While shades of Jack Abramoff still cover the windows of congress what they fail to illustrate is just how far lobbyists can go. What remain still unaddressed are the ramifications of the money Wall Street pumps into the coffers of our legislators. A congressman or woman can enter Washington Politics with mediocre means and leave a multi millionaire.
But, Power, money, and politics always have the potential to mix into a toxic brew, and for those looking to gain the legislative edge; the rules leave enough loopholes to do so within the bounds of the law, a law designed specifically for that purpose.
Lobbying is a broad based concept, so broad, and ambiguous that lobbyists actually have the edge, including the ability to have their own attorneys draft legislation that becomes law.
And the rewards for our politically privileged are ominous, for example:
The American Bankers Association invested $1.8 million lobbying the federal government in the first quarter to prevent several key issues of sweeping legislation to overhaul financial institutions from being passed by the House and Senate.
The banking industry's biggest trade group lobbied Congress and federal agencies on the financial overhaul legislation as well as accounting rules, new requirements for credit card issuers, small business lending, bankruptcy legislation, insurance, retirement savings and taxes. In addition to the House and Senate, the bankers' group also had lobbying contacts with the Treasury Department, the Federal Reserve, the Securities and Exchange Commission, and the White House, according to a disclosure form filed April 20 with the Senate's public records office.
Among the group's members are Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and U.S. Bancorp. The association represents major financial institutions as well as regional, community and small banks.
Paying someone for their vote even though it is considered lobbying is just another way to say Bribery even if no money is exchanged at the moment, but only a promise for future support.
Lobbyists are like insects, they multiply and there is no clear method to exterminate them.
Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts
Friday, June 4, 2010
Saturday, April 24, 2010
Wall Street’s culture of Deception (Part 2)
Bank Stock Value Manipulation:
We are now aware of Lehman Bros SCAM, where they would hide billions of dollars of bad debts by selling them prior to a required reporting period and buy them back directly after the report was filed. This is known now as end-of-quarter balance sheet manipulation, the purpose was to trick investors into thinking the Bank or investment house was less leveraged than it was.
This was a form of stock value manipulation, which is illegal! It also constitutes FRAUD on the investors, who would have sold their stock had they known the truth. It is concealing the true nature and value of the company and of its stock value.
Now as it turns out, almost of all of Wall Street is based on this same phony perception, having been caught using this same Ploy, Bank of America now claims there is nothing wrong with concealing in this manner its bad assets. We respectfully disagree!
Comparing Bank of America's "average quarterly assets" and "end of quarter assets" found that, in each quarter, billions of dollars of assets conveniently disappeared briefly at the end of the quarter, only to return again at the start of the next one.
Like Lehman, Bank of America found some legal loophole in some country somewhere that allowed them to momentarily hide tens of billions of dollars of assets somewhere where Wall Street wouldn't see them. And, naturally, Bank of America thinks it's perfectly acceptable: We believe this has been a common practice on Wall Street for sometime
For those that don’t know Repo 105, Lehman Bros asset disappearance program, it was a sale and repurchase agreement by which Lehman parked about 50 billion in assets (presumably assets they did not want to discuss) overnight via a repo transaction so they would not appear on the balance sheet. Who the counter party was has still not been disclosed.
But unfortunately the Lehman executives do have one point. Repo 105 type balance sheet faking was “an old trick” and well known to anyone who cared to read balance sheets (very) carefully.
With BoA they did the very same thing, the end period assets were always lower than the average assets. Moreover it was not obvious unless you really looked because the quarterly earnings releases did not include average assets (but you could work it out because they stated return on average assets.
Bank of America was parking its assets off balance sheet at the end of every quarter for some time and had been obscuring the fact.
There must be a Counterparty
If Bank of America wanted to shove the assets off balance sheet someone (credit worthy) needed to be found to house the assets overnight. There are not that many parties credit worthy for $50 billion or more of overnight repos.
Well BoA found such a willing participant the counterparty was MUFJ. If you look you can see – the same way that MUFJ had end period assets higher than average assets and that the differences and timing roughly match. Someone had to assist BofA in its financial manipulation and that was MUFJ. MUFJ stands for (Mitsubishi UFJ Financial Group)
About MUFJ
Mitsubishi UFJ Financial Group, Inc. (MUFJ), incorporated on April 2, 2001, they are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Co., Ltd. (MUS), Mitsubishi UFJ NICOS Co., Ltd. (Mitsubishi UFJ NICOS), and other subsidiaries.
Through its subsidiaries and affiliated companies, MUFG engages in a range of financial operations, including commercial banking, investment banking, trust banking and asset management services, securities businesses, and credit card businesses, and provides related services to individual and corporate customers. In July 2008, BTMU acquired 49.375% interest in JALCARD, Inc., a wholly owned subsidiary of Japan Airlines International Co., Ltd. In November 2008, BTMU completed the acquisition of all the interest in UnionBanCal Corporation (UNBC), and as a result, UNBC became a wholly owned indirect subsidiary of MUFG.
