... The shareholders’ claims are scathing of Lloyd Blankfein, the chairman and chief executive of the bank, and Gary Cohen, the president, and the rest of the bank’s 12-strong board, which they said was made up of individuals too interested in their “grossly excessive” compensation and too closely connected to each other to run the bank properly. “The director defendants completely abdicated their oversight duties to the company,” one lawsuit said.
Instead, the bank’s leaders sold $65.4 million of “artificially inflated” Goldman stock while they — but not other shareholders — knew of the SEC’s impending charges, the legal action alleged. Goldman’s credibility had been “devastated” and its corporate image and goodwill “irreparably damaged” by the charges, shareholders asserted.
“For at least the foreseeable future, Goldman will suffer from what is known as the ‘liar’s discount’, a term applied to the stocks of companies who have been implicated in illegal behaviour and have misled the investing public,” one suit said.
Shareholders want Goldman Sachs to pay them damages and make corporate governance reforms. Mr Blankfein went on a public relations offensive at the weekend, doing an interview on The Charlie Rose Show in which he acknowledged that the bank, which is overhauling its internal rules for dealing with clients, “can’t exist in the current state that we are in”. He added: “We have a lot of work to do.”
Warren Buffett, the renowned investor who loaned Goldman $5 billion during the financial crisis in return for an annual return of $500 million, tried to boost the bank’s image at his shareholders’ meeting in Omaha, Nebraska, at the weekend.
“I don’t hold against Goldman Sachs the fact that an allegation’s been made by the SEC,” he said. “If it leads to something more serious, then we’ll think about it if it happens.”
Mr Buffett did not convince at least some of his own shareholders. “I hope they nail Goldman,” John Buckley, an Omaha native, told The Times. “It ain’t right, doing that to people.”
Shares in Goldman Sachs dropped by 9.4 per cent last Friday after the bank was downgraded by two analysts who cited the difficulty of predicting the outcome of the bank’s legal problems. The stock made a comparatively small rebound yesterday, rising by $4.37, or 3 per cent, to close at $149.57. ...
Instead, the bank’s leaders sold $65.4 million of “artificially inflated” Goldman stock while they — but not other shareholders — knew of the SEC’s impending charges, the legal action alleged. Goldman’s credibility had been “devastated” and its corporate image and goodwill “irreparably damaged” by the charges, shareholders asserted.
“For at least the foreseeable future, Goldman will suffer from what is known as the ‘liar’s discount’, a term applied to the stocks of companies who have been implicated in illegal behaviour and have misled the investing public,” one suit said.
Shareholders want Goldman Sachs to pay them damages and make corporate governance reforms. Mr Blankfein went on a public relations offensive at the weekend, doing an interview on The Charlie Rose Show in which he acknowledged that the bank, which is overhauling its internal rules for dealing with clients, “can’t exist in the current state that we are in”. He added: “We have a lot of work to do.”
Warren Buffett, the renowned investor who loaned Goldman $5 billion during the financial crisis in return for an annual return of $500 million, tried to boost the bank’s image at his shareholders’ meeting in Omaha, Nebraska, at the weekend.
“I don’t hold against Goldman Sachs the fact that an allegation’s been made by the SEC,” he said. “If it leads to something more serious, then we’ll think about it if it happens.”
Mr Buffett did not convince at least some of his own shareholders. “I hope they nail Goldman,” John Buckley, an Omaha native, told The Times. “It ain’t right, doing that to people.”
Shares in Goldman Sachs dropped by 9.4 per cent last Friday after the bank was downgraded by two analysts who cited the difficulty of predicting the outcome of the bank’s legal problems. The stock made a comparatively small rebound yesterday, rising by $4.37, or 3 per cent, to close at $149.57. ...
... In a hefty dossier circulated to media, the bank produced charts showing it never controlled more than 6% of the market for residential mortgage-backed securities or 9% of trade in collateralised debt obligations (CDOs). Mortgage-related products never exceeded 2% of group revenues between 2003-2008, the bank said. It denied engaging "in some type of massive 'bet' against our clients".
Correspondence in the dossier shows a discussion raging within the firm about appropriate exposure and the direction of the housing market. At one point in late 2006, a Goldman banker emailed colleagues bemoaning: "Sub-prime market getting hit hard – hedge funds hitting street, Wall Street Journal article. At this point we are down $20m today."
In another exchange, one trading executive writes that "the market in general underestimated how bad it could get", continuing: "While undoubtedly there will be some continued spillover, I'm not so convinced this is a total death spiral. In fact we may have terrific opportunities."
For Goldman's 30,500 staff worldwide, the next few weeks are crucial. Insiders say clients, so far, have been supportive in spite of the SEC's accusations that Goldman misled investors with Abacus, a mortgage derivative allegedly designed to fail. If the SEC's prosecution is successful, Goldman risks huge damage to its reputation and could suffer an exodus of customers and staff.
The bank's defence has been hindered by the release of a batch of emails sent by Fabrice Tourre, who refers to himself as the 'Fabulous Fab', to his girlfriend, Marine Serres. In the emails, the originator of the Abacus deal intersperses expressions of love and affection with banter about CDOs. In the messages, Tourre jokes that he has been selling Abacus to "widows and orphans" at an airport and he is scornful about the financial package, describing it as "a product of pure intellectual masturbation" that has "no purpose" and is "absolutely conceptual".
Correspondence in the dossier shows a discussion raging within the firm about appropriate exposure and the direction of the housing market. At one point in late 2006, a Goldman banker emailed colleagues bemoaning: "Sub-prime market getting hit hard – hedge funds hitting street, Wall Street Journal article. At this point we are down $20m today."
In another exchange, one trading executive writes that "the market in general underestimated how bad it could get", continuing: "While undoubtedly there will be some continued spillover, I'm not so convinced this is a total death spiral. In fact we may have terrific opportunities."
For Goldman's 30,500 staff worldwide, the next few weeks are crucial. Insiders say clients, so far, have been supportive in spite of the SEC's accusations that Goldman misled investors with Abacus, a mortgage derivative allegedly designed to fail. If the SEC's prosecution is successful, Goldman risks huge damage to its reputation and could suffer an exodus of customers and staff.
The bank's defence has been hindered by the release of a batch of emails sent by Fabrice Tourre, who refers to himself as the 'Fabulous Fab', to his girlfriend, Marine Serres. In the emails, the originator of the Abacus deal intersperses expressions of love and affection with banter about CDOs. In the messages, Tourre jokes that he has been selling Abacus to "widows and orphans" at an airport and he is scornful about the financial package, describing it as "a product of pure intellectual masturbation" that has "no purpose" and is "absolutely conceptual".
FABRICE TOURRE, the 31-year-old trader at the centre of the Goldman Sachs fraud allegations, dismissed the complex debt products he created for the bank as “pure intellectual masturbation”.
In a series of damaging emails released yesterday, Tourre also compared the products to a “Frankenstein” monster that had “turned against his own inventor”.
Other emails that emerged yesterday showed Lloyd Blankfein, Goldman’s chief executive, boasting about the money the bank made from the housing market collapse. “Of course we didn’t dodge the mortgage mess,” Blankfein wrote in November 2007. “We lost money, then made more than we lost because of shorts (bets against housing).”
The Blankfein emails were released by a Senate committee that will take evidence from him and Tourre this week. The committee is investigation the firm’s role in selling sub-prime mortgage products. The probe has been triggered by a lawsuit from the Securities and Exchange Commission (SEC) that alleges Goldman defrauded investors of $1 billion (£650m).
Senator Carl Levin, the committee’s chairman, described the bank and its Wall Street peers yesterday as “self-interested promoters of risky and complex financial schemes that helped trigger the crisis”.
Levin also accused the bank of making “enormous” profits by betting that house prices would fall — a claim rejected by Goldman. ...
In a series of damaging emails released yesterday, Tourre also compared the products to a “Frankenstein” monster that had “turned against his own inventor”.
Other emails that emerged yesterday showed Lloyd Blankfein, Goldman’s chief executive, boasting about the money the bank made from the housing market collapse. “Of course we didn’t dodge the mortgage mess,” Blankfein wrote in November 2007. “We lost money, then made more than we lost because of shorts (bets against housing).”
The Blankfein emails were released by a Senate committee that will take evidence from him and Tourre this week. The committee is investigation the firm’s role in selling sub-prime mortgage products. The probe has been triggered by a lawsuit from the Securities and Exchange Commission (SEC) that alleges Goldman defrauded investors of $1 billion (£650m).
Senator Carl Levin, the committee’s chairman, described the bank and its Wall Street peers yesterday as “self-interested promoters of risky and complex financial schemes that helped trigger the crisis”.
Levin also accused the bank of making “enormous” profits by betting that house prices would fall — a claim rejected by Goldman. ...
Alistair Darling: the world will back IMF bank taxes
UK chancellor says that Britain, the US and the eurozone countries agree that banks need to be cut down to size
Larry Elliott and Jill Treanor
Wednesday 21 April 2010
The G20 group of rich and poor countries is likely to make rapid progress on a radical IMF plan to tax the world's financial institutions in the hope of reaching a deal by the end of the year, the chancellor, Alistair Darling, said today.
Speaking to the Guardian, the chancellor said that Britain, the US and the eurozone countries were agreed that action needed to be taken to cut banks down to size and to prevent another crisis putting pressure on public finances.
Despite opposition from Canada, which will host the next G20 meeting this summer, Darling said pressure from those countries with major financial centres would keep the issue high on the agenda. The resilience of Canada's banks during the three-year financial crisis has made Ottawa reluctant to discuss taxes on finance at the G20, but the chancellor said: "If everybody else wants to discuss it, nobody is going to keep it off the agenda."
Prospects for an international deal have improved since the Obama administration adopted a more aggressive approach towards Wall Street banks earlier this year. Darling said: "I hope that we will have the principles agreed by the end of the year, and convert them into practice later."
He added, however, that there would be no sudden introduction of either of the two charges proposed by the IMF this week: a financial stability contribution to fund any future bailout; and a financial activities tax on bank profits and pay. ...
