Tag Archives: Goldman Sachs

Goldman Sachs: No 'sustainable' profit in curing diseases

Tue, 01 May 2018 14:36:02 +0000

eowyn2

When I began blogging some 10 years ago, I was a conspiracy theory innocent and, like many Americans, looked askance at conspiracy theories.

By the way, did you know that the CIA concocted the “conspiracy theorist” label for the express purpose of attacking and discrediting people who questioned the official narrative about the Kennedy assassination? (Source)

After ten years of daily blogging, which requires me to be attuned to both mainstream and alternative media, I have discovered that, alarmingly, most conspiracy theories turn out to be true.

One conspiracy theory has to do with Big Pharma. From the mouth of Goldman Sachs, the multinational investment bank and financial services company, now comes confirmation of the suspicion that the pharmaceutical industry has a vested interest not in curing diseases, but in keeping people sick.

Tae Kim reports for CNBC that an April 10, 2018 Goldman Sachs report for biotech companies, The Genome Revolution, asks if curing diseases is “a sustainable business model” for pharmaceutical companies because, unlike long-term management of diseases (“chronic therapies”), “one shot cures” don’t deliver “recurring revenue” or “sustained cash flow”.

In a note to clients, Salveen Jaswal Richte, 40, vice president of Goldman Sachs’ research division, wrote:

“The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies. While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.

For a “biotech expert,” it is interesting that Ms. Richte has only a B.S. in Biomedical Engineering (and a minor in Entrepreneurship and Management) from Johns Hopkins University. She and her husband, Mark Jason Richter, owns an apartment in New York City which they’d purchased last year for $4.58 million.

I can’t help but wonder what Salveen Richte would do if her daughter comes down with a disease for which Big Pharma refuses to develop a “one shot cure” because it’s more profitable to keep her on a lifetime regimen of drugs?

As an example of unprofitable “one shot cures,” Richter cited Gilead Sciences’ treatments for hepatitis C, which achieved cure rates of more than 90%. The company’s U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report.

Richte also points out the unprofitability of curing infectious diseases such as hepatitis C because it decreases the number of “carriers” — those infected with Hep C — who can transmit the virus to infect others:

“GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients. In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”

The report suggests three potential solutions to deliver the big bucks for biotech firms:

“Solution 1: Address large markets: Hemophilia is a $9-10bn WW market (hemophilia A, B), growing at ~6-7% annually.”

“Solution 2: Address disorders with high incidence: Spinal muscular atrophy (SMA) affects the cells (neurons) in the spinal cord, impacting the ability to walk, eat, or breathe.”

“Solution 3: Constant innovation and portfolio expansion: There are hundreds of inherited retinal diseases (genetics forms of blindness) … Pace of innovation will also play a role as future programs can offset the declining revenue trajectory of prior assets.”

@PaxNostrum tweets:

I was involved in pharmaceutical litigation against big drug companies. This, or something similar, has been said thousands of times under oath by Pharma reps and their counsel. Money is made on treatment, not cures. They would bury cures & promote treatment in a NY second.

@Fruityboots tweets:

everybody with an infectious disease let’s cough on some napkins and mail em to Goldman Sachs

H/t FOTM‘s josephbc69

See also:

~Eowyn

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Ted Cruz's undisclosed $1M loan from Goldman Sachs

Heidi and Ted Cruz, March 23, 2015, Lynchburg, VA. (Photo Paul J. Richards/AFP/Getty Images)

Heidi and Ted Cruz, March 23, 2015, Lynchburg, VA. (Photo Paul J. Richards/AFP/Getty Images)


Senator Ted Cruz’s wife, Heidi, is head of the Southwest Region in the Investment Management Division of the Wall Street investment bank Goldman Sachs, on a temporary “leave” because of Ted’s presidential campaign.

