Archive for the ‘Wall Street’ Category

Obama gets a low grade from Wall Street economists

March 13, 2009

Midway thru Pres. Barack Obama’s post-election 100-day honeymoon period is an erosion of popularity. In spite of his “heroic” effort in trying to steer the US to the “right “ track, the new president gets a failing grade of 59% from majority of 49 Wall Street economists polled. According to the Wall Street Journal Survey, financial thinkers are dissatisfied with Obama’s economic policy. The Dow Jones fell close to ¼ of its value at the 7 weeks of his administration.

Treasury secretary Timothy Geithner who assumed his position in the Obama cabinet in spite of evading to pay taxes has a poor grade of 51%, while Federal Reserve Chairman Ben Bernanke scored better, with an average 71.

The changing result augurs badly for Obama who has enjoyed extraordinary popularity before and after the election. The high expectation is there, but he is tumbling down from the sky putting down his public approval to about 60%—quickly in just a few days. Considering the media’s slobbering love and public admiration for Obama, the downward trend of his approval rating is unexpected.

It’s a concern that Americans who disaprove of his policies are rising. The trend is a significant negative twist on how the public perceives his performance even if he was heralded as the hero who’ll deliver America and the world from economic woes. There is strong doubt if Americans can spend their way from bankruptcy by borrowing at the expense of current tax-payers and the next generation.(Photo Credit: tsevis) =0=

RELATED BLOG: “Fearless economic forecasts” Posted by mesiamd at 3/11/2009

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Ponzi wiz Bernard Madoff sent to prison

March 13, 2009


It’s a little bit like seeing the devil,” said Burt Ross, a lawyer from Englewood, NJ who lost $5 million in Madoff’s swindle. Feeling betrayed, DeWitt Baker, an investor who lost more than $1 million angrily fumed “I’d stone him to death.” —-AP (03.12/09, Neusmeister, L; Hays, T)

Bernard Madoff, the personification of Wall Street greed and reckless extravagance has admitted guilt of pulling the biggest Ponzi scam in history. In the Federal Court of Manhattan, in New York, US district judge Denny Chin revoked Madoff’s $10 million bail and ordered the disgraced swindler’s confinement to a windowless room at the Metropolitan Correction Center instead of being comfortably holed in his lavish $7 million home at 133 E, 64th Street.

For defrauding his clients of $65 billion, at sentencing date in June this year, the former chairman of Nasdaq could get a life sentence—a maximum of 150 years in jail for perjury and financial fraud.

Without implicating anyone except himself, the apologetic Madoff who gave no comfort to his victims, pleaded guilty in all counts of fraud. In doing so, many believed his acceptance of full responsibility was a way to protect his wife Ruth, his family, and friends. His victims were fuming mad. Wall Street regulators ignored the flags of deception which allowed the once respected investment guru to operate without being caught for decades.

Thousands of defrauded clients in the United States and abroad include banks, charities, financial institutions, pension funds, retirees, and private individuals whose life savings and investments have been damaged. In their ranks are those who have suffered irreparable financial ruin with no chance to recover. At least one victim has been driven into committing suicide.

Some of Madoff’s Victims
——————————————Description———————Amount
Fairfield Greenwich Advisors—–investment firm————–$7,500,000,000
Banco Santander——————Spanish bank—————–$2,870,000,000
Bank Medici————————-Austrian bank—————-$2,100,000,000
HSBC——————————— British bank——————-$1,000,000,000
BNP————————————French bank——————-$431,170,000
New York University——————University——————–$24,000,000
Korea Teachers Pension———-Korean Pension Fund———$9,100,000
Marc Rich——————————fugitive financier————–Not available
Yeshiva University———————NY private university——–$14,500,000
Int’l Olympic Committee————–Olympic organizer———-$4,800,000
Zsa Zsa Gabor————————-actress————————$10,000,000
Diocese of St. Thomas—————Cath. Church (Virgin Is)—–$2,000,000
Source: http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

