Daily Archives: May 18, 2010

Ya think? Goldman Sachs clients discover that their banker is also their competitor

And doing its best to ruin them. Again, as per my previous post, what the hell are you guys doing down there? This is not the Wall Street my father, or even I worked on (and no, lest that sound like Blumenthal, let me say I never worked on Wall Street – I just trotted down there now and then to retrieve money the worst of you bad boys had taken from my clients).

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Two down

Arlen Specter tossed out on his ass. Good riddance.

From Politco. With friends like these ….

At one point, the race seemed Specter’s to lose, with sky-high name recognition in a state where he served for three decades. But he was a fixture in Washington politics at a time when that was toxic. And as primary day approached, Obama and Vice President Joe Biden — both of whom had boasted of luring the longtime Republican into the Democratic ranks last year — steered well clear of the state and Specter himself.

The White House rebuffed an 11th-hour plea from Specter for a presidential visit on his behalf. Biden was in Philadelphia Monday night to give a commencement speech but did not make a campaign appearance for his longtime friend in the Senate

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A fearful symmetry

Fake veteran stands behind Blumenthal

Harvard swim team captain and decorated Viet Nam War veteran Richard Blumenthal stacked his press conference today with other fake and phony veterans. Maybe they all went swimming afterwards? Swapped lies about their heroic deeds in ‘Nam? Tugged on each other’s puds?

And who the hell is running this man’s campaign that he would round-up discredited, exposed frauds to appear on stage with his candidate today, of all days?

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Good God – I hope we don’t need banks, because we may soon have none left

Nationwide conspiracy to defraud states. I’m a lawyer and, from that experience, a cynic, but I’ve still retained a faith that most of our bankers are honorable types. What a chump I am. But I still fear the populist backlash this kind of malfeasance is going to ignite.

West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.

They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.

California to Pennsylvania

The workings of the conspiracy — which stretched from California to Pennsylvania and included more than 200 deals involving about 160 state agencies, local governments and non- profits — can be pieced together from the Justice Department’s indictment of CDR, civil lawsuits by governments around the country, e-mails obtained by Bloomberg News and interviews with current and former bankers and public officials.

“The whole investment process was rigged across the board,” said Charlie Anderson, who retired in 2007 as head of field operations for the Internal Revenue Service’s tax-exempt bond division. “It was so commonplace that people talked about it on the phones of their employers and ignored the fact that they were being recorded.”

Anderson said he referred scores of cases to the Justice Department when he was with the IRS. He estimates that bid rigging cost taxpayers billions of dollars. Anderson said prosecutors are lining up conspirators to plead guilty and name names.

“This will go on for a long time and a lot of people will be indicted,” he said in a telephone interview.

And there’s this: what the hell is wrong with Wall Street? I really don’t understand it.

This isn’t the first time Wall Street has faced accusations of reaping excessive fees on investment deals with public officials. Goldman Sachs Group Inc., Lehman Brothers, which filed for bankruptcy in 2008, Merrill Lynch & Co. and other securities firms agreed by 2000 to pay more than $170 million to settle SEC charges that they had sold overpriced Treasury bonds to municipalities.

The so-called yield burning drove down the returns that local governments earned and trimmed required payments to the IRS. The firms neither admitted nor denied wrongdoing.

Even as the banks were settling with regulators, they devised another way to burn yield, this time by skimming money from GICs, according to the indictment, which said the conspiracy went from 1998 to at least 2006.

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One down

Rand Paul, tea party candidate, wins in a landslide.

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Jan Ivarsson, Guest cartoonist

Jan Ivarsson

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Chris Shays on his friend Blumenthal

Damning with faint praise.

HARTFORD — Former Representative Christopher Shays of Connecticut, a Republican who says he is a good friend of Richard Blumenthal’s, said in an interview Tuesday that he had watched with worry as Mr. Blumenthal gradually embellished his military record over the years.

Mr. Shays, a 10-term incumbent who lost a re-election bid in November 2008, was a conscientious objector during the Vietnam War. He said he and Mr. Blumenthal began their careers in politics at roughly the same time and frequently addressed the same groups. He recalled that early on, Mr. Blumenthal spoke humbly about his military record, rarely discussing it and always making clear that he had held only desk jobs and had not been in the line of fire, though he remained proud of having been a Marine.

“But as time went on, he would mention it more often, and Vietnam would show up,” even when Mr. Blumenthal was not speaking to veterans, Mr. Shays said.

Eventually, Mr. Shays said, he began hearing Mr. Blumenthal refer to having served in Vietnam. Mr. Shays said he assumed, wrongly, that Mr. Blumenthal had perhaps been a military lawyer there. That alone, he said, was enough for him to have had the impulse to advise Blumenthal to be careful, that people could interpret his remarks as a claim to have seen action there.

“I felt inclined to go to him and say, ‘Dick, in your service in Vietnam, you weren’t on the firing line, you don’t want to overstate that,’ ” Mr. Shays said. “I just felt like he was raising the stakes in a way that was inconsistent with what he’d said in the past. I was actually going to go up and speak to him. And I wish I had.”

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