The Company manages the underwriting of debt and equity instruments for large corporations. It also provides arrangement services relating to private placements primarily for medium-sized enterprise issuers and institutional investors. The Company advises on financing methods to meet various financing needs, including loans with derivatives, corporate bonds, commercial paper, asset-backed securities, securitization programs and syndicated loans. It also offers a range of products to meet fund management needs, such as deposits with derivatives, government bonds, debenture notes and investment funds. It also offers swaps, options and other risk-hedge programs to customers.
Well this is just the second Scam uncovered in the series, stay tuned.
We are now aware of Lehman Bros SCAM, where they would hide billions of dollars of bad debts by selling them prior to a required reporting period and buy them back directly after the report was filed. This is known now as end-of-quarter balance sheet manipulation, the purpose was to trick investors into thinking the Bank or investment house was less leveraged than it was.
This was a form of stock value manipulation, which is illegal! It also constitutes FRAUD on the investors, who would have sold their stock had they known the truth. It is concealing the true nature and value of the company and of its stock value.
Now as it turns out, almost of all of Wall Street is based on this same phony perception, having been caught using this same Ploy, Bank of America now claims there is nothing wrong with concealing in this manner its bad assets. We respectfully disagree!
Comparing Bank of America's "average quarterly assets" and "end of quarter assets" found that, in each quarter, billions of dollars of assets conveniently disappeared briefly at the end of the quarter, only to return again at the start of the next one.
Like Lehman, Bank of America found some legal loophole in some country somewhere that allowed them to momentarily hide tens of billions of dollars of assets somewhere where Wall Street wouldn't see them. And, naturally, Bank of America thinks it's perfectly acceptable: We believe this has been a common practice on Wall Street for sometime
For those that don’t know Repo 105, Lehman Bros asset disappearance program, it was a sale and repurchase agreement by which Lehman parked about 50 billion in assets (presumably assets they did not want to discuss) overnight via a repo transaction so they would not appear on the balance sheet. Who the counter party was has still not been disclosed.
But unfortunately the Lehman executives do have one point. Repo 105 type balance sheet faking was “an old trick” and well known to anyone who cared to read balance sheets (very) carefully.
With BoA they did the very same thing, the end period assets were always lower than the average assets. Moreover it was not obvious unless you really looked because the quarterly earnings releases did not include average assets (but you could work it out because they stated return on average assets.
Bank of America was parking its assets off balance sheet at the end of every quarter for some time and had been obscuring the fact.
There must be a Counterparty
If Bank of America wanted to shove the assets off balance sheet someone (credit worthy) needed to be found to house the assets overnight. There are not that many parties credit worthy for $50 billion or more of overnight repos.
Well BoA found such a willing participant the counterparty was MUFJ. If you look you can see – the same way that MUFJ had end period assets higher than average assets and that the differences and timing roughly match. Someone had to assist BofA in its financial manipulation and that was MUFJ. MUFJ stands for (Mitsubishi UFJ Financial Group)
About MUFJ
Mitsubishi UFJ Financial Group, Inc. (MUFJ), incorporated on April 2, 2001, they are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Co., Ltd. (MUS), Mitsubishi UFJ NICOS Co., Ltd. (Mitsubishi UFJ NICOS), and other subsidiaries.
Through its subsidiaries and affiliated companies, MUFG engages in a range of financial operations, including commercial banking, investment banking, trust banking and asset management services, securities businesses, and credit card businesses, and provides related services to individual and corporate customers. In July 2008, BTMU acquired 49.375% interest in JALCARD, Inc., a wholly owned subsidiary of Japan Airlines International Co., Ltd. In November 2008, BTMU completed the acquisition of all the interest in UnionBanCal Corporation (UNBC), and as a result, UNBC became a wholly owned indirect subsidiary of MUFG.
The Company manages the underwriting of debt and equity instruments for large corporations. It also provides arrangement services relating to private placements primarily for medium-sized enterprise issuers and institutional investors. The Company advises on financing methods to meet various financing needs, including loans with derivatives, corporate bonds, commercial paper, asset-backed securities, securitization programs and syndicated loans. It also offers a range of products to meet fund management needs, such as deposits with derivatives, government bonds, debenture notes and investment funds. It also offers swaps, options and other risk-hedge programs to customers.
Well this is just the second Scam uncovered in the series, stay tuned.
Thursday, January 28, 2010
The Wall Street Bankers: Aaron Burr, and Alexander Hamilton
Very few know its history: Chase traces its roots back to the founding of The Manhattan Company by Aaron Burr on September 1, 1799, in a house at 40 Wall Street.
After an epidemic of yellow fever in 1798, in which coffins had been sold by itinerant vendors on street corners, Aaron Burr established the Manhattan Company, with the ostensible aim of bringing clean water to the city from the Bronx River but in fact designed as a front for the creation of New York's second bank, rivaling Alexander Hamilton’s, Bank of New York.
