Bank Of America Is Right

I wholeheartedly agree with the lawyers representing one of the biggest banks in America. Disclosing the bonuses of Merrill Lynch employees preceding BoA's acquisition will cause "grave and irreparable harm" if the information gets out to the public.

Guess what?

I can't wait to see all of those details disclosed, down to the very last penny.

Does that mean Bank of America will fail? No, I doubt that will happen at this date, the government Fed has invested too much money in them (like they have in AIG) to let the megalithic bank go down in flames.

The "harm" will come in other ways though. With Cuomo's help as New York's Attorney General, the insatiable and devastating greed of these Wall Street houses will continue to be in the news. While Main Street suffers, those living on it will be able to see the wealthy protest having their dirty laundry aired out in public. It will harm their reputations and deservedly so.

Whatever these people are guilty of, the more that we know about it, the better we'll be in the long run. Unless we get full accountability then nothing systemic will change. Without justice, there will just be another bubble down the line and this catastrophic economic environment will be recreated again.

There was a few minutes dedicated to this issue on Bill Maher's show last night. One of the panelists, I believe the CNBC anchor, was saying that the rich have suffered, with trillions in assets having vanished over the last few months. Maher, ever the brilliant debater, countered with the fact that the rich are not suffering, it is their bank statements that are hurting. Other Americans, the ones that are foregoing three meals a day to make ends meet, those are the people that are truly suffering in this fiscal crisis.

We need to get our priorities straight in this country. I think President Obama is trying to guide us out of the greed and self-serving behavior of the last eight thirty years since we heard how greed is good under Reagan. Though as Obama said, it can't be done by him alone. So by exposing these titans of Wall Street who pillaged their companies before they collapsed, we are serving the greater good for a change. And if that causes these people grave and irreperable harm....well, they did it to themselves.

Cuomo Remains Tough As NY's Attorney General

While Paterson's popularity plummets, Andrew Cuomo's stock continues to soar. The difference is attributable to what each politician is doing. The former can't keep his agenda straight, with budget woes, being off-message, inability to control his staff and starting off with the Senate appointment saga, looks like the typically secretive Albany pol. Meanwhile Cuomo is busting financial bad guys.

From The Huffington Post:

Some of the top earners at Merrill Lynch who were given $209 million in 2008 were subpoenaed by New York State Attorney General Andrew Cuomo on Wednesday, a source close to the investigation tells the Huffington Post.

The subpoenas were served on the seven executives - including Andrea Orcel, the firm's top investment banker (who was paid $33.8 million in cash and stock in 2008), trading chief Thomas Montag and former head of strategy Peter Kraus, who were named in a story in the Wall Street Journal on Wednesday, according to the source.

The subpoenas compel the executives, some of whom currently work at Bank of America, to come in and discuss their bonuses, who they communicated with regarding their bonuses, when they got their bonuses and other relevant information, says the source.

He's forcing these crooks out into the opening with their books in hand. It seems that these companies protest and then Cuomo swoops in and while not giving these people the jailtime they deserve yet, certainly working hard to expose what they've been up to and showing how they screwed the economy for their own personal gain.

The news must be bittersweet for Paterson, as catching corporate criminals that caused the state's budget woes is a great thing, but his competition in the Democratic primary is the one getting all the credit. Of course, no one knows how Cuomo would be in the Executive's chair. The last time we had a kick-ass, take-no-names Attorney General become governor....well, we all know how Paterson got this gig anyhow. I'm not saying that Cuomo will be like Paterson's predecessor, but the trappings of each office are remarkably different. It almost seems that it's better to be the A.G. than the Gov.

Cuomo Sets His Sights On Ex-Merrill Lynch Execs

New York pundits have been busy speculating about Andrew Cuomo's chances for a bid to oust Paterson in next year's primaries. Yet the Attorney General is concerning himself with more pressing matters, such as corporate greed. He's been doing going after crooked Wall Streeters for a long time now and especially so in these last few months. The financial industry is rife with greedy traders, corrupt bankers and crooked, so-called government regulators. Cuomo is out to get them all, including those who were at Merrill Lynch in their waning days. In the middle of his bullseye are four executives who swiped $121 million in bonueses just before the firm was overtaken by Bank of America.

From The NY Daily News:

Attorney General Andrew Cuomo for the past month has been examining the highly suspicious timing of the last-minute Merrill handouts.

In all, Merrill doled out $3.6 billion in bonuses just days before Bank of America finalized its deal to buy the collapsing firm - with the help of $45 billion in taxpayer money.

