Wall Street supported charlatans operating in Europe: “Money and Power: How Goldman Sachs Came to Rule the World” - by John Steel Gordon

In a recent book by William D. Cohan he writes that when J. P. Morgan & Co. opened its new building at 23 Wall Street, at the corner of Wall and Broad, in 1913, it didn’t bother to put its name on the door. The bank assumed, doubtless correctly, that anyone who had legitimate business with the Street’s most famous and powerful bank would know where to find it.

Goldman Sachs’s new headquarters on West Street in lower Manhattan also has no name on the door. Indeed, it has no name in the lobby either. The anonymity is, perhaps, a mark of Goldman Sachs’s self-evaluation that it, like the Morgan Bank a century ago, is the undisputed leader of Wall Street.
 

Cohan covers this early history, but only cursorily. Indeed, the history is largely potted, taken from such secondary sources as Stephen Birmingham’s “Our Crowd” and John Kenneth Galbraith’s “The Great Crash, 1929.” The early chapters of “Money and Power” are sprinkled with such phrases as “according to Birmingham.” Using secondary sources is perfectly acceptable, but foisting off on them the responsibility for getting the history right is not.

Note EU-Digest: Bottom line is that Goldman Sachs by the very nature of their history and actions should be closely scrutinized. In reference to its activities in Europe, specifically in relation to Greece, they should have been banned from doing any business in the EU a long time ago.  

Unfortunately they have not been banned, and worse they are not the only one in this category of "Multi-National Corporate Untouchables". There are many more. Just think of  Rupert Murdoch's empire. It is high time the European Commission, instead of talking about it, take some serious action by publicly exposing their dubious practices, and getting rid of these dangerous and powerful Wall Street supported charlatans operating in Europe.

By: William D. Cohan’s “Money and Power: How Goldman Sachs Came to Rule the World” - The Washington Post

Wall Street "New" Math Just As Confusing As Old Math | The

It’s not how much money you make, it’s what the money’s called. Not to mention what you’re called. Just ask the Wall Street lower classes, those making between $250,000 and $500,000 annually. They’re reportedly dismayed by the real possibility that their 2010 annual bonus will be a lump of coal -- a big fat zero.

Trying to get regulators and regular people to pipe down over the exorbitant paydays even incompetent managers regularly pull down on Wall Street, some compensation managers came up with what should have been a win-win maneuver. They raised base annual salaries in 2009 and 2010 to cover what they otherwise would have handed out as year-end bonuses.

At Goldman Sachs, for example, managing directors are making $ $500,000 instead of the $300,000 they were making last year; Morgan Stanley and Credit Suisse directors are making $400,000, twice what they made last year

For more: Wall Street "New" Math Just As Confusing As Old Math | The Daily Feed | Minyanville.com

Financial Regulation: US Senate passes biggest, regulatory changes since the Great Depression

On Thursday, the US Senate plucked up its courage and passed its version of the controversial financial reform package. It is bold, brave and risky, but then again, tough times demand tough solutions.

This bill must now be reconciled with the House of Representatives’ version that has already been passed. But the margin of passage in the Senate – a 59 to 39 split that included some Republicans – is probably sufficient to ensure passage in the Senate of any joint-reconciled version.

This Senate vote means Congress is now poised to pass a broad expansion of government oversight of the increasingly complex (and increasingly murky) banking industry and financial markets. The legislation is designed to put measures in place to prevent a repeat of the 2008 financial meltdown. In addition, it simultaneously reshapes the varied roles of numerous federal agencies, and vastly empowers the Federal Reserve Bank, in an attempt to predict and contain future debacles – especially since the current regimen didn’t see that most recent crisis coming, until it hit.

Note EU-Digest: Another step in the right direction and a plus for President Obama

For more: The Daily Maverick :: US Senate passes biggest, baddest regulatory changes since the Great Depression

U.S., Europe at odds over global financial reform - by Howard Schneider and David Cho

A feud between the United States and Europe has cast doubt on the likelihood of a comprehensive global response to the financial crisis that nearly sparked a worldwide depression, according to regulators and analysts.

Combined, the disagreements demonstrate how difficult effective global regulation remains in an era in which capital moves easily across borders but the rules for institutions and traders are set by different national governments with their own political priorities.

