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The Wall Street Circle (Jerk) Of Trust
Many readers have expressed their incredulity, frustration and, at times, outright anger, with what can be classified simply as a mutual circle jerk among Wall Street's financial analysts, rushing to upgrade each others' stocks with impunity. These analysts have been operating with an S&P and Moody's like tendency to ignore any and all pitfalls associated with skyrocketing loan losses, coupled with tepid increases by the banks' taking on necessary reserves to account for what will likely be a collapse in the CRE market, which we at Zero Hedge have been documenting for the past nine months. Hereby we demonstrate the circular nature of all these activities: the attached graphic shows just how prevalent the ponzi upgrade game has become - among the top 7 banks which have staggering (and in many cases taxpayer subsidized) balance sheets and hold all the keys for the next major leg down, there is just one sell rating (and even that is simply between a European analyst and a European firm). Which begs a new spin on an old question: if a ponzi scheme develops before our eyes and everyone is blissfully ignoring it, has a ponzi ever occurred (we refer you to the SEC for the answer)?
And please don't be fooled by the red lines: virtually all of them emanate out of CLSA iconoclast Mike Mayo, who has not only always been a lone voice of sanity on Wall Street, but with his harsh language (he has a sell rating on all major US banks except Goldman), Mike has become the defacto new Meredith Whitney. Whether or not he is proven right will be determined by the outcome of the generational confrontation currently in play between the printing presses of the Federal Reserve (and China's desire to assimilate the US middle class as its latest vassal extention) and the rest of the formerly free markets. For a good summary of Mike Mayo's contrarian approach to Wall Street we recommend the following WSJ article.
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Response from SEC: "Fonzi? Yeah he was cool. I bought one of those 'sit on it' tee-shirts back in '76."
http://mypage.direct.ca/k/kdomries/images/dumb.jpg
http://www.youtube.com/watch?v=TSqkdcT25ss
Are they taking nominations for the next competition, or is that an invite only event?
Nice piece Tyler / As we always blissfully say around our offices: "Wall Street -- the most highly regulated, legally CORRUPT, industry in the world" Funny, as one of our colleagues in the hedge fund area stated a few months ago... he said: "It seems like if you're honest, you are getting run out of business, while those who are corrupt, seem to thrive in this current enviornment." Good work ZH...
Thanks Tyler, I see my name on that intricate web of lies and deceit. I guess I am finally getting some recognition for being a fraudster extraordinaire.
In Mayo we trust.
Are you referring to the punk band, the pompous praise, or the pubic pleasure...or all three? They are sorta punks, but there's no real talent. Hence the scheme?
Is "mutual circle jerk" redundant? Or does that mean you work the guy to your left and right simulatenously? Maybe that does take talent....?
Please pass the FASoline.
politicians & bankers do not rule empires - armies do. i love the pentagram - um, pentagon - symbolism.
Armies travel on their stomachs... which is why the politicians and the bankers rule the empires.
Look at the Louisiana Purchase-- Napoleon sold off all that land under a dealer that was financed by British Barings bankers, whom effectively funded Napoleon's war against the British.
Without this financing, there's no army, no weapons, no food, no war.
Tyler, you need to add a new tag:circle jerk.
That would alert all government agencies as they like to keep abreast of circle jerk action.
Honestly, there is still someone around looking at "ratings" ?
LOL.
Mutual Circle Jerk: Are you referring to the punk band, pompous praise or pubic pleasure or all three? Only one of them takes talent hence the scheme. Is "mutual circle jerk" redundant or is that where you work the guy to the left and right simultaneously. Maybe that does take talent?....
Speaking of Circle Jerks
http://www.youtube.com/watch?v=93J0wh1m_hM
(i was 111686) forgot to login
Definition of a "fierce competitor":
Someone who comes in first and third in a circle jerk
Like track, is there one free false start?
"I'm shocked, shocked to find that gambling is going on in here!"
[a croupier hands Renault a pile of money] -- Captain Renault, Casablanca.
All this reminds me Cheeky's comment about the pillaging of USSR before the fall...They are not even trying hide it anymore.
