Archive for the ‘Bankers’ Category

Competition and Socialism

Tuesday, June 14th, 2011

Planning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity.
- Deng Xiaoping

People who are aware of the history of USSR and perhaps Maoist China may come under the impression that the definition of socialism is a command economy. The definition of socialism is actually the “dictatorship of the proletariat” and not specifically a command economy. The definition of Communism is “from each according to his ability, to each according to his need,” and this may imply some degree of commanding but nothing is explicitly defined as planning. Bailing out major banks as Obama did is a form of planning but it is not a form of socialism. The idea of socialism is that the working class truly “owns” the means of production and that no “human right” gives a particular business leader ultimate authority to use the means in a way that contravenes the interests of the working class or the country.

Those who consider themselves to be fans of Stalin may believe that Stalinist economics are a tenant of socialism. No, Stalinist economics are an adaption to the material conditions at the time. It is a fact that in Marx’s hierarchy, feudalism is considered less progressive than capitalism. Stalin applied a Marxist “pro-worker” leadership to feudal conditions. He had to take what was not industrialized and industrialize it. This does not change the fact that capitalism is more progressive than feudalism. Being a Marxist is not solely being against capitalism.

Socialism implemented in a capitalist country would contain characteristics of capitalism. Socialism created in a feudal economy would have to develop those forces. The key is that under socialism the market is not seen as sovereign but controlled. The Chinese economy works such that market forces exist, but communist party members also manage corporations. It is pragmatic in that the profit motive is allowable except when it violates the interests of workers, in which case the Government steps in.

When competition provides something that is good for society, it can be utilized. In fact sometimes capitalists do away with competition through monopolization. The essential difference between socialism and capitalism is “who is in charge.” Are the business leaders in charge or is the revolutionary party in charge? The difference is not that one plans and the other competes. A business leader can succeed, but a revolutionary party leader will determine how this success should be used to benefit the working class and country.

Goldman Sachs Accused of Fraud by US Government

Saturday, April 17th, 2010

The Link
One who is concerned with populist issues in the United States of America must applaud the Government for what it has done. Granted, the entire system has not realized itself to be fraudulent, but it is a step away from denial. The Government is solving a major problem here.

WASHINGTON (AP) — The government on Friday accused Wall Street’s most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail.

And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the “exotic trades” he created “without necessarily understanding all of the implications of those monstrosities!!!”

The civil charges filed by the Securities and Exchange Commission are the government’s most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.

The news sent Goldman Sachs shares and the stock market reeling as the SEC said other financial deals related to the meltdown continue to be investigated. It was a blow to the reputation of a financial giant that had emerged relatively unscathed from the economic crisis.

Goldman Sachs denied the allegations. In a statement, it called the SEC’s charges “completely unfounded in law and fact” and said it will contest them.

The SEC is seeking to recoup the money lost by investors and impose unspecified civil fines against Goldman Sachs and the executive, Fabrice Tourre. The SEC could enter into settlement negotiations over the amount if Goldman changed its stance and decided not to fight the charges in a trial.

The SEC said Paulson paid Goldman roughly $15 million in 2007 to devise an investment tied to mortgage-related securities that the hedge fund viewed as likely to decline in value. Separately, Paulson took out a form of insurance that allowed it to make a huge profit when those securities’ value plunged.

The fraud allegations focus on how Goldman sold the securities. Goldman told investors that a third party, ACA Management LLC, had selected the pools of subprime mortgages it used to create the securities. The securities are known as synthetic collateralized debt obligations.

The SEC alleges that Goldman misled investors by failing to disclose that Paulson & Co. also played a role in selecting the mortgage pools and stood to profit from their decline in value. Two European banks that bought the securities lost nearly $1 billion, the SEC said.

“Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party,” SEC Enforcement Director Robert Khuzami said in a statement.

But Goldman said in a statement that it never mischaracterized Paulson’s strategy in the transaction. It added that it wasn’t obliged to “disclose the identities of a buyer to a seller and vice versa.”

