UNEXPECTEDLY: Media Silent on the Clinton Mortgage Banking Scam.

How much of Bloomberg’s fortune was gotten from monitoring his customers?

Virtually all the major financial institutions use Bloomberg terminals.  I say virtually all because it’s possible that there may be a hold-out, but Bloomberg is indispensable to the financial world.  It now appears that the Bloomberg sales force, the guys at the bottom of the information pyramid, has access to their customer’s usage patterns and could see what they were doing.  How much more can the top guy find out about what his customers are doing? 

For people who are not in the financial industry an explantion is in order.  The Bloomberg system is like Google, Bing, Facebook and the telephone company combined.  It’s a vast data base for people who want to look up statistics and financial facts.  But it’s also a communications network that allows Bloomberg’s customer to make trades.  The people who run the Bloomberg System can monitor this, and Michael Bloomberg is at the top of that system.  The Week:

"At Bloomberg, omniscience is a feature, not a bug." Monitoring terminal users' data has long been part of an obsession with controlling and using all available data at the company, where "stalking is simply part of the culture." Employees can keep tabs on each other, checking when someone scans — or "badges" — out of an office, and management is said to log every keystroke to track staff and outside customers. That Bloomberg culture explains how hundreds of people at the company could spy on customers "without batting an eye." In fact, this suddenly "inexcusable" practice highlights a key to Bloomberg's phenomenal success. "Data comes into the company — as much as possible, from wherever possible — but it doesn't leave because, at Bloomberg, information is money."

Being able to know what a huge hedge fund manager, the traders at Goldman Sachs or the guys at the Federal Reserve are doing before they even do (log every keystroke) it is a huge advantage if someone wanted to use that information to make money.

Of course he’s not supposed to do that. 

Of course the IRS is not supposed to attack conservative groups as a way of silencing opposition to Obama, the Holder Justice Department is not supposed to spy on reporters, and the mainstream media is not supposed to be blatantly partisan, but that’s the way it is. 

Glenn Reynolds has remarked that   “In the Obama era, the question isn’t whether you’re paranoid. It’s whether you’re paranoid enough.”

I never questioned that the information that the Bloomberg terminal I was using would be misused.  The fact is that my inquiries were plain vanilla and I did not trade on the system.  But questions about the misuse of any data base are no longer related to the tin-foil-hat crowd.  So the question occurs to people who are getting very suspicious about spying and corruption: were all of the billions Michael Bloomberg accumulated just  due to the rental fees on his terminals or was some part based on the illicit use of the system he created; a system that made it possible for him to spy on his customers?  In the Obama era that question can no longer be dismissed.

DRUDGE and now UPI catching on to Harry Reid lies.

Harry Reid caught lying about '$2.6 trillion' in cuts passed by Senate...

Harry Reid twice wrong on '$2.6 trillion' cuts in 'This Week' interview

How do we know?   His lips were moving.  Well, who can blame his for uttering ever more blatant lies, the press has been covering up for his and all the other lies the Democrats have been told, I'm sure it's s shock to him if he's ever held to the truth.

The only mystery to me is why so many people have left their money in the Greek banks this long.

Via Zerohedge

By the time the Ministry of Finance is storing records in garbage bags and shopping carts, perhaps, just maybe, one might become a little concerned about loaning money to the Greek government. One hopes.

Where they keep the records.

Occupy Wall Street and financing the Obama campaign.

Imagine you are one of those investment bankers who gave and gave to the 2008 Obama campaign. Imagine further that you are less than happy with the results of Obama’s economic policies and don’t think that you ought to be demonized by Obama and his Occupy Wall Street army.

Would you contribute to his 2012 campaign?

You betcha. You would if you know what’s good for you.

Remember that it was earlier in his administration that he told bankers that he was the only one standing between them and the pitchforks of the mob. So now if he senses an reluctance to give him money, he’s got the mobs and it’s only a few blocks from Zuccotti Park to their offices and penthouses.

Investors piling into securities just before downgrade?

From today's Wall Street Journal:

NEW YORK—Many investors sold stocks and other riskier assets and flocked back to safe-haven Treasury bonds as disappointing U.S. economic data added to fears about the global growth outlook.