UK chancellor says that Britain, the US and the eurozone countries agree that banks need to be cut down to size
Larry Elliott and Jill Treanor
Wednesday 21 April 2010
The G20 group of rich and poor countries is likely to make rapid progress on a radical IMF plan to tax the world's financial institutions in the hope of reaching a deal by the end of the year, the chancellor, Alistair Darling, said today.
Speaking to the Guardian, the chancellor said that Britain, the US and the eurozone countries were agreed that action needed to be taken to cut banks down to size and to prevent another crisis putting pressure on public finances.
Despite opposition from Canada, which will host the next G20 meeting this summer, Darling said pressure from those countries with major financial centres would keep the issue high on the agenda. The resilience of Canada's banks during the three-year financial crisis has made Ottawa reluctant to discuss taxes on finance at the G20, but the chancellor said: "If everybody else wants to discuss it, nobody is going to keep it off the agenda."
Prospects for an international deal have improved since the Obama administration adopted a more aggressive approach towards Wall Street banks earlier this year. Darling said: "I hope that we will have the principles agreed by the end of the year, and convert them into practice later."
He added, however, that there would be no sudden introduction of either of the two charges proposed by the IMF this week: a financial stability contribution to fund any future bailout; and a financial activities tax on bank profits and pay. ...
Unemployment benefits and GOP principle
Michael Tomasky Monday 5 April 2010
... You may remember a few weeks ago that it was Republican Senator Jim Bunning who held up extension of these benefits because the Senate wasn't coming up to any way to pay for them and make the extension deficit neutral thereby. This time around it's Oklahoma's Tom Coburn:
"The legitimate debate is whether we borrow and steal from our kids or we get out of town and send the bill to our kids for something that we're going to consume today," Coburn said on the Senate floor.
The cost is $10 billion, so I can see that if you're concerned about the deficit it's a fair point. But here's the thing that gets me.
Somehow, Republicans don't manage to raise these objections about deficit neutrality when the question involves tax cuts heavily weighted toward the rich. The Bush tax cuts of 2001 and 2003 increased the deficit. I don't remember many Republican protestations about that. As you can see from this roll-call vote from 2006, extending the tax cuts (well after their deficit-augmenting reality was known), all 51 (at the time) Republican senators voted for them, Coburn and Bunning among them.
Rich people are rich because they're good, so by definition the deficit isn't their fault. Working-class unemployed people, well, hard luck.
Michael Tomasky Monday 5 April 2010
... You may remember a few weeks ago that it was Republican Senator Jim Bunning who held up extension of these benefits because the Senate wasn't coming up to any way to pay for them and make the extension deficit neutral thereby. This time around it's Oklahoma's Tom Coburn:
"The legitimate debate is whether we borrow and steal from our kids or we get out of town and send the bill to our kids for something that we're going to consume today," Coburn said on the Senate floor.
The cost is $10 billion, so I can see that if you're concerned about the deficit it's a fair point. But here's the thing that gets me.
Somehow, Republicans don't manage to raise these objections about deficit neutrality when the question involves tax cuts heavily weighted toward the rich. The Bush tax cuts of 2001 and 2003 increased the deficit. I don't remember many Republican protestations about that. As you can see from this roll-call vote from 2006, extending the tax cuts (well after their deficit-augmenting reality was known), all 51 (at the time) Republican senators voted for them, Coburn and Bunning among them.
Rich people are rich because they're good, so by definition the deficit isn't their fault. Working-class unemployed people, well, hard luck.
Why we must break up the banks
Paul Krugman says it isn't necessary – but breaking up financial giants would at least give us hope that things can change
Dean Baker
Wednesday 7 April 2010
It's not often that I disagree with Paul Krugman, but there are occasions where at least one of us is wrong. And the treatment of too big to fail (TBTF) banks is one of them.
Krugman argued in a column last week that breaking up the TBTF banks is not a necessary part of financial reform. Krugman pointed to the example of Canada as a country with a well-regulated financial system. Canada did not experience a financial crisis in 2008 in spite of the fact that five big banks essentially account for the whole of the Canadian banking system. On the other side, Krugman noted that the collapse of large numbers of small banks can also create a crisis, pointing to the chain of bank collapses at the start of the Great Depression.
These are valid points, but to paraphrase Dorothy in the Wizard of Oz: "we're not in Canada anymore." While Canadian banking regulation appears to have been effective thus far (we may want to see how they cope with a yet to deflate housing bubble before pronouncing it a success), Canada is a very different country from the United States. In Canada, they have had universal Medicare for 40 years. As the first President Bush used to say, it is a kinder, gentler, country.
This matters for financial regulation, because there is a level of independence and integrity on the part of the regulators in Canada that does not exist in the United States. The line in Washington is that if you want to talk to someone from Goldman Sachs, call the treasury department. ...
Paul Krugman says it isn't necessary – but breaking up financial giants would at least give us hope that things can change
Dean Baker
Wednesday 7 April 2010
It's not often that I disagree with Paul Krugman, but there are occasions where at least one of us is wrong. And the treatment of too big to fail (TBTF) banks is one of them.
Krugman argued in a column last week that breaking up the TBTF banks is not a necessary part of financial reform. Krugman pointed to the example of Canada as a country with a well-regulated financial system. Canada did not experience a financial crisis in 2008 in spite of the fact that five big banks essentially account for the whole of the Canadian banking system. On the other side, Krugman noted that the collapse of large numbers of small banks can also create a crisis, pointing to the chain of bank collapses at the start of the Great Depression.
These are valid points, but to paraphrase Dorothy in the Wizard of Oz: "we're not in Canada anymore." While Canadian banking regulation appears to have been effective thus far (we may want to see how they cope with a yet to deflate housing bubble before pronouncing it a success), Canada is a very different country from the United States. In Canada, they have had universal Medicare for 40 years. As the first President Bush used to say, it is a kinder, gentler, country.
This matters for financial regulation, because there is a level of independence and integrity on the part of the regulators in Canada that does not exist in the United States. The line in Washington is that if you want to talk to someone from Goldman Sachs, call the treasury department. ...
Guillaume Rambourg, the star trader suspended last week from Gartmore, the fund manager, used the Bloomberg instant messaging system to “direct” trades for nearly a year.
Jeff Meyer, Gartmore’s chief executive, said Rambourg circumvented a company rule introduced on May 15 last year. Staff were given training sessions and asked to take a test to make sure they understood that they could no longer direct trades. “That is what has caused us the most concern about Guillaume — it’s a behavioural issue. He knew what the rules were but continued as he had before,” said Meyer.
Rambourg, who owns 4% of the firm, did not appear to have profited from his actions. “I’ll jump off this building if he was doing it for profit,” said Meyer.
The rule banned fund managers from telling Gartmore’s trading staff which brokers to use on share deals. Before it was introduced, fund managers would use the company’s own IT systems to pass messages suggesting that business be directed to a certain firm. ...
Jeff Meyer, Gartmore’s chief executive, said Rambourg circumvented a company rule introduced on May 15 last year. Staff were given training sessions and asked to take a test to make sure they understood that they could no longer direct trades. “That is what has caused us the most concern about Guillaume — it’s a behavioural issue. He knew what the rules were but continued as he had before,” said Meyer.
Rambourg, who owns 4% of the firm, did not appear to have profited from his actions. “I’ll jump off this building if he was doing it for profit,” said Meyer.
The rule banned fund managers from telling Gartmore’s trading staff which brokers to use on share deals. Before it was introduced, fund managers would use the company’s own IT systems to pass messages suggesting that business be directed to a certain firm. ...
A tax break created by Gordon Brown to encourage millions of people to save has degenerated into a £3 billion a year rip-off that enriches the banks, according to a damning verdict from the statutory consumer watchdog.
Consumer Focus has made a formal complaint to the Office of Fair Trading alleging that cash Isas pay derisory rates of interest and that banks use unfair obstacles to stop people from switching to better deals. The OFT has 90 days to respond.
“It beggars belief that in 21st century Britain it takes a month to transfer information and funds from one bank to another,” said Mike O’Connor, chief executive of Consumer Focus. “The average Isa saver is getting a poor deal.” ...
Consumer Focus has made a formal complaint to the Office of Fair Trading alleging that cash Isas pay derisory rates of interest and that banks use unfair obstacles to stop people from switching to better deals. The OFT has 90 days to respond.
“It beggars belief that in 21st century Britain it takes a month to transfer information and funds from one bank to another,” said Mike O’Connor, chief executive of Consumer Focus. “The average Isa saver is getting a poor deal.” ...
The US Senate is known as the body where legislation goes to die, and a Republican senator from Kentucky has spent several days illustrating that point at the expense of nearly 500,000 out-of-work Americans.
Since last week Senator Jim Bunning [an ex-baseball player] has used his privilege under the chamber's parliamentary rules to hold up a 30-day extension of unemployment benefits, health insurance assistance, funding for road and infrastructure projects across the country, and other aid.
In exchange for lifting his objections he demands the senate come up with a way to pay for the $10bn extension package by reducing spending elsewhere, eliciting scoffs from Democrats who note that he voted for President Bush's $1.7tn tax cuts for the wealthy.
Nearly every major item on President Barack Obama's agenda, from health insurance reform to cap-and-trade climate regulation, has stalled in the Senate after passing the House of Representatives. ...
Since last week Senator Jim Bunning [an ex-baseball player] has used his privilege under the chamber's parliamentary rules to hold up a 30-day extension of unemployment benefits, health insurance assistance, funding for road and infrastructure projects across the country, and other aid.
In exchange for lifting his objections he demands the senate come up with a way to pay for the $10bn extension package by reducing spending elsewhere, eliciting scoffs from Democrats who note that he voted for President Bush's $1.7tn tax cuts for the wealthy.
Nearly every major item on President Barack Obama's agenda, from health insurance reform to cap-and-trade climate regulation, has stalled in the Senate after passing the House of Representatives. ...
One of the biggest bonuses seen this year for any London-based banker was revealed today as HSBC announced it had given Stuart Gulliver, its head of investment banking, a £9.8 million package.
Mr Gulliver was awarded a £9 million bonus on top of his £800,000 base pay for his "exceptional performance" in trebling the profits of his division to $10.5 billion, HSBC said.