In addition to being fierce political and personal rivals, Aaron Burr and Alexander Hamilton competed in business, with Burr's Bank of the Manhattan Company competing against Hamilton's Bank of New York. In 1804, their rivalry erupted into a duel, leading to the death of Alexander Hamilton. The dueling pistols are owned by the successor company of Chase Manhattan. They are currently on display on the executive conference floor of the JP Morgan Chase building at 277 Park Avenue in New York City.
Chase National Bank
Chase National Bank was formed in 1877 by John Thompson. It was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase, although Chase did not have a connection with the bank.
The Chase National Bank acquired a number of smaller banks in the 1920s, through its Chase Securities Corporation. In 1926, for instance, it acquired Mechanics and Metals National Bank.
It’s most significant acquisition though was the Equitable Trust Company of New York in 1930, the largest stockholder of which was John D. Rockefeller, Jr. This made it the largest bank in America and indeed the world.
Chase was primarily a wholesale bank, dealing with other prominent financial institutions and major corporate clients, such as General Electric, which had, through its RCA affiliate, leased prominent space and become a crucial first tenant of Rockefeller Center, rescuing that major project in 1930. The bank also is closely associated with and has financed the oil industry, having longstanding connections with its board of directors to the successor companies of Standard Oil, especially Exxon Mobil, which are also Rockefeller holdings.
Merger as Chase Manhattan
Bank In 1955, Chase National Bank and The Manhattan Company merged to create Chase Manhattan Bank. As Chase was a much larger bank, it was first intended that Chase acquire the "Bank of Manhattan", as it was nicknamed, but it transpired that Burr's original charter for the Manhattan Company had not only included the clause allowing it to start a bank with surplus funds, but another requiring unanimous consent of shareholders for the bank to be taken over. The deal was therefore structured as an acquisition by the Bank of the Manhattan Company of Chase National, with John J. McCloy becoming chairman of the merged entity. This avoided the requirement of unanimous consent by shareholders.
Under McCloy's successor, George Champion, the antiquated 1799 state charter was relinquished for a modern one. In 1969, under the leadership of David Rockefeller, the bank became part of a bank holding company, the Chase Manhattan Corporation.
Two famous American families the Burr’s and the Hamilton’s were Wall Street Bankers.
After an epidemic of yellow fever in 1798, in which coffins had been sold by itinerant vendors on street corners, Aaron Burr established the Manhattan Company, with the ostensible aim of bringing clean water to the city from the Bronx River but in fact designed as a front for the creation of New York's second bank, rivaling Alexander Hamilton’s, Bank of New York.
In addition to being fierce political and personal rivals, Aaron Burr and Alexander Hamilton competed in business, with Burr's Bank of the Manhattan Company competing against Hamilton's Bank of New York. In 1804, their rivalry erupted into a duel, leading to the death of Alexander Hamilton. The dueling pistols are owned by the successor company of Chase Manhattan. They are currently on display on the executive conference floor of the JP Morgan Chase building at 277 Park Avenue in New York City.
Chase National Bank
Chase National Bank was formed in 1877 by John Thompson. It was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase, although Chase did not have a connection with the bank.
The Chase National Bank acquired a number of smaller banks in the 1920s, through its Chase Securities Corporation. In 1926, for instance, it acquired Mechanics and Metals National Bank.
It’s most significant acquisition though was the Equitable Trust Company of New York in 1930, the largest stockholder of which was John D. Rockefeller, Jr. This made it the largest bank in America and indeed the world.
Chase was primarily a wholesale bank, dealing with other prominent financial institutions and major corporate clients, such as General Electric, which had, through its RCA affiliate, leased prominent space and become a crucial first tenant of Rockefeller Center, rescuing that major project in 1930. The bank also is closely associated with and has financed the oil industry, having longstanding connections with its board of directors to the successor companies of Standard Oil, especially Exxon Mobil, which are also Rockefeller holdings.
Merger as Chase Manhattan
Bank In 1955, Chase National Bank and The Manhattan Company merged to create Chase Manhattan Bank. As Chase was a much larger bank, it was first intended that Chase acquire the "Bank of Manhattan", as it was nicknamed, but it transpired that Burr's original charter for the Manhattan Company had not only included the clause allowing it to start a bank with surplus funds, but another requiring unanimous consent of shareholders for the bank to be taken over. The deal was therefore structured as an acquisition by the Bank of the Manhattan Company of Chase National, with John J. McCloy becoming chairman of the merged entity. This avoided the requirement of unanimous consent by shareholders.
Under McCloy's successor, George Champion, the antiquated 1799 state charter was relinquished for a modern one. In 1969, under the leadership of David Rockefeller, the bank became part of a bank holding company, the Chase Manhattan Corporation.
Two famous American families the Burr’s and the Hamilton’s were Wall Street Bankers.
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