Monday, May 28, 2012
RT - Oops, BBC: Iraq photo to illustrate Houla massacre?
Richard (RJ) Eskow - 10 Reasons To Be Suspicious About Wall Street's Facebook Fiasco
“Zuckerberg promptly sold his 30.2 million shares, netting a quick billion dollars and change. That tells you what he thinks of this investment.”
Three of Wall Street biggest and best-known financial institutions handled the Facebook IPO, so why were people immediately suspicious when the stock soared and then promptly tanked? Easy answer: Because three of Wall Street biggest and best-known financial institutions handled the Facebook IPO.
Each of them - Morgan Stanley, Goldman Sachs, and JPMorgan Chase - has a history of exactly the kinds of unethical and/or illegal behavior that might, just might, explain what happened with Facebook.
Mark Gongloff offers a good overview of Mr. Zuckerberg's Wild Ride, in which a stock that was offered at an IPO price of $38 soared to $45 and then plunged to its current (as of this writing) price of $31. A lot of people lost money - which means a lot of people made money, too.
Zuckerberg promptly sold his 30.2 million shares, netting a quick billion dollars and change. That tells you what he thinks of this investment.
Here are ten reasons why it makes sense to be suspicious of the Facebook IPO, starting with the fact that any overview of the three institutions which handled it might best be described as "rounding up the usual suspects":
1. Morgan Stanley has a history - and a culture - of tricking their own clients into making lousy investments.
It was Morgan Stanley's brokers who, in one notorious account, loved to brag "I ripped his face off!" after convincing one of the firm's own clients to buy a stock that the firm knew was lousy. (See Frank Portnoy's account in Fiasco.)
CNBC reports that "Morgan Stanley may have spent billions of dollars to support the (Facebook) stock price by buying shares in the market." This kind of market manipulation is common. They do these things to create an artificial sense of momentum when the market is turning against an offering. Investors don't know they're doing it at the time, of course. In this case, Morgan Stanley could have spend a billion dollars or more manipulating the stock price.
Now Morgan Stanley's being investigated by the SEC and the Commonwealth of Massachusetts, after reports indicated that its analysts were withholding crucial (and negative) information about the stock offering and at the same time sharing it with their own favored clients. That's a no-no.
2. JPMorgan Chase has a long rap sheet. What's another bust?
JPMorgan Chase is currently in the public time-out box for its botched derivatives trades in London - about which which it appears to have deceived its own investors (when it failed to tell anyone that the new, improved "risk model" it rolled out was not being used to analyze this London unit.)
When CEO Jamie Dimon said that laws may have been violated in that case, was he expecting people to be surprised? JPM has a long history as a corporate lawbreaker during Dimon's tenure. It paid millions to settle a long list of violations that includes illegally cheating veterans coming home from Iraq - or still risking their lives there. It gave up nearly three quarters of a billion dollars to settle charges of bribing public officials in Jefferson County, Alabama. (Jefferson County is bankrupt. JPM's executives are doing just fine.)
And JPMorgan Chase just gave up billions more to settle charges stemming from its rampant foreclosure fraud, which involve mass perjury and forgery conducted by a group of inexperienced youngsters that JPM employees called "the Burger King kids."
The JPM rap sheet's got a lot more offenses on it, but that should give you the general idea. Dimon loves to affect an air of respectability. But his outfit ain't the PTA, if you catch my drift.
3. Goldman Sachs is ... well, it's Goldman Sachs.
In one of its many notorious deals, ABACUS, Goldman Sachs lied to prospective investors about mortgage-backed securities. While it was telling investors that these securities were well-chosen and reliable, it was hiding the fact that they were actually being selected by an investor who was famous for betting against them.
Goldman recently settled a $22 million lawsuit for illegally sharing confidential information with its preferred clients, which is a form of insider trading, using internal meetings called "huddles."
That's a lot like the conduct that's being investigated at Morgan Stanley, and the questions it raises is the same one: Was this IPO designed to fail? Barring that, did insiders only tell a few favorites once they knew it would fail, so that they could all get rich betting against the suckers who didn't know any better?
Who's huddling who in the Facebook deal?
4. Goldman Sachs already tried to evade the law for Facebook once before.
If at first you don't succeed ...