NOTE EU-Digest: The EU is to be applauded for finally acting against the unscrupulous U.S.-based hedge funds. After all, the financial crises Europe is facing today started in America precisely because of the US lack in having the proper mechanisms to control their manipulative financial industry. If the US Government is still unable to control their own financial industry, Europe at least can bar some of them from doing business in the European Union.

For more: U.S., Europe at odds over global financial reform - washingtonpost.com

New Banking Regulations … Same Old Story - by Shah Gilani

To save U.S. banks from losing their license to dangle the nation's economy over a cliff, the U.S. Federal Reserve and the country's elected elite threw them a bailout party and gifted them with the accounting- world's version of "Transformers. "

Unfortunately, new banking regulations aimed at solving these problems are little more than the same old song and dance that forced the bailout - and stuck U.S. taxpayers with a multi-trillion-dollar tab.

U.S. taxpayers and retail-level investors have been taken into the heart of the forest - and intentionally abandoned. The only way to escape is via a pathway paved by true transparency and real accountability.

At a time when banks are fat with profits - even as deep problems remain - these institutions should be prohibited from making bonus payments, and should instead be forced to write down all their non-performing assets in accordance with proper accounting standards. The projected bank bonus pools would cover most of those write-downs over the next few years.

We have a chance to celebrate a second anniversary of stock- market gains and another year of economic growth, but to ensure that prospect we need to start to break up all the too-big-to-fail banks. Once the giants are cut down to size, maybe we can have real transparency and not be afraid of being driven over a cliff by a bunch of greedy, drunken party boys.

For more: New Banking Regulations ... Same Old Story

Financial regulation in America: Another fine mess - with Republicans blocking every proposal to protect consumers

With health-care reform stalled, the White House would dearly love to see Congress approve an overhaul of financial regulation. But as Washington, DC, struggles with snowstorms, a chill has descended on relations between Democrats and Republicans on the Senate Banking Committee, which has the job of shepherding through a mega-bill on financial reform, a version of which passed the House of Representatives in December. On February 5th Christopher Dodd (pictured left), the committee’s Democratic chairman, said he was giving up on two-month-old bilateral talks with its top Republican, Richard Shelby (pictured right), after reaching an “impasse”. Mr Dodd apparently called it a day after making several concessions but receiving little in return.

The window for reaching a cross-party consensus is closing fast. As winter turns to spring, senators will begin to focus more on the November mid-term elections than on outstanding legislation. Mr Dodd may have little more than a month to get a deal before attention turns elsewhere. There is a “real chance” of the bill still being stuck in the Senate this time next year, thinks Tom Pax at Clifford Chance, a law firm. If it is, Mr Dodd’s successor on the committee—he retires this year—may try to break it into more digestible pieces.

The main sticking-point is a new consumer-protection agency, which would write rules for products such as credit cards and mortgages. A key part of Barack Obama’s reform agenda (and of the House bill), this is opposed by banks and many Republicans.

For more go to: Financial regulation in America: Another fine mess | The Economist

Business as usual: Wall Street pay soars to record levels. - But have you got a job?

EU-Digest

Wall Street pay soars to record levels. But have you got a job yet?

Despite all the rhetoric of "our" political leaders the so-called regulation of the financial market so far has only been a lot of "hot air". Today major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite the announced "regulatory scrutiny" of Wall Street’s pay culture. Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal. Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year’s $117 billion — and to top 2007’s $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels. An economic advocate noted: "the market might have rallied, but the public on Main street is not convinced the economy is getting better for them. Many people are becoming more and more convinced that this holiday season they will be spending far less on all kinds of unnecessary plastic and electronic junk (not produced in their own countries) for their families. Bottom line: "the stop gap" economic measures are not working for the public at large and if not drastically corrected very soon there will be a "class warfare", with the people taking control of the deteriorating situation".

G-20: No Concrete Result - 'MORE BLA -BLA- BLA'

EU-Digest

G-20: No Concrete Result - 'MORE BLA -BLA- BLA'

At the conclusion of the two-day summit, leaders of the G-20 nations, comprised of the largest developed and emerging countries, issued a 23-page statement that promised, among other things, to fix problems in the financial system that contributed to the economic crisis. They stated they would discourage excessive risk-taking and reduce the chance of future financial meltdowns, the leaders endorsed practices to limit bonuses and to tie executive compensation to long-term performance. European leaders had pressed for pay caps, but the idea was resisted by the United States and Britain and was never on the negotiating table, officials said.

