Kaufman

No, American Banks DON'T Need to Be Big to Compete with Bigger Foreign Rivals

Following a brief infomercial for Gordian Group's apparent skills in bringing dough-makers and yeast-cooking perfection to the table - arguing that they are here to preserve jobs (for skilled workers who have been apparently working for below-market wages) - and maximizing value for the Bakery Union; Peter Kaufman stops the pretense of helping and goes straight for the threat. "We are here to work with credible bidders to get started right away with a great work-force; on the other hand, if bidders don't want to work with us (and re-hire Hostess employees), the union will ask the AFL-CIO to put any Hostess product on its 'boycott product' list." But "we're here to help," he reminds the somewhat stunned CNBC anchor. It seems beggars are once again choosers... as the entitled roll on.

And now it's on us to mobilize and make sure at least one of us in each district contact our representatives and do what we can to inform them.  The longer this goes on, the more bad algo's will manipulate the system

MARTIN SMITH: Is that really the job of a prosecutor, to worry about anything other than simply pursuing justice?

LANNY BREUER: Well, I think I am pursuing justice. And I think the entire responsibility of the department is to pursue justice. But in any given case, I think I and prosecutors around the country, being responsible, should speak to regulators, should speak to experts, because if I bring a case against institution A, and as a result of bringing that case, there’s some huge economic effect — if it creates a ripple effect so that suddenly, counterparties and other financial institutions or other companies that had nothing to do with this are affected badly — it’s a factor we need to know and understand.

...the pushback from Wall Street was intense and multi-pronged. The Blob oozed through the halls of government, seeking, through its glutinous embrace, to immobilize the legislative and regulatory apparatus, thereby preserving the status quo. The executive jets of the Wall Street air force flew sortie after sortie, transporting high-ranking emissaries from new York to Washington to meet with the SEC, [Senator Chris] Dodd and [Senator Richard] Shelby staff, and the staff of other senators on the Banking Committee. Some of the executives, no doubt less enthusiastically, even met with Josh and me. The research companies and market experts Wall Street employs also raised their voices against us. At times it got ugly. Ted was called a crackpot and dangerously uninformed. He was accused of “politicizing” market regulation (a strange notion considering he wasn’t running for election). It seemed as if Wall Street, which wasn’t used to someone on Capitol Hill asking in-depth questions about arcane issues, wished to silence or marginalize its critics. Industry people would always ask me, “What got Kaufman so interested in this stuff?” Used to politicians whose top priorities were to please their home-state business interests and raise money, they had trouble fathoming that Ted was so interested because it was the right thing to do. He believed in fair markets. And because he was genuinely concerned about emerging issues that threatened the stock market, where half of all Americans keep a sizable portion of their retirement savings.

Solyndra, Ener1, and now Kaufman Bros - The current economy may not be very good at creating jobs, even minority-focused ones, but its track record in inverse job creation is rapidly becoming second to none. Bloomberg reports that "Kaufman Bros. LP, the minority-owned investment bank that helped unwind U.S. stakes in bailed-out financial companies, ceased operations as of yesterday, according to a notice posted on its website. Chief Executive Officer Benny Lorenzo told employees that New York-based Kaufman was closing immediately in a meeting yesterday after trading closed, according to two people with knowledge of the matter, who declined to be identified because they weren’t authorized to speak publicly. Neither Lorenzo nor Chief Financial Officer Gerard Durkin returned messages left on their office and mobile phones yesterday and today." More amusing is the following description: "The company, which also has offices in San Francisco, said it was sought out by institutional investors, hedge funds and government agencies to help meet diversity goals." No comment. The closure notice can be found on the company's website. And so another bank bites the dust. Many more coming.

The real outlook of Monetary Easing vs Treasury Yields

But ballet is beset by serious ailments that threaten its future in this country... 

Legendary ex-Bear commentator Sal Catrini summarizes it best: "Whether this solves our long-term problems remains to be seen, but when you flood the market with liquidity, risk assets go much higher"

Back in August when Bloomberg first scoured the depraved depths of the almost-30,000 pages of FOIA-released Fed documentation surrounding the biggest ever bailout in history, the sheer volume of the loans, ultra-low cost of funds, and lying-through-their-teeth nature of the bank CEOs was enough for some vindication of tin-foil-hat-wearing fringe blogs. In this month's Bloomberg Markets magazine, much of this is rehashed but the truly incredible part - though not entirely shocking to us - is the magnitude of the profits that the banks amassed directly as a result of these 'secret' bailouts. Almost a quarter of their entire income was generated during this period from bailout-related sub-market funds. Over $13bn profit was 'appropriated' during the crisis with Citi and BofA among the largest profiteers.