The charges name only Goldman Sachs and Tourre, who was a vice president in his late 20s when the alleged fraud was orchestrated in 2007. Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.

In an e-mail to the friend, he described himself as “the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”

Tourre, 31, has since been promoted to executive director of Goldman Sachs International in London.

Stanford University spokeswoman Elaine Ray said a student by the name of Fabrice Tourre received a master’s degree in management science and engineering from the school in 2001.

A call to a lawyer for Tourre, Pamela Chepiga at Allen & Overy LLP, wasn’t returned.

Asked why the SEC did not also pursue a case against Paulson, Khuzami said: “It was Goldman that made the representations to investors. Paulson did not.”

Paulson & Co. is run by John Paulson, who reaped billions by betting against subprime mortgage securities. He is not related to former Treasury Secretary Henry Paulson, a former Goldman CEO.

John Paulson was among the first on Wall Street to bet heavily against subprime mortgages. His firm earned more than $15 billion in 2007, and he pocketed $3.7 billion. He has since earned billions more, largely by betting against bank stocks and then buying them back after their shares plunged.

In a statement, Paulson & Co. said: “As the SEC said at its press conference, Paulson is not the subject of this complaint, made no misrepresentations and is not the subject of any charges.”

Goldman, founded more than 140 years ago, built a reputation as a trusted adviser to investment banking clients and for sending top executives into presidential Cabinet posts.

In recent years, it shifted toward taking more risks with its clients’ money and its own. Goldman’s trading allowed the firm to weather the financial crisis better than most other big banks. It earned a record $4.79 billion in the last quarter of 2009.

The complaint filed in federal court in Manhattan “undermines their brand,” said Simon Johnson, a professor at the Massachusetts Institute of Technology and a Goldman critic. “It undermines their political clout. I don’t think anybody really values being connected to Goldman at this point.”

He continued: “There are many people who — until this morning — thought Goldman Sachs was well-run.”

The SEC’s enforcement chief said the agency is investigating a wide range of practices related to the crisis. The prospect of possible legal jeopardy for other major financial players roiled the stock market.

Goldman Sachs shares fell more than 12 percent Goldman and lost $14.2 billion in market capitalization. The Dow Jones industrial average finished down more than 125 points.

The SEC appears to be taking a particularly aggressive approach with Goldman. Typically, cases are resolved by firms agreeing to a settlement before the charges are made public, said John Coffee, a securities law professor at Columbia University.

“The SEC has changed its style,” Coffee said. “They wanted to tell the world what they thought Goldman had done wrong.”

The charges come as lawmakers seek to crack down on Wall Street practices that helped cause the financial crisis. Congress is considering tougher rules for complex investments like those involved in the alleged Goldman fraud.

President Barack Obama vowed Friday to veto a financial overhaul bill that doesn’t regulate mortgage-backed securities and other so-called derivatives. Legislation in Congress would for the first time regulate derivatives, whose value depends on an underlying asset, such as mortgages or stocks. Senate Republicans oppose the bill.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is “pleased that the SEC is departing from the lax enforcement of the Bush administration and is returning to the SEC’s proper role of protecting investors in the marketplace,” spokesman Steven Adamske said.

The biggest loser in the alleged fraud was ABN Amro, a major Dutch bank, and the Royal Bank of Scotland, which acquired major portions of it in 2007. The SEC said the Royal Bank of Scotland paid Goldman $841 million to unwind ABN transactions.

IKB Deutsche Industriebank AG, a German commercial bank, lost nearly all its $150 million investment, the agency said. Most of the money the banks lost went to Paulson in a series of transactions between Goldman and the hedge fund, the SEC said.

IKB was an early casualty of the financial crisis. It issued a profit warning in 2007 saying it had been hurt by U.S. subprime mortgage investments. IKB was sold in 2008 to Dallas-based Lone Star Funds.

Ed Trissel, a spokesman for Lone Star Funds, declined to comment on the case.