On that subject, this guy's funny: http://www.energybulletin.net/node/23259
I used to marvel how the russian language had more cuss words than any other. I am starting to understand...
Holy crap Batman! Great article, but now I'm going to have to double my prozac, again.
Cut the bullshit,,you told me you doubled it last week. Argos, if this keeps up you going full circle back to a basket case.. Maybe a supplement of Aderal psycho stimulant medication composed of amphetamine and dextroamphetamine. Relatively benign.
great quote by Alexander Solzhenitsyn at the bottom (slide 21):
"Don't believe them, don't fear them, don't ask anything of them."
+100
Wow, Davey, this is one of the best bits since I discovered ZH. And bear in mind, the presentation was written in 2006... A definite MUST READ.
I like to glance at his blog every once in a while (Dmitry doesn't post very often). He seems to have gone a little fringe, but still has some good info.
Blog of Dmitry Orlov: http://cluborlov.blogspot.com/
Thanks to a disappearing Glass-Steagall, commercial and investment banking are one and the same. There is no honor amongst this particular group of thieves.
As long as these linkages remain legal, the lies and manipulations will continue and intensify. Despite the many pleas for reinstatement of G-S, the government does exactly zero on the issue. In fact, government is the co-conspirator.....shotgunning the marriages of BAC/ML and JPM/BS last year.....essentially doubling down on a bad idea.
So the bed of corruption has been reinforced by the only power that is capable of fixing it.
I don't know if I buy the Glass-Steagall canard. Everyone loves to trot it out there as a cause of this mess, but I don't see it as one of the chief culprits.
Central players in all of this are Goldman, Morgan, Merrill, Lehman and Bear. Regardless of Gramm-Leach-Bliley, they were all purely investment banks. The repeal of Glass-Steagall didn't change anything for them. In varying degrees and methods, they all managed to screw things up quite nicely without hitching on to commercial banks or insurance companies.
Now, rewind to about a year ago. Before the Merrill-BofA merger went sour in December, the conventional wisdom was that the banks that had toxic assets would actually be saved by gaining commercial deposits. That's why BofA made sense as a Merrill suitor, and why Goldman and Morgan scrambled to become banking holding companies. Their ability to bring in commercial deposits, compliments of G-L-B, probably saved Merrill and played some role (even on an abstract level) in stabilizing Goldman and Morgan. Yes, in the interim, the Merrill-BofA merger has become a rotten mess, but not for any reason related to the concept of merging a commercial bank with an investment bank.
I think Gramm-Leach-Bliley and the repeal of Glass-Steagall has simply become a bogeyman for those that instinctively oppose deregulation. It may be true that a greater degree of regulation is necessary to prevent the recurrence of this financial crisis, but that doesn't necessarily make it true that we need to retain a piece of regulation that was neatly tailored to the financial landscape of the 1930s. Let's just think through what makes sense and what doesn't.
the ink wasn't even dry on the bill repealling Glass-Steagall when the Citibank - Worldcom shit hit the fan. Gramm-Leach may not be the source of every misdeed perpetrated by Wall Street over the decade since, but it was a HUGE "mistake". Really, it was a grand act of corruption that encapsulates the corruption of the times pretty well. The fact that nothing has been done to reinstate Glass-Steagall is representative of just how totally corrupt and BAD current leadership is especially with regard to dealing with the financial crisis born of past corrupt leadership.
I suspect a more likely culprit (or "root cause" as we say in IT) of the current let-em-dangle piracy is the conversion of the IBs from partnerships to public corporations.
Spurious comment that I can't delete.
Contributing factors to the demise of the empire:
*Repeal of Glass-Steagall helped monopolies grow even bigger (into mythical too big to fail). Remember this was put in place after the first great depression as it was determined to be a contributor to the great crash.
*Lack of regulatory enforcement of the rules due to captured regulators and captured representatives. INSIDER TRADING, HFT, DARK POOLS, % OWNERSHIP RESTRICTIONS, NAKED SHORTING AND LONG POSITIONS WITHOUT COLLATERAL (TBTF's collusion & whims on driving stocks & bonds up or down with unlimited orders)- NOT RECONCILING SECURITY #'s TO OWNERS, GIVING LOANS TO ANYONE KNOWING THEY WOULD BE BAILED OUT.