Last week, an article by Fred Kaufman in Foreign Policy magazine ripped off a gangrenous scab: the topic of Goldman manipulating markets, a theme extensively dissected over the past two years, only in this case a rather sensitive one: that of food prices. Since the topic of Goldman being involved in market manipulation is nothing new to Zero Hedge, which first exposed the firm's prop trading shenanigans in 2009, a trope that was merely validated when Lucas van Praag responded to our allegations, to be promptly followed by Volcker making prop trading by banks semi-illegal, we were not surprised to read this piece. What did surprises is that Goldman once again exhibited horrendous PR sense by issuing yet another Lucas van Praag response, literally minutes ago, in the same venue. While van Praag does touch upon some valid points, the overall response is beyond weak and along the lines of the traditional excuse: "we generously provide liquidity/markets/capital, etc." which merely exacerbates the overarching theme: Goldman's relentless condescension, and assumption that it always is dealing with idiots who have no idea how the firm operates. As Goldman is about to find out, this will do nothing but generate a firestorm of angry responses by the "non-faceless" crowd which will now have a scapegoat to blame, since by taking he defensive, Goldman once again validates the allegation. What happens next to Goldman, and the GSCI, is unclear but will likely not be favorable in light of Obama's recent witchhunt against "speculators." Yet at the end of the day what can one expect from a firm that will always have to live with the following classical example of shooting itself in the foot: "When asked about these emails, Mr. Swenson also denied that Goldman had attempted to squeeze the CDS short market. He claimed that the cost of single name CDS shorts had gone too high, and the purpose behind Goldman’s actions was to restore balance to the market. Mr. Swenson could not explain, however, why in an effort to restore balance to the market, he used the phrases “cause maximum pain,” and “this will have people totally demoralized".”

On Friday, free and efficient market champion Ted Kaufman, previously known for his stern crusade to rid the world of the HFT scourge, and all other market irregularities which unfortunately will stay with us until the next major market crash (and until the disbanding of the SEC following the terminal realization of its corrupt and utter worthlessness), held a hearing on the impact of the TARP on financial stability, no longer in his former position as a senator, but as Chairman of the Congressional TARP oversight panel. Witness included Simon Johnson, Joseph Stiglitz, Allan Meltzer, William Nelson (Deputy Director of Monetary Affairs, Federal Reserve), Damon Silvers (AFL-CIO Associate General Counsel), and others. In typical Kaufman fashion, this no-nonsense hearing was one of the most informative and expository of all Wall Street evils to ever take place on the Hill. Which of course is why it received almost no coverage in the media. Below we present a full transcript of the entire hearing, together with select highlights. The insights proffered by the panelists and the witnesses, while nothing new to those who have carefully followed the generational theft that has been occurring for two and a half years in plain view of everyone and shows no signs of stopping, are truly a must read for virtually every citizen of America and the world: this transcript explains in great detail what absolute crime is, and why it will likely forever go unpunished.

Let's see what Ben says on this Wednesday.

For those wondering why the market leaked higher in the last hour, it is because someone got an advance copy of the transcript (or advance notice) that in this Sunday's latest attempt at faux transparency on 60 Minutes, the bearded mutant-cum-supreme genocidal overlord says that more QE is coming. From Reuters: "The euro rose to a session peak against the dollar in late afternoon New York trade on Friday after a report on the CBS website that Federal Reserve Chairman Ben Bernanke did not rule out buying more than $600 billion of bonds in further quantitative easing." It also explains why the euro is back to 1.34, and is right in line with our expectations that the EURUSD is only weak so long as the market realizes that much, much more QE is coming. How much? See the chart below for our ongoing expectation of what the Fed's balance sheet will look like soon. And yes, the $7 dollar jump in gold late in the day may be multiplied 10-20x on Monday after the world realizes that the US economy is as fucked as always.

Live coverage of the Senate Banking Committee's make believe grilling of Bank of America representative Barbara Desoer over fraudclosure starts live at 3:15pm, or was supposed to: just like the EU Press Conference, it is also late.