The payment came as Michael Geoghegan, HSBC chief executive, confirmed that he will give his £4 million bonus to charity.
HSBC disappointed investors after full-year profits fell by 24 per cent to $7.1 billion (£4.7 billion) following a big write down of the value of its own bonds. Its shares lost more than 5 per cent, down 37.1p, to 682.46p. ...
Mr Gulliver was awarded a £9 million bonus on top of his £800,000 base pay for his "exceptional performance" in trebling the profits of his division to $10.5 billion, HSBC said.
The payment came as Michael Geoghegan, HSBC chief executive, confirmed that he will give his £4 million bonus to charity.
HSBC disappointed investors after full-year profits fell by 24 per cent to $7.1 billion (£4.7 billion) following a big write down of the value of its own bonds. Its shares lost more than 5 per cent, down 37.1p, to 682.46p. ...
... Buffett has been criticizing overreaching corporate managers and complaisant directors for decades. But the question of how to motivate good corporate behavior has taken on new weight as Washington debates reining in the financial giants whose missteps brought the economy to its knees two years ago.
The Obama administration last month proposed separating banks' proprietary trading activities from their federally subsidized deposit-gathering and lending ones. Other proposed rules would increase the amount of capital banks hold against losses and how much cash they carry to deal with a surge of withdrawals.
But Buffett said there's a simpler way to cap risk-taking: Forcing lavishly compensated CEOs to take responsibility for assessing the risks at their firms -- and putting their own wealth at stake, to boot.
"It is the behavior of these CEOs and directors that needs to be changed," he wrote. "They have long benefitted from oversized financial carrots; some meaningful sticks now need to be employed as well."
The comment reflects a theme that has run through Buffett's letters to investors over the years: Shareholders are best served by managers who think like owners. More often, he has said, they are ill served by executives who instead pursue value-destroying mergers or pile up debt in a bid to boost returns. ...
The Obama administration last month proposed separating banks' proprietary trading activities from their federally subsidized deposit-gathering and lending ones. Other proposed rules would increase the amount of capital banks hold against losses and how much cash they carry to deal with a surge of withdrawals.
But Buffett said there's a simpler way to cap risk-taking: Forcing lavishly compensated CEOs to take responsibility for assessing the risks at their firms -- and putting their own wealth at stake, to boot.
"It is the behavior of these CEOs and directors that needs to be changed," he wrote. "They have long benefitted from oversized financial carrots; some meaningful sticks now need to be employed as well."
The comment reflects a theme that has run through Buffett's letters to investors over the years: Shareholders are best served by managers who think like owners. More often, he has said, they are ill served by executives who instead pursue value-destroying mergers or pile up debt in a bid to boost returns. ...
Power companies have been accused of profiteering from the coldest winter for 30 years after a surge in corporate profits.
ScottishPower, which has more than 5 million British customers, saw profits rise by 7.9% last year amid fears that many people could not afford to heat their homes during the bitter winter. Results tomorrow from British Gas, the country's biggest supplier of gas and electricity with 15.6 million customers, are expected to show that operating profits rose 46% to £554m, up from £379m in 2008.
The increases were condemned by unions, customer groups and charities representing the elderly, and follow warnings this week from the regulator Ofgem that companies boosted margins by £30 for each dual fuel customer in the last three months as wholesale costs fell.
Gary Smith, national officer at the GMB union, said: "Buying cheap and selling dear will always add up to high profits in a natural monopoly. No great managerial elan or skills are needed. It is long overdue that the government should step in and take control of the energy sector and put in place proper plans for secure supplies at reasonable prices as happens in the rest of Europe."
David Hunter of McKinnon & Clarke, which buys energy for businesses across Britain, said: "Despite wholesale prices going into freefall, ScottishPower hasn't cut domestic standard tariffs in almost a year. Failure of the big six suppliers [British Gas, EDF, npower, ScottishPower, Scottish and Southern, and E.ON] to pass on to customers the massive reductions in wholesale energy prices which they have been enjoying since 2008 is scandalous." ...
Hey, our utilities are doing the same thing to us in Yankistan - and why the fuck haven't gasoline prices plummeted either?
ScottishPower, which has more than 5 million British customers, saw profits rise by 7.9% last year amid fears that many people could not afford to heat their homes during the bitter winter. Results tomorrow from British Gas, the country's biggest supplier of gas and electricity with 15.6 million customers, are expected to show that operating profits rose 46% to £554m, up from £379m in 2008.
The increases were condemned by unions, customer groups and charities representing the elderly, and follow warnings this week from the regulator Ofgem that companies boosted margins by £30 for each dual fuel customer in the last three months as wholesale costs fell.
Gary Smith, national officer at the GMB union, said: "Buying cheap and selling dear will always add up to high profits in a natural monopoly. No great managerial elan or skills are needed. It is long overdue that the government should step in and take control of the energy sector and put in place proper plans for secure supplies at reasonable prices as happens in the rest of Europe."
David Hunter of McKinnon & Clarke, which buys energy for businesses across Britain, said: "Despite wholesale prices going into freefall, ScottishPower hasn't cut domestic standard tariffs in almost a year. Failure of the big six suppliers [British Gas, EDF, npower, ScottishPower, Scottish and Southern, and E.ON] to pass on to customers the massive reductions in wholesale energy prices which they have been enjoying since 2008 is scandalous." ...
Hey, our utilities are doing the same thing to us in Yankistan - and why the fuck haven't gasoline prices plummeted either?
Couple told by BT that broadband upgrade would cost £45,000
A couple, Ray and Frei Walker, who want broadband for their home and bed and breakfast business have been told by British Telecom that the installation would cost £45,000.
By Nick Britten
07 Feb 2010
They have managed with an old “dial up” service for the last nine years at the Victorian guest house they own.
But when they looked into getting broadband installed they were hit by the huge quote because BT said for the Walkers to benefit it would need to install new equipment that would also serve others in the village.
Mr Walker, 60, said: “It’s a farce, and obviously we’re staggered. We don’t have £45,000 and if we did we wouldn’t spend it on this.”
Currently BT broadband access is available to residents of the 150-strong village of Dufton, near Appelby, Cumbria, but BT said there was no capacity for any new users.
The Walkers currently have two telephone lines going into the house – one for a phone and one for the Internet – supplied by Digital Access Carrier System, or DACS, which allows BT to deliver both lines from its exchange through one copper wire.
The DACS box also services other villagers’ telephone lines.
They believed that by getting rid of one phone line, it would free up capacity for broadband.
But BT said to install broadband it would have to remove the current box, where the lines are squeezed down into one line and which is fitted to a telephone pole in the village, and install new, larger capacity equipment and cables for others in the village as well.
They quoted for the cost of removing the box plus “40 joint bosses, 637 metres of fibre copper cable and 1,341 metres of mole ploughing cable”.
Mr Walker accused the company of abusing its network monopoly because he had switched phone supplier and had been intent on using a different broadband supplier, even though BT still owns and maintains the equipment.
He said: “They seem to be wanting us to pay for equipment which will upgrade the whole village, and that’s what makes it more galling.
“We just want the same crap broadband service as everybody else in the village but BT won’t even let us have that.” ...
A couple, Ray and Frei Walker, who want broadband for their home and bed and breakfast business have been told by British Telecom that the installation would cost £45,000.
By Nick Britten
07 Feb 2010
They have managed with an old “dial up” service for the last nine years at the Victorian guest house they own.
But when they looked into getting broadband installed they were hit by the huge quote because BT said for the Walkers to benefit it would need to install new equipment that would also serve others in the village.
Mr Walker, 60, said: “It’s a farce, and obviously we’re staggered. We don’t have £45,000 and if we did we wouldn’t spend it on this.”
Currently BT broadband access is available to residents of the 150-strong village of Dufton, near Appelby, Cumbria, but BT said there was no capacity for any new users.
The Walkers currently have two telephone lines going into the house – one for a phone and one for the Internet – supplied by Digital Access Carrier System, or DACS, which allows BT to deliver both lines from its exchange through one copper wire.
The DACS box also services other villagers’ telephone lines.
They believed that by getting rid of one phone line, it would free up capacity for broadband.
But BT said to install broadband it would have to remove the current box, where the lines are squeezed down into one line and which is fitted to a telephone pole in the village, and install new, larger capacity equipment and cables for others in the village as well.
They quoted for the cost of removing the box plus “40 joint bosses, 637 metres of fibre copper cable and 1,341 metres of mole ploughing cable”.
Mr Walker accused the company of abusing its network monopoly because he had switched phone supplier and had been intent on using a different broadband supplier, even though BT still owns and maintains the equipment.
He said: “They seem to be wanting us to pay for equipment which will upgrade the whole village, and that’s what makes it more galling.
“We just want the same crap broadband service as everybody else in the village but BT won’t even let us have that.” ...
How Bush's grandfather helped Hitler's rise to power
Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president
Ben Aris in Berlin and Duncan Campbell in Washington
Saturday 25 September 2004
George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.
The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.
His business dealings, which continued until his company's assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.
The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator's action should have been grounds for prosecution for giving aid and comfort to the enemy.
The debate over Prescott Bush's behaviour has been bubbling under the surface for some time. There has been a steady internet chatter about the "Bush/Nazi" connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war and when there was already significant information about the Nazis' plans and policies, he worked for and profited from companies closely involved with the very German businesses that financed Hitler's rise to power. It has also been suggested that the money he made from these dealings helped to establish the Bush family fortune and set up its political dynasty. ...
Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president
Ben Aris in Berlin and Duncan Campbell in Washington
Saturday 25 September 2004
George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.
The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.
His business dealings, which continued until his company's assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.
The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator's action should have been grounds for prosecution for giving aid and comfort to the enemy.
The debate over Prescott Bush's behaviour has been bubbling under the surface for some time. There has been a steady internet chatter about the "Bush/Nazi" connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war and when there was already significant information about the Nazis' plans and policies, he worked for and profited from companies closely involved with the very German businesses that financed Hitler's rise to power. It has also been suggested that the money he made from these dealings helped to establish the Bush family fortune and set up its political dynasty. ...