At the time we asked, "Which Is More 'Gangsta,' (rapper) 50 Cent's Twitter Stock Pitch or Goldman's Facebook Deal?" We stand by our original conclusion: Sorry, Fitty.
Lloyd Blankfein's entourage tried to avoid SEC regulations that say a privately held company can't have more than 500 investors by defining many thousands of unrelated investors as a single group. They demanded a minimum $2 million investment - there ain't no sucker like a rich sucker - and pitched the deal in language that would embarrass a Nigerian email scammer:
"When you have a chance I wanted to find a time to discuss a highly confidential and time sensitive investment opportunity ... If you agree not to use information that we reveal to you ... I will be able to disclose the name of the company and provide you with more information..."
They should've started the pitch letter with the words "Dearest Beloved, My late husband the oil minister ..." As Nomi Prinsnoted at the time, the plan was to artificially inflate the value of these illegally-traded shares and then ""pawn off the overpriced goods on the clients."
They tried to run that little number back in 2010 but failed. Did they finally succeed this time?
5. There's no such thing as a free market.
Thanks to deregulation, our "free markets" ain't free - in fact, they're less free than at any time in modern history.
Nevertheless the anti-regulatory crowd insists on describing what we have today as a "free market," instead of what it really is: a financial funhouse where investors don't know until it's too late which pop-up vampire is a cardboard cutout and which one's really going suck their blood. "Ripped his face off" indeed.
That's not market economics, it's a horror show.
6. Facebook's a shaky investment anyway.
Think about it: With all the money they have at their disposal, Zuckerberg and his team still can't design a user interface that doesn't frustrate, aggravate, and infuriate millions of people every day. Sure, people use it - because everybody else does. But that was true of MySpace, too, until something better came along. Facebook has a mind-boggling number of users, and they spend an equally mind-boggling amount of time on it every day. But even Mafia Wars come to an end sometime.
What's more, the stock they're peddling isn't much to write home about. Their voting rights are highly diluted, so that the stock owned by Zuckerberg and other preferred holders has ten times as much voting power as everybody else's. Zuckerberg owns 18 percent of Facebook's shares, but has absolute control of the company with 57 percent of the votes.
When something's as overhyped as Facebook stock, it's caveat emptor time. You're throwing yourself at Zuckerberg's mercy, hoping he does better with the company than he has designing Facebook's account management features. (Tried changing your privacy levels lately?)
But if he mismanages your money you'll just have to bend over and get poked.
7. Mark Zuckerburg doesn't give a rat's you-know-what about investors or IPOs.
"A million dollars isn't cool," says Justin Timberlake as Sean Parker in that movie about Zuckerberg and Facebook. "Abillion dollars is cool." It was a cool week for Zuckerberg, who just made another billion, but he doesn't think much of investors. Stephen Gandel lays out all the ways it shows, starting with the fact that Zuckerberg didn't want to take the company public and keeps reminding everybody about it. SEC rules - the same rules Goldman tried to evade last year - forced him into it.
Zuckerberg also kept blowing off investors at scheduled meetings. Frankly, that's a refreshing change from all the CEOs I've known who kowtow to them (and often game the numbers to impress them). But it doesn't exactly strengthen one's confidence that this offering was designed with the best interests of investors in mind.
And while CNN's Gandel concludes that Zuckerberg doesn't care about making more money, I'm not so sure. He's sure made a lot in the last few days. For its part, Goldman's already shown that it's willing to trade on insider information to help high-value clients - clients like Meg Whitman. They called it "spinning," and it involved rewarding executives who gave them a lot of corporate business (which uses their investors' money, not their own) shares in IPOs they're underwriting.
Whitman was forced to resign from its board and pay a multimillion-dollar fine after the story became public. If they'd "spin" for a piece of eBay's investment action, what motions would they go through for Facebook's?
8. These three players have a huge collective presence on Nasdaq.
Morgan Stanley and Goldman Sachs are almost always in the top ten in reported trade volume on NASDAQ, where Facebook was offered. And JPMorgan Chase provides financial backing to many of these deals. Together they represent a huge chunk of NASDAQ (and New York Stock Exchange) transactions. They control a lot of the trading flow and they're sitting on a lot of data.
That means they can manipulate the market in all sorts of ways. And they can leverage other people's money and make it work ... for them.