The imprisonment of Madoff is just the tip of the iceberg to the massive scandal that rocks Wall Street. Trust in the financial institutions is at an all time low. Many Americans adversely affected by the economic meltdown are demanding for accountability and prosecution of those responsible in the betrayal of trust. (Photo Credits: Acteon; Jason Smith) =0=

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Ponzi wiz Bernard Madoff sent to prison

March 13, 2009


It’s a little bit like seeing the devil,” said Burt Ross, a lawyer from Englewood, NJ who lost $5 million in Madoff’s swindle. Feeling betrayed, DeWitt Baker, an investor who lost more than $1 million angrily fumed “I’d stone him to death.” —-AP (03.12/09, Neusmeister, L; Hays, T)

Bernard Madoff, the personification of Wall Street greed and reckless extravagance has admitted guilt of pulling the biggest Ponzi scam in history. In the Federal Court of Manhattan, in New York, US district judge Denny Chin revoked Madoff’s $10 million bail and ordered the disgraced swindler’s confinement to a windowless room at the Metropolitan Correction Center instead of being comfortably holed in his lavish $7 million home at 133 E, 64th Street.

For defrauding his clients of $65 billion, at sentencing date in June this year, the former chairman of Nasdaq could get a life sentence—a maximum of 150 years in jail for perjury and financial fraud.

Without implicating anyone except himself, the apologetic Madoff who gave no comfort to his victims, pleaded guilty in all counts of fraud. In doing so, many believed his acceptance of full responsibility was a way to protect his wife Ruth, his family, and friends. His victims were fuming mad. Wall Street regulators ignored the flags of deception which allowed the once respected investment guru to operate without being caught for decades.

Thousands of defrauded clients in the United States and abroad include banks, charities, financial institutions, pension funds, retirees, and private individuals whose life savings and investments have been damaged. In their ranks are those who have suffered irreparable financial ruin with no chance to recover. At least one victim has been driven into committing suicide.

Some of Madoff’s Victims
——————————————Description———————Amount
Fairfield Greenwich Advisors—–investment firm————–$7,500,000,000
Banco Santander——————Spanish bank—————–$2,870,000,000
Bank Medici————————-Austrian bank—————-$2,100,000,000
HSBC——————————— British bank——————-$1,000,000,000
BNP————————————French bank——————-$431,170,000
New York University——————University——————–$24,000,000
Korea Teachers Pension———-Korean Pension Fund———$9,100,000
Marc Rich——————————fugitive financier————–Not available
Yeshiva University———————NY private university——–$14,500,000
Int’l Olympic Committee————–Olympic organizer———-$4,800,000
Zsa Zsa Gabor————————-actress————————$10,000,000
Diocese of St. Thomas—————Cath. Church (Virgin Is)—–$2,000,000
Source: http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

The imprisonment of Madoff is just the tip of the iceberg to the massive scandal that rocks Wall Street. Trust in the financial institutions is at an all time low. Many Americans adversely affected by the economic meltdown are demanding for accountability and prosecution of those responsible in the betrayal of trust. (Photo Credits: Acteon; Jason Smith) =0=

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In spite of a collapsing financial world, $18.4 billion were spent for greedy bonuses in Wall Street

January 30, 2009

If there is consolation to American taxpayers damaged by the economic meltdown, Pres. Barack Obama criticized billions of astounding spending. He decried as “shameful” and “irresponsible” the $18.4 billion bonuses distributed during the past year for workers in Wall Street. Yes! In spite of a 44% cut on yearend perks given to the money merchants, the amount clearly shows the extravagance and greed of the people who are partly to blame for the financial crisis. A staggering $18.4 billion was spent as giveaways in spite of the $700 billion bail-out they asked and handed over by the government because of a crumbling economy.

This news doesn’t help the effort to bring back trust in the system. The disclosure speaks of top officials still engaged in reckless spending, some using large amounts of money in the shadows to continue their vice.