Let's see if I understand this: the three major rating agencies are promising to cut the AAA rating on US debt, but "investors" are flocking to these bonds prior to the most publicized downgrade in human history?

Does this make any sense at all?  The author gives reasons:

• Slower economic growth.
• The Europeans have even bigger problems.
• The size of the market for US Treasury bonds.

Come on, if this is as creative as these unnamed investors can get, the people on Wall Street are suffering from a case of terminal stupidity.

The Truth About Money and Politics

Of the top 20 groups making contributions, 14 are almost 100% giving to Democrats, 4 are evenly splits and two favor Republicans about 65/35.

Click on the headline for the table.

Here’s How to Manage Our Politicians

Vik Rubenfeld at Pajamas Media gives us a list of goals that we should establish for our politicians.  The challenge is finding the mechanism for rewarding or punishing them for meeting or failing ot meet these goals.

GOALS
Effective management begins with the setting of goals. The single most important part of developing such an organization is the specification of the goals of the people. The goals must be long-term and evergreen. This would differentiate the organization from groups that focus on specific legislation.
Potential goals include:
National Security

• Safety of U.S. citizens at home and abroad

Financial Health of Federal and State Governments:

• Increasing GDP
• Decreasing deficit
• Decreasing debt

Financial Health of the People

• Increasing average and median income
• Reducing unemployment

Medical Health

• Increasing life expectancy
• Reducing incidence of major diseases
• Decreasing cost of health care

Upholding the Constitution

• Per Founders’ intent rather than as a “living document”

Upholding Personal Freedom

• Reducing taxes
• Reducing legal regulations and restrictions

Upholding Judeo-Christian Culture

• Supporting appreciation of the Judeo-Christian Bible

Supporting Capitalism

• Reducing legal regulations and restrictions on U.S. businesses
• Increasing financial success of U.S. businesses

Education

• Reducing cost to taxpayers
• Increasing test scores
• Decreasing dropout rates

Smaller Government

• Reducing number of government employees
• Reducing state and federal spending

We want our money back! No more "too big to jail."

Ann Coulter’s column is another reminder just how the financial catastrophe of 2008 happened and who is responsible. Yes, Wall Street made money and banks made money, but the people ultimately responsible, the “heroin pushers” were the Liberal politicians in congress and in charge of Fannie and Freddie who created the crap that brought the whole system down and drove the American family into the ditch. And I mean the American family literally. There is not a homeowner in the country who has not been affected by this disaster. Not an investor, not a retiree, not a bond holder, not anyone with a 401k who has not suffered in this disaster. The entire country is still reeling, hoping to live long enough to eventually recover. And the real culprits have made off with their money and Chris Dodd and Barney Frank are still not in jail for their part in this disaster.

Investigate this:

Forget "stimulus" bills and "shovel-ready" bailouts ... the current financial crisis, which is the second Great Depression, was created slowly and methodically by Democrat hacks running Fannie Mae and Freddie Mac over the past 18 years....

Goo-goo liberals with federal titles pressured banks into making absurd loans to high-risk borrowers -- demanding, for example, that the banks accept unemployment benefits as collateral. Then Fannie repackaged the bad loans as "prime mortgages" and sold them to banks, thus poisoning the entire financial market with hidden bad loans....

Obama's own Federal Housing Finance Agency reported recently that by 2014, Freddie and Fannie will cost taxpayers between $221 billion to $363 billion.

Over and over again, Republicans tried to rein in the politically correct policies being foisted on mortgage lenders by Fannie Mae, only to be met by a Praetorian Guard of Democrats howling that Republicans hated the poor.

In 2003, Republicans on the Senate Banking Committee wrote a bill to tighten the lending regulation of Fannie and Freddie. Every single Democrat on the committee voted against it.

In the House, Barney Frank angrily proclaimed that Fannie Mae was "just fine."

Rep. William Clay, D-Mo., accused Republicans of going on a "witch hunt" against Fannie Mae and attempting a "political lynching of Franklin Raines" ...

As late as 2008, Sen. Chris Dodd, D-Conn., who had received more than $133,000 in political contributions from Fannie Mae, called Fannie "fundamentally strong" and "in good shape" -- which is the kind of thing the Politburo used to say about Yuri Andropov right after he died.

