Goldman Sachs Equals Financial Cancer

Metastasize - transfer of disease from one organ or part of the body to another not directly connected with it, all malignant tumors are capable of metastasizing.

Goldman Sachs is a cancer on the economy of the United States and now it has metastasized and become a cancer to Greece as well. This corporation has no ethical compass. Its only purpose is to make money for itself and its principals. They have infected the government of the United States and now that malignancy is spreading around the world.

In the Sunday New York Times of February 14, 2010, is a well written article about how Goldman Sachs advised the government of Greece to go deeper in debt while keeping the debt off their balance sheet. This kind of stuff is not rocket science. Any asshole can suggest that a country part with future revenue streams from fees that would be needed to pay existing debt service. And, that folks is exactly what Goldman Sachs did. Now Greece is looking at going belly up because it can not meet the interest payments on its existing debt. Is this the way a financial adviser advices a client nation?

It sure will be interesting to see how much will change as a result of the new regulations that are coming out of Congress. Given the amount of influence that the Wall Street firms have with our politicians, it will be interesting to see if there will be a meaningful change. If there is no meaningful change and the games continue, we will be headed back down that same road to the next financial crisis. Too big to fail and too big in influence will eventually bury us as a nation. The world will not play our game of financial cancer forever.

Stay tuned.

This Saturday Is Different

I have been reading TOO BIG TO FAIL by Andrew Sorkin for the last several days. As those of you who have been reading my blog for a while know, I worked in the field of investment securities and portfolio management for many years. Either, Sorkin is writing about something that is over his head, or, there really were no experts when it came to dealing with the financial crisis on Wall Street, in either the banks or the law firms that were advising the banks, or, the people in Washington that were trying to find solutions to the current problems. What there was was just so many clowns crawling out of the same little car as you would see in the circus, and then not knowing which way to go.

If ever there was an argument for better and more comprehensive regulations of banking, investment banking, and the capital markets, this book, and I am sure others I have not read yet, provide all the reasons why, unless something is done that is meaningful in the way of better regulations, we are all headed back down that same road to the next financial crisis again. I guarantee that.

I have written this more than once, shit, whether in a brown paper bag or a silk purse with gold trim is still shit. The credit rating agencies are responsible for the mortgage bubble and you don't have to be an Einstein to figure that out. Unless steps are taken to regulate the credit rating agencies and hold their feet to the fire, the tinder is just sitting there waiting to be lit to start the next financial crisis and bond market meltdown. This is not rocket surgery. But, unfortunately it is a lot of politics. Keep your money in cash if you're going to need it, and say your prayers that someone somewhere will be able to open up some eyes and minds to what is waiting for us down the road if we do not change the way we do business. And, you can throw the Federal Reserve Bank in there too.

Stay tuned.

Federal Home Loan Bank Commemorative Stamp, oil on paper, first exhibited May, 1992, Covington, KY.

Mother & Child: An American Icon by F.D. Zigler

This week has been a snow filled week for much of the country and I am tired of all this snow. I am going to take it easy today, as I try to take it easy everyday, and recharge my batteries. The football season is over and baseball isn't quite here, and I don't feel like writing about the political-economy today. I am going to post a painting today and leave it at that.

Stay tuned.

Mother & Child: An American Icon, oil on board, 72"x48", wood frame w/gold metal leaf, first exhibited May, 1992, Covington, KY.

The Old Republican Party Is Dead

I read. I read books. I read magazines. I read the Sunday New York Times, and I read what is on the Internet, but I should stop watching TV news. Watching these guys and gals is getting to be the most frustrating part of my day. Yesterday, I caught myself talking to the TV screen. Those idiots are making an idiot out of me.

Every American has their own perspective of the political-economic events that unfold in Washington, D.C., and I am no exception. I have written my opinions concerning President Obama's attempts to work with the Republicans in Congress. I have my opinions, and while they are grounded in my experience of living in this country for 67 years, I realize that others can have viewed the same events and come away with a totally different picture.

