepening recession endangers conventional newspapers. At many of them, circulation is growing, along with the sales forces dispatched to sell the papers to passers-by.

The recession has hardly been a windfall for these street papers, most of which are nonprofits that survive on grants and donations as well as circulation revenue. But the economic downturn has heightened interest in their offbeat coverage and driven new vendors to their doors.[Click to continue reading Rising Circulation, at Papers Sold by Homeless –]


  1. or whatever they can get, a percentage of issues sell for more than $2.00 []

Reading Around on March 31st through April 1st

Chortle At Joker’s Boner
A few interesting links collected March 31st through April 1st:

  • ESPN – OTL: Gotham’s Savior – E-ticket – Then I ask whether he’s driven to build a new thing here that will prove Phoenix was no fluke, that will show everyone that his system really works, that will silence the naysayers once and for all, and he says that until he has won it all, they can say anything they want about him and he can’t say boo back.I say Yeah, but aren’t you burning to shut ’em up?

    He says it doesn’t consume him.

    I say I get that, but wouldn’t you relish it?

    And he leans forward in his chair and reaches across the desk to wipe up a little mess of popcorn kernels with his left hand.

    He cups the bits of shell in his right hand, then pours them casually into the nearby wastebasket, and looks up with a sly grin and says, “You’re asking if I’m human?”

    Wish Mike D’Antoni would have accepted the Bulls job, oh well.

  • AIG Exec Whines About Public Anger, and Now We’re Supposed to Pity Him? Yeah, Right | Corporate Accountability and WorkPlace | AlterNet – DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano’s toxic credit default swaps portfolio, and only a handful of people in our unit did; 2) I didn’t even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn’t, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who promised we would be rewarded for staying, but then went back on their word when they folded in highly cowardly fashion in the face of an angry and stupid populist mob.I have a few responses to those points. They are 1) Bullshit; 2) bullshit; 3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo. You dog.

    AIGFP only had 377 employees. Those 400-odd folks received almost $3.5 billion in compensation in the last seven years…averages out to over $9 million of compensation per person.

  • One Killer Smoked Brisket Recipe | Meaten – Anyway, that is how I do it, I hope that it made sense, and let me know how yours turns out.Viva Meat!

    Image courtesy of swanksalot1


  1. is it so fracking hard to give proper credit?? Still disappointed that TreeHugger is such a corrupt website., which I imagine has a lot less traffic than TreeHugger figured out how to properly give credit to my photo. []