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Audio - 2010: It's The New Wild West!
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Rumpl4skn



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PostPosted: Fri Feb 12, 2010 9:00 am    Post subject: Reply with quote

Someone once wrote, "Beware of Greek bearer bonds...." Wink

Same guy also wrote, "Beware the Ides of March." I wonder how poetic this is going to get? Cool
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Fintan
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PostPosted: Fri Feb 12, 2010 6:48 pm    Post subject: Reply with quote



This is a reality check based on two professional financial prediction reports.
These two reports, themselves combine data from multiple sources,
so we are getting a good overview of the future here.

And it's not a pretty picture.

Quote:
.....Over the next two decades, the boomer generation will age into
retirement and run down their accumulated savings. An era of capital
abundance will gradually turn into an era of capital scarcity.
...

...Government debt burdens will rise sharply, with the risk premium
demanded for financing these debts increasing as private sector net
savings flows dwindle. Link

That's the first reason the future is
going to be way different from today.

We'll come back to that after taking
a look at the national debt issues.

Quote:

The red bars show the official debt figures. The red line marks the point
where official debt is equal to one year's GDP.

As you can see, Greece is well over that line and paying the price.

But the grey bars show the full future liabilities of governments: social
security, health spending, etc. Here the US and France are vying
for the position of worst off, after Greece.

The markets are reacting now to the state of the official red bars.

But that's peanuts compared to the real problems.

Quote:

So, bearing all liabilities current and future in mind, there's the measure
of the remedial action needed to rein in the government spend without
actually going bankrupt. Yes, I said "without actually going bankrupt."

To avoid going bankrupt, the EU and the US need
to Cut Spending by 8% Now and keep to
the lower spending permanently --year after year.

How likely is that?
Here's the US over the last 20 years.
Only 48 months of surplus in a score of years.

Quote:


Compounding these debt issues,
the demographics are abysmal:

Quote:


Japan is toast, and Germany is not much better. The US, China and
Brazil are in the midrange. India has a permanent mini baby boom.

By 2050, Italy's population will have fallen by 22%. Spain's population is
halving every generation. By 2050, there will be 100 million fewer
Europeans and 100 million more (mostly red-state) Americans.

The implications for G20 economies which
comprise most of the world's GDP are dire:


Quote:


The picture among the G8 economies is even worse.

The implications:

1) The Big Brother, western, Nation State concept Is Busted!

2) Only significant inflation can make this problem manageable.

Quote:
.....With similar developments afflicting most major economies,
government bond yields are likely to require a significant rise in risk
premia to cover the eventuality of default, either outright or through
inflation
.....

...high debt ratios increase the temptation for policymakers to engineer
higher inflation as a soft option for containing debt/GDP ratios.

Link


Here's the first official recognition that the inflation route
is the only one which buys enough time and space.

It comes from the IMF, which uncharacteristically says : Go Inflation!

Quote:
The International Monetary Fund's top economist, Olivier Blanchard, says
central bankers should consider aiming for a higher inflation rate than
they do currently to lessen the chances of repeating the recent severe
recession.

Central banks may want to target 4% inflation, rather than the 2%
target that most central banks now try to achieve, the IMF paper says.

At a 4% inflation rate, Mr. Blanchard says, short-term interest rates
in placid economies likely would be around 6% to 7%. Link

You can translate those ideal-world rates into much higher
actual inflation and higher than planned interest rates.

- There just aren't enough global savers to go round any more.
- Governments will have to downsize or kill their economies.
- Economies will have to restructure for long-term social benefit.

Starting Now.

Quote:
Sources:

http://www.sgresearch.com/publication/en/19C05683D1CC9042C12576C7003152D1.pub

http://ftalphaville.ft.com/blog/2010/02/11/147641/bond-on-bonds-disaster-ahead/

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Fintan
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PostPosted: Fri Feb 12, 2010 8:12 pm    Post subject: Reply with quote

One further comment
relevant to the post above
Wink

Quote:
There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West.