The SEC charges come after Goldman Sachs denied last week it that bet against clients by selling them mortgage-backed securities while reducing its own exposure to them.

In an annual letter to shareholders, Goldman said it began reducing its exposure to the U.S. mortgage market in late 2006.

AP Business Writers Alan Zibel in Washington, Stevenson Jacobs in New York and Ashley M. Heher in Chicago contributed to this report.

The Fed, Allen Greenspan attacked on MSNBC

Monday, April 12th, 2010

Visit msnbc.com for breaking news, world news, and news about the economy

Who is to Blame for Supporting US Imperialism?

Tuesday, December 1st, 2009

Now more than ever, America is deeply hated around the world, and many people have come to detest the opportunism of most of our population for their economist compromises with militarism. It is therefore important to understand who is to blame for tolerating and supporting US imperialism and to properly address how the problem should be addressed.

My position has always been that America is a banker’s prison house of nations without a right to exist. It should come down by force of arms with each people de-linking their ethnic identity from America as a prerequisite for building socialism and communism. When the people loudly procolaim, “ Death to America!,” we speak not of the needless mass killing of three hundred million people, but of the end to an oppressive and monstrous cosmopolitan Zionist project which brings ruin to White people as much as to Blacks, Red Indians, Mexican-Americans or Puerto Ricans. Even more so, it is also a direct threat of our total extermination! This is a line, incidentally understood in many advanced White nationalist quarters, for those who still believe the Zionist media nonsense about how White racialist forces inherently are so ultra-chauvinistic that they wind up being aligned with imperialism.

So then while we reject America as a concept, we cannot reject the fact that materially it obviously does exist. We all are currently thrown into this project which constitutes the center of world imperialism dominated by Jewish finance capital where most people hold self-defeating and deeply reactionary views that promote militarism or illusions about imperialism and Zionism.

The ultra-“left,” namely anarchists, sectarian Maoists, chauvinistic Black/African nationalists and racialists, eclectic New Leftists who unfortunately aren’t dead yet, and that broad cult of ignoring class analysis commonly know as “Third Worldists,” are correct to the extent that they blame the American people for tolerating US imperialist aggression, for taking opportunist lines out of populist feelings, and for putting up insignificant resistance to it. These forces lack an understanding of the socio-economic power structure and often replace anti-imperialism with anti-White sectarianism. However, they are basically correct that the American economy is parasitic for which the popular classes bear some degree of responsibility for tolerating and often supporting and attempting to benefit from it.

Now then, if we European-Americans, as exemplified by your average redneck, are to be ridiculed for our false patriotism today which heralds the bombing and destruction of peoples, what about the Mexican who receives citizenship in exchange for serving in the imperialist army’s wars of aggression? What about the millions of pathologically lazy proponents of “Aztlan” who pretend to advance Mexican-American interests even while they are really short-sidedly aligned with the very globalist forces who are breaking down the ethnic character of all the world’s people, including Mexican-Americans and Mexicans, and promoting the free flow of imperialist finance capital and super-profits on the graves of national boundaries? What about those who invent a metaphysical “poverty draft” to pretend that those from among their own ethnic group or social class aren’t equally traitors for actively participating in imperialist wars? What about Red Indians who honor those from amongst their people who died while combating the liberation fighters in Iraq on behalf of US imperialism and world Zionism? Should we honor these fallen scum as “heroes” against oppression or be any less enthusiastic about their deaths? What about the reality of the Black streets today who do not turn their hearts towards Shahid Malik elShabazz (Malcolm X) and The Right Honorable Marcus Mosiah Garvey, but are galvanized around the ultra-Zionist and imperialist lackey Barack Obama simply because he has a non-White continence, even as Obama‘s policies often mirror those of the most hawkish quarters of neo-conservativism, including neo-colonialist policies against Black people? Even Louis Farrakhan’s wing of the Nation of Islam and the leadership of the New Panthers sound like your typical PC Kosher Jewish liberal today.

