text:
The JPMorgan scandal also throws into relief the government's failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
Meanwhile, an investigation into the mortgage abuses that led to the financial crisis, promised by President Obama in January, has been slow to produce results.
September 1, 2012
Still No Justice for Mortgage Abuses
It has been six months since the big banks settled with state and federal officials over evidence of widespread foreclosure fraud, promising to provide $25 billion in mortgage relief in exchange for not being sued over past foreclosure abuses.
At the time, it looked like a sweet deal for the banks. The fines were paltry compared with the damage done to homeowners and the economy. And much of the relief the banks were obliged to provide could be met by continuing more or less with business as usual.
It still looks like a sweet deal.
The Office of Mortgage Settlement Oversight, the monitor of the settlement, released a preliminary report last week showing that 138,000 homeowners had received some form of relief from March 1 through June 30. That is roughly the number that would have been expected under various aid programs in effect before the settlement. Worse, with some three million borrowers now in or near foreclosure, according to Moody's Analytics, it is nowhere near the level of relief needed to fix the housing market.
The type of relief provided — mostly short sales, in which a bank allows a homeowner to sell for less than is owed on the mortgage — had become increasingly common before the settlement.
Short sales are better than foreclosures, in part because they prevent vacancies that depress house values. But they are not punishment for wrongdoing in any meaningful sense; rather, they allow banks to get higher prices for underwater properties than they could have gotten in foreclosure sales.
Nor do they fulfill the settlement's main purpose: to keep underwater borrowers in their homes by reducing the principal on their mortgage loans. According to the monitor's report, $8.7 billion of debt has been written off in short sales versus only $750 million of principal reduction from loan modifications.
The settlement was not, of course, intended as a cure for the housing bust. And future progress reports will no doubt show many more homeowners receiving big loan modifications. But, based on the banks' performance so far, it also seems likely they will be able to structure the required relief in ways designed to tidy up their balance sheets, rather than to save as many homes as possible.
Even the relief that is provided may turn out to be less than meets the eye. That's because much of the debt forgiven in short sales and loan modifications will be counted as taxable income to the borrowers, creating huge tax bills they will not be able to pay.
Mortgage debt that is forgiven is exempt from taxation under current law, but only if the debt was used to buy or improve the house. The law does not exempt debt forgiven on many home equity loans, even though the foreclosure settlement envisions billions of dollars in modifications to such loans.
Several bills in Congress call for extending the law, which is set to expire at the end of the year. But what is obviously needed is a broader law shielding all forgiven mortgage debt from tax.
Meanwhile, an investigation into the mortgage abuses that led to the financial crisis, promised by President Obama in January, has been slow to produce results. The settlement left open the possibility of civil and criminal suits on mortgage securitizations and other practices that inflated the bubble. The aim is to produce deeper accountability and larger fines with which to provide even more mortgage relief, but no suits have yet been filed.
The economy will not recover and justice will not be done unless and until the mortgage mess is resolved.
BANKSTERS' PROFITS AND CRIMES ARE SOARING… so are foreclosures!
OBAMA and HIS CRIMINAL BANKSTERS – THE LOOTING OF A NATION CONTINUES!
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
Consider the Obama administration's choices for the four most important positions in financial sector law enforcement. The attorney general (Eric Holder) and the head of the Justice Department's criminal division (Lanny Breuer) both come to us from Covington & Burling, a law firm that represents and lobbies for most of the major banks and their industry associations; indeed Breuer was co-head of its white collar criminal defense practice, and represented the Moody's rating agency in the Enron case. Mary Schapiro, the head of the SEC, spent the housing bubble in charge of FINRA, the investment banking industry's "self-regulator," which gave her a $9 million severance for a job well done. And her head of enforcement, perhaps most stunningly of all, is Robert Khuzami, who was general counsel for Deutsche Bank's North American business during the entire bubble. So zero prosecutions isn't much of a surprise, really.
Banking Is a Criminal Industry Because Its Crimes Go Unpunished
Posted: 07/16/2012 8:23 am
Financial Reform , Financial Crisis , Financial Crisis , JP Morgan , Finance , Financial Crimes , LIBOR , Business News
Consider just this month's news in financial services.
First, Barclay's has been manipulating the Libor, the main interest rate upon which most other interest rates and financial transactions are based, since 2005. Moreover, Barclay's traders were colluding with traders in many other banks to assist them in manipulating the Libor too, so that they could all profit from their bets on it.
Second, JP Morgan Chase is having a really great month. Recent reports describe how it is resisting Federal subpoenas related to price-fixing in U.S. electricity markets. It is also accused (by former employees among others) of deliberately inflating the performance of its investment funds to obtain business. And finally, JP Morgan's failed "London whale" trade, which has now cost over $5 billion, is being investigated to determine whether the loss was initially concealed from regulators and the public.
Third, HSBC is paying a fine because it allowed hundreds of millions, perhaps billions, of dollars of money laundering by rogue states and sanctioned firms, including some related to terrorist activities and Iran's nuclear efforts. But HSBC is only one of at least 12 banks now known to have tolerated, and in some cases aggressively courted, money laundering by rogue states, terrorist organizations, corrupt dictators, and major drug cartels over the last decade. Others include Barclay's, Lloyds, Credit Suisse, and Wachovia (now part of Wells Fargo). Several of the banks created special handbooks on how to evade surveillance, created special business units to handle money laundering, and actively suppressed whistleblowers who warned of drug cartel activities.
Fourth, a new private lawsuit cites documents indicating that Morgan Stanley successfully pressured rating agencies into inflating the ratings of mortgage-backed securities it issued during the housing bubble.
Fifth, Visa and Mastercard have just agreed to pay $7 billion to settle a private antitrust case filed by thousands of merchants, who alleged that Visa and Mastercard colluded to fix fees and terms of service.
Just another month in financial services. Is it unusual? No, it's not. If we go back just a little further, we have UBS, HSBC, Julius Baer, and other banks actively marketing tax evasion services to wealthy U.S. and European citizens. We have senior executives of several banks (including JP Morgan Chase and UBS) strongly suspecting that Bernard Madoff was running a Ponzi scheme, but deciding to make money from him rather than turn him in. And then, of course, we have the financial crisis and everything that led to it. As I show in great detail in my book Predator Nation, we now possess overwhelming evidence of massive securities fraud, accounting fraud, perjury, and criminal Sarbanes-Oxley violations by mortgage lenders, investment banks, and credit insurers (including senior executives of Countrywide, Citigroup, Morgan Stanley, Goldman Sachs, Bear Stearns, AIG, and Lehman Brothers) during the housing bubble that caused the financial crisis. If we go back to the late 1990s, we have the massively fraudulent hyping of Internet stocks, and several banks (including Merrill Lynch and Citigroup) actively aiding Enron in committing its frauds.