Heidi Cruz is also a former investment banker for J.P. Morgan and a “historical member” of the Council on Foreign Relations (CFR), for which she served as a member of the CFR-sponsored Independent Task Force on the Future of North America, which a North American Union. (See “Is Ted Cruz an advocate of a North American Union?“)

Although Heidi Cruz presently is on leave, she was fully working for Goldman Sachs in 2012 when Ted obtained a low-interest $1 million loan from her employer for his senatorial campaign. To top it off, Ted Cruz did not disclose the loan as he is required by law.
The New York Times reports on Jan. 13, 2016, that campaign finance reports show that in the critical weeks before the May 2012 GOP primary, Ted Cruz put “personal funds” totaling $960,000 into his Senate campaign. Two months later, shortly before a scheduled runoff election, he added more, bringing the total to $1.2 million — “which is all we had saved,” as Cruz described it in an interview.
But a review of personal financial disclosures that Cruz filed later with the Senate does not show a liquidation of assets that would have accounted for all the money he spent on his campaign. What it does show, however, is that in the first half of 2012, Ted and Heidi Cruz obtained a low-interest loan from Goldman Sachs, as well as another one from Citibank. The loans totaled $750,000 and eventually increased to $1 million before being paid down later that year. Both loans had floating interest rates around 3%, generally in line with rates available to wealthy borrowers at that time.

Neither loan appears in reports filed by Cruz’s senate campaign committee with the Federal Election Commission (FEC).

Candidates are required to disclose the source of money they borrow to finance their campaigns. Other campaigns have been investigated and fined for failing to make such disclosures, which are intended to inform voters and prevent candidates from receiving special treatment from lenders.

A spokeswoman for Cruz’s presidential campaign, Catherine Frazier, acknowledged that the loan from Goldman Sachs, drawn against the value of the Cruzes’ brokerage account, was a source of money for the Senate race, but insisted that the failure to report the loan was “inadvertent” and that there had been no attempt to hide anything. Frazier did not address whether the Citibank loan was used also for Cruz’s Senate race.

Former election commission lawyer who specializes in campaign finance law Kenneth Gross, however, disagrees.

Gross said that listing a bank loan in an annual Senate ethics report — which deals only with personal finances — would not satisfy the requirement that it be promptly disclosed to election officials during a campaign: “They’re two different reporting regimes. The law says if you get a loan for the purpose of funding a campaign, you have to show the original source of the loan, the terms of the loan and you even have to provide a copy of the loan document to the Federal Election Commission.”

Specifically, in failing to report the two bank loans to the FEC, Cruz violated:

  • 52 USC 30104 (b)(2) (6), which requires the committee of a federal candidate to disclose on a report filed “loans made by or guaranteed by the candidate”; and
  • 52 USC 30104(b)(4)(d), which requires the reporting of “repayment of loans made by or guaranteed by the candidate”.

ZeroHedge points out that someone will have to file an official complaint against Cruz, and the FEC could impose fines. But if evidence emerges that his failure to disclose the loans was ‘knowing and willful,’ he could be criminally prosecuted by the U.S. Department of Justice, according to campaign finance experts.
Aside from Ted Cruz’s dishonesty in not reporting the loans to the FEC, there is also the matter of his hypocrisy.

In 2012 when he ran for the Senate as a darling of the Tea Party, and in his current presidential campaign, Ted Cruz presents himself as a populist for the “little man,” against Wall Street bailouts and the influence of big banks in Washington. Recently, when asked about the political clout of Goldman Sachs in particular, he replied:

“Like many other players on Wall Street and big business, they seek out and get special favors from government.”

As financial analyst Martin Armstrong puts it:

The dishonesty here is that Cruz has pretended to stand against the bankers…. I am sorry. But Cruz is bought and paid for and would be in the pocket of the New York Banks no different than Hillary, Bush, or the rest of them who take money from this crowd. You do not forget to report a loan from Goldman Sachs when your wife is a managing director. Come on. How stupid do we have to be to entertain this excuse?