Amidst joblessness, home sales slump, and poor stock performance, Obama is facing the challenge of making the public believe. Congress has just approved the $825 billion “stimulus package” which is basically another big spending to mitigate the damaging effects of the financial mess. More enraged Americans fear that unless transparency and ethical practice in business is restored, there is little reason to hope that confidence will come back and the economy will be fixed in due time. (Photo Credits: Epicharmus x 2)=0=

Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess

November 21, 2008

It is said that when a new president gets elected in the United States, Wall Street gets exuberant and the market becomes cocky. Renewed confidence and optimism bring an upward trend in stocks trading in America and the rest of the world. The upward trend hasn’t happened in President-elect Barack Obama, the Mr. Fix expected by many to deliver the world from this troubling economic mess.

Since the Great Depression (1930’s to the 1940’s,) America suffers from the worst financial downturn. On Friday, November 21, 2008, on midday trading, the Dow Jones Industrials (DJI) tumbled 67.47 points further, or 0.89 percent, to 7,484.82. The Standard & Poor’s 500 Index (.SPX) lost 8.85 points, or 1.18 percent, to 743.59. The Nasdaq Composite Index (.IXIC) was down 17.82 points, or 1.35 percent, at 1,298.30.

In spite of the $700 billion bailout, the market continues to slide. With the public confused of what is going on, economic planners need more money for bailouts to keep the economy on track and stable.

There are those who seriously doubt whether this will work as instability and business losses continue. Financial leaders like Ben Shalom Bernanke of the Federal Reserve and Henry Paulson of the Treasury have a short window period to work on before the full blown effects of the crisis appear early next year.

Joblessness at 6.5%, the highest since 1994, is expected to top 8.5% in 2009. It feeds the fire of uncertainty, raising doubts on the usefulness of helping the floundering US auto and banking industry.

More business close-downs are feared. The housing market has almost screeched into a halt leaving many homes in foreclosures. American auto manufacturers brace for bankrupcies. The public is spooked by advisories of store closings. Americans are angered and worried.

The usual honeymoon period given to an incoming administration may not last long as the impatient public can’t wait for the magical fruition of Obama’s promise during the campaign. A scramble to form a government cabinet to help the new president shows signs of old hands from the Clinton administration which make people to ask if it’s the same traditional politics that will be at play. Without guarantee of success, there is palpable anxiety over leaders with checkered past trying to reprogram the nation’s socio-economic direction.

Obama is in a bind. There is a growing belief that the recession will last longer than what has been experienced in recent history. Some are thinking that it can grow worse to precipitate the hapless conditions of the Great Depression. Though not much can be done by individual US citizens to prevent the worse, sensible measures like focusing on one’s job, belt-tightening in personal finance, and deciding wisely on investment strategies are recommended.

Global economies are suffering. The American sniffle has worsened and spread into a global pneumonia whose end result is basically unknown. A protracted economic malady is likely to bring instability and stagnation. It makes civil unrest and chaos more likely particularly in the poor countries where hunger is common.

Meanwhile, the public overwhelmingly craves that Obama comes victorious in reversing the ugly course of business. How best he can do it is subject to debate and entails vigilant waiting. While he prepares for his inauguration in January, Americans gripped with worry need to give him time and the benefit of the doubt. (Photo Credits: JSDart)=0=

RELATED BLOG: “Dr. Doom’s economic crystal ball & the need to say the truth” Posted by mesiamd at 10/30/2008

Americans looking for solution(s) to the financial mess are better off to decide if they know who are accountable

October 1, 2008

When Pres. George Bush aired the dire warnings of US Treasury Sec. Henry Paulson and Chairman of the Federal Reserves Ben Shalom Bernanke that the $700 billion bailout plan must be carried out quickly because the financial crisis can ruin the economy of the nation, America was in panic. Many reflexively agreed to pass a fast legislation for an economic rescue, when the initial shock of the experts’ warning dissipated. The men in the main street started asking what would be the implications if government, at the expense of taxpayers’ money, bails out the ailing privately-run Wall Street. They worried about the future of their homes, savings, credit lines, investments, businesses, and retirement portfolios.