There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels.

It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today!

There is no America. There is no democracy.

There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those *are* the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale.

--Network

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duane



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PostPosted: Fri Feb 12, 2010 10:02 pm    Post subject: Reply with quote

a bit on the population discussion

there seem to be those who decry that birth rates in countries are declining to less than replacement and this will be economic disaster. East germany and several other east european countries are losing populaton.
wolves are returning to east Germany as the area is abandoned. The smaller population will not be able to maintain the modern infrastructure of buildings, water systems, roads, airports, etc. ( i can't seem to find the article that i read)

China was mentioned also headed for trouble with a massive older population followed by a smaller younger one (thanks to one-child policy and male child surplus)

others think the world is too crowded and a drastic reduction is needed
http://www.youtube.com/PopulationSpeakOut


i think the world could stand a few less people but more importantly, more of the people already existing need to live more in harmony with the planet. there is going to be a turnover as the baby boomers and their equivalent in other countries "recycle". fixing the place up a little before we go isn't too much to ask.

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Rumpl4skn



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PostPosted: Fri Feb 12, 2010 11:30 pm    Post subject: Reply with quote

Paddy Chayefsky was one of the hippest motherfuckers who ever put ink on paper. Cool



I love this flick so much I bought the special anniversary edition.
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MichaelC



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PostPosted: Sat Feb 13, 2010 5:13 am    Post subject: Reply with quote

Thanks, Fintan.

However, I would trust anyone in the OECD - or anything they say or 'predict' - about as much as I would trust Barack Obama.[/list]
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RedMahna



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PostPosted: Sun Feb 14, 2010 1:34 pm    Post subject: Reply with quote

speaking of greece... sunday ny times headline story today:

Quote:
Wall St. Helped Greece to Mask Debt Fueling Europes Crisis

By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ
Published: February 13, 2010