See also:

~Eowyn

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Wall Street owns Clintons; Goldman Sachs biggest donor

Faces of Hillary
So much for the fiction that Democrats are for the poor, the oppressed, the little guy. In truth, Democrats only use them for their votes to stay in power — in other words, as Useful Idiots.
Here’s the evidence.
The Wall Street Journal reports (via Zero Hedge) that, even before Hillary “What difference does it make?” Clinton formally declares she’s running for POTUS in 2016, the Clintons already have accumulated the most formidable war chest in the history of the United States.
To date, during two decades on the national stage through campaigns, paid speeches, and a rat’s nest of organizations advancing their political goals, Clinton Inc. has raised about $3 billion from all sources, including individual donors, corporate contributors and foreign governments.
More than $1 billion of Clinton Inc.’s war chest come from U.S. companies and industry donors, of which Wall Street financial services firms have been one of the single largest sources of money. And of those Wall Street donors, the No. 1 supporter of the Clintons — accounting for nearly $5 million in donation — is Goldman Sachs.

Clinton Inc1The WSJ concludes:
Those deep ties potentially give Mrs. Clinton a financial advantage in the 2016 presidential election, if she runs, and could bring industry donors back to the Democratic Party for the first time since Mr. Clinton left the White House. […]
Not counting about $250 million the Clinton foundation has received from foreign donors, at least 75% of the money arrived in large donations from industry sources, a category defined by federal regulators and the Center for Responsive Politics. […]
“She has the credibility among Wall Street donors that could make it likely that Wall Street moves back into the Democratic fold,” said Sam Geduldig, a Republican lobbyist and fundraiser who represents Wall Street firms.
 ~Eowyn

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Will there be a JCPenney a year from now?

Ron Johnson

Ron Johnson, the man who single-handedly destroyed JC Penney

For more than a year, FOTM has been chronicling the precipitous decline of J. C. Penney (JCP) which began when CEO Ron Johnson decided to “improve” the family store by pandering to homosexuals — hiring lesbian Ellen Degeneris as the company’s spokeswoman, and featuring lesbians and gay men as, respectively, moms and dads in its Mother’s Day and Father’s Day ads.

__________________________________________________

Earth to Ron Johnson: Gay men don’t buy their clothes from JC Penney!

__________________________________________________

Johnson’s move wasn’t smart on the grounds of simple market calculation. The plain truth is that homosexuals comprise no more than 2% of the U.S. population, according to a study by the Williams Institute, a gay and lesbian think tank at UCLA School of Law, and corroborated by none other than the U.S. Centers for Disease Control and Prevention (CDC).

Alas, more than 5 months after JCP finally gave Johnson the boot, JCP’s fortunes continue to sink. The question must now be asked:

Will there be a JCPenney a year from now?

Here are the bad signs:

1. JCP is losing even more money than a year ago

On Aug. 20, 2013, USA Today reports that JCP reported a net loss of $586 million for its second quarter — its 9th consecutive drop in quarterly revenue. The $586 million loss compares with a $147 million net loss a year ago. Same-store sales were down about 12% from the second quarter of 2012.

2. Investors are jumping out of the sinking ship

CNN reports that in late August, investor and hedge fund manager Bill Ackman who began buying JCP in October 2010 when shares were around $25 a piece, cut his losses and sold his entire stake — all 39 million shares in JCP to Citigroup. The latter then offered the shares at $12.90 each, which means Ackman took a loss of $500 million.

3. Goldman Sachs begins to talk about JCP going bankrupt

ZeroHedge reports on Sept. 24, 2013 that Goldman Sachs just wrote a report in which it laid out, in a lucid and compelling manner, why JCP is doomed although the report tried to soften the blow by saying “we believe handicapping a bankruptcy filing for JCP is premature.”

4. JCP stocks plunged to single-digits

The day after the Goldman Sachs report, on Sept. 25, 2013, as reported by ZeroHedge, JCP stocks fell 16% to single-digits.

JCP now trades sub-$10

5. Even before the cratering of JCP stocks, in early August, analyst Jon Najarian already had said J.C. Penney can’t be saved.

As reported by Jeff Macke for Yahoo, Aug. 1, 2013, OptionMonster.com’s Jon Najarian thinks a year from now J.C. Penney will be little more than a distant memory or half the size it is today.

Macke paints a stark picture:

Retail is difficult to execute but not complicated to analyze. If you turn down all the noise and walk through most of the 1,000+ J.C. Penney stores around the country, you’ll find a lot of chaos and not many customers. The most loyal Penney’s shoppers have been alienated, and the younger customers the chain so desperately courted have yet to appear.