Enron's accounting fraud was a paltry $567 million -- and it didn't bring down the entire financial system. Those involved in the Enron manipulations went to prison. Raines and Gorelick not only didn't go to jail, they walked away with multimillion-dollar payouts, courtesy of the taxpayer.

...

Under the Democrats' 2010 "Financial Reform" bill (written by Chris Dodd, Barney Frank and Goldman Sachs), Raines keeps his $90 million, Jamie Gorelick keeps her $26.4 million, and Goldman keeps its $12 billion from the AIG bailout.

Let's get it back. Twelve billion, one hundred and sixteen point four million dollars might not sound like a lot to you, but it starts to add up.

Here in Virginia ex-delegate Phil Hamilton has been indicted for sponsoring a bill that gave money to start up a university center which in turn hired him to direct it.  That was four years ago.  The amount of money involved was $500,000 to Old Dominion University and Hamilton got a $40,000 job out of it.  In the grand scheme of things, chump change.

Compare that to the trillions of dollars that were involved in the Democrats' fraud scheme, that netted them millions of dollars in payments while driving the country's finances off the cliff and ruining the lives of millions of people. 

There should be no institution that's "too big to fail" and no politician who's "too big to jail." 

What’s more important: cutting spending or cutting the deficit?

What’s more important: cutting spending or cutting the deficit? Wait, aren’t they connected?

The story from the Washington Examiner polls the public and the political class and shows that where you sit is hwere you stand.

The survey found "that 57% of likely U.S. voters think reducing federal government spending is more important than reducing the deficit. Thirty-four percent (34%) put reducing the deficit first," according to Rasmussen.


But when the same issue was put before members of the two groups, the results were profoundly different:


"It’s telling to note that while 65% of mainstream voters believe cutting spending is more important, 72% of the Political Class say the primary emphasis should be on deficit reduction," Rasmussen said.

Here’s the reason why most voters believe that cutting spending is more important. If you cut spending, you accomplish two things: you reduce the deficit AND you reduce the impact that the government has on the individual. The Tea Party is about the gargantuan government as much as it is about the humongous deficit.

When the political class puts deficit reduction first what people hear is: tax increases. The ruling class continues to believe that the people will be willing to pay more of their money to the government if they can see the deficit reduced; and this has the added benefit – to the government – of being able to continue to give money to their favored constituencies.

The focus should be laser-like on spending reductions; cutting the size and scope of government. If we do that, the deficit will take care of itself.

The "Poverty" Part of the Southern Poverty Law Center (SPLC) Doesn't Apply to It's Leaders.

In fact, poverty does not seem enter into the SPLC's concerns. 

The Petrelis Files exposes the fabulous wealth of the poverty pimps running the SPLC. Not only does the SPLC have about $190 million in the bank, but that banks appears to be in a tax haven - the Cayman Islands (form 1099, part V, line 4b). Could it be in case Morris Dees, head of the SPLC, decides to leave the country with the SPLC treasury?

It looks like he's already helped himself to much of it.  Dees pays himself $350,000 per year, and travels on chartered planes (private jets for those of you in flyover country).

Poverty pays very well as evidenced by Dees home and wife:

The swimming pool, as seen from the pool house.



An area in the main house for relaxing conversations.

The studio building for Dees' wife Susan Starr.

A lounging jacket designed and modeled by Starr.

Played right, poverty a a very lucrative business.  After seeing these pictures we can better understand why Dees and the SPLC is such a go-to source for the media.  Dees is just like them.

It's Illegal In California to Give Your Customers Coffee and Donuts ....

Mark Steyn wonders what effect this election will actually have.

A few big things have the American people upset: the attempted hijacking of their health care by the federal government and the smug, condescending arrogance of the ruling class swept into power by the Obamas and their $200 million-dollars-a-day vacations.

But as a small business owner, I know that the real burdens that the American people and the American entrepreneur suffer under were not up for election this year, or the year before, or the year before that. The real rulers of our lives sit in offices with grey metal desks and who tell us that a hardware story owner can’t put out a pot of coffee and a box of donuts for its customers without a kitchen with stainless steel sinks with hot and cold running water and a prep kitchen to handle the donuts. In other words, it’s illegal to run down to Dunkin Donuts for coffee and pastries and put them out for your customers if you live in California.