So, July 2012 really isn't abnormal at all. The reason for this is very simple. Over the past two decades, the financial services industry has become a pervasively unethical and highly criminal industry, with massive fraud tolerated or even encouraged by senior management. But how did that happen?
Well, deregulation helped, of course. But something else was far more important. It is the one critical factor that unites all of the episodes cited above, including those of this month. This critical unifying factor is the total number of criminal prosecutions of major firms and senior executives as a result of all of these crimes combined.
And what is that number?
Literally zero. A number that neither President Obama nor Mitt Romney shows the slightest interest in changing.
Consider the Obama administration's choices for the four most important positions in financial sector law enforcement. The attorney general (Eric Holder) and the head of the Justice Department's criminal division (Lanny Breuer) both come to us from Covington & Burling, a law firm that represents and lobbies for most of the major banks and their industry associations; indeed Breuer was co-head of its white collar criminal defense practice, and represented the Moody's rating agency in the Enron case. Mary Schapiro, the head of the SEC, spent the housing bubble in charge of FINRA, the investment banking industry's "self-regulator," which gave her a $9 million severance for a job well done. And her head of enforcement, perhaps most stunningly of all, is Robert Khuzami, who was general counsel for Deutsche Bank's North American business during the entire bubble. So zero prosecutions isn't much of a surprise, really.
In contrast, what do you think would happen to you if, as a lone individual, you were caught supporting Iran's nuclear program? Do you think that you would get off with a "deferred prosecution agreement" and a fine equal to a few percent of your annual salary? No?
But that's because you don't live right. You probably haven't been to the White House a dozen times since President Obama took office, or attended White House state dinners, like Lloyd Blankfein has. Nor have you probably overseen millions of dollars in lobbying and campaign donations, or hired senior administration officials, or sent your executives into the government in senior regulatory positions, or paid $135,000 for a speech by someone who later became chairman of the National Economic Council. And, well, you get the law enforcement that you pay for.
Charles Ferguson is the author of Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America.
Ex-TARP overseer denounces US government cover-up of Wall Street crimes
31 July 2012
In interviews prompted by the publication of his new book (Bailout) on the $700 billion US bank bailout scheme—the Troubled Asset Relief Program (TARP)—the former special inspector general for the program, Neil Barofsky, has denounced bank regulators and top officials in the Bush and Obama administrations for covering up Wall Street criminality both before and after the financial crash of September 2008.
In an interview last Thursday with the Daily Ticker blog, Barofsky accused Treasury Secretary Timothy Geithner of facilitating the banks' manipulation of Libor, the global benchmark interest rate, when he was president of the Federal Reserve Bank of New York in 2007-2008, prior to his joining the Obama administration. Recently published documents show that as early as 2007, Geithner knew that London-based Barclays Bank was submitting false information to the Libor board to conceal its financial weakness.
Geithner merely wrote to the Bank of England suggesting certain changes in the Libor rate-setting mechanism, but made no public statement and failed to notify regulators at the US Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission, even though major US banks were alleged to be involved in the rate-rigging fraud.
In his interview, Barofsky rejected Geithner's claims to have acted appropriately. Calling the Libor scandal a "global conspiracy to fix one of the most important interest rates in the world," the former TARP inspector general said, "[Geithner] heard this information and looked the other way. Geithner and other regulators should be held accountable, they should be fired across the board. If they knew about an ongoing fraud, and they didn't do anything about it, they don't deserve to have their jobs. I hope to see people in handcuffs."
In the same interview and others given over the past week, Barofsky has spoken in scathing terms of the domination of Washington by Wall Street and the subservience of both major parties to the financial elite. "It was shocking," he told the Daily Ticker, "how much control the big banks had over their own bailout and how they often would dictate terms of some of the TARP programs and the overwhelming deference shown by Treasury officials to the banks. I saw no differences in these core issues between the Bush and Obama administrations."
In an interview with CBS News' Charlie Rose on July 23, Barofsky referred to key elements of his account of TARP, including the lack of any restrictions on the banks' use of bailout funds and the fact that they were not even required to tell the government what they were doing with the taxpayer money that had been handed to them.
"When I got to Washington," he said, "I saw that it had been hijacked by a small group of very powerful Wall Street banks... It's not Democratic, it's not Republican, it's across political barriers… [Geithner] oversaw a policy that saw our largest banks, the too-big-to-fail institutions, get bigger than ever and more powerful, more politically connected."
In his book, Barofsky derides the cynicism of the claims made when President Bush, candidate Obama and congressional leaders of both parties were seeking to ram through the TARP law over massive popular opposition that the bailout would benefit Main Street as well as Wall Street. He notes, for instance, that the government's mortgage modification program—billed as a means to help millions of homeowners—has disbursed only $3 billion out of the $50 billion set aside for it.
Barofsky, who served as the Treasury Department's special inspector general for TARP until his resignation last February, is well placed to document the collusion of the government with the banks. He issued numerous reports while in his TARP post exposing the lack of any real government oversight over the taxpayer money funneled to the banks, as well as decisions ensuring that Wall Street firms such as Goldman Sachs recouped tens of billions of dollars in potential losses at the public's expense.
Deprived of any enforcement powers under the TARP law drafted by Wall Street lawyers and ratified by Congress, Barofsky was simply ignored by Geithner and the Obama administration and his reports were largely buried by the media.
Barofsky's book has received a similar response from the media, as did reports issued last year by the Financial Crisis Inquiry Commission and the Senate Permanent Subcommittee on Investigations documenting in detail fraudulent and illegal activities by the banks in the lead-up to the financial crash of 2008.
Four years after the crisis precipitated by the banks, not a single top banker has been prosecuted, let alone convicted. Meanwhile, the same bankers, and the government officials who shielded them and ensured that they grew even richer, are demanding that American workers accept the "new normal" of wages at $13 or less, along with the destruction of pensions, health care and working conditions.
For all of his exposures, Barofsky, a Democrat, fails to draw the requisite conclusions, suggesting that popular rage can "sow the seeds for the types of reform that will one day break our system free from the corrupting grasp of the megabucks."
The criminality of the financial system and the complicity of all of the official institutions are not, however, mere aberrations or blemishes on an otherwise healthy system. They are expressions of the putrefaction and failure of the capitalist system itself. Its mortal crisis is reflected above all in the ever-greater scale of social inequality.
There is no way to break the power of the financial oligarchy outside of a mass working class movement armed with a socialist program, including the seizure of the ill-gotten wealth of the financial mafia and the nationalization of the banks and major corporations under the democratic control of the working population.
Andre Damon and Barry Grey
The authors also recommend:
JPMorgan scandal: The tip of the iceberg
[17 July 2012]
[17 July 2012]
Libor scandal exposes banks' rigging of global rates
[6 July 2012]
[6 July 2012]
Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America [Hardcover]
Book Description
Publication Date: May 22, 2012
Charles H. Ferguson, who electrified the world with his Oscar-winning documentary Inside Job, now explains how a predator elite took over the country, step by step, and he exposes the networks of academic, financial, and political influence, in all recent administrations, that prepared the predators' path to conquest.