Executive pay should be capped at 20 times average, says union leader
A Davos meeting was told executive pay had reached unsustainable levels compared with workers' pay
Larry Elliott
Wednesday 27 January 2010
A union leader representing 20 million workers worldwide tonight called for executive salaries to be capped at 20 times the pay of the average worker as he branded the system for rewarding business leaders "corrupt" and a "racket".
Speaking at the World Economic Forum in Davos, Philip Jennings, general secretary of the UNI global union, said the pay gap between those running companies and their workforces had widened to "unsustainable levels".
High-profile support for the union argument was provided by the French president, Nicolas Sarkozy, who said the current remuneration model could not be tolerated. "It is morally indefensible and we can't allow a tiny minority to skew the system", Sarkozy said.
The French president added that world leaders should not use recovery from recession as an excuse to slacken the pace of reform. "We need a revolution in world regulation to put labour standards on the same footing as those for trade."
Sarkozy said he couldn't understand why the International Labour Organisation, which tries to raise labour standards, had a lower status than the World Trade Organisation, which seeks to liberalise trade. ...
A Davos meeting was told executive pay had reached unsustainable levels compared with workers' pay
Larry Elliott
Wednesday 27 January 2010
A union leader representing 20 million workers worldwide tonight called for executive salaries to be capped at 20 times the pay of the average worker as he branded the system for rewarding business leaders "corrupt" and a "racket".
Speaking at the World Economic Forum in Davos, Philip Jennings, general secretary of the UNI global union, said the pay gap between those running companies and their workforces had widened to "unsustainable levels".
High-profile support for the union argument was provided by the French president, Nicolas Sarkozy, who said the current remuneration model could not be tolerated. "It is morally indefensible and we can't allow a tiny minority to skew the system", Sarkozy said.
The French president added that world leaders should not use recovery from recession as an excuse to slacken the pace of reform. "We need a revolution in world regulation to put labour standards on the same footing as those for trade."
Sarkozy said he couldn't understand why the International Labour Organisation, which tries to raise labour standards, had a lower status than the World Trade Organisation, which seeks to liberalise trade. ...
A “financial crisis responsibility fee” - I like it.
I like it very much, thank you.
I like it very much, thank you.
Belgian prosecutors highlighted the massive losses faced by EU governments from VAT fraud today after they charged three Britons and a Dutchman with money-laundering following an investigation into a multimillion-pound scam involving carbon emissions permits.
The three Britons, who were arrested last month in Belgium, were accused of failing to pay VAT worth €3m (£2.7m) on a series of carbon credit transactions.
European authorities believe the EU has lost at least €5bn to carbon-trading VAT fraud in the last 18 months. Europol, the EU's law-enforcement operation, fears the fraud will be used in other areas, especially gas and electricity trading markets, after criminals found VAT fraud was one of the most lucrative financial frauds.
Pollution permits for businesses were launched in the European Union in 2005 in an effort to cut carbon emissions. But the lack of harmonised tax regimes across the EU has prevented the creation of an orderly market that eliminated fraud.
The fraud occurs when carbon credits are bought and imported tax-free from other EU countries, then sold to domestic buyers, charging them VAT. The UK allows credits to be sold without adding VAT, while Belgians must pay VAT when they buy credits. Once the transaction, or series of transactions, are complete, the sellers disappear without paying the tax. ...
The three Britons, who were arrested last month in Belgium, were accused of failing to pay VAT worth €3m (£2.7m) on a series of carbon credit transactions.
European authorities believe the EU has lost at least €5bn to carbon-trading VAT fraud in the last 18 months. Europol, the EU's law-enforcement operation, fears the fraud will be used in other areas, especially gas and electricity trading markets, after criminals found VAT fraud was one of the most lucrative financial frauds.
Pollution permits for businesses were launched in the European Union in 2005 in an effort to cut carbon emissions. But the lack of harmonised tax regimes across the EU has prevented the creation of an orderly market that eliminated fraud.
The fraud occurs when carbon credits are bought and imported tax-free from other EU countries, then sold to domestic buyers, charging them VAT. The UK allows credits to be sold without adding VAT, while Belgians must pay VAT when they buy credits. Once the transaction, or series of transactions, are complete, the sellers disappear without paying the tax. ...
Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.
This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered. ...
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.
This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered. ...
The banks' defence of Fortress Bonus is starting to crumble. Their claim that unilateral action against excessive rewards by the UK would damage the City has been a key plank of their case against bonus reform, but that has been demolished by the chancellor's bank levy in the pre-budget report.
In this column I have repeatedly argued that action by the UK, where the financial sector is so dominant, would send a powerful signal to the rest of the world and embolden other countries to follow suit.
So it has proved: Nicolas Sarkozy is introducing a similar tax, with one French official saying "There is no obstacle to doing it now if it has been done in London." Angela Merkel is making warm noises; the hope is that the rest of the EU and the United States will join in.
Politically, the tax surcharge was a clever move. By sparking international action, the sting has been drawn from the Conservatives' cry of "class war"; George Osborne and David Cameron could not oppose the measure without alienating an angry public. ...
In this column I have repeatedly argued that action by the UK, where the financial sector is so dominant, would send a powerful signal to the rest of the world and embolden other countries to follow suit.
So it has proved: Nicolas Sarkozy is introducing a similar tax, with one French official saying "There is no obstacle to doing it now if it has been done in London." Angela Merkel is making warm noises; the hope is that the rest of the EU and the United States will join in.
Politically, the tax surcharge was a clever move. By sparking international action, the sting has been drawn from the Conservatives' cry of "class war"; George Osborne and David Cameron could not oppose the measure without alienating an angry public. ...
Kucinich seeks 60 percent excise tax on TARP executive bonuses
By Sabrina Eaton, The Plain Dealer
December 10, 2009
Cleveland Democratic Rep. Dennis Kucinich wants to impose a 60 percent excise tax on the fat bonuses that were paid to executives of companies that took money from last year's bank bailout.
On Wednesday, he proposed an amendment to a pending financial industry reform bill that would do that and impose an additional 70 percent tax on TARP recipients' corporate profits.
"Without the extraordinary actions of the federal government, many of these institutions would have collapsed a long time ago," Kucinich told the House Rules Committee, arguing that his amendment would hold "to account those institutions and individuals that made the decisions that led to the crisis." ...
By Sabrina Eaton, The Plain Dealer
December 10, 2009
Cleveland Democratic Rep. Dennis Kucinich wants to impose a 60 percent excise tax on the fat bonuses that were paid to executives of companies that took money from last year's bank bailout.
On Wednesday, he proposed an amendment to a pending financial industry reform bill that would do that and impose an additional 70 percent tax on TARP recipients' corporate profits.
"Without the extraordinary actions of the federal government, many of these institutions would have collapsed a long time ago," Kucinich told the House Rules Committee, arguing that his amendment would hold "to account those institutions and individuals that made the decisions that led to the crisis." ...
Wall Street bank Goldman Sachs has blinked in the face of a public outcry over its multimillion-dollar pay packages by suspending cash bonuses for its top 30 executives, in a concession to critics delivered as political momentum mounts for a crackdown on rewards in the financial sector.
Goldman is typically the biggest payer of any leading US bank, with a policy of distributing more than 40% of its revenue to employees, and it has faced furious protests over an anticipated handout of $23bn (£14.1bn) this year, an average of more than $700,000 per employee.
The bank yesterday announced that its senior staff, including six London-based executives, would receive shares vesting over a five-year period instead of cash bonuses. Under enhanced "clawback" powers, it will be able to reclaim shares from any employees found to have inflicted "material financial harm" on its businesses. In an unprecedented move for a major US bank, Goldman will put its remuneration policies before a yearly "say on pay" vote by shareholders at its annual meetings.
A Goldman spokesman said the bank had taken public opinion into consideration: "The motivation was that these are extraordinary times, that the firm has done well and that that has excited a great deal of comment and not a little criticism." ...
Goldman is typically the biggest payer of any leading US bank, with a policy of distributing more than 40% of its revenue to employees, and it has faced furious protests over an anticipated handout of $23bn (£14.1bn) this year, an average of more than $700,000 per employee.
The bank yesterday announced that its senior staff, including six London-based executives, would receive shares vesting over a five-year period instead of cash bonuses. Under enhanced "clawback" powers, it will be able to reclaim shares from any employees found to have inflicted "material financial harm" on its businesses. In an unprecedented move for a major US bank, Goldman will put its remuneration policies before a yearly "say on pay" vote by shareholders at its annual meetings.
A Goldman spokesman said the bank had taken public opinion into consideration: "The motivation was that these are extraordinary times, that the firm has done well and that that has excited a great deal of comment and not a little criticism." ...
Judge wipes out couple's mortgage after bank's 'repulsive' behaviour
A New York judge was so angry with a bank's "harsh, repugnant, shocking and repulsive" behaviour towards a financially struggling couple that he wiped out their $525,000 (£316,000) mortgage.
By Tom Leonard in New York
Published: 12:06AM GMT 26 Nov 2009
In an unusual legal decision that may cheer ordinary homeowners but dismay lenders, Judge Jeffrey Spinner took a tough line on a California-based bank that he considered had been determined to foreclose on the couple's home in Suffolk County, Long Island.
His ruling against OneWest and its IndyMac mortgage division has relieved Greg Horoski and his wife, Diane Yano-Horoski, of the $291,000 they owed on the original loan as well as $235,000 in interest.
OneWest took $814 million in federal bailout money but has a reputation for foreclosing quickly on property owners who falls into arrears. ...
... The judge attacked the bank for repeatedly refusing to work out a deal, for misleading him about the sums in the case and for its treatment of the couple.
He wrote that OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious", cancelling the debt to deter it from "imposing further mortifying abuse" against the couple. ...
... Mr Horoski...told the New York Post, "I think the judge felt it was almost a personal vendetta. It was like dealing with organised crime."
A New York judge was so angry with a bank's "harsh, repugnant, shocking and repulsive" behaviour towards a financially struggling couple that he wiped out their $525,000 (£316,000) mortgage.
By Tom Leonard in New York
Published: 12:06AM GMT 26 Nov 2009
In an unusual legal decision that may cheer ordinary homeowners but dismay lenders, Judge Jeffrey Spinner took a tough line on a California-based bank that he considered had been determined to foreclose on the couple's home in Suffolk County, Long Island.