Current CEO Mike Ullman only took back the corner office in April but there’s little evidence that he’s been able to right the ship. […] 

No retailers can survive a 30% drop in sales over the course of 2 years. Analysts are hopeful the rate of the decline in sales will stabilize by the end of the year but there’s little to suggest that new customers are coming in or the old shoppers have learned to trust JC Penney again. Liquidity and downgrades aside, J.C. Penney’s biggest problem is that customers simply don’t like what it’s become.

See FOTM’s past posts on JCPenney:

~Eowyn

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17 big banks on Moody's chopping block

Founded in 1909, Moody’s (or Moody’s Investors Service) is one of the Big Three credit rating agencies. The other two are Standard & Poor’s and Fitch Group.
On February 15, Moody’s announced a blanket review of 17 banks that operate in global capital markets.
Max Nisen and Simone Foxman report for Business Insider, June 15, 2012, that Moody’s rationale for its review is that the banks “face challenges that are not fully captured in their current ratings” — those of “more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions.” As a result, the banks’ longer term profitability and growth prospects are greatly “diminished.”
Downgrades on these major banks would have a serious financial impact on not just those banks, but on “counterparties” who have derivatives contracts with the banks.
So far, two of the 17 banks listed have been downgraded. The remaining 15 may be rated down by Moody sometime this month.
Here are the 17 banks, beginning with the two that Moody’s already  downgraded:
1. Nomura: Downgraded one notch to Baa3 on March 15.
2. Macquarie: Downgrade two to A3 on March 16.
3. Bank of America: Potential downgrading by one notch from the current Baa1 rating to Baa2. Potential damage of $3.5 billion.
4. Societe Generale: Possible downgrading by one notch from A1 to A2. Estimated collateral costs are unavailable.
5. Barclays: Possible downgrading by 2 notches from Aa3 to A1. Estimated collateral costs unavailable.
6. BNP Paribas: Possible downgrading by 2 notches from Aa3 to A1. Estimated collateral costs unavailable.
7. Citigroup: Possible downgrading by 2 notches from A3 to Baa2. Potential damage of $1.1 billion.
8. Credit Agricole: Aa3 to A2. Estimated collateral costs available.
9. Deutsch Bank: Aa3 to A2. Potential damage € 168 billion to € 246 billion.
10. Goldman Sachs: A1 to A3. Potential damage $6.8 billion.
11. HSBC: Aa2 to A1. Estimated collateral costs unavailable.
12. JP Morgan: Aa3 to A2. Potential damage $4.7 billion.
13. Royal Bank of Canada: Aa1 to Aa3. Potential damage $6.7 billion.
14. Credit Suisse: Aa2 to A2. Potential damage CHF 4.5 billion (about $4.73 billion).
15. Morgan Stanley: A2 to Baa2 (3 notches!). Potential damage $9.519 billion.
16. UBS: Aa3 to A3 (3 notches). Potential damage CHF 7 billion (around $7.3 billion).
17. Strangely, Business Insider doesn’t give a 17th bank.
~Eowyn

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Who Gets Your State Income Tax?

If you live in one of 16 states and your employer has a “special deal” with the state government, this applies to you!
[youtube=https://www.youtube.com/watch?v=4sZzQQLX-AI]
More info here
H/T  Kelleigh
~LTG

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TPTB: Same big contributors to both parties' presidential candidates

Follow politics long enough, you eventually become cynical — really cynical. There’ve been whispers that no matter whom the Democrat and Republican Parties choose to be their respective presidential candidates, the selection is really made behind the scenes by shadowy The Powers That Be (TPTB).
Now, Tyler Durden of ZeroHedge offers tantalizing evidence of the identities of at least some members of TPTB.
Take a look at the three rosters below.
The one on the left is a list of top contributors to Mitt Romney’s 2012 presidential campaign. The chart in the middle is a list of top contributors to Barack Obama’s winning 2008 presidential campaign. The chart on the right is a list of top contributors to George W. Bush’s winning 2004 presidential campaign.

~Click charts to enlarge~

Source: OpenSecrets here, here and here.
And, just for comparison, here is the list of top contributors to John McCain losing 2008 presidential campaign. Goldman Sachs liked McCain about 75% less than Obama, and — SURPRISE, SURPRISE — McCain lost!