Over the last several decades, the United States has undergone one of the most radical social and economic transformations in its history.
· Finance has become America's dominant industry, while manufacturing, even for high technology industries, has nearly disappeared.
· The financial sector has become increasingly criminalized, with the widespread fraud that caused the housing bubble going completely unpunished.
· Federal tax collections as a share of GDP are at their lowest level in sixty years, with the wealthy and highly profitable corporations enjoying the greatest tax reductions.
· Most shockingly, the United States, so long the beacon of opportunity for the ambitious poor, has become one of the world's most unequal and unfair societies.
If you're smart and a hard worker, but your parents aren't rich, you're now better off being born in Munich, Germany or in Singapore than in Cleveland, Ohio or New York.
This radical shift did not happen by accident.
Ferguson shows how, since the Reagan administration in the 1980s, both major political parties have become captives of the moneyed elite. It was the Clinton administration that dismantled the regulatory controls that protected the average citizen from avaricious financiers. It was the Bush team that destroyed the federal revenue base with its grotesquely skewed tax cuts for the rich. And it is the Obama White House that has allowed financial criminals to continue to operate unchecked, even after supposed "reforms" installed after the collapse of 2008.
Predator Nation reveals how once-revered figures like Alan Greenspan and Larry Summers became mere courtiers to the elite. Based on many newly released court filings, it details the extent of the crimes—there is no other word—committed in the frenzied chase for wealth that caused the financial crisis. And, finally, it lays out a plan of action for how we might take back our country and the American dream.
Over the last several decades, the United States has undergone one of the most radical social and economic transformations in its history.
· Finance has become America's dominant industry, while manufacturing, even for high technology industries, has nearly disappeared.
· The financial sector has become increasingly criminalized, with the widespread fraud that caused the housing bubble going completely unpunished.
· Federal tax collections as a share of GDP are at their lowest level in sixty years, with the wealthy and highly profitable corporations enjoying the greatest tax reductions.
· Most shockingly, the United States, so long the beacon of opportunity for the ambitious poor, has become one of the world's most unequal and unfair societies.
If you're smart and a hard worker, but your parents aren't rich, you're now better off being born in Munich, Germany or in Singapore than in Cleveland, Ohio or New York.
This radical shift did not happen by accident.
Ferguson shows how, since the Reagan administration in the 1980s, both major political parties have become captives of the moneyed elite. It was the Clinton administration that dismantled the regulatory controls that protected the average citizen from avaricious financiers. It was the Bush team that destroyed the federal revenue base with its grotesquely skewed tax cuts for the rich. And it is the Obama White House that has allowed financial criminals to continue to operate unchecked, even after supposed "reforms" installed after the collapse of 2008.
Predator Nation reveals how once-revered figures like Alan Greenspan and Larry Summers became mere courtiers to the elite. Based on many newly released court filings, it details the extent of the crimes—there is no other word—committed in the frenzied chase for wealth that caused the financial crisis. And, finally, it lays out a plan of action for how we might take back our country and the American dream.
Guest Reviewer: Simon Johnson on Predator Nation by Charles H. Ferguson
Simon Johnson is coauthor of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown and White House Burning: The Founding Fathers, Our National Debt, and Why It Matters To You.
Predator Nation demolishes the view that the global financial crisis was merely some sort of freak accident. Charles Ferguson makes a convincing case that the world's banking system was brought to the brink of complete collapse in 2008–09 by a virulent combination of unchecked greed and criminal behavior.
This is an epic crime story with an apparently clean getaway, courtesy of the George W. Bush and Barack Obama administrations. Both presidents proved unwilling to hold anyone to account—or even to launch meaningful investigations.
Leading bankers walked away with billions of dollars in unjustified compensation. The costs imposed on the rest of us can be measured in the trillions of dollars.
Predator Nation provides a roadmap for prosecution, systematically covering the banks involved, the names of culpable executives, the obvious crimes, the precise laws broken, and the evidence hiding in plain sight. No doubt it will be widely ignored by our legal officials.
Ferguson's points are also intensely political. Reckless behavior by bankers can be traced back to the bipartisan consensus around deregulating finance in recent decades. This result is a socially destructive industry with immense political power—and capable of defeating all attempts at meaningful reform. The continued predominance of rogue finance is greatly facilitated by its effective corruption of American academia and many so-called "independent experts" (documented in Charles Ferguson's Oscar-winning movie, Inside Job.)
Big banks hold American politics in a death grip. To understand this—and to start to think about how to break this grip—read Predator Nation and give a copy to everyone you know.
THE BANKSTER-OWNED PRESIDENT PROMISED HIS CRIMINAL BANKSTER DONORS NO real REGULATION, NO PRISON TIME, AND UNLIMITED PILLAGING OF THE NATION'S ECONOMY!
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
"Barack Obama's favorite banker faces losses of $2 billion and possibly more -- all because of the complex, now-you-see-it-now-you-don't trading in exotic financial instruments that he has so ardently lobbied Congress not to regulate."
Is JPMorgan's Loss a Canary in a Coal Mine?
Posted: 05/16/2012 4:49 pm
That sound of shattered glass you've been hearing is the iconic portrait of Jamie Dimon splintering as it hits the floor of JPMorgan Chase. As the Good Book says, "Pride goeth before a fall," and the sleek, silver-haired, too-smart-for-his-own-good CEO of America's largest bank has been turning every television show within reach into a confessional booth. Barack Obama's favorite banker faces losses of $2 billion and possibly more -- all because of the complex, now-you-see-it-now-you-don't trading in exotic financial instruments that he has so ardently lobbied Congress not to regulate.
Once again, doing God's work -- that is, betting huge sums of money with depositor funds knowing that you are too big to fail and can count on taxpayers riding to your rescue if your avarice threatens to take the country down -- has lost some of its luster. The jewels in Dimon's crown sparkle with a little less grandiosity than a few days ago, when he ridiculed Paul Volcker's ideas for keeping Wall Street honest as "infantile."
To find out more about what this all means, I turned to Simon Johnson, once chief economist of the International Monetary Fund and now a professor at MIT's Sloan School of Management and senior fellow at the Peterson Institute for International Economics. He and his colleague James Kwak founded the now-indispensable website baselinescenario.com. They co-authored the bestselling book 13 Bankers and a most recent book, White House Burning, an account every citizen should read to understand how the national deficit affects our future.
Bill Moyers: If Chase began to collapse because of risky betting, would the government be forced to step in again?
Simon Johnson: Absolutely, Bill. JPMorgan Chase is too big to fail. Hopefully in the future we can move away from this system, but right now it is too big. It's about a $2.5 trillion dollar bank in terms of total assets. That's roughly 20 percent of the U.S. economy, comparing their assets to our GDP. That's huge. If that bank were to collapse -- I'm not saying it will -- but if it were to collapse, it would be a shock to the economy bigger than that of the collapse of Lehman Brothers, and as a result, they would be protected by the Federal Reserve. They are exactly what's known as too big to fail.