So while we're at it, remind me again: Why do we allow so few companies to dominate our financial market? It's called an "oligopoly," and it's bad. It's especially bad when they become too big to fail and can pretty much do whatever they want, knowing we'll rescue them again if - make that when - they screw up again.
9. There was a lot of automated trading of Facebook shares.
The roller-coaster ride for Facebook's stock also appears to involve very high volumes of electronic robo-trading, which always raises suspicions. That could just be a sign that the computer programs which now dominate our stock market (and which cry out for a financial transactions tax) didn't like the transaction. If so, they're smarter than most humans.
Or it could mean that these three firms, which together play a dominant role on Nasdaq, pulled a fast one of some kind. Somebody needs to analyze those 'flash' trades and find out.
10. Because they can.
Hey, these three underwriters can do whatever they want - and they know it.
Until some bankers get indicted - which doesn't seem likely anytime soon, given the glacial pace of the Administration's much-hyped (but now apparently forgotten) mortgage fraud task force - they can break any law or rule they want to break. What's the worst that could happen to them? If they get caught they'll negotiation another gigantic fine and let the shareholders (including working people's pension funds and 401ks) pick up the tab while they collect their bonuses and head off to the Hamptons.
So, until the Administration shows us some Wall Street indictments, the usual suspects will keep committing the usual offenses over and over. The Justice Department needs to get serious about investigating Wall Street fraud. And more states should join Massachusetts in investigating this deal.
This one goes to 11 ...
Do we know that's what happened with the Facebook IPO? No - and we won't know without a proper investigation. But wedo know that the Facebook plunge reflects a classic scenario for shady traders who make money hyping a stock while secretly betting against it.
And we know that all three of these institutions are perfectly capable of doing it. They have the means, they have the motive, and - until our government does something about it - they have the opportunity.
So get on with it, Washington. You better update your status on those fraud investigations before it's too late.
Bloomberg - Half of Detroit's Streetlights May Go Out as City Shrinks
By Chris Christoff | Bloomberg – Fri, May 25, 2012 10:28 AM EDT
Detroit, whose 139 square miles contain 60 percent fewer residents than in 1950, will try to nudge them into a smaller living space by eliminating nearly half its streetlights.
As it is, 40 percent of the 88,000 streetlights are broken and the city, whose finances are to be overseen by an appointed board, can't afford to fix them. Mayor Dave Bing's plan would create an authority to borrow $160 million to upgrade and reduce the number of streetlights to 46,000. Maintenance would be contracted out, saving the city $10 million a year.
Other U.S. cities have gone partially dark to save money, among them Colorado Springs; Santa Rosa, California; and Rockford,Illinois. Detroit's plan goes further: It would leave sparsely populated swaths unlit in a community of 713,000 that covers more area than Boston, Buffalo and San Francisco combined. Vacant property and parks account for 37 square miles (96 square kilometers), according to city planners.
"You have to identify those neighborhoods where you want to concentrate your population," said Chris Brown, Detroit's chief operating officer. "We're not going to light distressed areas like we light other areas."
Detroit's dwindling income and property-tax revenue have required residents to endure unreliable buses and strained police services throughout the city. Because streetlights are basic to urban life, deciding what areas to illuminate will reshape the city, said Kirk Cheyfitz, co-founder of a project called Detroit143 -- named for the 139 square miles of land, plus water -- that publicizes neighborhood issues.
"It touches kids going to school in the dark," said Cheyfitz, chief executive of Story Worldwide Ltd., a New York marketing company. "It touches midnight Mass at a church. It touches businesses that want to stay open past 9 p.m."
Bing in 2010 began an independent project called Detroit Works to sort ideas on how to reconfigure the city for residences, businesses, green space and even agriculture, a plan due in August.
Meantime, Brown said, the city will fix broken streetlights in certain places even as it discontinues such services as street and sidewalk repairs in "distressed" areas -- those with a high degree of blight and little or no commercial activity.
Bing's plan requires state legislation to create the lighting authority. Governor Rick Snyder supports the plan, said his senior policy adviser, Valerie Brader.