There is urgency in the passing the bail-out package. It looks like the Democrats who control the Congress saw this and Nancy Pelosi (D,) the majority speaker of the House of Representatives and her cohorts announced that a deal was about to be reached. Psyching the people, they made it appear that a bipartisan consensus was in the offing only to reveal later the legislation didn’t pass for lack of votes. This caused the sharp drop in the Dow Jones industrials and huge losses in the market reverberated all over the globe.

Pelosi (D,) was quick to blame politics. In a very nasty statement characteristic of partisan politics, she alleged the Republicans killed the legislation. But in truth a third of her party (95 Democrats) didn’t support the bill she wanted to pass. The new bill had to be rewritten for another vote probably on or earlier than Thursday, October 2, 2008.

The bail-out package bill was killed partly due to apparent rush and lack of deliberation. Many legislators in both political parties needed clarification of the nature of the bail-out. There were lots of questions to be answered before a decision could be made. That was what the American people demanded for the bill they barely could understand.

Democrats and Republicans alike in the meantime called on to stop blaming those who were responsible for this financial meltdown. Speaking in the name of “patriotism” to focus on problem-solving, they were successful in keeping the angered public silent as they were warned of dire consequences if nothing was done quickly.

But as disgusted Americans pondered on their future, many demanded to know who were responsible for this mess. They realized knowing these people was as important as coming up with the solution and deciding whom to vote in the November presidential election. They asked why they, the taxpayers, had to answer for the indiscretion, greed, recklessness, and lack of oversight of Wall Street.

There have been talks that Sen. Barack Obama (D) is somehow involved in the fall of Fannie Mae and Freddie Mac which triggered the financial market crisis which doesn’t have easy solution to date. Few Democrat supporters including the liberal media are interested to talk about culpability lest they stymie the gains their candidate over McCain (R) in the campaign trail. On the other hand, the Republicans who were in the administration failed to prevent the financial catastrophe that they knew was coming.

The genesis of the money problem dates back longer than the Carter years, but majority of the biased media expediently pinned blame almost solely on Pres. Bush. Moreover, the media had been mum of past attempts of Pres. Bush and Sen. John McCain to make changes in the mortgage lending system, long before the meltdown, but their attempts were foiled by the Democrats, many of whom had been emboldened by interest groups which supported them as politicians. Some of them are the most vociferous in trying to bail-out a failed system that they helped create.

As the Americans try to put together the broken pieces, there is a picture that emerges. If they miss the correct interpretation, they may end up choosing the less qualified president who has to deal with the serious repercussions of this financial mess which is expected to persist. Whichever political party the public looks up to, there is just too much blame and accountability that must be bravely and honestly confronted. The time to do this is now. Isn’t this what the Democrats refer to as “multi-tasking,” the ability to do more than one thing at a time? (Photo Credits: SilveryLily; MacRonin47; Winnie0917) =0=

Worsening US financial crisis spreads overseas

September 29, 2008

The Asian markets open today with grim news that the Dow Jones industrials plunged 780 points after the US government failed to pass the $700 billion bail-out package that is hoped stabilize the floundering economy. Today’s trading is expected to be bad overseas. With little time to waste, Capitol Hill is back to rewrite a bill that is deemed vital in averting a domino-effect in cash-strapped financial institutions threatened by bankruptcies.

But Wall Street found further reason for worry overseas, as the fallout from U.S. economic problems keep spreading. Three European governments agreed to inject Fortis NV with a $16.4 billion bailout. Fortis, with has headquarters in Brussels, Belgium and Utrecht, Netherlands, is Belgium’s largest retail bank.

The British government, meanwhile, said it is nationalizing mortgage lender Bradford & Bingley, which has a $91 billion mortgage and loan portfolio. It was the latest sign that the credit crisis has spread beyond the U.S. “—-AP (09/129/08,Paradis,T)

Americans, skeptical of the political maneuverings in the Congress, are enraged by the uncertainty Wall Street has placed their jobs, savings, homes, investments, and retirement plans. With few options in sight, they wait for the government to shore-up the economy with the bail-out proposal whose final result is unclear. The public seems inclined to focus on a solution for now, but the blame is trickling in, highlighting the greed, negligence and corruption. =0=

With market still bleeding, corporate greed blamed for financial woes in Wall Street

September 17, 2008

With last week’s unprecedented government bail out of Fannie Mae and Freddie Mac to the bankruptcy of Lehman Brothers, the United States and the financial world are finding ways to avoid further meltdown in Wall Street. Spooked by financial uncertainties, money institutions are finding ways to avert market collapse.