Moyers: I was just looking at an interview I did with you in February of 2009, soon after the collapse of 2008 and you said, and I'm quoting, "The signs that I see... the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When there's a small group of people who got you into a disaster and who are still powerful, you know you need to come in and break that power and you can't. You're stuck." How do you feel about that insight now?
Johnson: I'm still nervous, and I think that the losses that JPMorgan reported -- that CEO Jamie Dimon reported -- and the way in which they're presented, the fact that they're surprised by it and the fact that they didn't know they were taking these kinds of risks, the fact that they lost so much money in a relatively benign moment compared to what we've seen in the past and what we're likely to see in the future -- all of this suggests that we are absolutely on the path towards another financial crisis of the same order of magnitude as the last one.
Moyers: Should Jamie Dimon resign? I ask that because as you know and as we've discussed, Chase and other huge banks have been using their enormous wealth for years to, in effect, buy off our politicians and regulators. Chase just had to pay up almost three quarters of a billion dollars in settlements and surrendered fees to settle one case alone, that of bribery and corruption in Jefferson County, Alabama. It's also paid out billions of dollars to settle other cases of perjury, forgery, fraud and sale of unregistered securities. And these charges were for actions that took place while Mr. Dimon was the CEO. Should he resign?
Johnson: I think, Bill, there should be an independent investigation into how JPMorgan operates both with regard to these losses and with regard to all of the problems that you just identified. This investigation should be conducted separate from the board of directors. Remember that the shareholders and the board of directors absolutely have an incentive to keep JPMorgan Chase as a too-big-to-fail bank. But because it is that kind of bank, its downside risk is taken by the Federal Reserve, by the taxpayer, by the broader economy and all citizens. We need to have an independent, detailed, specific investigation to establish who knew what when and what kind of wrongdoing management was engaged in. On the basis of that, we'll see what we'll see and who should have to resign.
Moyers: Dimon is also on the board of the Federal Reserve Bank of New York, which, as everyone knows is supposed to regulate JPMorgan. What in the world are bankers doing on the Fed board, regulating themselves?
Johnson: This is a terrible situation, Bill. It goes back to the origins, the political compromise at the very beginning of the Federal Reserve system about a hundred years ago. The bankers were very powerful back then, also, and they got a Federal Reserve system in which they had a lot of representation. Some of that has eroded over time because of previous abuses, but you're absolutely right, the prominent bankers, including most notably, Jamie Dimon, are members of the board of the New York Federal Reserve, a key element in the Federal Reserve system. And he should, under these circumstances, absolutely step down from that role. It's completely inappropriate to have such a big bank represented in this fashion. The New York Fed claims there's no impropriety, there's no wrong doing and he doesn't involve himself in supervision and so on and so forth. Perhaps, but why does Mr. Dimon, a very busy man, take time out of his day to be on the board of the New York fed? He is getting something from this. It's a trade, just like everything else on Wall Street.
Moyers: He dismissed criticism of his dual role yesterday by downplaying the role of the Fed board. He said it's more like an "advisory group than anything else." I had to check my hearing aid to see if I'd heard that correctly.
Johnson: Well, I think he is advising them on lots of things. He also, of course, meets with some regularity with top Treasury officials, and some reports say that he meets with President Obama with some regularity. The political access and connections of Mr. Dimon are second to none. One of his senior executives was until recently chief of staff in the White House, if you can believe that. I really think this has gone far enough. Under these kinds of circumstances with this amount of loss of control over risk management, what we need to have is Mr. Dimon step down from the New York Federal Reserve Board.
Moyers: He told shareholders at their annual meeting Tuesday -- they were meeting in Tampa, Florida -- that these were "self-inflicted mistakes" that "should never have happened." Does that seem reasonable to you?
Johnson: Well, it's all very odd, Bill, and I've talked to as many experts as I can find who are at all informed about what JPMorgan was doing and how they were doing it and nobody really understands the true picture. That's why we need an independent investigation to establish -- was this an isolated incident or, more likely, the breakdown of a system of controlling and managing risks. Keep in mind that JPMorgan is widely regarded to be the best in the business at risk management, as it is called on Wall Street. And if they can't do this in a relatively benign moment when things are not so very bad around the world, what is going to happen to them and to other banks when something really dramatic happens, for example, in Europe in the eurozone?
Moyers: Some of his supporters are claiming that only the bank has lost on this and that there's absolutely no chance that the loss could have threatened the stability of the banking system as happened in 2008. What do you say again to that?
Johnson: I say this is the canary in the coal mine. This tells you that something is fundamentally wrong with the way banks measure, manage and control their risks. They don't have enough equity funding in their business. They like to have a little bit of equity and a lot of debt. They get paid based on return on equity, unadjusted for risk. If things go well, they get the upside. If things go badly, the downside is someone else's problem. And that someone else is you and me, Bill. It goes to the Federal Reserve, but not only, it goes to the Treasury, it goes to the debt.
The Congressional Budget Office estimates that the increase in debt relative to GDP due to the last crisis will end up being 50 percent of GDP, call that $7 trillion dollars, $7.5 trillion dollars in today's money. That's extraordinary. It's an enormous shock to our fiscal accounts and to our ability to pay pensions and keep the healthcare system running in the future. For what? What did we get from that? Absolutely nothing. The bankers got some billions in extra pay, we get trillions in extra debt. It's unfair, it's inefficient, it's unconscionable, and it needs to stop.
Moyers: Wasn't part of the risk that Dimon took with taxpayer guaranteed deposits? I mean, if I had money at JPMorgan Chase, wouldn't some of my money have been used to take this risk?
Johnson: Again, we don't know the exact details, but news reports do suggest that yes, they were gambling with federally insured deposits, which just really puts the icing on the cake here.
Moyers: Do we know yet what is Dimon's culpability? Is it conceivable to you that a risk this big would have been incurred without his approval?
Johnson: It seems very strange and quite a stretch. And he did tell investors, when he reported on first quarter earnings in April, that he was aware of the situation, aware of the trade -- he called it a "tempest in a teacup," and, therefore, not something to worry about.
Moyers: He's been Wall Street's point man in their campaign against tighter regulation of derivatives and proprietary trading. Were derivatives at the heart of this gamble?
Johnson: Yes, according to reliable reports, this was a so-called "hedging" strategy that turned out to be no more than a gamble, but the people involved perhaps didn't understand that or maybe they understood it and covered it up. It was absolutely about a bet on extremely complex derivatives and the interesting question is who failed to understand exactly what they were getting into. And how did Jamie Dimon, who has a reputation that he burnishes more than anybody else for being the number one expert risk manager in the world -- how did he miss this one?