H/t our beloved Joseph!
~Eowyn

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Jon Corzine's Sergeant Shultz Defense


Hans Schultz is a comical character in the old TV show Hogan’s Heroes (1965-1971).
Masterfully played by the actor John Banner, Schultz is a bumbling, obese sergeant in the Nazi German POW camp, Stalag 13, who, when confronted by evidence of the Allied prisoners’ covert activities, will simply look the other way, repeating “I hear nothing, I see nothing, I know nothing!” to avoid being blamed. This eventually became a catchphrase of the series.
But there’s nothing comical or funny about Jon Corzine, the Sergeant Shultz of the Obama administration.

Obama campaigning for Jon Corzine


Jon Corzine, a Democrat, was New Jersey governor (2006-2010), U.S. senator from New Jersey (2001-2006), and Chairman and CEO of Wall Street titan Goldman Sachs (1994-1999). Corzine has participated in meetings of the secretive Bilderberg Group, a network of the world’s leaders in the fields of politics, business, and banking, from 1995–1997, 1999, 2003 and 2004.
In 2010, Barack Obama campaigned for Corzine’s reelection to be New Jersey governor. Corzine lost to Republican Chris Christie and so, in March 2010, instead became the CEO of MF Global, the giant financial derivatives broker that went bankrupt more than a month ago — the 8th largest bankruptcy in U.S. history. The broker had unlawfully used its clients’ funds to invest in European sovereign bonds that went bust. An estimated $1-2 billion of clients’ money is unaccounted for.
Summoned before the House Agriculture Committee hearing yesterday, Corzine told Representative Randy Neugebauer (R-Texas) that he never “intended” to authorize anyone to tap into what should be the “segregated funds” of MF Global’s clients.
To which Neugebauer said: “So the answer is you don’t know whether you did or not.”

“I hear nothing, I see nothing, I know nothing!”

To Rep. Austin Scott (R-Georgia), Corzine said he didn’t want to speculate on when the commingling of funds first occurred.

“I hear nothing, I see nothing, I know nothing!”

Representative Leonard Boswell (D-Iowa) asked Corzine what lawmakers should say to their constituents who have lost money in MF Global. Corzine said he hoped that the missing funds would be found.

“I hear nothing, I see nothing, I know nothing!”

Corzine said he was not aware of customer funds being transferred to the broker commodity. There was no intention on my part to violate the segregation rules, he said.

“I hear nothing, I see nothing, I know nothing!”

Corzine declined to name individuals who should have directly managed the transfer of funds. He said he didn’t know who would have ultimately have hit the buttons.

“I hear nothing, I see nothing, I know nothing!”

Corzine was asked “Is there a shortfall in the customer funds that MF Global was legally required to keep segregated?”
“I know only what I read,” Corzine said.

“I hear nothing, I see nothing, I know nothing!”

Congresswoman Renee L. Ellmers (R-NC) asks Corzine about his relationship with Gary Gensler, the head of the federal agency (Commodity Futures Trading Commission) that’s supposed to “regulate” MF Global. Both Corzine and Gensler had worked for Wall Street titan Goldman Sachs. More than that, Corzine had been the boss of Gensler at Goldman Sachs.
Corzine said he and Gensler were not in contact on a frequent basis.

“I hear nothing, I see nothing, I know nothing!”

Asked how he would address farmers who have lost money in MF Global, Corzine said he could not offer specific advice.

“I hear nothing, I see nothing, I know nothing!”

The upshot of Corzine’s testmony before the House committee:
“I simply do not know where the money is,” Corzine said.

“I hear nothing, I see nothing, I know nothing!”

Corzine would have us think that a man who was New Jersey’s governor and senator and, before that, was CEO of Goldman Sachs, “hears nothing, sees nothing, and knows nothing!”
If you believe that, I have the Brooklyn Bridge to sell you.
~Eowyn

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American Democracy Endangered by a Government-Financial Complex

On January 17, 1961, in his farewell speech as president, Dwight D. Eisenhower sounded a warning about a “military-industrial complex” in America. He urged Americans that “we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex…. The potential for the disastrous rise of misplaced power exists and will persist … Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”
Today, not only is there a military-industrial complex, there is another even more clear and present danger — the government-financial complex.