There's already experience snuffing out streetlights within Detroit's borders. Highland Park, a 3-square-mile city encircled by its larger neighbor, removed 1,100 of 1,600 streetlights last year, after piling up a $4 million debt to DTE Energy. The move saves $45,000 a month, said Alejandro Bodipo-Memba, a spokesman for the company.
Only major streets and intersections remain lit in the city of 12,000, once home to Chrysler Group LLC's namesake car manufacturer and Henry Ford's first moving assembly line. Mayor DeAndre Windom, 45, said residents at first complained, through few do now. He's considering grants and private funding to relight darkened streets
Colorado Springs pulled the plug on 9,000 of its 25,600 lights in 2010 to save $1.3 million, said David Krauth, a city traffic engineer. Some were relit as revenue improved, though 3,500 remain dark, saving about $500,000 a year, he said.
In Detroit, some streets have no working lights. Many appear dim or are blocked by trees. And some areas with mostly vacant lots are well-lit.
A single, broken streetlight on the northeast side brings fear to Cynthia Perry, 55. It hasn't worked for six years, Perry said in an interview on the darkened sidewalk where she walks from her garage to her house entrance.
"I'm afraid coming in at night," she said. "I'm not going to seclude myself in the house and never go anywhere."
In southwest Detroit, businesses on West Vernor Highway, a main commercial thoroughfare, have sought $4 million in private grants to fix the situation themselves. The state would pay $2.5 million, said Kathy Wendler, president of the Southwest Detroit Business Association.
Jamahl Makled, 40, said he's owned businesses in southwest Detroit for about two decades, most recently cell-phone stores. He said they've have been burglarized more than a dozen times.
"In the dark, criminals are comfortable," Makled said. "It's not good for the economy and the safety of the residents."
North of there, on a stretch of West Grand Boulevard, the bases of light poles show where thieves tore out the wiring.
As many as 15,000 Detroit streetlights use 1920s technology, according to a 2010 study by McKinsey & Co. Upgrading the system would cost $140 million to $200 million, and $5 million more to operate than the $23 million now spent annually, the report said.
Besides streetlights, the Detroit lighting department provides electricity to 144 customers that include Detroit schools, Wayne State University and local government offices. Almost 22 percent of the city's electric bills were unpaid, the McKinsey report said.
That's just one reason Detroit is digging out of a $265 million deficit and saddled with more than $12 billion in long- term debt. To avoid a state takeover, Detroit agreed in April to have its finances overseen by a nine-member board appointed by the city and the state.
Delivering services to a thinly spread population is expensive. Some 20 neighborhoods, each a square mile or more, are only 10 to 15 percent occupied, said John Mogk, a law professor at Wayne State University who specializes in urban law and policy. He said the city can't force residents to move, and it's almost impossible under Michigan law for the city to seize properties for development.
Mogk said landowners can demand many times what property would fetch on the open market.
"There are tremendous political, administrative, financial and, to some degree, legal obstacles," Mogk said. "Unless you phase out a neighborhood altogether, you still need lighting, and waste pickup and police and fire protection."
As Detroit's streets go dark, some of those neighborhoods may fade away with the dying light.
To contact the reporter on this story: Chris Christoff in Lansing, MI firstname.lastname@example.org.
To contact the editor responsible for this story: Steve Merelman at
Reuters - Vatican faces widening of leaks scandal
By Philip Pullella
VATICAN CITY (Reuters) - The Vatican faces a widening scandal that in one short week has seen Pope Benedict's butler arrested, the president of its bank unceremoniously dismissed and the publication of a new book alleging conspiracies among cardinals.
It was a poisonous Pentecost Sunday for the pope, who likely had the tumultuous events of the past week on his mind as he celebrated a mass in St Peter's Basilica on the day regarded as the birthday of the Church.
On Saturday his personal butler, Paolo Gabriele, 46, was formally charged with stealing confidential papal documents in the scandal that has come to be known as "Vatileaks". Some of the documents allege cronyism and corruption in contracts with Italian companies.
One prominent cardinal, illustrating the growing emotion of the debate in Vatican circles, wrote in an Italian newspaper that the pope had been betrayed just as Jesus was betrayed 2,000 years ago.
The scandal, which has been brewing for months, has hit the very heart of the Roman Catholic Church. Gabriele - now known in Vatican statements as "the defendant" - was until Wednesday night the quiet man who served the pope's meals, helped him dress and held his umbrella on rainy days.