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
As worries over Greece rattle world markets, records and interviews show that with Wall Streets help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.
Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November three months before Athens became the epicenter of global financial anxiety a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.
The bankers, led by Goldmans president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greeces health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.
It had worked before. In 2001, just after Greece was admitted to Europes monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europes deficit rules while continuing to spend beyond its means.
Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Streets role in the worlds latest financial drama.
As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.
In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.
Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a countrys liabilities.
Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.
The crisis in Greece poses the most significant challenge yet to Europes common currency, the euro, and the Continents goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.
A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any banks offers. All debt financings are conducted in an effort of transparency, she said. Goldman and JPMorgan declined to comment.
While Wall Streets handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.
Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it, said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greeces accounting policies.
Wall Street did not create Europes debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt the Wall Street term for loans to governments is as unfettered as it is vast.
If a government wants to cheat, it can cheat, said Garry Schinasi, a veteran of the International Monetary Funds capital markets surveillance unit, which monitors vulnerability in global capital markets.
Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldmans proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.
Such derivatives, which are not openly documented or disclosed, add to the uncertainty over how deep the troubles go in Greece and which other governments might have used similar off-balance sheet accounting.
The tide of fear is now washing over other economically troubled countries on the periphery of Europe, making it more expensive for Italy, Spain and Portugal to borrow.
For all the benefits of uniting Europe with one currency, the birth of the euro came with an original sin: countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.
Derivatives do not have to be sinister. The 2001 transaction involved a type of derivative known as a swap. One such instrument, called an interest-rate swap, can help companies and countries cope with swings in their borrowing costs by exchanging fixed-rate payments for floating-rate ones, or vice versa. Another kind, a currency swap, can minimize the impact of volatile foreign exchange rates.
But with the help of JPMorgan, Italy was able to do more than that. Despite persistently high deficits, a 1996 derivative helped bring Italys budget into line by swapping currency with JPMorgan at a favorable exchange rate, effectively putting more money in the governments hands. In return, Italy committed to future payments that were not booked as liabilities.
Derivatives are a very useful instrument, said Gustavo Piga, an economics professor who wrote a report for the Council on Foreign Relations on the Italian transaction. They just become bad if theyre used to window-dress accounts.
In Greece, the financial wizardry went even further. In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the countrys airports and highways to raise much-needed money.
Aeolos, a legal entity created in 2001, helped Greece reduce the debt on its balance sheet that year. As part of the deal, Greece got cash upfront in return for pledging future landing fees at the countrys airports. A similar deal in 2000 called Ariadne devoured the revenue that the government collected from its national lottery. Greece, however, classified those transactions as sales, not loans, despite doubts by many critics.
These kinds of deals have been controversial within government circles for years. As far back as 2000, European finance ministers fiercely debated whether derivative deals used for creative accounting should be disclosed.
The answer was no. But in 2002, accounting disclosure was required for many entities like Aeolos and Ariadne that did not appear on nations balance sheets, prompting governments to restate such deals as loans rather than sales.
Still, as recently as 2008, Eurostat, the European Unions statistics agency, reported that in a number of instances, the observed securitization operations seem to have been purportedly designed to achieve a given accounting result, irrespective of the economic merit of the operation.
While such accounting gimmicks may be beneficial in the short run, over time they can prove disastrous.
George Alogoskoufis, who became Greeces finance minister in a political party shift after the Goldman deal, criticized the transaction in the Parliament in 2005. The deal, Mr. Alogoskoufis argued, would saddle the government with big payments to Goldman until 2019.
Mr. Alogoskoufis, who stepped down a year ago, said in an e-mail message last week that Goldman later agreed to reconfigure the deal to restore its good will with the republic. He said the new design was better for Greece than the old one.
In 2005, Goldman sold the interest rate swap to the National Bank of Greece, the countrys largest bank, according to two people briefed on the transaction.
In 2008, Goldman helped the bank put the swap into a legal entity called Titlos. But the bank retained the bonds that Titlos issued, according to Dealogic, a financial research firm, for use as collateral to borrow even more from the European Central Bank.
Edward Manchester, a senior vice president at the Moodys credit rating agency, said the deal would ultimately be a money-loser for Greece because of its long-term payment obligations.
Referring to the Titlos swap with the government of Greece, he said: This swap is always going to be unprofitable for the Greek government.


bad, bad wall street! but legal, so no problem, right? $3 Million in transaction fees... nice. that was somebody's bonus. and greece was aware what they were signing up for.

yup, sounds like a typical bank deal. legal loan-sharking with a willing (desperate) customer. (OMG, the pres of GS goes on an international sales trip!!! the boy is a salesman!! wonder what kind of ball-twisting went on?? "bring on the champagne, girls, and ball clamps!!")

let's see... how many deals have gone bad for these top-dog financers? uhuh. tons. but we will hand our children over for those.

can you say, SLAVE?

red

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duane



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PostPosted: Tue Feb 16, 2010 9:59 am    Post subject: Reply with quote

another on wall street and greece

http://blogs.alternet.org/speakeasy/2010/02/15/what-is-hedge-fund-king-john-paulson-doing-in-greece/


Posted by Kevin Connor at 1:40 pm
February 15, 2010
commentsREPLIES: 6
What Is Hedge Fund King John Paulson Doing in Greece?

Goldman Sachss Greek adventure got an in-depth look from the New York Times yesterday. The article extends on last weeks Spiegel piece, which reported that the bank helped Greece hide the true extent of its debt through the use of specialized derivative products. We first reported on the parallels between AIG and Greece in a post last week, following the lead of Zero Hedge. Entry into the paper of record means the story now has legs this side of the pond, and MIT economist Simon Johnson is arguing that Goldman Sachs is set to be blacklisted in Europe.