Moyers:I've been reading a lot of stories today about members of the House, Republicans in particular, saying this doesn't change their opinion at all that we've got to still diminish regulation. What do you think about that?
Johnson: I think that it is a recipe for disaster. Look, deregulating or not regulating during the boom is exactly how you get into bailouts in the bust. The goal should be to make all the banks small enough and simple enough to fail. End the government subsidies here. And when I talk to people on the intellectual right, Bill, they get this, as do people on the intellectual left. The problem is, the political right largely doesn't want to go there because of the donations. I'm afraid some people, not all, but some people on the political left don't want to go there either.
Moyers: The Washington Post reported that the Justice Department has launched a criminal investigation into JPMorgan's trading loss. Have you spotted -- and I know this is sensitive -- but have you spotted anything in the story so far that suggests the possibility of criminality? Dodd-Frank is not in existence yet, so where would any possibility of criminality come from?
Johnson: Well Dodd-Frank is in existence but the rules have not been written and therefore not implemented. So yes, it is hard to violate those rules in their current state. And many of those rules, by the way, violation would be a civil penalty, not a criminal penalty. If you violate a securities law -- if you've mislead investors, if there was material adverse information that was not disclosed in an appropriate and timely manner -- that's a very serious offence traditionally.
I have to say that the Department of Justice and the Securities and Exchange Commission have not been very good at enforcing securities law in recent years, including and specifically since the financial crisis. I am skeptical that this will change. But if they have an investigation that reveals all of the details of what happened and how it happened, that would be extremely informative and show us, I believe, that the risk management approach and attitudes on Wall Street are deeply flawed and leading us towards a big crisis.
Moyers: So what are people to do, Simon? What can people do now in response to this?
Johnson: Well, I think you have to look for politicians who are proposing solutions, and look on the right and on the left. I see Elizabeth Warren, running for the Senate in Massachusetts, who is saying we should bring back Glass-Steagall to separate commercial banking from investment banking. I see Tom Hoenig, who is not a politician, he's a regulator, he's the former president of the Kansas City Fed, and he's now one of the top two people at the Federal Deposit Insurance Corporation, the FDIC. He is saying that big banks should no longer have trading desks. That's the same sort of idea that Elizabeth Warren is expressing. We need a lot more people to focus on this and to make this an issue for the elections.
And I would say in this context, Bill, it's very important not to be distracted. I understand for example, Speaker Boehner, the Republican Speaker of the House of Representatives, is proposing to have another conflict over the debt ceiling in the near future. This is the politics of distraction. This is refusing to recognize that a huge part of our fiscal problems today and in the future are due to these risks within the financial system that are allowed because the people running the biggest banks hand out massive campaign contributions across the political spectrum.
Moyers: Are you saying that this financial crisis, so-called, is at heart a political crisis?
Johnson: Yes, exactly. I think that a few people, particularly in and around the financial system, have become too powerful. They were allowed to take a lot of risk, and they did massive damage to the economy -- more than eight million jobs lost. We're still struggling to get back anywhere close to employment levels where we were before 2008. And they've done massive damage to the budget. This damage to the budget is long lasting; it undermines the budget when we need it to be stronger because the society is aging. We need to support Social Security and support Medicare on a fair basis. We need to restore and rebuild revenue, revenue that was absolutely devastated by the financial crisis. People need to understand the link between what the banks did and the budget. And too many people fail to do that. "Oh, it's too complicated. I don't want to understand the details, I don't want to spend time with it." That's a mistake, a very big mistake. You're playing into the hands of a few powerful people in the society who want private benefit and social loss.
Watch Moyers & Company weekly on public television. See more web-only features like this at BillMoyers.com
Why hasn't Obama been impeached? His violations of our borders laws, inducing illegals to vote, sabotage of jobs for Americans, connections to criminal banksters…. WHAT DOES IT TAKE?
NO WORKS IN THE CORRUPT OBAMA WHITE HOUSE THAT IS NOT CONNECTED TO THE BANKSTERS THAT OWN OBAMA, OR THE MEXICAN FASCIST PARTY of LA RAZA!
For much of Obama's tenure, Jamie Dimon was known as the White House's "favorite banker." According to White House logs, Dimon visited the White House at least 18 times, often to talk to his former subordinate at JPMorgan, William Daley, who had been named White House chief of staff by Obama after the Democratic rout in the 2010 elections.
The JPMorgan scandal also throws into relief the government's failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
The JPMorgan debacle
15 May 2012
The economic and political fallout from JPMorgan Chase's sudden announcement last Thursday night that it lost more than $2 billion from speculative bets on credit derivatives continued to grow on Monday. The biggest US bank announced the forced retirement of Ina Drew, who headed up the bank's London-based Chief Investment Office, which placed huge bets on the creditworthiness of a collection of US corporations. Other top executives and traders are expected to be sacked or demoted.
The bank's shares fell another 3.2 percent, bringing its two-day market capitalization loss to nearly $19 billion. The Wall Street Journal reported that JPMorgan was prepared for a total loss of more than $4 billion over the next year from its soured stake in credit default swaps—the same investment vehicle that played a central role in the collapse of Lehman Brothers and the government bailout of insurance giant American International Group (AIG) in September of 2008.
In an interview on NBC's "Meet the Press" program on Sunday, JPMorgan CEO Jamie Dimon sought to present the loss as an innocent mistake, resulting from "errors, sloppiness and bad judgment." Only a month ago, Dimon, who has led the public campaign by Wall Street against even the mildest restrictions on speculative banking practices, dismissed warnings over the massive bets being made by his Chief Investment Office as "a complete tempest in a teapot."
The scale of the loss and the denials that preceded it raise the likelihood that banking rules and laws against investor fraud and deception were breached.
President Obama, however, rushed to the defense of JPMorgan and Dimon, declaring on a daytime television talk show Monday that JPMorgan was "one of the best managed banks there is" and Dimon was "one of the smartest bankers we got." At the same time he cited the bank's loss as a vindication of the Dodd-Frank financial regulatory bill that he signed into law in July of 2010. "This is why we passed Wall Street reform," he said.
In fact, the JPMorgan debacle demonstrates that nearly four years after the Wall Street crash nothing has changed for the financial aristocracy. No measures have been taken to rein in the banks, which received trillions of dollars in government handouts, guarantees and cheap loans. The same forms of speculation and outright swindling that led to the financial meltdown and the worst economic crisis since the Great Depression continue unabated.
The big banks, such as JPMorgan, have increased their stranglehold over the US economy. They have recorded bumper profits by withholding credit from consumers and small businesses, keeping unemployment high, while speculating on credit default swaps and other exotic financial instruments that drain resources from the real economy. On this basis, bank executives and traders, including those at bailed-out institutions, have continued to rake in eight-figure compensation packages. Last year, Ina Drew made $14 million, and Jamie Dimon took in $26 million.