Obama-Corzine: The face of the Govt-Financial Complex


Documents released through a FOIA (Freedom of Information Act) request reveal that the 2008 TARP (Troubled Asset Relief Program) — better known as the “too big to fail” Wall Street bailout — was actually 10 times the amount we were told, totalling $7.7 trillion.
Below are excerpts of Les Leopold’s article for AlterNet, “Bloomberg Unearths Wall Street’s Secret Government,” republished on MINA, Dec. 2, 2011:

We now have concrete evidence that Wall Street and Washington are running a secret government far removed from the democratic process. Through a freedom of information request by Bloomberg News, the public now has access to over 29,000 pages of Fed documents and 21,000 additional Fed transactions that were deliberately hidden, and for good reason. (See here and here .)

These documents show how top government officials willfully concealed from Congress and the public the true extent of the 2008-’09 bailouts that enriched the few and enhanced the interests of giant Wall Streets firms. Here’s what we now know:

  • The secret Wall Street bailouts totaled $7.77 trillion, 10 times more than the $700 billion Troubled Asset Relief Program (TARP) passed by Congress in 2008.
  • Knowledge of the secret bailout funds was not shared with Congress even while it was drafting and debating legislation to break up the big banks.
  • The secret funding, provided at below-market rates, gave Wall Street banks an additional $13 billion in profits. (That’s enough money to hire more than 325,000 entry level teachers.)
  • The secret loans financed bank mergers so that the largest banks could grow even larger. The money also allowed banks to step up their lobbying efforts.
  • While Henry Paulson (Bush’s Secretary of the Treasury) was informing Congress and the public that only minor reforms were needed to protect Fannie and Freddie from collapse, he met secretly with leading Wall Street hedge fund managers — among them his former colleagues at Goldman Sachs — to alert them that he was about to nationalize the giant mortgage companies – a move that would eradicate nearly all the stock value of the companies. This information was enormously valuable because it allowed these hedge funds to short Fannie and Freddie and thereby make a fortune.
  • While Timothy Geithner [Obama’s Secretary of the Treasury] was head of the NY Federal Reserve, he argued against legislative efforts by Senator Ted Kaufman, D-Delaware, to limit the size of banks because the issue was “too complex for Congress and that people who know the markets should handle these decisions,” Kaufman recalls. Meanwhile, Geithner was fully aware of the enormous secret loans while Senator Kaufman was kept in the dark. Barney Frank, who was authoring key bank reform legislation was also not informed of the secret loans. No one in Congress was told.

All of which led Leopold to conclude:

“Usually, I am not an alarmist. In fact, I often argue against facile conspiracy theories. I want to believe that our democracy still has promise. But, the Wall Street-induced crash and the government’s response to it has me very worried. The Bloomberg News revelations suggest that Wall Street’s secret government has enormous disdain for what remains of our democracy. The financial elites obviously believe that Congress cannot be trusted to do the right thing even when it is bought and paid for by the very banks it supposedly regulates. As for the rest of us? We’re just a financially illiterate mass to be manipulated through the mass media. Our minds too can be bought and sold through careful marketing.

This financial arrogance and corruption is enormously corrosive to our democratic values. Already, many Americans, and for good reason, no longer trust their government. Already, many Americans, and for good reason, no longer vote. Already, many Americans, and for good reason, believe that democracy as we know it is a sham. Wall Street couldn’t have written a better script to maintain its domination.”

This Government-Financial Complex continues to this day, as seen in the conflicts-of-interest corrupt relations of the federal oversight agency and the now-bankrupt MF Global.
Lastly, I have a message to the Occupy Wall Street movement:

This Government-Financial Complex is not capitalism because government is interfering with and warping the free market. This collusion between the government and big business is classic Fascism — the corporatist state. Your protests are misplaced. You should be protesting before the White House.

~Eowyn

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Conflict-of-Interest/Corruption in Govt Oversight of MF Global

Isn’t this just cozy.

