Monday, March 10, 2014

Contributions to the Financial Crisis

"The email from a Credit Suisse executive was blunt: The bank seemed to be pushing through risky home mortgages from questionable applicants.
One borrower, the executive wrote, appeared to be a gas station attendant who was living with his mother while claiming to make $93,000 a year. Another was a former sales clerk at Nordstrom who was said to be making $110,000 a year.
A different email, from another Credit Suisse executive in June 2007, went further: “Our diligence process is such a joke.”  NYT 9 March 2014
The joke was on us.  These guys still have not been held accountable for all the pain they created.

Union Busting

Recently, a vote to unionize a Volkswagon plant in Tennessee failed by a narrow margin.  Were the workers scared by threats to withdraw state subsidies to the automaker, or have they forgotten our labor history?  They probably forgot the good old days when unions were weak and had no Federal government protection.  In the Great Coalfield War of 1914,the Colorado Fuel and Iron Company owned by John D. Rockefeller, used standard union-busting techniques such as mass firings, and if that was not enough, they obtained the help of Colorado's National Guard who turned a machine gun on the strikers encampment killing twenty of its inhabitants including women and children. 
     Class war continues.

Melding finance and politics

William A. Ackman, the activist hedge fund manager who had bet a billion dollars on the collapse of the nutritional supplement company Herbalife, offered his latest evidence to a handful of other hedge fund managers about why the company’s stock could soon plummet. He also spreads the word in Congress and regulatory agencies, hoping the bad publicity will ruin Herbalife and cause its stock price to fall to benefit his short position.  (see NYT 10 March)
    Small time crooks who steal a purse or have an ounce of pot go to jail for long periods.   But if you steal a billion, you probably are featured in the Wall Street Journal.