His ruling against OneWest and its IndyMac mortgage division has relieved Greg Horoski and his wife, Diane Yano-Horoski, of the $291,000 they owed on the original loan as well as $235,000 in interest.
OneWest took $814 million in federal bailout money but has a reputation for foreclosing quickly on property owners who falls into arrears. ...
... The judge attacked the bank for repeatedly refusing to work out a deal, for misleading him about the sums in the case and for its treatment of the couple.
He wrote that OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious", cancelling the debt to deter it from "imposing further mortifying abuse" against the couple. ...
... Mr Horoski...told the New York Post, "I think the judge felt it was almost a personal vendetta. It was like dealing with organised crime."
Britain's retail banks should be banned from paying out "significant" cash bonuses as part of a drive to plough profits back into new lending, the shadow chancellor, George Osborne, will declare tomorrow.
In the strongest attack by the Tories on banks, Osborne will say that bonuses should be paid in shares, which cannot be cashed in for at least three years, as he warns that billions of pounds in "subsidised profits" are threatening to worsen the credit crunch.
In a speech to Thomson Reuters in Canary Wharf, east London, Osborne will tell financiers: "We cannot wait for the promised land of a new responsible bonus culture which looks more remote than ever. We need to take emergency steps to support bank lending and move the economy forward.
"I am today calling on the Treasury and the Financial Services Authority to combine forces and stop retail banks paying out profits in significant cash bonuses. Full stop. Then the cash that would have been paid out should be put on to banks' balance sheets explicitly to support new lending. This should be a condition of continuing to receive taxpayer guarantees and liquidity support." ...
In the strongest attack by the Tories on banks, Osborne will say that bonuses should be paid in shares, which cannot be cashed in for at least three years, as he warns that billions of pounds in "subsidised profits" are threatening to worsen the credit crunch.
In a speech to Thomson Reuters in Canary Wharf, east London, Osborne will tell financiers: "We cannot wait for the promised land of a new responsible bonus culture which looks more remote than ever. We need to take emergency steps to support bank lending and move the economy forward.
"I am today calling on the Treasury and the Financial Services Authority to combine forces and stop retail banks paying out profits in significant cash bonuses. Full stop. Then the cash that would have been paid out should be put on to banks' balance sheets explicitly to support new lending. This should be a condition of continuing to receive taxpayer guarantees and liquidity support." ...
Alistair Darling has openly criticised Goldman Sachs over its plan to pay huge staff bonuses so soon after the financial crisis nearly crushed the banking sector.
Speaking at an event in London this lunchtime, the chancellor cited the Wall Street giant as an example of a bank that "manifestly" failed to appreciate how the City landscape had changed.
"What happened with Goldman Sachs last week sends the wrong signals," said Darling, who was attending an event at Canary Wharf. "I've spoken to all our banks and none of them would be standing here today if the taxpayer hadn't put their hand into their pocket."
Goldman Sachs itself does not appear to share Darling's concerns. Last night, Lord Griffiths, vice-chairman of Goldman Sachs International, claimed that huge salaries were a price worth paying.
"I believe that we should be thinking about the medium-term common good, not the short-term common good ... we should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," said Griffiths. ...
I think you should fuck off, mr griffiths. I don't think any boss anywhere deserves pay that's more than 100 times what the lowest paid employees receive. I very much like the Japanese idea of bosses' getting no more than up to ten times what the lowest paid employees get.
Speaking at an event in London this lunchtime, the chancellor cited the Wall Street giant as an example of a bank that "manifestly" failed to appreciate how the City landscape had changed.
"What happened with Goldman Sachs last week sends the wrong signals," said Darling, who was attending an event at Canary Wharf. "I've spoken to all our banks and none of them would be standing here today if the taxpayer hadn't put their hand into their pocket."
Goldman Sachs itself does not appear to share Darling's concerns. Last night, Lord Griffiths, vice-chairman of Goldman Sachs International, claimed that huge salaries were a price worth paying.
"I believe that we should be thinking about the medium-term common good, not the short-term common good ... we should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," said Griffiths. ...
I think you should fuck off, mr griffiths. I don't think any boss anywhere deserves pay that's more than 100 times what the lowest paid employees receive. I very much like the Japanese idea of bosses' getting no more than up to ten times what the lowest paid employees get.
THE state-owned Royal Bank of Scotland is planning to hand out record bonuses of up to £5m each in a snub to struggling taxpayers.
The move would see the average employee in its high-risk investment banking arm take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.
The payouts by the investment banking division — from a total pay and bonus pot of £4 billion — would top the deals awarded at the peak of the financial boom in 2007 and are 66% higher than those paid last year.
RBS, then headed by Sir Fred Goodwin, had to be rescued from collapse by the Treasury last October with an initial injection of £20 billion. The taxpayer now has a 70% stake in the bank. ...
The move would see the average employee in its high-risk investment banking arm take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.
The payouts by the investment banking division — from a total pay and bonus pot of £4 billion — would top the deals awarded at the peak of the financial boom in 2007 and are 66% higher than those paid last year.
RBS, then headed by Sir Fred Goodwin, had to be rescued from collapse by the Treasury last October with an initial injection of £20 billion. The taxpayer now has a 70% stake in the bank. ...
Former Wall Street financiers face criminal action
Former Bear Stearns hedge fund manager Matthew Tannin's private jottings show concerns about 'blow up risk' to investors
Andrew Clark in New York
guardian.co.uk, Sunday 11 October 2009
They are scribblings that may come back to haunt Matthew Tannin. The former high-flying Bear Stearns hedge fund manager – who goes on trial for fraud in a New York court this week – had a habit of recording his inner-most thoughts in emails sent to himself on a private Google Mail account.
"I am going to use this to keep my diary," he wrote. "I didn't want to use my work email any more."
In words never intended for public consumption, Tannin wrote of his worries about becoming dependant on an antidepressant, Wellbutrin, and a stress medication, Lorazapan, to cope with concern about the performance of his fund. He expressed satisfaction at earning close to $2m (£1.3m) in a year but alluded to a "religious crisis" and complained about "schlepping the kids around from place to place" during a holiday in London.
As his confidence in his money-making panache began to falter, Tannin pinpointed a meeting in 2006 when he realised that his Bear Stearns fund faced potential trouble: "I had a wave of fear set over me – that the Fund couldn't be run in the way that I was 'hoping'. And that it was going to subject investors to 'blow up risk'."
Tannin and his boss, Ralph Cioffi, ran two funds holding $1.4bn of clients' funds that collapsed in July 2007, an event widely viewed as the first clear signal of America's sub-prime mortgage crisis and the global credit crunch. The meltdown of these funds sparked a chain of events that contributed to the demise of Bear Stearns, an 85-year-old Wall Street institution, in early 2008. They have been charged by US prosecutors with defrauding customers by hiding the true condition of investments as prospects steadily darkened.
The first high-rolling financiers to face criminal action arising from the financial crisis, Cioffi and Tannin have become unwitting poster boys for perceived arrogance, recklessness and irresponsibility on Wall Street. Frustrated at not seeing higher-ranking bank bosses clapped in irons, the public and the US media are watching keenly. ...
Former Bear Stearns hedge fund manager Matthew Tannin's private jottings show concerns about 'blow up risk' to investors
Andrew Clark in New York
guardian.co.uk, Sunday 11 October 2009
They are scribblings that may come back to haunt Matthew Tannin. The former high-flying Bear Stearns hedge fund manager – who goes on trial for fraud in a New York court this week – had a habit of recording his inner-most thoughts in emails sent to himself on a private Google Mail account.
"I am going to use this to keep my diary," he wrote. "I didn't want to use my work email any more."
In words never intended for public consumption, Tannin wrote of his worries about becoming dependant on an antidepressant, Wellbutrin, and a stress medication, Lorazapan, to cope with concern about the performance of his fund. He expressed satisfaction at earning close to $2m (£1.3m) in a year but alluded to a "religious crisis" and complained about "schlepping the kids around from place to place" during a holiday in London.
As his confidence in his money-making panache began to falter, Tannin pinpointed a meeting in 2006 when he realised that his Bear Stearns fund faced potential trouble: "I had a wave of fear set over me – that the Fund couldn't be run in the way that I was 'hoping'. And that it was going to subject investors to 'blow up risk'."
Tannin and his boss, Ralph Cioffi, ran two funds holding $1.4bn of clients' funds that collapsed in July 2007, an event widely viewed as the first clear signal of America's sub-prime mortgage crisis and the global credit crunch. The meltdown of these funds sparked a chain of events that contributed to the demise of Bear Stearns, an 85-year-old Wall Street institution, in early 2008. They have been charged by US prosecutors with defrauding customers by hiding the true condition of investments as prospects steadily darkened.
The first high-rolling financiers to face criminal action arising from the financial crisis, Cioffi and Tannin have become unwitting poster boys for perceived arrogance, recklessness and irresponsibility on Wall Street. Frustrated at not seeing higher-ranking bank bosses clapped in irons, the public and the US media are watching keenly. ...
The International Monetary Fund today threw its weight behind a new tax on the global financial sector designed to limit risky speculative behaviour and help the world's poorest countries.
Dominique Strauss-Kahn, the IMF's managing director, said banks and other big financial institutions were responsible for systemic risk and it was only right that they provided resources to mitigate those threats to the world economy.
While ruling out a so-called Tobin tax – a levy on foreign currency transactions proposed by the American economist James Tobin in the early 1970s – Strauss-Kahn said a high-level IMF team would work on proposals in the coming months.
"The very simple idea of putting a tax on transactions won't work for many technical reasons," Strauss-Kahn said at a press conference held in the run-up to the IMF's annual meeting in Istanbul next week.
"On the other hand, considering the financial sector is creating a lot of systemic risks for the global economy, it is fair that the sector pay some part of its resources to mitigate risks it is creating itself." ...
Hmmm. This is a lot like seeing Lucifer giving orders to Beelzebub, innit.
Dominique Strauss-Kahn, the IMF's managing director, said banks and other big financial institutions were responsible for systemic risk and it was only right that they provided resources to mitigate those threats to the world economy.