*Derivatives that are not traded on an exchange for price discovery, represent multiple claims on the same underlying item, no collateral, and not standardized - thank Larry Summers for this monumental epic failure as he prevented the regulation proposed. The banks can threaten to blow themselves up along with everyone else with these trillions in derivatives and nobody knows what they represent.
*Destroying the dollar - capital is fleeing the country since expected inflation rates plus tax rates (for those not a bank) and loss of purchasing power in the dollar from a mad printing press overwhelm bond yields, & equity dividend yields (for a net loss period without even considering default risk). Capital appreciation on equities is driven solely by fed liquidity and could be pulled out like a chair from the retail investor at the whim of the owners of Ben Bernanke. The future is bleak and I feel we are like the frog with the temperature being raised - when to jump indeed. No upside in any normal long asset class within the US. Capital allocation and capital loss allocation have been turned upside down making investment decisions for businesses extremely difficult and promoting speculation- along with changing rules in the middle of the game.
I truly believe this is a planned financial genocide by the wicked, and we are only beginning to see how evil they are. The middle class is being turned into the Gaza strip, there is no seeking win/win, they are only out for complete world domination. They will promise financial stability and stop their financial terrorism only with the surrender of US dominance - into a one world currency they will dominate. The IMF, BIS, World Bank, TBTF's, and central banks around the world (including the fed) act in concert across borders (collusion) like gypsies working the street to distract and grab wallets and purses.
If you haven't noticed, almost all of the leaders have similar last names - this common denominator is a fact and does not represent the benefits of diversity that this same group of people promote through the media and television. I am not sure how the masses became ruled by a handful of dominant people, but I am pretty sure it involved a printing press, blackmail, and bribes.
The masses are waking up to the system of the corrupt elites, which is why Zbignew Brezynski stated with a glimmer in his eye that it was infinitely easier to kill a million people than to try and control them - even if true this is a scary statement by a foreign policy advisor to the current administration. Perhaps an epidemic will make Brezynski's statement prophetic.
LOL and the American citizens are the pivot man in the circle jerk. Get your umbrellas out.
Nice to see CNBC excellence in journalism and "Class" with the following headline: "P*rn Flounders, But @dult Novelty Bus!ness Booms."
dear circle jerk analysts: may i remind you of your duty of due care, having a reasonable basis, and independence and objectivity just to name a few virtues you should maintain amongst the higher standard set upon you. but if you want to remain a sales dept "bitch"and coward in your craft, then please continue on. furthermore, if this is to what ends you want to exchange your time for, i pity you. so what are you waiting for?
Damn...that is a beautiful graphic. What a story it tells...So many crimes...so few convictions (but plenty of conviction buys)
Tim Geithner's $14 Billion Gift of Taxpayer Funds to Goldman Sachs
Obama's administration of the financial system, cloaked in excessive secrecy, conflicts of interest, and enormous payoffs to campaign contributors demands a Congressional investigation, except of the course those doing the investigating are also implicated in the scandal.
An appointment of an independent prosecutor to investigate the Treasury bailouts is the decent thing for the Justice Department to do in any presidential adminstration, not to mention one that is a reform government that had promised transparency and an end to crony capitalism and lobbyists running the process.
If this same scandal had occurred under G. W. Bush the media would be screaming for an investigation. From what we can see, Obama appears to be heavily influenced by a cartel of special interests including Big Healthcare and Big Finance, that are heavy campaign contributors of money and people for his administration. Shame. Shame and scandal. And it may yet end in disgrace.
http://jessescrossroadscafe.blogspot.com/2009/10/tim-geithners-14-billio...
"An appointment of an independent prosecutor to investigate the Treasury bailouts..."
Is there really such thing as an independent prosecutor when we're talking about a trillion dollar political scandal?
The only way to beat this thing is at the ballot box, and not just in the presindential elections.