One question looming over this story: did Goldman position itself to profit from the Greek fiasco? Did it use its special knowledge of Greeks hidden debt to build profitable bets on its future downfall and rescue? If the banks past behavior is any guide, the answer is yes. Ignoring the impending catastrophe (obvious from their vantage point), and failing to properly hedge (extract massive profits), would have been irresponsible (insufficiently greedy/corrupt) on the part of senior management.

Considering this, hedge fund king John Paulsons role in Greece deserves far more scrutiny. I wrote about this last week, pointing out that they shared the same vulture flight pattern in Greece, but at the time did not realize that Paulson and Goldman actually partnered in executing massive and profitable bets against the subprime market. Are they doing the same with Greece?

News of Paulsons fund taking large positions against Greek debt has barely risen above rumor in the English-language press, despite this article in a Greek daily, which says that Paulson is orchestrating the pressure on Greek government bonds and the Euro, and reports that Paulson has a team of 20-30 traders focused on Greece.
Protests in Greece

In Greece, protesters rally against the government's austerity measures. The banner reads "We are struggling to live."

A research firm is now calling Paulson the George Soros of derivatives markets, where the bulk of speculation against European debt and the Euro is happening; the Telegraph says that so far no hedge fund has put its head above the parapet in this destructive trade, but the rumor is that Paulson is behind it.

If Paulson is the hedge fund king behind the parapet, as rumored in English and reported in Greek, then it would seem fairly likely that Paulson and Goldman partnered colluded? to build profitable short positions against Greek debt. That Goldman was shepherding hedge fund client Paulson around Athens in recent weeks would seem to suggest that the bank and hedge fund are working together in Greece.

Paulson and Goldman have partnered before on the subprime short trades that won them enormous profits in the midst of the housing. Those trades have gotten a lot of attention, but the fact that Paulson and Goldman worked together to make it all happen has received much less ink. The story of Paulsons investments is detailed in Gregory Zuckermans book, The Greatest Trade Ever. Goldman plays a prominent role, setting up the CDOs that Paulson would wager against, and then selling them to investors. The star Goldman trader who placed the banks winning bets against the subprime market, Josh Birnbaum, was reportedly in frequent contact with Paulson, at one point encouraging him to back off his bets (perhaps to make more room for Goldman).

Since Paulson was in the room with Goldman (and several other banks) when these CDOs were first conceived, it would seem that the fund had an unfair edge over the investors that would lose their shirt buying the securities. Zuckerman notes that Deutsche Bank suffered losses because it couldnt find takers; that famous taker, AIG, may have been Goldmans convenient solution.

These parallels raise obvious questions: was Paulson also in the room with Goldman before it tried to sell Greece on a new way to hide its debt this past November? As a hedge fund client of Goldmans, did Paulson have special information about Greeces true debt situation? Are Goldman and Paulson partnering, once again, to profit from the downfall of an entire country/continent?

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RedMahna



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PostPosted: Tue Feb 16, 2010 11:38 pm    Post subject: Reply with quote

nice article, duane. all makes sense and obviously points to the impossibility that no one knew how bad things would get... y'know, the old "we didn't see it coming" bullshit.

makes me think of how silly it was to deny Red Sox player Pete Rose from going to the Baseball Hall of Fame because he bet against his own team. after all, it's legal to do that kind of stuff on Wall Street.

(sarcasm Wink )
red

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Up-North



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PostPosted: Mon Mar 15, 2010 7:43 pm    Post subject: Reply with quote

This is really responding to some of the earlier comments here.


Although this is my first post, I have been following this site and the audios since 2004. The first Audio I heard was the Peak Oil scam with Dave McGowan before the 2004 election. What brought me to this site, and what has kept me here has evolved. As an Architect, questions about 911 brought me here in 04, but my interest in psychology and other lifes questions and meanings have kept me here. Good work BFN.



Enough about me.