In my particular business, I’m required to file something called and ADV 1 and and an ADV 2 with the federal regulators and register with the SEC to be allowed to provide my clients with financial advice. Well, OK, so we hired a law firm and tens of thousands of dollars later we’re officially and legally registered.

So, by the way, was Bernie Madoff.

So the crooks and liars who got us into this current financial mess – yes, I’m talking to you Chris Dodd and Barney Frank – decide that they need to overhaul financial regulation to eliminate financial risks, like “too big to fail.” They do this by writing a law - the Frank-Dodd Financial Reform bill - that enshrines “too big to fail” as an official government policy while completely ignoring the two institutions - other than Frank and Dodd- that more than any other caused the financial crisis: Fannie Mae and Freddie Mac. Fannie and Freddie between them guarantee about 90% of all home loans and their reckless lending to people who could not afford their mortgages led directly to the financial crisis that cost millions of families their homes and caused banks around the world to fail.

But back to me. Thanks to the new laws I now have to file a revised form ADV 2 written in prose instead of checking off some boxes and I have to register with the state instead of with the feds. And how will that make the financial world safer for the average investor? Beats me (hint: it doesn’t) … but it’s making my lawyers richer, which may be the purpose of the law all along.

Steyn:

This is the reality of small business in America today. You don’t make the rules, you don’t vote for people who make the rules. But you have to work harder, pay more taxes, buy more permits, fill in more paperwork, contribute to the growth of an ever less favorable business environment and prostrate yourself before the Commissar of Community Services – all for the privilege of taking home less and less money.

And eventually you wake up and find, as in California, that your state is all hole and no doughnut. Just as gun control is not about guns but control, so doughnut control is likewise not about doughnuts, but about ever more total control. Big Government won’t make the coffee, or the doughnuts. It just regulates them. All it makes is small citizens. If next Tuesday doesn’t begin the rollback of unaffordable hyper-regulation, we’ll need a new mass movement – the Alliance of Non-Compliance.

Description of Faisel Shahzad: "He was like you, like me, handsome, liberal and an active person"

The NY Slimes has written an article about the Times Square bungler in which they ask the question: what made him a "radical?" The headline blames the economy: Recession changed NYC bomb suspect.  And as all good NY Slimes readers know, the recession was caused by George Bush and the rotten Republicans so ... all we have to do is connect the dots.  Say it together folks: "It was George Bush's fault!"

“The question is who has put Faisal in this path?” Mr. Ahmad asked. “The Faisal with the beard that you see, he was not the old Faisal. He was like you, like me, handsome, liberal and an active person.”

So here we have this innocent, NY Slimes reading, active, liberal turned from the path of righteousness, hugging trees, saving the whales, envisioning whirled peas, transformed by George Bush into a would-be American slaughtering, beard wearing, resume inflating, globe trotting, huge carbon footprint leaving,  Jihadist who despite his best efforts and his privileged upbringing and multiple degrees from American universities can't manage to set off an explosion when some ignorant boob from the sticks can make one from fertilizer and fuel oil.

If this is not an indictment of the American educational system, and liberals in general, I don't know what is.

A fairy tale of GM (and its masters)

By the way, this is not something you will not read in your local paper, which is why the newspaper business is on life support.

Previously unreleased documents supplied to The Washington Times reveal that GM specifically used funds it received from the Troubled Asset Relief Program to pay off the government loan. According to Neil Barofsky, the special inspector general for TARP, $4.7 billion of $6.7 billion - 70 percent - of what GM paid back came from TARP money the company received. "The one thing a lot of people overlook with this is where they got the money to pay the loan," Mr. Barofsky told Fox News' Neil Cavuto on Wednesday. "It isn't from earnings." The numbers are based on a quarterly report Mr. Barofsky's office provided to Congress last week.

Despite administration denials, the inspector general proves that GM paid off its loan with government money.

