Category Archives: Hedge Funds

My Advice to the Occupy Wall Street Protesters

Matt Taibbi

Rolling Stone

October 27, 2011

I’ve been down to “Occupy Wall Street” twice now, and I love it. The protests building at Liberty Square and spreading over Lower Manhattan are a great thing, the logical answer to the Tea Party and a long-overdue middle finger to the financial elite. The protesters picked the right target and, through their refusal to disband after just one day, the right tactic, showing the public at large that the movement against Wall Street has stamina, resolve and growing popular appeal.

But… there’s a but. And for me this is a deeply personal thing, because this issue of how to combat Wall Street corruption has consumed my life for years now, and it’s hard for me not to see where Occupy Wall Street could be better and more dangerous. I’m guessing, for instance, that the banks were secretly thrilled in the early going of the protests, sure they’d won round one of the messaging war.

Why? Because after a decade of unparalleled thievery and corruption, with tens of millions entering the ranks of the hungry thanks to artificially inflated commodity prices, and millions more displaced from their homes by corruption in the mortgage markets, the headline from the first week of protests against the financial-services sector was an old cop macing a quartet of college girls.

That, to me, speaks volumes about the primary challenge of opposing the 50-headed hydra of Wall Street corruption, which is that it’s extremely difficult to explain the crimes of the modern financial elite in a simple visual. The essence of this particular sort of oligarchic power is its complexity and day-to-day invisibility: Its worst crimes, from bribery and insider trading and market manipulation, to backroom dominance of government and the usurping of the regulatory structure from within, simply can’t be seen by the public or put on TV. There just isn’t going to be an iconic “Running Girl” photo with Goldman Sachs, Citigroup or Bank of America – just 62 million Americans with zero or negative net worth, scratching their heads and wondering where the hell all their money went and why their votes seem to count less and less each and every year.

No matter what, I’ll be supporting Occupy Wall Street. And I think the movement’s basic strategy – to build numbers and stay in the fight, rather than tying itself to any particular set of principles – makes a lot of sense early on. But the time is rapidly approaching when the movement is going to have to offer concrete solutions to the problems posed by Wall Street. To do that, it will need a short but powerful list of demands. There are thousands one could make, but I’d suggest focusing on five:

1. Break up the monopolies. The so-called “Too Big to Fail” financial companies – now sometimes called by the more accurate term “Systemically Dangerous Institutions” – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.

2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about. It would also deter the endless chase for instant profits through computerized insider-trading schemes like High Frequency Trading, and force Wall Street to go back to the job it’s supposed to be doing, i.e., making sober investments in job-creating businesses and watching them grow.

3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer’s own money to lobby against him. You can either suck on the public teat or influence the next presidential race, but you can’t do both. Butt out for once and let the people choose the next president and Congress.

4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break, which allows hedge-fund titans like Stevie Cohen and John Paulson to pay taxes of only 15 percent on their billions in gambling income, while ordinary Americans pay twice that for teaching kids and putting out fires. I defy any politician to stand up and defend that loophole during an election year.

5. Change the way bankers get paid. We need new laws preventing Wall Street executives from getting bonuses upfront for deals that might blow up in all of our faces later. It should be: You make a deal today, you get company stock you can redeem two or three years from now. That forces everyone to be invested in his own company’s long-term health – no more Joe Cassanos pocketing multimillion-dollar bonuses for destroying the AIGs of the world.

To quote the immortal political philosopher Matt Damon from Rounders, “The key to No Limit poker is to put a man to a decision for all his chips.” The only reason the Lloyd Blankfeins and Jamie Dimons of the world survive is that they’re never forced, by the media or anyone else, to put all their cards on the table. If Occupy Wall Street can do that – if it can speak to the millions of people the banks have driven into foreclosure and joblessness – it has a chance to build a massive grassroots movement. All it has to do is light a match in the right place, and the overwhelming public support for real reform – not later, but right now – will be there in an instant.

This story is from the October 27, 2011 issue of Rolling Stone.

Why is ABC News Chief White House Correspondent Jake Tapper Such a Complete and Utter Tool ?

T H I N K  P R O G R E S S jaketapper_-douchebag


Last week, in an appalling show of corporate greed, “a small group of speculators” sank the Obama administration’s proposed Chrysler deal for just “an extra fifteen cents on the dollar.” The selfish greed of the hedge funds may, however, have produced a good result by forcing Chrysler into the bankruptcy process. The New York Times reported on Friday, “whatever the outcome, this bit of brinkmanship — which many characterized as a game of chicken with Washington — has become yet another public relations disaster for Wall Street.” But instead, this story of corporate greed has now been turned into a right-wing attack on President Obama. Here’s how it happened in three simple steps.