But, I am not changing my mind on this one. You can throw my NFL black quarterback analogy out the window, but I am staying with it. The talking heads may not be able to call it as they see it, but I am not on TV and I don't make a dime from writing this blog. I write what I think. They, the talking heads, may bring the civil rights issue into the picture by way of the higher percentage of black unemployment in the United States, but they will not hit the nail on the head until they start talking about the fact that there are no black Republicans in Congress and that essentially the Republican Party, and the direction it is going, is more exclusionary and white than it has ever been in its long history.

Where are the Liberal Republicans? The answer is: they are all dead. Where are the moderate Republicans? The answer: On there way to being dead figuratively and literally. The Republican Party that adopted the Southern Strategy is not the Republican Party of Jacob Javits and Nelson Rockefeller. That Republican Party is dead.

Stay tuned.

Looking For Answers ???

I just finished reading an article about how Standard & Poor's (S&P) is letting too big to fail (TBTF) institutions (banks) that the Federal Government is no longer going to guarantee their debt, assume a new level of risk. Mention was made of the 18 largest banks receiving Federal backing, backstopping their debt during the recent financial crisis. The article goes on to say in so many words that the holders of their debt instruments, notes and bonds, will have to take a haircut if the banks find themselves in the position they found themselves in during the last financial crisis. My question is: do not all equity holders go to zero before any debt holders take less than 100 cents on the dollar? How can the law be rewritten to preserve shareholder equity at the cost of debt holders first claim? I realize that Congress can do anything, even stupid things, but someone is going to have to explain to me how this new system is going to work. Naturally if the Federal guarantee is taken away for the debt of TBTF institutions, their cost of capital must increase. This will cause all consumer interest rates to shift upward.

As usual, the Congress of the United States, in their effort to do something, and not being able to do the right thing - which is proper regulations and bringing back Glass-Steagal, they come up with something I don't understand. Perhaps, I will eventually read the answer to my questions.

Stay tuned.

President Obama: It Ain't Going to Happen

We are having snow today and it is snowing right now. How much snow? Who knows? The weather report on TV says just a few inches, but this snowfall just keeps coming. It sure looks pretty.

Turning our attention to Washington, and President Obama's desire to work with Republicans in Congress on the Health Care Bill, I find it to be just so much nonsense. Nonsense in that the Republicans are not going to work with President Obama on anything. I admire President Obama for trying, but my gut says that the Republican Party, a political party largely built on the Southern Strategy that came out of the Civil Rights era, will not work with a black president. Name one black Republican in Congress. There aren't any. People might point to Michael Steel, the head of the Republican National Committee and say see, there is a black Republican. Yes, there are black Republicans, but there are none in Congress that are in the Republican Party. And, for me that speaks volumes about just what the Republican Party is all about. Cooperating with a black president is not in their playbook. People will say that this is because of policy issues, and I say, my foot. It is about race and nothing more. President Obama can not acknowledge this, nor can any members of his administration. At least not now, perhaps some day when they write a book, they will give their frank opinion.

Democrats will have to do it by themselves if they want to get anything done. And, unfortunately, I think too many Democrats are hearing footsteps. With the economy and the stock market and some European countries having serious trouble economically, I don't see much of anything getting done in this Congress.

Stay tuned.

Greed & Poor Judgment Go Together like Peas In A Pod

First, Congrats to the New Orleans Saints on their come from behind win of Super Bowl 44 (XLIV). I like seeing a "new" team win as I believe the NFL is set up as a better professional sport's league than Major League Baseball (MLB). The owners of MLB need to take a closer look at the success of the NFL and simply copy some of its better features. Anyone, with an ounce of sense, knows that MLB is running themselves into the ground. Not having a salary cap in MLB is a tremendous mistake, and the selfish owners of the large market teams, like the New York Yankees, will continue to hurt the future fortunes of MLB. Smaller market teams can not compete with the almost unlimited wealth of some of the owners in the larger markets. The NFL, by having a salary cap, is the wiser professional league. Baseball owners of MLB, the secret of the NFL's success is not a classified secret.

And, to the politicians in Washington and the Obama administration, regulations and enforcement of banking and the securities markets is not a classified secret either. Throwing away the blue print that served this country so well for so many years and then just dumping it because Wall Street greed could go unchecked, if enough dollars were put in the pockets of enough politicians, is not patriotism. Such behavior is treason, economic and financial treason, and it should be punished like any other treasonable offense.

Stay tuned.