The watchdog, however, won't budge. When asked how to tell whether the $4.7 billion used to pay off the government loan came from TARP funds and not some other source, a spokesman for the Special Inspector General's Office explained: "We have a letter from General Motors requesting that they take the money out of escrow and pay the other debt down. And the money in the escrow was clearly TARP funding." That letter has been released by the Special Inspector General's Office.

Keeping score

WHY BLOGGING HAS SLOWED WAY, WAY DOWN

Thanks to those who read our blog regularly and especially those who asked why we have not been blogging lately. The answer is that I have been incredibly busy with our new venture.

Let me explain.

For almost a quarter century my partners and I have provided financial advice and asset management to individuals, families and institutions throughout the world. We began in the mid 1980s with Kidder, Peabody & Co. Kidder was acquired by GE and after a few years sold to Paine Webber. About 10 years ago Paine Webber was bought by UBS, the large Swiss bank. Throughout all this the name on my office door changed but we continued to provide the kind of financial services that my clients expected and appreciated.

The market collapse of 2008 made us consider whether we should continue to work for a major firm or whether independence was better for our clients and ourselves. We decided to form our own Registered Investment Advisory (RIA) firm, Korving & Co LLC, and opened our doors on January 29th.

We have had an overwhelmingly positive response from our clients and we have been working day and night to bring them to our new custodian.

Blogging will be light for the next few months, but I will find the time to post things that interest me from time to time.

Why the government is ALWAYS less efficient than the private sector.

Budgeting is probably the least favorite topic advisors have to deal with. How to spend money can be a very touchy topic. One way to start the conversation is with a simple but insightful analysis first put forward by Milton Friedman, winner of the 1976 Nobel Prize in Economics.

In his book Free to Choose, Friedman listed four ways to spend money: 1) spending your own money on yourself; 2) spending your own money on someone else; 3) spending someone else’s money on yourself; 4) spending someone else’s money on someone else.

In Case 1, spending your own money on yourself, you have the strongest incentive to economize and to get the highest value. When ordering dinner in a restaurant, only you can really decide if the extra cost of a higher priced meal is really worth it. Only a client can make the call as to whether he or she would rather spend $30,000 on a new car or spend $20,000 on a used car and put $10,000 away for the future.

Case 2, spending your own money on somebody else, is what most of us are doing right now during the holiday season. We have the same incentive to economize but not the same knowledge of what recipients would do with the money if they were spending it on themselves.

Buying lunch on an expense account is a classic example of Case 3, spending someone else’s money on yourself. You have a strong incentive to get your money’s worth but not to economize.

Finally, spending someone else’s money on someone else, Case 4, has the weakest incentives to economize or get the best value. This, unfortunately, probably explains why many government programs are not very efficient.

The point this simple analysis should bring home to clients is that they should weigh each dollar they spend. That is what Nobel prizewinners expect them to do.

[Stolen from FOUR WAYS TO SPEND MONEY, from Stephen J. Huxley, Ph.D., chief investment strategist, Asset Dedication ]

Tom Shales defending Roman Polanski: "in Hollywood I am not sure a 13-year-old is really a 13-year-old."

Via Patterico's Pontifications:

From a Washington Post chat with Tom Shales today (thanks to several readers):

Dunn Loring, Va.: Just wondered if you’ve noticed your habit of apologizing for media figues? For example, Polanski rapes and sodomizes a drugged 13-year-old and you write a flattering article that falsely understates his crime; Letterman jokes about the statutory rape of the teenage daughter of a conservative politician and you call the joke inartfully phrased but otherwise fine; Letterman admits to affairs with subordinate employees and you state it’s alright because he’s just a media personality. Do you ever condemn anything done on TV unless it’s done by a conservative?

Tom Shales: Hello, Dunn Loring, I didn’t want to sign off without trying to answer your question. I didn’t realize I had written a column defending Roman Polanski and minimized his crime – are you sure it was me? I mean, I? There is, apparently, more to this crime than it would seem, and it may sound like a hollow defense, but in Hollywood I am not sure a 13-year-old is really a 13-year-old.Do I ever condemn anything done on TV unless it’s done by a conservative? Honestly – I don’t think you could build a very strong case against me on that particular charge. I’d have to go back and read dozens and dozens of columns from the past several years – UGH! You can do that if you want. But remember, I am a critic, I don’t have to be “fair and balanced” and critize every faction equally. I swear to you I do not do it on ideological or political grounds, not consciously. I would hate to be that predictable. Thanks for dropping by…….