Bottom line: once again there was lots of talk, many promises, but no real results to report. No caps on bonuses, or specific regulatory agreements were announced. Climate Change Advocate Groups which had hoped that under the chairmanship of US President Barack Obama the Group of 20 summit might agree to set aside 150 billion dollars to pay for this work and convince emerging economies to sign the deal were also disappointed. The final summit statement agreed on by the leaders, however, was extremely vague on this issue and the specifics, with only a promise they would study the matter more carefully. Pressure groups were outraged, singling out Obama and Germany's Chancellor Angela Merkel for particular scorn. "This is a crisis of leadership. The rich-country G20 leaders -- especially Merkel and Obama -- set themselves a deadline for a climate finance proposal, and then slept right through it," said Ben Wikler of Avaaz.

Mr. Sarkozy who had promised to go back home to France if there were no pay caps imposed on bankers bonuses, did not leave, even though the EU proposal for bonus caps was shot down by the US and Britain. Apparently, Mr. Sarkozy was pacified with the limelight given to him by being allowed to appear on stage with Mr. Obama and Mr. Brown on the unrelated G20 issue of Iran's nuclear proliferation problems. Mr Sarkozy and fellow political leaders remained in Pittsburgh for the full two days of the conference, which can only be described as another Bla-Bla-Bla meeting, paid for by the taxpayer. A sad state of affairs, as the worlds financial community continues happily on its unregulated path.

YahooNews/Reuters: Germany, France target bank "excesses" for G20 meet

For the complete report from YahooNews click on this link

Germany, France target bank "excesses" for G20 meet

The leaders of Germany and France took aim at the banking sector on Monday, pledging to check banks' power and push for limits on bonus payments at a Group of 20 summit next month. Chancellor Angela Merkel said bonus payments to bankers were "rightly driving a lot of people crazy" and that she and French President Nicolas Sarkozy wanted the G20 summit in Pittsburgh on September 24-25 to make progress on financial regulation. "No bank may become so big that it could get into a position where it could blackmail governments," Merkel told a joint news conference with Sarkozy in Berlin.

Germany and France regard financial market excesses as being the root cause of the global economic downturn and want tighter regulations to prevent a repeat of the biggest financial crisis since World War Two.

Note EU-Digest: They are absolutely right.

Wallstreet -"There is a sucker born every day"

EU-Digest

Wallstreet-"There is a sucker born every day"

The Capitalist system of doing business is usually based on raising capital through public markets. Funds are accessed that are made available by institutions and individual investors. In this scenario, the likelihood that the individual investor somewhere along the line gets the shaft is pretty high, because the market is set up in such a way as to favor the large institutional investors. Basically one could say that the game is rigged and because there are very few rules to avoid that. Brokers and traders today make deals and can manipulate prices every day. So since tens of millions of trades are made around the clock daily in the global marketplace, one could also say that the financial markets operate very much like a multi-national casino. What makes it even more scary is that most of the public is sucked into believing what some of the "insider pundits", like a Cramer, who plays in one market and promotes another says. Therefore, don't be fooled or take any of these market terms - 1y Target Est.,T-Bill index, Actual EPS, CPS, or DPSwe - you get bombarded with serious. Most, or just about all of these terms used have absolutely no scientific base and must be seen as a clever attempt to give legitimacy to what is nothing else but a complex uncontrolled and unregulated financial gambling operation.

The purpose of the stock market has never been to spread wealth, maintain financial order, or support the economy. For every winner in Wall Street you can find a loser, for without losers, there are no winners. Wall Street is a gambling place where the winner takes it all. And like at any Casino the House always takes a cut. Brokers will make commissions no matter what happens, win or lose. Should the taxpayer fund such a rigged and unregulated financial system. Absolutely not.

Telegraph: European Commission proposes bodies to oversee banking risk and financial regulators - by Philip Aldrick

For the complete report from the Telegraph click on this link

European Commission proposes bodies to oversee banking risk and financial regulators - by Philip Aldrick

EU policymakers are proposing that two new centralized bodies be created to oversee banking risk and financial stability across the continent. The recommendation is made in a report to the European Commission compiled by a group headed by former Bank of France Governor, Jacques de Larosiere, but stops short of calling for a sole European regulator. Mr de Larosiere suggests a new European Systemic Risk Council that would pool and analyse all information for financial stability across the continent. It would be chaired by the European Central Bank and have representation from banking, insurance and securities supervisors.