American International Group Inc. (AIG,) the largest insurance company of the world, suffered losses as its shares fell down 92% after fool-heartedly insuring risky bonds. The Federal Reserve had to loan $85 billion to save the company from financial ruin which could disrupt markets and put the economy in jeopardy if its losses aren’t contained. This is in addition to the Treasury Department’s commitment to infuse up to about $100 billion in funds to the Fannies, America’s top mortgage lenders to keep them from going insolvent. Merrill Lynch, Bear Stearns, and Washington Mutual suffer money problems too, feeding uncertainty, confusion, fear and distrust in the banking system. At this point it is unclear whether these measures will reverse the on-going bleeding in the market.

To where this economic woes will end is anybody’s guess. For ordinary citizens, the uncertainties that shake the market bring new realities and offer opportunities to reassess where their investments will go. In spite of their efforts to improve their finances, people have been gripped with scary concerns about jobs, higher taxes, social security, healthcare, retirement and the future in


The financial crisis had been predicted since the Clinton administration. When the stock market slumped in 2000, the housing market boom that followed built unrealistic expectations and over-taxed the lending system. After a long run of profitable home buying and selling, prices slumped in 2006 and continued to the fall thereafter. In the midst of mounting mortgage debts, many borrowers were unable to pay their loans, forcing them to default. The accrued losses quickly mounted, triggering the current financial crisis.

The crisis caused by multifactorial reasons didn’t happen overnight and the blame is shared in many fronts. Corporate greed of Wall Street is partly responsible. CEO’s and money managers, pandering on their interests, rake astronomical profits in overseeing stocks and investment funds to the disadvantage of regular shareholders. Government regulators were remiss in protecting the public when they did little to restrict flagrant money lending schemes and shady business deals of corrupt opportunists.

The Congress on the other hand had been slow in updating the laws that regulate the business of Wall Street. Loans in banks were approved by mortgage lenders in spite of the borrower’s questionable ability to pay. The bullish optimism among house-buyers had caught them ill-prepared for the ups and downs of the market. Investigation and prosecution of corporate malfeasance and abuses had been inadequate.

To promote stability, the government has little choice but to bail-out the floundering companies at the expense of tax payers. To clean up the mess, it has to recognize the weaknesses and failures of the system that lacks oversight. With a huge trade deficit, America needs a correction and tougher regulations in the financial markets to avoid further damage to the economy.

The adverse effects of this economic downturn have serious repercussions on the economies abroad. There is volatility of stocks traded abroad. There is worry across Europe, Asia and Russia. If the confidence to USA’s financial institutions weakens or altogether lost, economies worldwide will suffer affecting the most, the poorest nations.


T
axpayers, shareholders of investments and portfolio owners have to foot the bills to keep the economy going. They scramble for solutions to counter depreciation of homes and restore confidence in doing business. They need to bring back the profits in the stock market, lower the cost of borrowing, and stimulate the growth of businesses.

Yet new policies instituted by the emergence of global economy stand on the way. Saddled with debts and the on-going war on terrorism, the US finds itself in weaker economic footing now than in the past. If the American economy suffers further and reversal of the financial turmoil comes late, a possible worldwide recession can result to social and political instability.

The lessons learned from past hardships—the great depression and the world wars however make Americans resilient and hopeful. As they watch the events unfold, they try to find a wiggle room to solve their problems to escape the worst. The Bush administration is doing unprecedented measures to do just that, though its choices for solution are pretty limited. Photo Credits: Gingerbugjones; BeebsandChi; Steely.scott)=0=