Mr. Parasite Goes To Washington

Intro: Robert Reich, wrote in "The Rebirth of Social Darwinism" that in the Gilded Age of the late nineteenth century

"the nation was mesmerized by the doctrine of free enterprise, but few Americans actually enjoyed much freedom. Robber barons like the financier Jay Gould, the railroad magnate Cornelius Vanderbilt, and the oil tycoon John D. Rockefeller, controlled much of American industry; the gap between rich and poor had turned into a chasm; urban slums festered; children worked long hours in factories; women couldn’t vote and black Americans were subject to Jim Crow; and the lackeys of rich literally deposited sacks of money on desks of pliant legislators. Most tellingly, it was a time when the ideas of William Graham Sumner, a professor of political and social science at Yale, dominated American social thought. Sumner brought Charles Darwin to America and twisted him into a theory to fit the times...


"To Sumner and his followers, life was a competitive struggle in which only the fittest could survive – and through this struggle societies became stronger over time. A correlate of this principle was that government should do little or nothing to help those in need because that would interfere with natural selection... Sumner wrote in the 1880s. It’s either 'liberty, inequality, survival of the fittest,' or 'not-liberty, equality, survival of the unfittest. The former carries society forward and favors all its best members; the latter carries society downwards and favors all its worst members.'"

I submit that Darwinism is alive and well, will always be, and that the psychopath or sociopath personality type - when combined with impulse control and intelligence - is an advantage to survival and procreation. But Sumner is wrong in his conclusion that "because [millionaires, etc.] are thus selected that wealth aggregates under their hands – both their own and that entrusted to them … They may fairly be regarded as the naturally selected agents of society... the bargain is a good one for society." Natural selection, in a society left unchecked by the rule of law, is not a great bargain, and some of us are not voluntarily making it. ~ Ilene 


Mr. Parasite Goes To Washington


Courtesy of Cody Penn Dent at Wall Street Examiner

We all know the story.

An energetic, successful person from industry sets off to use his skills as a reform minded public servant. Voters’ imaginations are captured by the opportunity to have someone of proven ability transform government, forge better policy and make it more effective at spending our resources.

Now we know the sadistically laughable version of that story – where an egotistical, conscienceless insider imposes himself on the narrative – buying the PR services and ad time necessary to saturate the population of New Jersey and adjacent states with a tired, bogus theme – a common guy who worked his way up to do great things.

Like any huckster on TV, Jon Corzine tried to foist a crappy product (himself) on unsuspecting rubes. He’d be comparable to Billy Mays who sold us things like laundry detergent, except Mays had a personality and was mildly likable. The comparison also fails when one considers that Corzine is still alive. Then there is that Sham Wow guy – another huckster who you can’t compare with Corzine since Corzine has yet to see a jail from the inside.

At least when you send your money in for OxyClean or a towel you actually get something. When people recently sent their money to MF Global they got a promise from a firm headed by a former Goldman Sachs CEO, Governor, and Senator. The promise? That those deposited funds would receive at least “ordinary care.” Yet, they learned that over a billion dollars has gone missing. And the huckster in charge tells Congress that (a) he has no idea how that happened and (b) he never intended for anything illegal to happen.

Let’s rate his performance as a salesman, shall we?

Does he know his product?

Clearly not. From his testimony he tells us he had no idea of what was really happening at his firm. As a former Goldman Sachs chief and Sarbanes-Oxley co-author, he had no idea (and apparently no curiosity) of how things operated, how money was handled, or even who really made the decision to gamble on European bonds – only that he and the board may or may not have been informed of these things in the vaguest of ways and at the most unspecific of times. He apparently lacked the capacity to supervise the “complex” operations such that over a billion dollars in client funds could get mixed in with the firm’s funds and then be placed on a bet that countries like Italy and Spain would suddenly become creditworthy. At 37 times leverage.

Does he know his customer?

To answer that question, you have to ask who the customer is. Based on his testimony to Congress (as well as the course of his career), the answer becomes clear: himself. As his own customer, Corzine did what comes naturally – put himself first and screw everyone else. Viewers were treated to a well choreographed, finely lawyered display of “not my fault” from the one person who had the means, authority, and experience to ensure that the very simple and elementary step of holding client funds separate from MF Global’s was taken.

Does he engage the buyer and close the deal?

A guy who does white collar criminal defense work rated Corzine’s performance as “phenomenal.”

Yet, Corzine convinced me of his complete and total culpability for these “lost” funds. Here’s why: Corzine either did this knowingly and is simply lying about it or he is criminally negligent. Take your pick.
This is a man who thoroughly knows trading and developed proprietary trading at Goldman Sachs into something hugely profitable. Goldman’s proprietary trading is legendary – harvesting massive amounts of data from markets in real time and then setting about to place complex trades at high volume to create and exploit market movement.