The pope made no reference during his two public appearances on Sunday to the scandal or the arrest, which aides said had "saddened and pained" him.
"I feel very sad for the pope. This whole thing is such a disservice to the Church," Carl Anderson, head of the Knights of Columbus charity group who is also a member of the board of the Vatican bank, told Reuters.
The night before the Vatican announced an arrest as part of its investigation of the leaks, it was rocked by the sudden ouster of the president of its bank, formally known as the Institute for Works of Religion (IOR).
Anderson, among those who voted no-confidence in Italian Ettore Gotti Tedeschi, said in a telephone interview with Reuters that the president was sacked because of "a fundamental failure to perform his basic responsibilities".
Anderson rejected accusations by Gotti Tedeschi that he had been ousted because he wanted the bank to be more transparent.
"Categorically, this action by the board had nothing to do with his promotion of transparency," Anderson said. "In Fact, he was becoming an obstacle to greater transparency by his inability to work senior management," Anderson said.
Anderson said the Vatican is still aiming to make the OECD's "white list" of states with financial transparency and other Vatican sources have pointed to the president's very public ouster as an example of the drive for transparency.
A memorandum of the meeting that ousted Gotti Tedeschi and obtained by Reuters said he had shown "progressively erratic personal behaviour" and failed to defend the bank "in the face of inaccurate media reports".
Gotti Tedeschi's ouster was significant in internal Vatican politics because it was another blow to the prestige of Vatican Secretary of State Cardinal Tarcisio Bertone, the pope's right-hand man, who was instrumental in bringing the Italian in from Spain's Banco Santander to run the IOR in 2009.
Earlier last week saw the publication of "His Holiness," a new book by Italian journalist Gianluigi Nuzzi, who was first leaked some of the documents in January and aired them on a television show.
He says he was given the material by people loyal to the Church who wanted to expose corruption and that he did not pay anything for the documents.
After the events of last week, the atmosphere in the walled city-state was glum on Sunday. Vatican sources said they could not rule out more arrests, particularly if Gabriele named any accomplices.
The leaks scandal prompted one prominent Churchman, Cardinal Carlo Maria Martini, the former archbishop of Milan and himself once a candidate for the papacy, to appeal to Church leaders "to urgently win back the trust of the faithful".
PERSONAL BETRAYAL OR BIGGER PLOT?
Martini, writing in an Italian newspaper, said the pope had been "betrayed" just as Jesus was betrayed 2,000 years ago, and that the Church would have to emerge from the latest scandal cleaner and stronger.
Still, few believed that Gabriele, a shy and private man, could have acted on his own and some said he may have been an unwitting pawn in a Vatican power struggle.
"Either he lost his mind or this is a trap," a friend of Gabriele's in the Vatican told the newspaper La Stampa.
"Whoever convinced him to do this is even more guilty because he manipulated a simple person."
While news of Gabriele's arrest has filled pages and pages of newspapers in Italy and beyond, the Vatican's own newspaper, L'Osservatore Romano, has ignored the story.
Some say this may be because the paper itself has been an instrument in a power struggle involving reciprocal mud-slinging between allies and enemies of Cardinal Bertone.
"This is a strategy of tension, an orgy of vendettas and pre-emptive vendettas that has now spun out of the control of those who thought they could orchestrate it," Church historian Alberto Melloni wrote in the Corriere della Sera newspaper.
The leaked documents included letters by an archbishop who was transferred to Washington after blowing the whistle on what he saw as a web of corruption and cronyism, a memo that put a number of cardinals in a bad light, and documents alleging internal conflicts about the Vatican bank.
Wednesday, May 2, 2012
Hình ảnh Ngày Lao động 1 tháng 5 trên thế giới
Tây Ban Nha:
In Spain, where unemployment has reached 24.4%, demonstrators in Valencia held banners and flags reading: "Work, dignity, they want to end all of it."
Thổ Nhĩ Kỳ:
Phi Líp Pin:
Indonesian workers display mock dead bodies representing the death of capitalism and imperialism during a rally to mark May Day in Jakarta, Indonesia, Tuesday, May 1, 2012. Thousands of Indonesian workers staged the rally demanding the government to raise minimum wage and reject outsourcing. – Photo by AP.