The Dodd-Frank law trumpeted by Obama is a fraud, an attempt to give the appearance of financial reform while enabling the banks to continue their parasitic and criminal activities. A case in point is the so-called Volcker Rule, named after the former chairman of the Federal Reserve and economic adviser to the Obama White House, Paul Volcker.
The rule, incorporated into the Dodd-Frank Act and supposedly one of its most daring provisions, ostensibly bars proprietary trading—speculation by a bank on its own account—by commercial banks whose consumer deposits are guaranteed by the federal government. The idea is to prevent government-insured banks from speculating with depositors' money.
But the regulation as drafted by federal regulators—under pressure from the Federal Reserve and Obama's treasury secretary, Timothy Geithner, as well as the banks—would actually allow the type of speculative bet made by JPMorgan in the guise of a "hedge" to offset risk in the bank's overall investment portfolio.
The Volcker Rule, whose precise form is yet to be announced, will do nothing to halt speculation by government-backed banks using small depositors' money.
The JPMorgan scandal also throws into relief the government's failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.
When Iowa Senator Charles Grassley submitted a letter to the Justice Department earlier this year asking how many bank executives had been prosecuted in response to the financial crisis, the Justice Department replied it did not know because it was not keeping a list.
According to a study by Syracuse University, however, federal financial fraud prosecutions have fallen to 20-year lows under the Obama administration, and are down 39 percent since 2003. Under Obama, the number of financial fraud cases has fallen to one-third the level of the Clinton administration.
These facts demonstrate the de facto dictatorship exercised by the financial aristocracy over the entire political system and both major parties. The Obama administration, in particular, is an instrument of the most powerful financial institutions. It has focused its efforts on protecting and increasing the wealth of the privileged elite while utilizing the crisis to permanently slash the wages and living standards of the working class.
For much of Obama's tenure, Jamie Dimon was known as the White House's "favorite banker." According to White House logs, Dimon visited the White House at least 18 times, often to talk to his former subordinate at JPMorgan, William Daley, who had been named White House chief of staff by Obama after the Democratic rout in the 2010 elections.
The incestuous and corrupt relations between Wall Street, the Obama administration and the entire political system underscore the necessity for the working class to build its own mass socialist movement to fight for its interests in opposition to the ruling elite.
The bankers responsible for the financial crisis, including Dimon and his co-conspirators, must be held criminally liable for their lawlessness and held accountable for the social suffering that has resulted from their actions. The ill-gotten trillions accumulated by the banks must be expropriated, with full protection for small depositors and small businesses, and used to provide decent jobs, housing, health care and education for all.
There is no way to rein in the banks and end their socially destructive activities within the framework of the capitalist system. The only way to stop the fraud and parasitism that go on every day on Wall Street is to nationalize the banks and run them as democratically controlled public utilities.
Andre Damon and Barry Grey
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
Obama: JPMorgan Is 'One of the Best-Managed Banks'
By Mary Bruce | ABC OTUS News – 2 hrs 31 mins ago
Obama: JPMorgan Is 'One of the …
Lou Rocco / ABC News
Just hours after a top JPMorgan Chase executive retired in the wake of a stunning $2 billion trading loss, President Obama told the hosts of ABC's "The View" that the bank's risky bets exemplified the need for Wall Street reform.
"JPMorgan is one of the best managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting," the president said. "We don't know all the details. It's going to be investigated, but this is why we passed Wall Street reform."
The full interview airs on "The View" Tuesday on ABC at 11 a.m. ET
While a powerhouse like JPMorgan might be able to weather an error that the bank's own CEO called "egregious," the president questioned what might happen to smaller institutions in similar situations.
"This is one of the best managed banks. You could have a bank that isn't as strong, isn't as profitable managing those same bets and we might have had to step in," he said. "That's why Wall Street reform is so important."
While touting his efforts to rein in the Wall Street behavior that led to the massive taxpayer bailout of the banks following the financial crisis, he noted his administration is still fighting for tough reform.
Pivoting to November, the president said Wall Street reform is one of the many critical areas where he and his Republican challenger, presumptive GOP nominee Mitt Romney, have a different vision for the future.
The president's full interview airs Tuesday on "The View." Tune into "World News with Diane Sawyer" tonight for more.
Nicole Gelinas
It's Not About Jamie Dimon
We should look to markets, not men, to govern the economy.
14 May 2012
It's Not About Jamie Dimon
We should look to markets, not men, to govern the economy.
14 May 2012
On Meet the Press yesterday, JPMorgan Chase chief Jamie Dimon epitomized what's wrong with America's approach to the financial crisis. The American media and political elite remain obsessed with personalities, looking for heroes and villains instead of focusing on what we really need: the dispassionate rule of law that would allow free markets to flourish. Meet the Press is for politicians, and Dimon performed like a model one. He spoke in short sentences and apologized directly: "I was dead wrong," he offered, for having made a "terrible, egregious mistake." Specifically, last Thursday, JPMorgan announced a $2 billion trading loss on a derivatives bet.
Theoretically, anyway, such a loss should be a matter between the bank and investors, not TV fodder. Yet Dimon's business—too-big-to-fail banking—is no ordinary business. Washington's willingness to subsidize failure means that Dimon's job is as much political risk management as financial risk management. Because JPMorgan depends on Uncle Sam's backing, one of Dimon's key constituencies is politicians and government regulators. And one way to charm regulators—and the voters who elect the politicians—is through a killer interview.
In October 2008, the Bush administration, not normally a fan of government expropriation, forced nine big banks, including Dimon's, to accept $125 billion in TARP money. The banks were deemed so important that they had to take the money to protect them against failure, whether they wanted it or not. Since then, the banks and the government have stayed bound together. President Obama's Dodd-Frank financial reform law, enacted two summers ago, has tied the two sides closer still. The problems that led to the financial crisis, remember, included investors' perception—honed over two decades of smaller-scale bailouts—that big banks were too big to fail. Dodd-Frank has given such banks an official title: "systemically important financial institutions."
Another problem that led to the financial crisis was that, over the years, politicians and regulators determined that banks had become so good at risk management that they no longer needed to abide by consistent rules—fixed limits on borrowing, for example, so that banks could fail without leaving behind so much unpaid debt that they endangered the economy. Instead, banks could largely do what their executives wanted, as long as regulators believed, on a case-by-case basis, that they knew what they were doing.
In the aftermath of the JPMorgan mess, politicians and reporters have been invoking the Dodd-Frank law's "Volcker Rule." Named after Paul Volcker, the Federal Reserve chairman from the Carter and Reagan eras, the rule prohibits banks whose customers benefit from taxpayer-backed deposit insurance from engaging in "proprietary trading," or speculation. But the Volcker Rule isn't a rule at all: it prohibits behavior that has no set definition. Twenty-two months after Dodd-Frank became law, regulators have delayed enforcing the rule because they still cannot figure out what proprietary trading really is. Consider how JPMorgan lost all that money: creating derivatives that let it sell billions of dollars' worth of protection against the risk that some corporate securities would default. That sure doesn't sound like a good idea. Banks, because they're lenders, are already at risk if people and companies default in droves.