Cuomo presented his initial findings Tuesday to Rep. Barney Frank (D-Mass.), whose House Financial Services Committee holds hearings Wednesday in Washington on how banks are spending bailout funds.

"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," Cuomo wrote to Frank.

As the article notes, Cuomo is well prepared to battle these crooks, with subpoenas coming to the odious John Thain and Steele Alphin for starters. Now, what Barney Frank will do with this information is anyone's guess. Frank isn't stupid, he should have known that giving bailout money to these companies was going to be lost somehow, especially since TARP was written with practically no oversight. Perhaps this will shake Congressional leaders enough to wake them up to what is going on up in New York. One thing is for sure though, Cuomo will keep shaking them with the evidence he finds.

How Bailout Money Is Spent In NYC

The greed of major players on Wall Street is never ending. Peter Kraus spent a whopping three months at the now defunct Merrill Lynch. His bonus for being there? $25 million. Yes, that's right, though the number doesn't even cause my jaw to drop anymore, just a little lump in my soul. So what, praytell happened with all that money? Well, it got spent right here in Manhattan.

From The Real Deal:

Investment advisor Carl Spielvogel and his wife Barbaralee Diamonstein-Spielvogel sold their cooperative apartment at 720 Park Avenue, at the corner of 70th Street, for $36.63 million, nearly twice what they paid for it two years ago.

The sale of the seventh-floor unit closed December 18, according to property records posted Friday.

The buyer was identified as Jill Kraus, wife of Peter Kraus, a former executive vice president at Merrill Lynch who reportedly received a $25 million bonus after working at the firm for three months this year. However, only her name was listed on the property report. He was hired as chairman and CEO of AllianceBernstein on December 19. A Merrill Lynch spokeswoman would not comment on his pay package.

Nothing like buying a $37 million dollar Park Ave. apartment before starting another job. Maybe if he leaves before April he can get another $10 million and buy a nice pied-a-terré on Central Park West or something.

There's a line from the documentary "Corporation" that fits best here. That the ex-carpet corporation guy said one day all people like this will go to jail. The example of Peter Kraus is certainly applicable here.

Now That's What I Call Greedy!

At the end of the year, the very few and fortunate among us receive holiday bonuses as a mark of a job well done and an acknowledgment that an employee means something special to the company. Then there is Wall Street. The Street has given out hundreds of billions in bonuses in the last few years, but in 2008 they will be trimmed by quite a bit, considering the mess that the top executives greed has helped cause. Current fiscal crisis and looming economic depression aside, some people's egos and not letting any kind of humility get in the way of the big fat bonus check they think they deserve.

From The Wall Street Journal:

Merrill Lynch & Co. chief John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered securities firm's compensation committee is resisting his request, according to people familiar with the situation.

The committee and full board are scheduled to meet Monday to hear Mr. Thain's formal bonus recommendations for himself and other senior executives of the New York company. No decision has been reached, and it isn't known what Mr. Thain will recommend, but the compensation committee is leaning toward denying the executives bonuses for this year, these people said.

Now as many know, Merrill Lynch was bought up for a pittance of what it was formerly worth, saved by the good graces of Bank of America back in September when the house of cards started to rapidly come down. The reduction in net assets for the former Financial District and world financial icon was trampled on by people like Thain, yet he wants an eight-figure reward for his deeds. I'm glad that the compensation committee is resisting that request, but really, they should be laughing his negligent and crooked ass out of the room, along with every last one of these greedy, self-absorbed bastards.

Paterson Readies His Budget Axe Yet Again

Sunday night was the first I had heard of the Lehman Brothers bankruptcy and Bank of America's acquisition of Merrill Lynch. One of the first things I wondered yesterday morning was when Governor Paterson would call legislators back up to Albany for more budget cuts. While Congress may act first on a stimulus package, a crisis on Wall Street can be felt far and wide but the epicenter is still New York. So what is a Governor to do that has already slashed almost $500 million from the budget?

From The Times-Union:

"I would not be surprised if the budget deficit we just cut down may skyrocket back up, and I may have to call on the Legislature to come back and grapple with it again," Paterson said Monday during an interview on the New York City-based NY1 news channel. He repeated that contention on the regional cable TV channel Capital News 9.

Paterson's remarks came during a tumultuous day on Wall Street, as the Dow Jones industrial average plunged 500 points -- its worst drop since Sept. 11, 2001 -- on the news of Lehman Brothers' bankruptcy filing, the takeover of Merrill Lynch by Bank of America, and the state's plan to devise a lifeline for American International Group insurance company.

The upheaval will likely mean mass layoffs and a drop in state income tax revenues. Officials say the results of their midyear financial report, usually finished in late October, will dictate whether lawmakers need to impose another round of cuts.