The CEO of MF Global, Jon Corzine, and the head of the federal agency that’s supposed to “regulate” MF Global, Gary Gensler, both had worked for Wall Street titan Goldman Sachs. More than that, Corzine had been the boss of Gensler at Goldman Sachs.

MF Global is the giant financial derivatives broker that went bankrupt a month ago, after making a disastrous $6.3 billion bet on European sovereign bonds with some of its clients’ money.

Obama with Jon Corzine


New York-based MF Global was led by Jon Corzine, a Democrat who was New Jersey governor (2006-2010), U.S. senator from New Jersey (2001-2006), and Chairman and CEO of Wall Street titan Goldman Sachs (1994-1999). Corzine has participated in meetings of the secretive Bilderberg Group, a network of the world’s leaders in the fields of politics, business, and banking, from 1995–1997, 1999, 2003 and 2004.
In 2010, Barack Obama campaigned for Corzine’s reelection to be New Jersey governor. Corzine lost to Republican Chris Christie and so, in March 2010, became the CEO of MF Global instead.
The Commodity Futures Trading Commission (CFTC) and other regulators are investigating whether the firm used money from clients’ accounts for its own purposes as its financial condition worsened. That would violate securities rules. The FBI is also investigating whether MF Global violated any criminal laws.

Gary Gensler


Gary Gensler is the chairman of the CFTC.
After graduating with an MBA from the Wharton School of the University of Pennsylvania, Gensler spent 18 years at Goldman Sachs, making partner when he was 30, becoming head of the company’s fixed income and currency trading operations in Tokyo by the mid-’90s, and eventually the company’s co-head of finance.
In 2008, Gensler first served as a senior adviser to the Hillary Clinton campaign and, after the Democratic Primary, the Obama campaign. Obama rewarded Gensler by nominating him to head the Commodity Futures Trading Commission.
In March 2009, Senator Bernie Sanders (I-VT) tried to block the nomination because Gensler “had worked with Sen. Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of AIG and has resulted in the largest taxpayer bailout in US history.” Sanders also accused Gensler of working to deregulate electronic energy trading, which led to the downfall of Enron, and supporting the Gramm-Leach-Bliley Act, which allowed American banks to become “too big to fail.”
In early November, Gensler stepped aside from the CFTC’s investigation of MF Global  because of his longstanding ties to Corzine.
The Associated Press reports on Nov. 29, 2011, that Rep. Randy Neugebauer (R-Texas), who heads the House Financial Services oversight subcommittee investigating MF Global’s collapse, asked Gensler to provide documents related to the agency’s oversight of the brokerage. Neugebauer also asked Gensler in a letter to explain his personal involvement in supervising MF Global.
Neugebauer noted that Corzine reportedly personally lobbied Gensler and his staff this year in opposition to a possible CFTC rule that would have affected MF Global. Neugebauer asked Gensler why he didn’t remove himself earlier from MF Global matters, so Corzine wouldn’t have been able to lobby him.
In his exclusive-to-subscribers post of Nov. 28, 2011, investigative journalist Wayne Madsen claims that his sources in Chicago say  that the collapse of MF Global is merely the tip of the iceberg in commodities trading fraud, especially in gold, and that a major cover-up of the extent of the fraud by the Obama administration, including by Attorney General Eric Holder, is currently underway.
Madsen also notes the timing of Massachusetts Democrat Rep. Barney Frank’s recent announcement that he is retiring after 16 terms in Congress. Frank, of course, is the former  chairman and a current ranking member of the House Financial Services Committee, the House’s oversight body over Wall Street and Chicago commodities trading.

~∞~

There is some good news for MF Global’s clients.
James Giddens, the court-appointed trustee overseeing the firm’s liquidation asked that an additional $2.1 billion be released from frozen customer accounts. It would be Giddens’s third transfer of funds to MF Global customers since the brokerage filed for bankruptcy protection on Oct. 31. That would bring the total distributed so far to about $4.1 billion.
With the proposed $2.1 billion distribution, all MF Global commodities customers would have retrieved two-thirds or more of the money they had in their accounts. Giddens has a goal of eventually returning 100% of all funds to customers — if the missing client funds are recovered.
~Eowyn

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