But does selling such synthetic "insurance" constitute proprietary trading? Michigan Senator Carl Levin, who helped draft the Volcker Rule language, says it does. Bank officials have argued that such behavior is hedging, which would be okay under Dodd-Frank.
Real rules could govern Wall Street, but politicians must give regulators the backing to create and enforce them. Rather than worry about the Volcker Rule, politicians and reporters should be focusing on derivatives rules. One reason that Washington had to bail out the financial system four years ago was that financial firms such as AIG had taken on virtually infinite risk through the derivatives markets. Through derivatives, AIG could "sell" protection against other companies' defaults with almost no cash down. Lo and behold, that's what JPMorgan Chase was doing, too. Regulators should demand that traders—whether big banks or tiny hedge funds—put a set amount of cash down behind such bets, curtailing the amount of potential unpaid debt in the financial system. Regulators should also require that traders execute such transactions on open clearinghouses and exchanges—so that markets can determine which bets are going well and which aren't, and clearinghouses can demand more money from traders to cover their losses. Such rules empower market signals, not regulatory micromanagement, to control risk. If such rules were in place, it's unlikely Dimon would have visited the White House 18 times in three years, as he would have had no way to manipulate a restriction that, after all, applied to everyone.
The best way to stop bailouts is to limit borrowing and demand transparency. When markets know that financial firms have put a cash cushion behind their bets—and where the risk behind such bets lies—they're unlikely to pull their money out of the financial system en masse, necessitating a government rescue. The Volcker Rule, by contrast, adds no such protection against future taxpayer rescues; all it does is unleash regulators to debate, in private, the definitions of risk.
Dodd-Frank gave regulators the authority to impose real rules on derivatives, and the regulators have done so. But lobbyists demanded and secured exceptions, which could eventually prove the rule. With such loophole-ridden reform, America has hardly set a good example for Europe, which lags even further behind in enacting derivatives rules. In fact, JPMorgan Chase may have executed the derivatives deals from London because the bank perceived London as a looser environment. Moving this activity around the world so that financiers can play inconsistent rules against one another does nothing to help the struggling Western economies.
The media and the politicians, however, would rather discuss people than arcane issues like financial rules. Look at how politely—almost obsequiously—NBC's David Gregory treated Dimon. Gregory asked Dimon: "Here you are, Jamie Dimon, you've got a sterling reputation. . . . How does a guy like you make this mistake? If this happened at JPMorgan Chase . . . what about all the other banks out there? If somebody else made a mistake like this, would we be again talking about too big to fail and taxpayer bailouts?" Then, when asking delicate questions about potential criminal liability, Gregory unconsciously switched from "you" to "the bank." Lowly regulators will hardly be more willing to take on Dimon and his colleagues.
Focusing on one man represents bailout thinking. Policymakers continue to be distracted from the rules needed to protect the economy from the consequences—including corporate failure—of the bad decisions that individuals can make. Nearly four years after the financial crisis began, Washington seems to have learned almost nothing.
"In general, these are professional prognosticators," said Ritsch. "And they may be putting their money on the person they predict will win, not the candidate they hope will win."
Shaping up to be the most corrupt
administration in American history:
administration in American history:
- Obama's team: Not the "best of the Washington insiders," as the liberal media style them, but rather, a dysfunctional and dangerous conglomerate of business-as-usual cronies and hacks
- In the first two weeks alone of his infant administration, Obama had made no fewer than 17 exceptions to his "no-lobbyist" rule
- Why the fact that the massive infusion of union dues into his campaign treasury didn't trouble him in the least reveals Obama's credibility as a reformer
- The lack of unprecedented pace of withdrawals and botched appointments -- and how getting through the confirmation process was no guarantee of ethical cleanliness or competence, even as Obama's cheerleaders were glorifying the Greatest Transition in World History
- Inconsistency: How Obama, erstwhile critic of the campaign finance practice known as "bundling," happily accepted more than $350,000 in bundled contributions from billionaire hedge-fund managers
- How Obama broke his transparency pledge with the very first bill he signed into law -- helping make hostility to transparency is a running thread through Obama's cabinet
- Michelle Obama: Beneath the cultured pearls, sleeveless designer dresses, and eyelashes applied by her full-time makeup artist, is a hardball Chicago politico
- Joe Biden: It's not just that he lies, it's that he lies so well that you think he really believes the stuff he makes up
- Treasury Secretary Geithner: His ineptness and epic blundering -- including how he nearly caused the collapse of the dollar in international trade with a single remark
- The appalling story of Technology Czar Vivek Kundra, the convicted shoplifter in charge of the entire federal government's information security infrastructure
- Obama's "Porker of the Month" Transportation Secretary, Roy LaHood: An earmark-addicted influence peddler born and raised on the politics of pay-to-play
- SEIU: Responsible for installing a cabal of hand-chosen officers who exploited their cash-infused fiefdoms for personal gain and presided over rigged elections -- in the process, becoming all that they had professed to stand against as representatives of the downtrodden worker
- How Obama lied on his "Fight the Smears" campaign website when he claimed that he "never organized with ACORN"
- ACORN: How the profound threat the group poses is not merely ideological or economic -- it's electoral
- ACORN's own internal review of shady money transfers among its web of affiliates: How it underscores concerns that conservatives have long raised about the organization
- Liar, liar, pantsuit on fire: How Hillary Clinton has already trampled upon her promise not to let her husband's financial dealings sway her decisions as Secretary of State
- How even a few principled progressives are finally beginning to question the cult of Obama -- even as Obama sycophants in the mainstream media continue to celebrate his "hipness" and "swagga"
Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union BossesBY TIMOTHY P CARNEY
Editorial Reviews
Obama Is Making You Poorer—But Who's Getting Rich?
Goldman Sachs, GE, Pfizer, the United Auto Workers—the same "special interests" Barack Obama was supposed to chase from the temple—are profiting handsomely from Obama's Big Government policies that crush taxpayers, small businesses, and consumers. In Obamanomics, investigative reporter Timothy P. Carney digs up the dirt the mainstream media ignores and the White House wishes you wouldn't see. Rather than Hope and Change, Obama is delivering corporate socialism to America, all while claiming he's battling corporate America. It's corporate welfare and regulatory robbery—it's Obamanomics.


text:
A huge, powerful warrior, Sandor Clegane is known as the Hound, referring to the arms of his family. Estranged from his even more gigantic brother, Ser Gregor, the Hound is known throughout the realm by the horrible burn scar that covers half his face. It's rumored that the source of the burn was a siege, or possibly dragon's breath. After leaving his family lands in the west following his father's death, he swore his sword to Queen Cersei and became sworn shield to her eldest son, Prince Joffrey.