Legislative leaders took a wait-and-see attitude toward another crisis session.

The wait-and-see won't last long and Albany could become a center of chaos as early as next month, before election day. Paterson talked about tax hikes as well as budget cuts, so that is better than this past special session where it was all about cutting services from the Republican Senate and the Governor's office.

As TU points out, this upcoming session should be even more intriguing than the last, as voters across New York will decide if control of the State Senate swings to the Democrats or not. Only two seats will make a difference, that is if you don't count the DINOs in there at the moment. Legislators definitely have big decisions as they face their constituents in a few weeks and will have to judge whether they balance the budget by raising taxes or cutting programs, because revenues are going to drop even further thanks to Wall Street.

Barack Obama Has The Right Message For This Horrific Financial Day

Senator John McCain thinks that the economy is fundamentally sound and that we should keep dropping taxes for the rich while wasting ten billion dollars a month (and lives) in Iraq. Obviously this has not been working as evidenced by our mounting national and personal debt. Today we are starting to see the beginning of the blowback for these conservative policies with large and storied financial institutions falling like a house of cards. Unlike McCain who is advocating for more of the same, Barack Obama has exactly the right message:

This morning we woke up to some very serious and troubling news from Wall Street.

The situation with Lehman Brothers and other financial institutions is the latest in a wave of crises that are generating enormous uncertainty about the future of our financial markets. This turmoil is a major threat to our economy and its ability to create good-paying jobs and help working Americans pay their bills, save for their future, and make their mortgage payments.

The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren’t minding the store. Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression.

I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. It’s a philosophy we’ve had for the last eight years – one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else. It’s a philosophy that says even common-sense regulations are unnecessary and unwise, and one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crises.

Well now, instead of prosperity trickling down, the pain has trickled up – from the struggles of hardworking Americans on Main Street to the largest firms of Wall Street.

This country can’t afford another four years of this failed philosophy. For years, I have consistently called for modernizing the rules of the road to suit a 21st century market – rules that would protect American investors and consumers. And I’ve called for policies that grow our economy and our middle-class together. That is the change I am calling for in this campaign, and that is the change I will bring as President.

Change isn't just an empty slogan for politicians to throw around while their policies are meant to keep the status quo going. McCain can say the word "change" all he wants but his actions show he wants the rich to get richer at the expense of the poor. Barack Obama wants to take us in a different direction than the one we've been heading in for the last eight years, so for the next fifty days we must work to get him in the White House in order to start the ball rolling.

Greenspan Laments Faltering Economy He Created And McCain's Wish To Continue It

Alan Greenspan rightly slammed McCain for his proposal to lower taxes again for the rich while not reducing spending. It is just idiotic to keep borrowing money from other countries at the rate that we do and not expect dire consequences to our market. Now that "Black Monday" is upon us and European markets are already off by five percent, we are about to get a taste of what McCain wants to continue.

From The Huffington Post:

Former Federal Reserve Chairman Alan Greenspan offered a woeful outlook of America's economic situation on Sunday, saying the crisis with the country's financial institutions was as dire as he had ever seen in his long career, and predicting that one or more of those institutions would likely collapse in the near future.

"Oh, by far," Greenspan said, when asked if the situation was the worst he had seen in his career. "There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system."[...]

In light of these dynamics, Greenspan noted that the government was left with tough decisions: which institutions are "so fundamental to the functioning" of society that they demanded a federal safety net? Earlier in the week, the former fed chairman noted that such choses extended to tax policy as well. In an interview with Bloomberg Television, Greenspan argued that the country couldn't afford the tax cuts being proposed by John McCain without an equally massive reduction in spending.

"I'm not in favor of financing tax cuts with borrowed money," he said. "I always have tied tax cuts to spending."

Now those comments are well and good now, but Greenspan did not admit to all the trouble he helped create throughout his tenure as Federal Reserve Chairman. Entire websites are dedicated to chronicling his failure to guide our economy away from exactly what he is decrying now. We've been borrowing for far too long and now multiple factors are helping take down an Investment Bank institution that has stood on Wall Street since 1850. The same factors led to Merrill Lynch selling itself to Bank of America and now Washington Mutual threats of going under as well.

We are in a serious economic crisis and any Republican (like McCain) that says the fundamentals are strong have no right to be near any levers of power that can affect the teetering system. The rich can always ride out downturns like this, but they don't give a shit about the poor...don't expect McCain to be any different. As for Greenspan, he helped start this mess so for anyone to be listening to him without a skeptical ear is just beyond absurd.