The fact is that economism, which can vaguely be defined as attempting to win gains in the struggle for social emancipation and national self-determination through collusion with the imperialist power structure, is a crippling problem with deadly consequences today. White European-Americans are often deeply guilty of this, but so is virtually everyone in the United States to an equal or even greater degree. The lesson to be learned is that all of us need to stop being soft on opportunism, not that the White popular classes in North America and Europe are inherently evil if they reject assimilation and cosmopolitanism. Indeed, White assimilation ultimately works against the self-determination of everyone and is in the best interest of no one except the Jews, the imperialists and petty local tyrants from among the brotherly peoples of the world. Ultimately, the unity and independence of the world and whatever ethnic group we hold dear demands we wage a successful revolutionary struggle against imperialism and Zionism. Namely we need to destroy our Zionist and imperialist rulers in the United States and their power structure. It is vital that we understand that this cannot be achieved short of protracted guerrilla warfare against the US government and the Jews. Furthermore, it is both our internationalist duty and the realization of our true patriotic self-interest to actively support our brothers and sisters in foreign lands on the front lines against the enemy today, particularly as they undergo armed struggle.

All of our peoples can and must correct a whole series of reactionary social roles and ideas, but we also do not need to be excessively disparaged. We need to hold accountable and uplift one another and to organize the masses. Through the concerted efforts of all the peoples in North America, let us wage a heroic struggle against imperialism and Zionism!

Liberal Democratic Capitalism is a failure

Thursday, November 19th, 2009

Libertarianism is an unquestionable failure. The economy and country has been ripped to shambles by outsourcing, uncontrolled immigration, poor loan policy, greed and a government that enables it. Globalization has created a system where each country cannot be self-sufficient and political correctness has completely destroyed this country socially. If one country crashes, they all crash. The government “solution” of bailing out the same people who caused the recession is an unquestionable failure. Our system of economics is far behind computer networking, as good networks are designed to be fault tolerant but our economy is not. Only the people who screw things up get bailed out while other people never get a chance to even start their careers.

Americans should get more militant if the government doesn’t cooperate. We’ve had enough of being bounced between a facade of two similar parties like pinballs and we’re not going to waste our lives away decaying under this system. Both parties serve the same elite and both hate communitarian nationalism. We’re not as dumb as the government thinks we are. If there is no light at the end of the tunnel, you can count on anti-government action and feeling escalating.

Christopher Dodd : “Free Media Productions gave me my ideas.”

Wednesday, November 11th, 2009

Just kidding, he didn’t actually say that. But he’s basically saying what I’m saying, which is that a giant bureaucracy could allow for a national economic self-interest and prevent another meltdown.

When the car gets stuck in the mud, the government must be there to get the car out.

The link

WASHINGTON — Senate Banking Committee Chairman Christopher Dodd on Tuesday called for sweeping new government powers to prevent another economic collapse, protect consumers and dismantle failing institutions.

Dodd’s 1,100 page-draft would strip the Federal Reserve and other regulators of their powers to regulate banks and hand that job to a single agency. The bill also would take away the Fed’s ability to monitor credit cards and mortgages and establish a new “Consumer Financial Protection Agency.”

The bill, inspired by last year’s financial meltdown, will minimize “economic turmoil and protect(ing) the interest of taxpayers,” the Connecticut Democrat wrote.

An advance copy of the legislation was obtained by The Associated Press.

President Barack Obama has demanded that Congress rewrite the federal regulations governing Wall Street to close legal loopholes and prevent the kind of fraud and abuse that fed the crisis.

Dodd’s proposal was expected to gain broad support among Democrats, but Republicans haven’t signed on.

Among the top points of contention is Dodd’s desire to create a new agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.

Republicans counter that creating another bureaucracy will make business harder for banks and limit the availability of credit.

The Senate Banking Committee was expected to review the legislation next week, paving the way for a floor vote by early next year.

The House was already on track with its own proposal. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December.