Step 1: Right-Wing Radio Gives Corporate Hedge Funds A Venue To Attack Obama In an interview with Detroit-based conservative talk show host Frank Beckmann on Friday, Tom Lauria — a corporate lawyer representing the hedge funds calling themselves the Committee of Chrysler Non-Tarp Lenders — alleged that one of its members, the investment firm Perella Weinberg, was “directly threatened by the White House” if it did not cooperate with the Obama’s administration’s rescue plan. (Perella was Rahm Emanuel’s former investment partner.) Lauria claimed that Perella withdrew its opposition to the government deal because the White House threatened “that the full force of the White House press corps would destroy its reputation if it continued to fight.” (Listen here.)

Step 2: Right-Wing Pressures White House Reporters To Take Up Its Attack After the story was cooked up by right-wing hate radio, it was peddled to members of the White House press corps, at least one of whom took the bait. On his radio show on Friday, right-wing talker Mark Levin discussed Lauria’s claims against Obama, and then called on his listeners to pressure the White House press corps — specifically ABC’s Jake Tapper — to report the story:

LEVIN: Somebody needs to pursue what’s going on in the White House behind the scenes! And stop playing games and making nice! American citizens — whatever walk of life they’re in — should not be threatened by the White House! Should not be told we’re going to drag you through the mud with the White House press corps! So confident is the White House that they have the White House press corps wrapped around their little finger! Maybe Jake Tapper will take a look at this. Ask that doofus — Gibbs.

Listen here:

Levin works for the ABC Radio Networks. Tapper works for ABC News. Step 3: ABC’s Jake Tapper Picks It Up, Drudge Promotes It A day after Levin’s show aired, ABC’s White House correspondent Jake Tapper gave the right-wing attacks the platform they were looking for. Tapper reported, “A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration’s Auto Industry Task Force, threatened one of the firms.” After Tapper reported it, Drudge linked to his story and helped give it further amplification: ddrudgeauto1 Both the White House and Perella Weinberg have released statements to ABC News denying the accusations made by Tom Lauria and the right-wing echo chamber. Bottom line: the right wing has morphed a story of corporate greed into a false political attack against Obama.

Former AIG Head Hank Greenberg on CNBC With Maria Bartiromo

Former AIG Head Hank Greenberg on CNBC With Maria Bartiromo

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Rick Santelli Subtly Schooled By Dylan Ratigan

Rick Santelli Subtly Schooled By Dylan Ratigan

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The Madness of Jim Cramer – Day After Pathetic Evisceration by "Comedian"

The Madness of Jim Cramer – Day After Pathetic Evisceration by “Comedian”

Vodpod videos no longer available.

Ben Bernanke on A.I.G. March 15, 2009 [video]

What We Should Learn from Jim Cramer vs. The Daily Show’s Jon Stewart

::What We Should Learn from Jim Cramer vs. the Daily Show’s Jon Stewart::

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March 12th, 2009 by Patrick Byrne

What should we learn from the fact that “The Daily Show’s” Jon Stewart has in four evenings (1 2 3 and 4) exposed Jim Cramer in a way that, in any sane world, he would have been exposed a decade ago? To answer that, consider these associated facts: while the Jim Cramer constellation of journalists (Mitchell’s Media Mob) backed each other up while covering-up the subject of criminally abusive short selling by hedge funds to whom they were close, four channels of the media broke rank:

  1. Two years ago Bloomberg did a half-hour documentary that broke away from the Party Line;
  2. Liz Moyer at Forbes has covered the real issues fairly and diligently, and another Forbes reporter named Nathan Vardi took a good swipe at the story (”Sewer Pipes“);
  3. Rolling Out Magazine (”an UrbanStyle Weekly serving the African American community”) called me up a couple years ago and did precisely the fair, non-disorted interview of which the remainder of the New York financial media was entirely incapable;
  4. Now, “The Daily Show” has broken ranks by stating the obvious: there are journalists shilling for favored hedge funds.

Could the lesson be that the first news organizations that can break ranks with the Party Line are either fringe (”Rolling Out Magazine” and “The Daily Show”) or the properties of billionaires (Bloomberg and Forbes) who cannot be intimidated?

Perhaps someday, a journalist will look into the pressures that were brought on news organizations (e.g., on Bloomberg leading up to their running “Phantom Shares”). Just a few weeks ago I got the  story, again, from a journalist: “I was working on a story about naked short selling and Deep Capture. Then, suddenly I was stopped. It’s weird because I have been a journalist here for 9 years. I have built a great reputation with my editor, and have never had a story interfered with. But I got a couple months into this story, and suddenly I was stopped from above. I’ve never seen that happen before.” I replied, If you only knew how many times a journalist has said that to me in the last couple years….

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