While ruling out a so-called Tobin tax – a levy on foreign currency transactions proposed by the American economist James Tobin in the early 1970s – Strauss-Kahn said a high-level IMF team would work on proposals in the coming months.
"The very simple idea of putting a tax on transactions won't work for many technical reasons," Strauss-Kahn said at a press conference held in the run-up to the IMF's annual meeting in Istanbul next week.
"On the other hand, considering the financial sector is creating a lot of systemic risks for the global economy, it is fair that the sector pay some part of its resources to mitigate risks it is creating itself." ...
Hmmm. This is a lot like seeing Lucifer giving orders to Beelzebub, innit.
Brown intervenes in bank charges standoff
PM tells bankers to settle long-running court battle over refunds for excessive charges 'without further delay' ...
PM tells bankers to settle long-running court battle over refunds for excessive charges 'without further delay' ...
A secretive Russian billionaire has abandoned his libel case against the Economist magazine after it suggested he had benefited from his close relationship with Vladimir Putin, Russia's former president turned prime minister.
Gennady Timchenko said recently that while he and Putin knew one another, their relationship was one of casual acquaintanceship rather than friendship.
He agreed a settlement yesterday with the UK magazine in the high court in London.
Timchenko had hired the high-profile libel firm Schillings. Speaking in March, his aides said the oil tycoon was determined to go ahead with the case and had "nothing to hide".
According to the Russian newspaper Vedomosti, Timchenko's decision to sue in Britain could have forced him to reveal potentially embarrassing details of his private bank accounts and the ownership and asset structure of his Swiss-based oil trading company, Gunvor. ...
Gennady Timchenko said recently that while he and Putin knew one another, their relationship was one of casual acquaintanceship rather than friendship.
He agreed a settlement yesterday with the UK magazine in the high court in London.
Timchenko had hired the high-profile libel firm Schillings. Speaking in March, his aides said the oil tycoon was determined to go ahead with the case and had "nothing to hide".
According to the Russian newspaper Vedomosti, Timchenko's decision to sue in Britain could have forced him to reveal potentially embarrassing details of his private bank accounts and the ownership and asset structure of his Swiss-based oil trading company, Gunvor. ...
July 8, 2009
Bankers to face draconian pay veto
Suzy Jagger, Politics and Business Correspondent
City regulators will be able to veto the pay deals of bank executives under new proposals set out today by Alistair Darling.
Addressing MPs in the House of Commons, the Chancellor said that the Financial Services Authority (FSA) will monitor the structure of bankers' remuneration packages and produce a report on them every year.
Should the City watchdog find that an executive's pay encourages the financier to take risky investment decisions, it can order the lender to put aside more capital in reserve. Any such requirement would reduce a bank's profitability and, the Treasury believes, act as an effective veto.
"We need a change of culture in the banks and their boardrooms, with pay practices that are focused on long-term stability and not short-term profit," Mr Darling said. ...
Bankers to face draconian pay veto
Suzy Jagger, Politics and Business Correspondent
City regulators will be able to veto the pay deals of bank executives under new proposals set out today by Alistair Darling.
Addressing MPs in the House of Commons, the Chancellor said that the Financial Services Authority (FSA) will monitor the structure of bankers' remuneration packages and produce a report on them every year.
Should the City watchdog find that an executive's pay encourages the financier to take risky investment decisions, it can order the lender to put aside more capital in reserve. Any such requirement would reduce a bank's profitability and, the Treasury believes, act as an effective veto.
"We need a change of culture in the banks and their boardrooms, with pay practices that are focused on long-term stability and not short-term profit," Mr Darling said. ...
Where can I "earn" a million squid in just over three months?! Sign me up!
Angry shareholders ambush the top pay bandwagon
The eruption of anger at Shell's annual meeting will also hit directors of other companies - and the institutional investors who stand accused of complacency and collusion, writes Richard Wachman
Sunday 24 May 2009
In the City, a whiff of grapeshot hangs in the air after the unleashing of one of the biggest waves of shareholder anger in recent times. The target companies include big names such as Shell, BP, RBS, Xstrata, Next, Amec and Provident Financial.
All must bear the shame of knowing that their remuneration reports have been opposed by a majority or a sizeable minority of shareholders. Once again, bosses are accused of having their snouts in the trough during a period when capitalism was coming off the rails.
The onslaught comes after politicians, regulators and public opinion identified bonuses and sky-high pay packets as one of the prime causes of the slump. By linking pay with share price performance, managers were encouraged to make foolish short-term decisions that ultimately brought the edifice of capitalism crashing down. Now there is a backlash as shareholders target excessive pay and bonuses sometimes awarded even if a company does badly or misses its performance targets.
Few would disagree that executive pay has been spiralling out of control. According to remuneration specialists, the average FTSE 100 chief executive has seen his rewards jump 125% in the past 10 years, while the heads of smaller quoted firms have seen their pay increase by 80% in the same time span. ...
The eruption of anger at Shell's annual meeting will also hit directors of other companies - and the institutional investors who stand accused of complacency and collusion, writes Richard Wachman
Sunday 24 May 2009
In the City, a whiff of grapeshot hangs in the air after the unleashing of one of the biggest waves of shareholder anger in recent times. The target companies include big names such as Shell, BP, RBS, Xstrata, Next, Amec and Provident Financial.
All must bear the shame of knowing that their remuneration reports have been opposed by a majority or a sizeable minority of shareholders. Once again, bosses are accused of having their snouts in the trough during a period when capitalism was coming off the rails.
The onslaught comes after politicians, regulators and public opinion identified bonuses and sky-high pay packets as one of the prime causes of the slump. By linking pay with share price performance, managers were encouraged to make foolish short-term decisions that ultimately brought the edifice of capitalism crashing down. Now there is a backlash as shareholders target excessive pay and bonuses sometimes awarded even if a company does badly or misses its performance targets.
Few would disagree that executive pay has been spiralling out of control. According to remuneration specialists, the average FTSE 100 chief executive has seen his rewards jump 125% in the past 10 years, while the heads of smaller quoted firms have seen their pay increase by 80% in the same time span. ...
April 25, 2009
Get thee to a miserable Swiss tax haven
Millions are losing their jobs and others having their homes repossessed. How dare the rich whine at paying more tax
Janice Turner
In Hong Kong last weekend I'd expected to find excitement and verve, some wild fusion of ancient East and Western ultra-new. Instead there was only money. No culture, no community, no green space or any space at all. Just swarming, ill-tempered, listless crowds shopping, forever shopping. As if someone had turned the Bluewater centre into a city state. Across the bay in Kowloon were only air-sucked temples to Versace ringed by men in doorways whispering “fake watch, fake bag”.
Fake city. Let the rich, so stung and outraged by this week's Budget, flee there. They'll find so much to love. Up in your £500K one-bedroom “unit” on the 43rd floor you can rise at dawn, rush to your work-pod in the sky, pile up the cash and have no human distraction beyond how to spend it. All those “international luxury brands” tax-free! And income tax at 16 per cent - if you're mug enough to pay any at all.
Hong Kong was like those other tax havens I've visited: soulless, dead-eyed. Citizenship of Andorra must be like living forever in Heathrow Terminal 3, with its filthy food, rows of strange duty-free stores where Russians pick over bling, booze, Bensons and - bizarrely - great cut-price hunks of yellow cheese. Or empty-hearted Monte Carlo, with eerie candy-coloured skyscraper canyons blocking out every inch of the lovely bay and the sunlight with it, silent but for the growl of Ferrari sports cars, where every tax-exile pensioner has the hunted, dodgy mien of a cornered war criminal. ...
Get thee to a miserable Swiss tax haven
Millions are losing their jobs and others having their homes repossessed. How dare the rich whine at paying more tax
Janice Turner
In Hong Kong last weekend I'd expected to find excitement and verve, some wild fusion of ancient East and Western ultra-new. Instead there was only money. No culture, no community, no green space or any space at all. Just swarming, ill-tempered, listless crowds shopping, forever shopping. As if someone had turned the Bluewater centre into a city state. Across the bay in Kowloon were only air-sucked temples to Versace ringed by men in doorways whispering “fake watch, fake bag”.
Fake city. Let the rich, so stung and outraged by this week's Budget, flee there. They'll find so much to love. Up in your £500K one-bedroom “unit” on the 43rd floor you can rise at dawn, rush to your work-pod in the sky, pile up the cash and have no human distraction beyond how to spend it. All those “international luxury brands” tax-free! And income tax at 16 per cent - if you're mug enough to pay any at all.
Hong Kong was like those other tax havens I've visited: soulless, dead-eyed. Citizenship of Andorra must be like living forever in Heathrow Terminal 3, with its filthy food, rows of strange duty-free stores where Russians pick over bling, booze, Bensons and - bizarrely - great cut-price hunks of yellow cheese. Or empty-hearted Monte Carlo, with eerie candy-coloured skyscraper canyons blocking out every inch of the lovely bay and the sunlight with it, silent but for the growl of Ferrari sports cars, where every tax-exile pensioner has the hunted, dodgy mien of a cornered war criminal. ...
Go get 'em, Hopey!
Internet Users Roar. Cable Giant Blinks.
April 16th, 2009 by Tim Karr
Time Warner Cable on Thursday afternoon shelved its plan to impose excessive Internet fees against those who use the Web for more than email and basic surfing.
The cable giant backed down under intense public pressure that bubbled up from the grassroots and culminated in calls by leading politicians to end the price gouging.
Time Warner Cable had been testing new Internet use penalties on people in Beaumont, Texas, and planned later this year to launch trials in Rochester, N.Y.; Austin and San Antonio, Texas; and Greensboro, N.C. If successful, Time Warner Cable execs planned to impose this cost structure upon the company’s 8.4 million broadband subscribers in 32 states.
Smothering Internet Video
The scheme would have forced consumers to pay up to $150 a month for full access to the Internet — an inflated pay-per-byte rate that the company hoped would dampen popular enthusiasm for online video watching, and stem the migration of viewers from cable television to online video sites like Hulu.com.
As justification, Time Warner Cable execs trotted out a tired argument about looming Internet brownouts that gave the impression that broadband was an evaporating commodity to be rationed at increasing costs. (A notion that holds about as much water as Exxon’s efforts to disprove global warming).