Dodd’s plan differs slightly from Frank’s bill and the administration’s proposal in that it would do more to scale back the powers of the Federal Reserve, which many lawmakers blame for the economic crisis.

For example, Frank has proposed that the Fed be in charge of enforcing tougher regulations on large and influential financial firms so that they don’t grow “too big to fail.” A council of regulators would monitor these firms and make recommendations.

Under Dodd’s bill, the Fed would have less reach. An “agency for financial stability,” managed by a board that includes Fed representation would enforce new rules and dismantle complex financial firms if they threaten the broader economy.

Both the House and Senate bills would likely put limits on the Fed’s ability to provide emergency loans and eliminate its oversight of consumer protections.

Also unlike the House bill, Dodd’s proposal would establish a single federal regulator for banks called the “Financial Institutions Regulatory Administration.”

The single regulator would get rid of two existing federal bank regulators — the Office of the Comptroller of the Currency and the Office of Thrift Supervision. It also would strip the Federal Deposit Insurance Corporation of its oversight of state banks and the Fed in their supervisory powers of bank holding companies.

Dodd has said consolidated oversight is needed to prevent banks from shopping around for an agency that will impose the least amount of oversight.

There can be no nationalism without a big Bureaucracy

Tuesday, November 10th, 2009

To quote a post I made in a secret place:

The only way to have populism is to make the state so strong that it can play referee against economic impulses that are not collectively beneficial. A strong state enables a national self-interest.

Imagine all the problems “fascism” could have prevented. With a strong state, there would be no global economic meltdown because the government would put the bankers in their place. If the bankers act against the interest of the state, they get the purge.

National socialists and white nationalists argue that the movement should all be for the race, and they don’t even know how to define the race. The race is nothing but a collection of genetic matter without the state. The state is everything and everything else is nothing. A cruel death to neo-liberalism!

Economy recovers for investors- but not for you

Friday, November 6th, 2009

Keep bailing out the biggest banks and corporations so that any jobs they create go overseas to India and China. Keep bailing out the people who caused the recession, the mismanages who will stuff their face with the money and use it to “maximize the profits of shareholders” rather than create jobs.

Quite frankly, it is time for populists to do a little more than talk about opposing the regime. If there is no light at the end of the tunnel, then populists should start to organize not against a particular party but against the entire power structure.

NEW YORK (CNNMoney.com) — The nation’s unemployment rate rose above 10% for the first time since 1983 in October, a much worse jump than expected as employers continued to trim jobs from payrolls.

The reading, reported by the government Friday, is a sign of the continued weakness in the labor market even though the economy grew in the third quarter following the longest and deepest downturn since the Great Depression.

The government reported that the unemployment rate spiked to 10.2%, up from 9.8% in September. It is the highest that this rate has been since April 1983. Economists had forecast an increase to 9.9%.

There was also a net loss of 190,000 jobs in October, according to the Labor Department, an improvement from a revised estimate of 219,000 job losses in September. However, economists surveyed by Briefing.com had forecast a loss of only 175,000 jobs in October. This was the 22nd straight month of job losses.

“The only good news is the number of layoffs are dropping off, but those who are laid off still aren’t finding jobs,” said David Wyss, chief economist with Standard & Poor’s.

The jump in the unemployment rate was driven up by a large drop in the number of people who describe themselves as self-employed, as well as the number of teenagers who have jobs. The unemployment rate for teenagers in the labor force soared to 27.6%, up 1.8 percentage points and hitting a third straight record high.

Both teen workers and the self-employed are not captured very well in the government’s separate survey of employers that is used to calculate the number of people on U.S. payrolls. That explains much of the disconnect between fewer job losses overall and the much worse unemployment rate.

The rise in unemployment was not spread evenly across the population. For those with college degrees, the unemployment rate fell to 4.7% from 4.9% in September, as the unemployment rate for those in management, professional, and related occupations slipped to 4.7% from 5.2%.

