It doesn’t happen often, but sometimes God smiles on us. Last week, he smiled on investigative reporters everywhere, when the lawyers for Goldman, Sachs slipped on one whopper of a legal banana peel, inadvertently delivering some of the bank’s darker secrets into the hands of the public.
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Now, however, through the magic of this unredacted document, the public will be able to see for itself what the banks’ attitudes are not just toward the “mythical” practice of naked short selling (hint: they volubly confess to the activity, in writing), but toward regulations and laws in general.
“Fuck the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.
We also find out here how Wall Street professionals manipulated public opinion by buying off and/or intimidating experts in their respective fields. In one email made public in this document, a lobbyist for SIFMA, the Securities Industry and Financial Markets Association, tells a Goldman executive how to engage an expert who otherwise would go work for “our more powerful enemies,” i.e. would work with Overstock on the company’s lawsuit.
“He should be someone we can work with, especially if he sees that cooperation results in resources, both data and funding,” the lobbyist writes, “while resistance results in isolation.”
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Was Goldman really disclosing “nonpublic data concerning customer short positions” to its big hedge fund clients? That would be something its smaller, “Muppet” customers would probably want to hear about.
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If this sounds complicated, just focus on this: naked short selling, in essence, is selling stock you do not have. If you don’t have to actually locate and borrow stock before you short it, you’re creating an artificial supply of stock shares.
In this case, that resulted in absurdities like the following disclosure in this document, in which a Goldman executive admits in a 2006 email that just a little bit too much trading in Overstock was going on: “Two months ago 107% of the floating was short!”
In other words, 107% of all Overstock shares available for trade were short – a physical impossibility, unless someone was somehow creating artificial supply in the stock.
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How they did this is ingenious, elaborate, and complex, and we’ll get into it more at a later date. In the meantime, this document all by itself shows numerous executives from companies like Goldman Sachs Execution and Clearing (GSEC) and Merrill Pro talking about a conscious strategy of “failing” trades – in other words, not bothering to locate, borrow, and deliver stock within the time alotted for legal settlement. For instance, in one email, GSEC tells a client, Wolverine Trading, “We will let you fail.”
FP: Now how much you’re willing to bet that nothing will happen to these firms and nobody, except the lawyer who screwed up, will pay any price? Wall Street is conducting highway robbery facilitated by a corrupt and incompetent political system and is ruining an already bankrupt nation.
That is why when conservatives blame the country’s problems on public funds spent on the public, they are either ignorant or dishonest. If the country is to be ruined, better public funds go to the public, not stolen by Wall Street frauds.
And that is why politicians and presidential candidates talk about high principles, gay marriage, war against women, abortion and so on. And it works. (for why, see next)
Daniel Greenfield: The Future's So Bright I Gotta Wear a Mortarboard
These days the man whose administration pays women less than men, which has been repeatedly accused of sexist treatment of its female staff and whose chief speechwriter was photographed groping a cardboard cutout of Hillary Clinton, has taken to the campaign trail to warn about a "War on Women". And where better to sell the war on women than on campuses which are becoming more female than male.
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The sheepskin was once a doorway to a privileged world of achievement, but diplomas aren't made of real sheepskin anymore, and the college degree has become as ubiquitous as tacky commencement speeches. Just about anyone who pays a limited amount of attention in school and is willing to take on a pile of debt can get a college degree from somewhere. It won't be worth much, but it will cost a lot.
Universalizing college has not universalized education; it has not made us a better educated country, only a dumber one. Universal education has led to dumbed-down education and meaningless degrees. The only way we could keep moving more and more students up the ladder was by making the ladder as short as possible. Promotion, populist education and educators who barely knew more than the students have taken care of the rest.
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The primary purpose of a degree in many fields is to provide demonstrable proof to prospective employers that you aren't an idiot [1]. A high school degree once served that purpose. Now not even a college degree does. But with a surplus of job-seekers, it's a useful way to winnow down the stack of applications to people who can analyze the heteronormative subtext of a detergent commercial and have few options for employment because of their massive student loan debt.
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Treating college as the new high school hasn't benefited students who waste four years of their lives and pick up staggering debts which make it harder for them to buy homes and start families, but it has benefited the liberal arts infrastructure, which, despite the liberal spin, is just as good at handing out useless degrees with no career path as any for-profit college. And it has benefited the Democratic Party, which rightly sees college campuses as recruitment grounds and liberal-voter-training seminars[2].
FP: Ah, public gullibility comes in so handy. One candidates talks about high principles that are defied by an opposite reality (see a previous post), the other about protecting women while they are mistreated and discriminated about. Dismantling an educational system that does not instill knowledge and ability to reason achieved the desired purpose.
Did you pay attention when I argued that instead of education academia does [1] vocational training and [2] leftish indoctrination?
Bill Katz: TRAYVON MARTIN CASE
ABC News has obtained a medical report compiled by George Zimmerman's physician, documenting the wounds suffered by Zimmerman the night he shot Trayvon Martin. The wounds, including a broken nose, black eyes, head injuries, and a back injury, appear to be consistent with Zimmerman's story that he was beaten by Martin. At the same time, it is reported that the FBI is looking into charging Zimmerman with a federal hate crime. The FBI is under the jurisdiction of Attorney General Eric Holder.
FP: Justice in Obama’s America.
The White House is Spending Big Money on Big Data
It's typical in an election year to see an administration spend money on new initiatives. A new cost cutting initiative unveiled back in March has generally gone un-noticed by the main stream technology media. Called the "Big Data Research and Development Initiative" the program is focused on improving the U.S. Federal governments ability to extract knowledge and insights from large and complex collections of digital data, the initiative promises to help solve some the Nation's most pressing challenges.
The program includes several federal agencies including&nbs p;NSF,&nbs p;HHS/NIH, DOE, DOD, DARPA and USGS who pledge more than $200 million in new commitments that they promise will greatly improve the tools and techniques needed to access, organize, and glean discoveries from huge volumes of digital data.
FP: If you believe that the government can do analytical research on big data on which it spends hundreds of millions of dollars, then I got a bridge in Brooklyn to sell you. Some companies in which political cronies are invested are making a killing at the public expense.
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