Other cable Internet providers have been paying close attention to Time Warner’s market tests with a mind to impose similar pricing penalties on their subscribers and effectively smother Internet video in the cradle.
Companies like Comcast, AT&T and Cox Communications were eager to see Time Warner’s metering trials to go well. They didn’t.
We’re Not Guinea Pigs
The company buckled under a withering barrage of negative press and consumer complaints.
Free Press activists sent more than 16,000 letters urging Congress to investigate Time Warner Cable. One grassroots group, www.StoptheCap.com, served as a clearing house for outraged customers.
Rep. Eric Massa of New York last week promised legislation to curb such ill-considered metering. And on Thursday, New York Sen. Charles Schumer came to Rochester, one of Time Warner’s test markets, in support of local opposition to the plan.
Schumer told Time Warner Cable that he didn’t want his constituents to be used as their Internet guinea pigs. By the end of his visit, the chastened cable execs announced their intention to scrap the trials. ...
April 16th, 2009 by Tim Karr
Time Warner Cable on Thursday afternoon shelved its plan to impose excessive Internet fees against those who use the Web for more than email and basic surfing.
The cable giant backed down under intense public pressure that bubbled up from the grassroots and culminated in calls by leading politicians to end the price gouging.
Time Warner Cable had been testing new Internet use penalties on people in Beaumont, Texas, and planned later this year to launch trials in Rochester, N.Y.; Austin and San Antonio, Texas; and Greensboro, N.C. If successful, Time Warner Cable execs planned to impose this cost structure upon the company’s 8.4 million broadband subscribers in 32 states.
Smothering Internet Video
The scheme would have forced consumers to pay up to $150 a month for full access to the Internet — an inflated pay-per-byte rate that the company hoped would dampen popular enthusiasm for online video watching, and stem the migration of viewers from cable television to online video sites like Hulu.com.
As justification, Time Warner Cable execs trotted out a tired argument about looming Internet brownouts that gave the impression that broadband was an evaporating commodity to be rationed at increasing costs. (A notion that holds about as much water as Exxon’s efforts to disprove global warming).
Other cable Internet providers have been paying close attention to Time Warner’s market tests with a mind to impose similar pricing penalties on their subscribers and effectively smother Internet video in the cradle.
Companies like Comcast, AT&T and Cox Communications were eager to see Time Warner’s metering trials to go well. They didn’t.
We’re Not Guinea Pigs
The company buckled under a withering barrage of negative press and consumer complaints.
Free Press activists sent more than 16,000 letters urging Congress to investigate Time Warner Cable. One grassroots group, www.StoptheCap.com, served as a clearing house for outraged customers.
Rep. Eric Massa of New York last week promised legislation to curb such ill-considered metering. And on Thursday, New York Sen. Charles Schumer came to Rochester, one of Time Warner’s test markets, in support of local opposition to the plan.
Schumer told Time Warner Cable that he didn’t want his constituents to be used as their Internet guinea pigs. By the end of his visit, the chastened cable execs announced their intention to scrap the trials. ...
Blimey! Bless yr heart, Mr Eric Massa!
That is sooooooo bay-ond tacky, Sugarplum. Y'all just cut that out naow, ya heah?
Marcy Kaptur of Ohio is the longest-serving Democratic congresswoman in U.S. history. Her district, stretching along the shore of Lake Erie from west of Cleveland to Toledo, faces an epidemic of home foreclosures and 11.5 percent unemployment. That heartland region, the Rust Belt, had its heart torn out by the North American Free Trade Agreement, with shuttered factories and struggling family farms. Kaptur led the fight in Congress against NAFTA. Now, she is recommending a radical foreclosure solution from the floor of the U.S. Congress:
“So I say to the American people, you be squatters in your own homes. Don’t you leave.”
She criticizes the bailout’s failure to protect homeowners facing foreclosure. Her advice to “squat” cleverly exploits a legal technicality within the subprime mortgage crisis. These mortgages were made, then bundled into securities and sold and resold repeatedly, by the very Wall Street banks that are now benefiting from TARP (the Troubled Asset Relief Program). The banks foreclosing on families very often can’t locate the actual loan note that binds the homeowner to the bad loan. “Produce the note,” Kaptur recommends those facing foreclosure demands of the banks.
“[P]ossession is nine-tenths of the law,” Rep. Kaptur told me. “Therefore, stay in your property. Get proper legal representation ... [if] Wall Street cannot produce the deed nor the mortgage audit trail ... you should stay in your home. It is your castle. It’s more than a piece of property. ... Most people don’t even think about getting representation, because they get a piece of paper from the bank, and they go, ‘Oh, it’s the bank,’ and they become fearful, rather than saying: ‘This is contract law. The mortgage is a contract. I am one party. There is another party. What are my legal rights under the law as a property owner?’
“If you look at the bad paper, if you look at where there’s trouble, 95 to 98 percent of the paper really has moved to five institutions: JPMorgan Chase, Bank of America, Wachovia, Citigroup and HSBC. They have this country held by the neck.”
Kaptur recommends calling the local Legal Aid Society, bar association or (888) 995-HOPE for legal assistance.
The onerous duty of physically evicting people and dragging their possessions to the curb typically falls on the local sheriff. Kaptur conditions her squatting advice, saying, “If it’s a sheriff’s eviction, if it’s reached that point, that [staying in the home] is almost impossible.” Unless the sheriff refuses to carry out the eviction, as Sheriff Warren Evans of Wayne County, Mich., has decided to do. Wayne County, [which includes] Detroit, has had more than 46,000 foreclosures in the past two years. ...
“So I say to the American people, you be squatters in your own homes. Don’t you leave.”
She criticizes the bailout’s failure to protect homeowners facing foreclosure. Her advice to “squat” cleverly exploits a legal technicality within the subprime mortgage crisis. These mortgages were made, then bundled into securities and sold and resold repeatedly, by the very Wall Street banks that are now benefiting from TARP (the Troubled Asset Relief Program). The banks foreclosing on families very often can’t locate the actual loan note that binds the homeowner to the bad loan. “Produce the note,” Kaptur recommends those facing foreclosure demands of the banks.
“[P]ossession is nine-tenths of the law,” Rep. Kaptur told me. “Therefore, stay in your property. Get proper legal representation ... [if] Wall Street cannot produce the deed nor the mortgage audit trail ... you should stay in your home. It is your castle. It’s more than a piece of property. ... Most people don’t even think about getting representation, because they get a piece of paper from the bank, and they go, ‘Oh, it’s the bank,’ and they become fearful, rather than saying: ‘This is contract law. The mortgage is a contract. I am one party. There is another party. What are my legal rights under the law as a property owner?’
“If you look at the bad paper, if you look at where there’s trouble, 95 to 98 percent of the paper really has moved to five institutions: JPMorgan Chase, Bank of America, Wachovia, Citigroup and HSBC. They have this country held by the neck.”
Kaptur recommends calling the local Legal Aid Society, bar association or (888) 995-HOPE for legal assistance.
The onerous duty of physically evicting people and dragging their possessions to the curb typically falls on the local sheriff. Kaptur conditions her squatting advice, saying, “If it’s a sheriff’s eviction, if it’s reached that point, that [staying in the home] is almost impossible.” Unless the sheriff refuses to carry out the eviction, as Sheriff Warren Evans of Wayne County, Mich., has decided to do. Wayne County, [which includes] Detroit, has had more than 46,000 foreclosures in the past two years. ...
Charge the utility company with murder.
Levin livid over reported Citigroup jet purchase
By TODD SPANGLER
FREE PRESS WASHINGTON STAFF
January 26, 2009
WASHINGTON – Sen. Carl Levin of Michigan is beside himself over a report that Citigroup is buying a $50-million corporate jet considering that when the heads of Detroit’s automakers came to Washington in private jets to ask for aid they got blasted for it.
The federal government, after all, is into Citigroup for $50 billion under its package to rescue financial firms. Eventually — thanks to President George W. Bush — General Motors and Chrysler got a line on $17.4 billion, but only after agreeing to give up their corporate jets. (Chrysler didn’t own one, but now doesn’t even charter or lease one.)
No such requirement for Citigroup — or the other financial institutions getting money under the $700 billion Wall Street rescue plan — exists.
The New York Post, citing “a source familiar with the deal,” reported today that Citigroup executives authorized the purchase of a new Dassault Falcon 7X, which, according to the Dassault’s sales literature, seats 12 in leather seats and sofas and includes a custom entertainment center.
Citigroup decline to speak to the Post and didn’t immediately return a call to the Free Press today either. ...
By TODD SPANGLER
FREE PRESS WASHINGTON STAFF
January 26, 2009
WASHINGTON – Sen. Carl Levin of Michigan is beside himself over a report that Citigroup is buying a $50-million corporate jet considering that when the heads of Detroit’s automakers came to Washington in private jets to ask for aid they got blasted for it.
The federal government, after all, is into Citigroup for $50 billion under its package to rescue financial firms. Eventually — thanks to President George W. Bush — General Motors and Chrysler got a line on $17.4 billion, but only after agreeing to give up their corporate jets. (Chrysler didn’t own one, but now doesn’t even charter or lease one.)
No such requirement for Citigroup — or the other financial institutions getting money under the $700 billion Wall Street rescue plan — exists.
The New York Post, citing “a source familiar with the deal,” reported today that Citigroup executives authorized the purchase of a new Dassault Falcon 7X, which, according to the Dassault’s sales literature, seats 12 in leather seats and sofas and includes a custom entertainment center.
Citigroup decline to speak to the Post and didn’t immediately return a call to the Free Press today either. ...
Offshore tax shelters much too inviting
American companies, especially those receiving federal aid, should be expected to pay a fair share of U.S. taxes
BY RON DZWONKOWSKI
FREE PRESS COLUMNIST
January 25, 2009
Pretty well buried under all the hoopla of President Barack Obama's inaugural was a report last week that could help the U.S. Treasury tame its way-out-of-whack balance sheet. The Government Accountability Office report looked at U.S. companies that stash money in foreign countries to shelter them from U.S. taxes.