But the unemployment rate for production jobs, such as factory workers, jumped to 14.5% from 14.1%. The jobless rate for workers in construction, maintenance or natural resources industries such as mining rose to 15.5% from 14.3%.
0:00 /3:08Real unemployment really bad

“There’s a real mismatch between the unemployed people out there compared to what job openings are available,” said John Silvia, chief economist with Wells Fargo Securities. He said construction workers who lost a job when the housing bubble burst don’t have the skills to compete for jobs in sectors that are hiring, such as health care and technology.

Government efforts to end job losses have had limited effects, although the Obama administration estimated last month that 640,000 jobs were created or saved by the federal stimulus package passed earlier this year. But that’s modest compared to the 7.3 million jobs that have been lost since the start of 2008.

Christina Romer, chair of the President’s Council of Economic Advisors, said the steady decline in monthly job losses since earlier this year is a hopeful sign for the economy.

But she acknowledged there’s still significant pain for those looking for work. “Having the unemployment rate reach double-digits is a stark reminder of how much work remains to be done before American families see the job gains and reduced unemployment that they need and deserve,” she said.

Friday’s report comes one day after Congress voted overwhelmingly to extend unemployment benefits by up to 20 weeks. There are now a record 5.6 million people who have been unemployed for six months or longer, as the average time an unemployed person has been out of a job hit 26.9 weeks.

Prior to this report, most economists had believed that the unemployment rate would keep rising and that job losses would continue into next year. But the jump in unemployment in October took it to levels worse than what many previously had expected to be the peak.

According to a survey of top forecasters by the National Association of Business Economics last month, the consensus estimate among economists was that unemployment would hit a high of 10% in the final three months of this year and the first quarter of 2010.

The five economists with the most bearish forecasts had expected unemployment to rise to 10.2% in the fourth quarter of this year before hitting 10.5% in the first half of next year.

Wyss is one of those economists who had projected an unemployment rate of 10.5% in the middle of next year. He said Friday’s report may force him to raise his worst case estimate.

“Some things aren’t playing out the way I expected them to,” he said. “There’s just no good news in this report.”

But others said they see some early signs of life for the labor market. Sung Won Sohn, economics professor at California State University Channel Islands, noted that the biggest increase in temporary employees in two years took place in October.

Employers typically bring in workers on a temporary basis before deciding to make more permanent hires. As such, he expects gains in payrolls by next spring.

“Despite the gloomy job picture, there are some encouraging signs,” he said.

Newly Discovered Third Positionist Website

Monday, September 7th, 2009

Third Position Justice

Interesting Website. I will add it to the blog roll. It has well constructed political opinion and links to very good material about the global financial crisis.

Don’t Hate the Player – Hate the Game

Monday, July 27th, 2009

The moral power of the exemplary person is the wind; that of the petty person is grass. When the wind blows over the grass, it will surely bend. – Confucious

Strike the Shepherd and the Sheep will Scatter – The 48 Laws of Power

Those who most successfully play the game of death – success in the free market, should not be blamed more heavily than the unlucky and weak. They may not be conscious allies, but they serve our inegalitarian interests. Analogously, Dennis Rodman cannot be blamed for the invention of basketball and gangster rapers cannot be blamed for the “harsh reality” of society or for profiting from the liberal capitalist system. Directly blaming the bankers and business men? Get real! The blame should be placed on George Washington, Abraham Lincoln, Barack Obama and the architects of society…the politicians, the military, the constitution. NOT the businessmen who happen to be a bit more “crafty” than their opponents. Do not blame Wal-Mart. Blame Washington DC. Let the behavior of Wal-Mart (shipping jobs overseas for low pay) expose Washington DC.

Don’t hate the player who plays the game. Hate the game. Until the military force that controls society is altered, we all play the game. Yes we would like to switch from one set of rules to another set of rules, but do not be jealous and hypocritical. Reject the two party system. All energy and focus should be in redirecting society collectively away from the ruling order, instead of trying to rehabilitate and tweak the regime without the necessary adjustments.

Don’t hate the player. Hate the game. It is not morally or strategically justified to blame the player.

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