I have never taken a psychedelic, but find a lot of depth and good ideas in Terrance McKenna. work. I know a few people on BFN are fans of Terrance, so what do you guys think of his Time wave zero and the theories behind it? His concepts and ideas are similar to what Carl has found in his Mayan research. Terrance, unlike Carl, found the Dec 21 2012 date to be the end of his time wave, which as some of you know he derived from studying the I Ching back in the mid 1970s. I dont get caught up in the end date so much as try to feel and see the changes around me. As Terrance would say the direct experience as YOU see it.



Anyone ever read Michael Hayes The Hermetic Code in DNA



Red Ice Creations had Carl Calleman on the show in 2008. How many have heard or visited that web site?



http://www.youtube.com/watch?v=r41emghwunU&feature=related

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Fintan
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PostPosted: Sat Mar 27, 2010 4:24 pm    Post subject: Reply with quote

Never got around to saying welcome to BFN.

So.... Welcome to BFN Up-North!
Though, you been around all the time, really. Wink

As I said elsewhere, McKenna's Timewave is not great
on the maths, but that was never his forte anyway.

Red Ice has been discussed here:
http://breakfornews.com/forum/viewtopic.php?p=15783

It's a bit hit an miss. He has interesting stuff sometimes, but
then he spoils it by interviewing the likes of David MI5 Icke.

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PostPosted: Sat Mar 27, 2010 4:37 pm    Post subject: Reply with quote

So, the US Government believes
in some Conspiracy Theories, eh?

Virtually every bank involved declined to comment.

Defense lawyers "inadvertently" named the individuals and companies
in a motion. Very curious! Why? Tipping-off to the conspirators?

Looks like some people are going
to have to do time for this one......


Quote:
"Nearly 30 bankers across more than a dozen financial companies have
been named by the government as suspected co-conspirators in a broad
investigation into the municipal derivatives market, according to court
documents." - Yahoo Finance


Quote:
JPMorgan, Lehman, UBS Named
in Bid-Rigging Conspiracy


By William Selway and Martin Z. Braun

March 26 (Bloomberg) -- JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and UBS AG were among more than a dozen Wall Street firms involved in a conspiracy to pay below-market interest rates to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case.

A government list of previously unidentified co- conspirators contains more than two dozen bankers at firms also including Bank of America Corp., Bear Stearns Cos., Societe Generale, two of General Electric Co.s financial businesses and Salomon Smith Barney, the former unit of Citigroup Inc., according to documents filed in U.S. District Court in Manhattan on March 24.

The papers were filed by attorneys for a former employee of CDR Financial Products Inc., an advisory firm indicted in October. The attorneys, as part of their legal filing, identified the roster as being provided by the government. The document is labeled list of co-conspirators.

None of the firms or individuals named on the list has been charged with wrongdoing. The court records mark the first time these companies have been identified as co-conspirators. They provide the broadest look yet at alleged collusion in the $2.8 trillion municipal securities market that the government says delivered profits to Wall Street at taxpayers expense.

Sufficient Evidence

If the government is saying they are co-conspirators, the government believes they have sufficient evidence that they can show they were part of the conspiracy, said Richard Donovan, a partner at New York-based law firm Kelley Drye & Warren LLP and co-chair of its antitrust practice. Donovan isnt involved in the case.

The governments case centers on investments known as guaranteed investment contracts that cities, states and school districts buy with the money they receive through municipal bond sales. Some $400 billion of municipal bonds are issued each year, and localities use the contracts to earn a return on some of the money until they need it for construction or other projects.

The Internal Revenue Service sometimes collects earnings on those investments and requires that they be awarded by competitive bidding to ensure that governments receive a fair return. The government charges that CDR ran sham auctions that allowed the banks to pay below-market interest rates to local governments.

CDR Fights Case

CDR, a Los Angeles-based local-government adviser, was indicted in October along with David Rubin, Zevi Wolmark and Evan Zarefsky, three current or former executives. The company and the three men have denied wrongdoing. Since last month, three former CDR employees who werent charged in the initial indictment have pleaded guilty and agreed to cooperate with the Justice Department.