...

So Shales not only wrote an article minimizing Polanski’s crime, but he even suffered the professional rebuke of a correction. But he doesn’t remember it! Let’s further remind him of his portrayal of Polanski as a man “hounded” by my employer, the Los Angeles County District Attorney:

Polanski belongs to a rarefied subculture: celebrities hounded by the state. His case brings to mind that of Charles Chaplin, pestered for years with sexual allegations, including a phony paternity suit, and otherwise hounded by authorities for his political beliefs.

Let’s quote Shales again from today: “I didn’t realize I had written a column defending Roman Polanski and minimized his crime.”

Realize it, Shales.

P.S. I can’t end this post without making an observation about the other portion of Shales’s comment from today, for this is perhaps the stupidest thing he has said yet on this topic: “it may sound like a hollow defense, but in Hollywood I am not sure a 13-year-old is really a 13-year-old.”

You know what? That, to me, sounds like more than just a “hollow defense.”

To me, that sounds like a quote that, in a year or so, Tom Shales will not remember even having made.

Read the whole thing.

There is something truly vile in Hollywood culture that makes people lie to others and ... I am fairly sure ... to themselves.

Government income is tanking

Thanks to Glenn Reynolds, I have found a hook to write an essay that I have been meaning to write for a few months.

JOHN GALT WRITES HOME: Federal Receipts Tank: March Tax Take Down 27.9%.

Here is the headline from the Chicago Daily Observer: Federal Receipts Tank: March Tax Take Down 27.9%

Through March, federal receipts were running 14% behind the previous year. Each month during the fiscal year has trailed the previous year, and degree of the difference has steadily increased.

There are several assumption built into the government’s projections of the deficits that are coming. Here’s a little secret that only you and I share: the deficits will be much, much bigger than current projections.

The numbers are off not because projected spending is going to be bigger than advertised, in fact it may not be possible for the feds to spend money as fast as they would like.

Deficit projections are low because tax revenues are going to plummet.

The feds collect taxes on income from various sources. The first, wages, are shrinking as people are joining the ranks of the unemployed, as companies are making across-the-board wage cuts, and as bonuses and salaries in formerly high wage areas like financial services are slashed (remember AIG?).

Second, dividend income is way, way down. GE, as an example, cut its dividend 68%. Banks – a former source of high dividend paying stocks – have all but eliminated dividends, and this is true across the board for companies who are hunkering down for a long period of austerity.

How about taxes on interest? GM is defaulting on its bonds, Citigroup is converting its preferred stock with a high coupon into common with no coupon. And that’s just the beginning. CD rates are in the very, very low single digits providing very, very skinny incomes that yield very skinny tax revenue. Interest on treasury bonds are so low some people are literally paying the government to hold their money.

And then there is the capital gains tax. I was very proactive last fall as losses mounted in advising my clients to sell and take their capital losses. That was the least I could do to turn lemons into lemonade. Now investors they have several ways of hiding their income from the tax man for years into the future. They can offset $3000 of ordinary income with accumulated capital losses. Second they can offset any capital gains for years into the future with losses they took last year, carrying their losses forward until they are exhausted. Anyone who ends up paying capital gains taxes this year or next is not well informed or advised.

The outflow side of the Federal deficit is out of control. What they Feds may not have counted on is that the income side is also out of control.

Corruption in public pensions

Public pension funds differ from private pension funds because their shortfall can be covered by taxing the public. That’s also the reason why they often turn into political piggy banks.

Take the NY State’s public pension funds which enriched money managers and “fixers” millions of dollars.

The fact is that pension fund managers are paid millions of dollars in fees and these managers are often chosen not for their expertise but for who they pay off.

Performance of pension managers is often worse than your typical retail mutual fund.

In The Public Pension Shakedown the "play for pay" scandal is exposed for all to see. And the one who gets stuck with the bill is the long-suffering taxpayer who has to make up the losses created by the crooks who run this money.