In 2009 the public got a rare and fleeting glimpse of the power of what Goldman had assembled. Code and data were downloaded by an employee and uploaded to an off shore server. The FBI, in bringing the indictment against the employee, commented that “in the wrong hands” the code could be used to “manipulate markets”. A hilarious statement in retrospect – the statement assumed Goldman’s were not the “wrong hands” in the first place and ignores (while simultaneously acknowledging) that the software, by design, alters markets.

Proprietary trading implemented to shape and exploit market movements is really a parasitic force – it actually undermines the soundness of markets and undermines “price discovery” as profits are culled by deceiving buyers and sellers into thinking that a fair price is taking hold via bargaining when it is not. Instead, the pricing is stage managed such that Goldman could buy positions cheap and sell them at a premium. In modern times, parasitic proprietary trading has resulted in participants simply leaving the market. As one who elevated proprietary trading to new, massively profitable heights, Corzine should be known as Mr. Parasite.

You would think that a person skilled enough in supervising such trading and taking Goldman public would be able to manage keeping client money separate from firm money at MF Global. Yet Corzine testified that the intricacies of simply keeping these sums in different accounts were beyond his supervisory skill set.

Again – it seems to me that he is either lying or criminally negligent. Pick one.

Time for Corzine’s Law

The greatest con men and hucksters crave interaction with those they are swindling. Like an executioner who really likes his job, these sociopaths really like to look deeply into their victims’ eyes and witness the moment when they’ve won. Corzine testified to Congress without his attorney sitting next to him. No quick chats with counsel – no coaching in front of the cameras. No – Corzine wanted to shove the hearing in the faces of those who had the temerity to subpoena him. So the staging was raw, bold and risky, but the answers were finely pre-parsed to leave his accusers with nothing. In my opinion, the man is as sociopathic as they come – his career has been built on finding suckers and taking them for a ride – as a trader, as a partner, as a Senator, as a Governor, as a CEO and now as a witness. I think Corzine got off on leaving Congressmen befuddled and slack jawed as he related a narrative in which he, as CEO, was in no way responsible yet deeply apologetic.

It is time we recognize that our markets are severely impaired by the sociopathic parasites who use their power as intermediaries to create the maximum number of losers possible. When that happens, participants leave markets. Our liquidity crises around the world are in no way aided by the fact that many retail investors have walked away from financial markets. “Risk off” doesn’t just refer to the risk of recession – it also refers to the risk of being bilked by sociopaths who think they are clever because of a novel interpretation of law on the basis of which, when confronted, they can disclaim liability based on vague statements about intentions.

Corzine has positioned himself as the ignorant, unaware boss because it is the path with the fewest sanctions. Criminal negligence is part of our body of law, but most jurisdictions only throw offenders in prison if they put a victim in the hospital or a grave. You can see life in prison if your gross negligence involves a motor vehicle, but not if it involves a financial vehicle. We need to amend our laws to extend the sanction of prison to those whose gross negligence creates property losses in excess of a billion dollars and affects in excess of 500 victims. Such would provide a simple yet bright regulatory line that would keep those like Corzine from escaping justice. If you ask to be responsible for others’ property, demand compensation for it and then show reckless disregard for that property on a societal scale and it results in massive loss, then you should see a jail cell for a while.

For reasons I will never understand, sociopaths find new ways to antagonize society with each generation. Consequently society has to create yet more laws to try to contain such atavism. Our generation seems to have its hands full with child predators – we have Adam’s law, Megan’s law, Chelsea’s law – laws named after victims of remorseless sociopaths. We should name this new, necessary law, “Corzine’s Law” so that people are reminded of the craven huckster whose career has been about promoting himself as a winner by creating as many losers as he could.


Corzine's Testimony Christmas Carol by Cody Penn Dent


Jon Corzine’s testimony could have been sung as a Christmas Carol:

(Sung to “God rest ye merry gentlemen”)
I guess you clever gentlemen
Are wondering what I’ll say.
Will I cite the 5th amendment
Or did I come to play?
Well I will tell you everything
On this December day.

You see, I don’t remember anything
Remember a thing
I just don’t seem to remember anything

Now clients gave us money
to invest in stocks and bonds
And some of it bought the services
of teenage Russian blonds
But that stuffs kinda normal
and isn’t really wrong

You see, I don’t remember anything
Remember a thing
I just don’t seem to remember anything

Hypothecated leverage
Are words that I don’t know
Even though at Goldman
It floated our IPO
But now its all so hard for me
as the MF CEO

You see, I don’t remember anything
Remember a thing
I just don’t seem to remember anything

So you see that I’m not guilty
That’s what I represent
Doing stuff illegally
Was never my intent
I simply meant to tweak the law
So suckers would get bent

You see, I don’t remember a thing
Remember a thing
I just don’t seem to remember anything


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