More than a dozen financial firms are also facing civil suits filed by municipalities over the alleged conspiracy. Yesterday, U.S. District Judge Victor Marrero in Manhattan refused to toss out a lawsuit brought by Mississippi and other bond issuers.

Brian Marchiony, a spokesman for JPMorgan in New York; Doug Morris, a spokesman for UBS in New York; and Danielle Romero- Apsilos, a spokeswoman for Citigroup in New York, all declined to comment. A Societe Generale spokesman, Jim Galvin; Lehman spokeswoman Kimberly MacLeod, and GE Capital spokesman Ned Reynolds in Stamford, Connecticut, also declined to comment. Bank of America spokeswoman Shirley Norton in San Francisco declined to comment. Bear Stearns was bought by JPMorgan in 2008, the same year Lehman Brothers collapsed.

Laura Sweeney, a Justice Department spokeswoman in Washington, declined to comment.

Absolute Disaster

Banks may choose to cooperate with prosecutors because in light of the government bailout funds theyve received a guilty plea would just be an absolute disaster for some of these companies, said Nathan Muyskens, a partner at Shook, Hardy & Bacon in Washington and former trial attorney with the Federal Trade Commissions Bureau of Competition.

There have been antitrust investigations where there have been companies involved that were just never indicted, he said in a phone interview.

At the same time, the government will probably focus on seeking to convict individual bankers, he said.

When someone goes to jail for five years, that resonates, he said. When a company pays $200 million, its simply a balance sheet issue. Jail time is what captures corporate Americas attention.

Lawyers Filing

In a court filing yesterday, defense lawyers said they inadvertently included the names of individual and company co-conspirators in a motion asking the court to compel the government to provide more specific evidence of the alleged misconduct. They asked the court to strike the entire exhibit in which the list appears. Judge Marrero granted the request.
The governments probe became public in 2006 when federal investigators raided CDR and two competitors and issued subpoenas to more than a dozen firms. The co-conspirators on the list released in court this week also included Wachovia Corp., which was purchased by San Francisco-based Wells Fargo & Co. in 2008. Elise Wilkinson, a Wells Fargo spokeswoman in Charlotte, North Carolina, didnt return a call today seeking comment.

October Indictments

The indictments released in October didnt identify any of the sellers of the investment contracts involved in the alleged conspiracy. They were identified only as Provider A and Provider B. They paid kickbacks to CDR after winning investment deals brokered by the firm, according to the indictments.

The firms did this by paying sham fees tied to financial transactions entered into with other companies, prosecutors said. Kickbacks were paid from 2001 to 2005, ranging from $4,500 to $475,000 each, according to the Justice Department.

According to the list contained in the court filing this week, the investment contracts involved were created by units of GE and divisions of Financial Security Assurance Holdings Ltd., a bond insurer formerly part of Brussels-based lender Dexia SA.

The kickbacks were paid out of fees generated by transactions entered into with two financial institutions that werent identified in the October court filing. The March 24 list filed by the defense named the two firms as UBS and Royal Bank of Canada.

Dexia Sale

Dexia completed the sale of FSAs bond-insurance business in July to Assured Guaranty Ltd. of Hamilton, Bermuda, while retaining its outstanding investment contracts.

Thierry Martiny, a spokesman for Dexia in Brussels, declined to comment. FSA, based in New York, was the biggest insurer of U.S. municipal bonds in 2007 and 2008.

We have no comment, said Betsy Castenir, a spokeswoman for Assured Guaranty in New York, in an e-mail response. Dexia has responsibility for the liabilities of the Financial Products business.

Royal Bank of Canada has been fully cooperating with the government, Kevin Foster, a spokesman for the bank in New York, said in an e-mailed statement. We have no knowledge or evidence of wrongdoing by any of our employees.

The case is U.S. v. Rubin/Chambers, Dunhill Insurance Services Inc., 09-CR-01058, U.S. District Court, Southern District of New York (Manhattan).

http://www.businessweek.com/news/2010-03-26/

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