"The only way to beat this thing is at the ballot box,"
Baseball bat.
Nathan Martin on Economic Edge has posted the video Dr. Paul Craig Roberts with Max Keiser—with this buildup: Roberts “says that the access Geithner is allowing to GS, C, and JPM is unprecedented. ‘America is a failed government…’ He explains that the crooks are now on the inside of government and in a normal situation they reside on the outside of government. Yes, the rule of law is gone…”
http://economicedge.blogspot.com/
Risk is the 'chance' of loss and financial risk is the 'chance' of financial loss. We should all know there is absolutely never a risk involved for those ordained priests of the Ashkenazi order who have owned and controlled every major private banking institution and transaction in the world including the private central banks since the beginning of time. For a micro group of money changers this temporal life offers zero chance of loss. But whoa to the money changer in the next life eternal where there exists an absolute guaranteed chance of loss. The loss of the soul. Like the strands of the double-helix they are all inseparately linked and bound together in one indisoluble chain.
I was going to correct the term 'whoa' to 'woe' here but upon reflection it is better the way it is.
Carry on then....
Nice graph to illustrate the concept. Ed Tufte, Visual Display of Quantitative Information, kind of stuff
SEC to stop HFT?
http://www.reuters.com/article/ousivMolt/idUSTRE59Q21B20091027
DRUGS. DRUGS GALORE. That's what has been "traded out" in the portfolios of the BANKSTERS, who need all their FRAUDSTERS in order to CIRCLE JERK the ZIONIST "New World Order" which is not going to fly no matter how many dumbo feathers. Look to the State of Israel and ITS' demise because only in the falling of this evil empire can the US HOPE FOR CHANGE ... UK-GB-EU-Israel-US ... this is the true circle jerk of monumental criminal insanity!
How gloriously inspired. BTW, I see they're really pumping prices of Nazi war "memorabilia" on eBay (no doubt another Zionist front organization), so you should run over there before you lose your chance to grab a piece of wondrous history. Ah, one can only dream "If only . . ."
Go take some drugs that work, dumbass.
Tyler,I love you.
Be Seeing You
tj3
really nice work!
If Mike Mayo won't return the favor then don't invite him.
Who else but ZH would/could do the work that would show the scam?
Grayson: "K-Street Whore".
http://tpmdc.talkingpointsmemo.com/2009/10/grayson-calls-lobbyist-k-street-whore.php
HAHAHAHAHA!!
What's going to happen when the S&P 500 gets marked to market....?
Inquiring minds want to know.......
Best regards,
Econolicious
OUTFRIGGIDDYSTANDING stuff TD!
"MARK IT ZERO, DUDE"
Its a good thing that your diagram has eight nodes and not six or it would have had a resemblance to a well known religious symbol.
These Shylocks know no shame, no moral, just greed. These people are the psychopaths of this world. May they rot in hell for ever. For the looks of Greenberg he's close to that already.
Is it time to demand some show trials?
How 'bout a little circus with our bread.
If Sheila Bair has a meeting with Mike Mayo and this time uses a good black marker, will the meeting ever have occurred?
<Mike has become the defacto new Meredith Whitney>: MM was there long before that MW...hence the WSJ piece. Even the C trade http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aCSqwzshBu2M (he downgraded C the day after Maheras left).
Merediatch is just a chick who capitalized on good timing and her plugs w/ the money honey
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom
That is the most beautiful thing I've ever seen. I've been thinking about the reciprocal and self-reinforcing nature of the upgrades, but that..."graphic" seems too demeaning...it's a hybrid of history, geometry, economics, and art.
Whoever you are, TD, and however many of you are in the composite that I assume you are, thank you.
Quickly Holmes the games afoot...follow the trail and we will find the culprit(s)!
put the graphic on 30 Euro t-shirt
I have solved the whole thing, thanks to this graphic. The reason they can do this circle jerk is because they are all squids. Look closely. Each has at least one tentacle on each others' squid unit, milking cash out of the Sachs.
Do you see it?
I have attained enlightenment. Can I ascend to the next plane of hell now? Will I become a squid, now that I know?