U.S. Sen. Carl Levin, D-Mich., who requested the report along with fellow Democratic Sen. Byron Dorgan of North Dakota, estimates that such companies are avoiding $100 billion in U.S. taxes. And many of them -- including Bank of America and Citigroup -- have lately been on the receiving end of billions of dollars in federal bailout money or fat federal government contracts.
Now, $100 billion may seem like pocket change when you're running a trillion-dollar budget deficit and carrying a $10.4-trillion national debt. But you know, every billion counts when you are trying to spend your way out of a recession. Unfortunately, this offshoring of taxable assets is entirely legal, which Levin and Dorgan hope to do something about.
Common sense, not to mention common decency, would seem to dictate that if you take tax dollars you also pay your full share of tax bills.
According to the report by the GAO, which is the congressional watchdog agency on government programs and spending, 83 of the 100 largest publicly traded U.S. corporations and 63 of the 100 largest publicly traded companies with government contracts have subsidiaries in places that are regarded as tax havens. There is no official definition of such places, but they have common characteristics, such as no or low local taxes, political stability, laws that keep financial dealings secret, and a tendency to promote themselves in the right circles as great places to keep your money out of reach of Uncle Sam or other tax-grabbing governments. ...
American companies, especially those receiving federal aid, should be expected to pay a fair share of U.S. taxes
BY RON DZWONKOWSKI
FREE PRESS COLUMNIST
January 25, 2009
Pretty well buried under all the hoopla of President Barack Obama's inaugural was a report last week that could help the U.S. Treasury tame its way-out-of-whack balance sheet. The Government Accountability Office report looked at U.S. companies that stash money in foreign countries to shelter them from U.S. taxes.
U.S. Sen. Carl Levin, D-Mich., who requested the report along with fellow Democratic Sen. Byron Dorgan of North Dakota, estimates that such companies are avoiding $100 billion in U.S. taxes. And many of them -- including Bank of America and Citigroup -- have lately been on the receiving end of billions of dollars in federal bailout money or fat federal government contracts.
Now, $100 billion may seem like pocket change when you're running a trillion-dollar budget deficit and carrying a $10.4-trillion national debt. But you know, every billion counts when you are trying to spend your way out of a recession. Unfortunately, this offshoring of taxable assets is entirely legal, which Levin and Dorgan hope to do something about.
Common sense, not to mention common decency, would seem to dictate that if you take tax dollars you also pay your full share of tax bills.
According to the report by the GAO, which is the congressional watchdog agency on government programs and spending, 83 of the 100 largest publicly traded U.S. corporations and 63 of the 100 largest publicly traded companies with government contracts have subsidiaries in places that are regarded as tax havens. There is no official definition of such places, but they have common characteristics, such as no or low local taxes, political stability, laws that keep financial dealings secret, and a tendency to promote themselves in the right circles as great places to keep your money out of reach of Uncle Sam or other tax-grabbing governments. ...
Lehman's Fuld sold Florida mansion to wife for $100
Mon Jan 26, 2009
NEW YORK (Reuters) - Fallen Lehman Brothers Chief Executive Richard Fuld sold his $13.3 million (£9.8 million) mansion to his wife for just $100 (£73) last November, according to Florida real estate records.
The 62-year old executive, who could face civil lawsuits after overseeing the storied investment bank's collapse into Chapter 11 proceedings last September, transferred ownership of the 3.3 acres seaside home to Kathleen Fuld on November 10, records show.
The couple had jointly bought the home for $13.75 million in March 2004, as first reported by Cityfile.com.
Fuld has been blamed for Lehman's collapse on September 15 after it was weighed down by bad assets leading to the largest-ever U.S. bankruptcy when it was unable to find a buyer to come to its rescue.
He was widely criticized for not acting quickly enough to save the 158-year old bank. ...
Mon Jan 26, 2009
NEW YORK (Reuters) - Fallen Lehman Brothers Chief Executive Richard Fuld sold his $13.3 million (£9.8 million) mansion to his wife for just $100 (£73) last November, according to Florida real estate records.
The 62-year old executive, who could face civil lawsuits after overseeing the storied investment bank's collapse into Chapter 11 proceedings last September, transferred ownership of the 3.3 acres seaside home to Kathleen Fuld on November 10, records show.
The couple had jointly bought the home for $13.75 million in March 2004, as first reported by Cityfile.com.
Fuld has been blamed for Lehman's collapse on September 15 after it was weighed down by bad assets leading to the largest-ever U.S. bankruptcy when it was unable to find a buyer to come to its rescue.
He was widely criticized for not acting quickly enough to save the 158-year old bank. ...
January 25, 2009
MPs probe bank auditors
Iain Dey
THE government was under pressure last night to investigate the role of auditors in the collapse of British banks, after a Sunday Times investigation into fees paid to the “big four” accountancy firms.
The four banks that are expected to sign up to the government’s controversial toxic-asset-protection scheme have paid almost £650m in fees to their auditors since 2000.
Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays have paid their auditors almost as much for “other services” as they have for their official role in checking the books.
The findings resurrected cross-party calls for a probe into the relationships between auditors and their clients. ...
MPs probe bank auditors
Iain Dey
THE government was under pressure last night to investigate the role of auditors in the collapse of British banks, after a Sunday Times investigation into fees paid to the “big four” accountancy firms.
The four banks that are expected to sign up to the government’s controversial toxic-asset-protection scheme have paid almost £650m in fees to their auditors since 2000.
Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays have paid their auditors almost as much for “other services” as they have for their official role in checking the books.
The findings resurrected cross-party calls for a probe into the relationships between auditors and their clients. ...
January 25, 2009
Madoff’s UK investors set to sue
Robert Watts
UK investors are planning legal action against HSBC, UBS, Barclays and Nicola Horlick’s Bramdean fund over advice received before the Bernard Madoff $50 billion (£36.8 billion) investment scandal.
One of the British victims had £36m invested in Madoff funds, according to a lawyer acting for the claimants.
Ten wealthy investors have approached the law firm Edwin Coe with a view to suing bankers, fund managers and other intermediaries for the full value of the money they have lost in the Madoff collapse.
The 10 claimants are said to include some of Britain’s richest people, with combined losses of about £87m. While their identities remain shrouded in secrecy, it is understood that most are entrepreneurs who amassed their fortunes by selling their businesses. ...
Madoff’s UK investors set to sue
Robert Watts
UK investors are planning legal action against HSBC, UBS, Barclays and Nicola Horlick’s Bramdean fund over advice received before the Bernard Madoff $50 billion (£36.8 billion) investment scandal.
One of the British victims had £36m invested in Madoff funds, according to a lawyer acting for the claimants.
Ten wealthy investors have approached the law firm Edwin Coe with a view to suing bankers, fund managers and other intermediaries for the full value of the money they have lost in the Madoff collapse.
The 10 claimants are said to include some of Britain’s richest people, with combined losses of about £87m. While their identities remain shrouded in secrecy, it is understood that most are entrepreneurs who amassed their fortunes by selling their businesses. ...
... consider the strange story of Harry Markopolos. Mr. Markopolos is the former investment officer with Rampart Investment Management in Boston who, for nine years, tried to explain to the Securities and Exchange Commission that Bernard L. Madoff couldn’t be anything other than a fraud. Mr. Madoff’s investment performance, given his stated strategy, was not merely improbable but mathematically impossible. And so, Mr. Markopolos reasoned, Bernard Madoff must be doing something other than what he said he was doing.
In his devastatingly persuasive 17-page letter to the S.E.C., Mr. Markopolos saw two possible scenarios. In the “Unlikely” scenario: Mr. Madoff, who acted as a broker as well as an investor, was “front-running” his brokerage customers. A customer might submit an order to Madoff Securities to buy shares in I.B.M. at a certain price, for example, and Madoff Securities instantly would buy I.B.M. shares for its own portfolio ahead of the customer order. If I.B.M.’s shares rose, Mr. Madoff kept them; if they fell he fobbed them off onto the poor customer.
In the “Highly Likely” scenario, wrote Mr. Markopolos, “Madoff Securities is the world’s largest Ponzi Scheme.” Which, as we now know, it was.
Harry Markopolos sent his report to the S.E.C. on Nov. 7, 2005 — more than three years before Mr. Madoff was finally exposed — but he had been trying to explain the fraud to them since 1999. He had no direct financial interest in exposing Mr. Madoff — he wasn’t an unhappy investor or a disgruntled employee. There was no way to short shares in Madoff Securities, and so Mr. Markopolos could not have made money directly from Mr. Madoff’s failure. To judge from his letter, Harry Markopolos anticipated mainly downsides for himself: he declined to put his name on it for fear of what might happen to him and his family if anyone found out he had written it. And yet the S.E.C.’s cursory investigation of Mr. Madoff pronounced him free of fraud. ...
In his devastatingly persuasive 17-page letter to the S.E.C., Mr. Markopolos saw two possible scenarios. In the “Unlikely” scenario: Mr. Madoff, who acted as a broker as well as an investor, was “front-running” his brokerage customers. A customer might submit an order to Madoff Securities to buy shares in I.B.M. at a certain price, for example, and Madoff Securities instantly would buy I.B.M. shares for its own portfolio ahead of the customer order. If I.B.M.’s shares rose, Mr. Madoff kept them; if they fell he fobbed them off onto the poor customer.
In the “Highly Likely” scenario, wrote Mr. Markopolos, “Madoff Securities is the world’s largest Ponzi Scheme.” Which, as we now know, it was.
Harry Markopolos sent his report to the S.E.C. on Nov. 7, 2005 — more than three years before Mr. Madoff was finally exposed — but he had been trying to explain the fraud to them since 1999. He had no direct financial interest in exposing Mr. Madoff — he wasn’t an unhappy investor or a disgruntled employee. There was no way to short shares in Madoff Securities, and so Mr. Markopolos could not have made money directly from Mr. Madoff’s failure. To judge from his letter, Harry Markopolos anticipated mainly downsides for himself: he declined to put his name on it for fear of what might happen to him and his family if anyone found out he had written it. And yet the S.E.C.’s cursory investigation of Mr. Madoff pronounced him free of fraud. ...
If pat robertson's a good christian, I'm a millionaire whom scrabble adores.