Despite his prowess, the Hound is not a knight, in large part because of his refusal to accept knighthood. Known to be cruel, violent, and uncouth, Clegane thinks little of knights or their vows.
According to reports, the character has been aged upwards from about his late-twenties in the series to his mid-thirties.

subset: commoncrawl


text:
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Skipping billies: Dave & Tim show bypasses Charlottesville
Widely thought to be his first solo tour, Dave Matthews' latest performance schedule turns out to be a duo tour with longtime DMB sideman and guitar virtuoso Tim Reynolds.
Unfortunately for locals, the closest it's coming to Charlottesville is Norfolk.
Although the duo got their start in Charlottesville with shows at the Prism and the Jefferson Theater back in 1993, 10 years later it skips Matthews' hometown, beginning in Wallingford, Connecticut, on March 19 and trailing south through small theaters and colleges before jumping across the Midwest and wrapping up at Carthage College in Kenosha, Wisconsin, on April 4.
Reynolds, a former Charlottesvillian now based in Santa Fe, released his latest solo effort, Chaos View, supported by a 2002 tour. He also contributed (along with DMB's Leroi Moore) to ex-DMB keyboardist Peter Griesar's highly anticipated Superfastgo, out this month.
Hope springs eternal in local DMB fans for an encore performance to rekindle the magic sparked by the band's triumphant 2001 Scott Stadium show. While the Dave & Tim show could probably fill U Hall, tour planners may find the giant domed stadium a little– well– acoustically challenged.
Lack of a worthy amphitheater keeps Charlottesville a sleeping giant for mid-size concerts and means students and locals must traipse up and down the coast in their quest for acts that bypass this market. While this lamented fact has caused considerable hand wringing, there may yet be reason for hope. Recent news reports confirm that Charlottesville's downtown amphitheater, home of the popular Fridays After Five music shows, could likely expand into a mini-Wolf Trap-style pavilion capable of seating several thousand.
Local delegate Mitch Van Yahres has already set things in motion with the recent passage of a bill allowing food vendors to sell alcoholic beverages for any outdoor event staged within the city or county. Proponents and organizers have also stage-whispered DMB manager Coran Capshaw's name as the force most likely to lead the effort with a combination of political and financial muscle. He put on a well-attended Little Feat concert there in the mid-1990s.
Capshaw's ever-expanding commercial and private real estate interests here– buttressed by his own failed 1995 effort to erect a pavillion– may finally be the canny impresario's entry into self-contained concert promotion and the ace in the hole that could bring Dave into his own backyard.
Summer tour breaks new ground
Capshaw has laid the groundwork for a DMB summer tour tentatively set for the band's traditional June through September jaunts. This year, however, Capshaw is hinting at a change from the group's familiar stomping grounds. Reports in Rolling Stone and other reliable sources have Capshaw considering bringing the DMB spectacle to previously untried territory. Whether these plans include another attempt at a European or Latin American trek remains to be seen, but will more likely direct Dave and Company into U.S. markets where the band has gained popularity as a result of increased radio and television exposure.
Band to fans: no streaming
DMB's 2003 shows will begin with a change in management's taping policy that has already sparked intense debate on fan websites. While the band continues to welcome taping of its shows for personal use and free exchange between tapers, an amendment to the band's taping policy bans the posting of audio or video files for streaming or downloading– a practice management claims defeats the policy's "spirit."
The move has forced such websites as the Internet Archive to halt access to its vault of recorded performances. Meanwhile, some fans charge that the move violates the band's own "spread the music" spirit– and could give rise to an underground trading market.
Dave lives
The much-reported rumor of the demise of Dave Matthews has itself been mostly put to rest. An account of Matthews' alleged death surfaced in late January on a hastily constructed facsimile of CNN's website reporting Matthews had died of a drug overdose.
"If I die before my time," Matthews has told Rolling Stone, "it will not be on the altar of rock and roll. It will be because I slipped on a pencil and smashed my head on a fire hydrant. I can safely predict I will not be found lying face down in a puddle of my groupies' vomit." 'Nuff said.
Dave: no blood for oil
Dave Matthews has joined a growing list of celebrities speaking out against a possible war with Iraq. In a statement posted on the band's website last week, Matthews questioned the Bush Administration's motives. He says he "fears that our true motivation is about oil and our own flailing economy; about the failure to destroy Al Qaeda and about revenge."
The Dead lives with Capshaw
Musictoday, the e-commerce arm of Coran Capshaw's Charlottesville-based empire, is reportedly close to sealing a deal with surviving members of the Grateful Dead to market the legendary band's lucrative merchandise.
Musictoday already counts the recently re-formed (first christened The Other Ones and now know simply as The Dead) band's Phil Lesh as a solo client and offers the group's 27-disc, multi-volume "Dick's Picks" live recordings as a mail-order business. The reorganization would effectively dismantle the band's own Grateful Dead Productions (operated by, among other's, Jerry Garcia's brother). "We want to simplify and play music," drummer Mickey Hart told the San Francisco Chronicle, "and get rid of all this mumbo-jumbo."


text:
When advisor Elle Kaplan first started tweeting, she wasn't trying to build business but to make Wall Street more relatable, especially to women.
"I wanted to provide a voice for non-Wall Streeters and people who feel disenfranchised from Wall Street—anyone who is other," says the 36-year-old Kaplan, CEO and founding partner of Lexion Capital Management in New York City. "My objective was to lift the veil, to demystify Wall Street."
In less than one year, Kaplan's "online tribe," as she calls it, has surged from 10 to more than 2,400 Twitter followers. Not coincidentally, a dozen of them have signed on as clients.
"It's inspired me to expand faster. There is so much unmet demand," says Kaplan, whose fee-only firm manages $90 million in assets. "I wish I had embraced it sooner."
The use of social media in the advisory community is gaining traction—that much is undeniable. There are a lot of Elle Kaplans out there. But how effective is it, really? As Kevin Dinino, president of San Diego-based KCD Public Relations, frames it: "Is the juice really worth the squeeze?"
An Aite Group research study late last year concluded that advisors were seeing limited or diminished returns from their use of social media—in part because they failed to use it correctly. As Investment News quipped in its headline about the study: "It's more like social notworking."
Aite Group senior analyst Ron Shevlin, co-author of the report, believes there's too much hype around social media and too little attention to return on investment. In fact, Aite is so put off by the hype that the firm has no plan to revisit the topic in depth any time soon.
"There's this huge, huge gap between awareness and effective utilization," Shevlin says. "Is it driving bottom line results? Definitely not. It's nowhere near being a reliable, dependable channel for marketing from an advisor perspective and I'll go to the mat arguing that."
Even advocates agree that social media adoption by advisors is still in its early stages. But there are signs that it is beginning to become more mainstream.
LPL Financial, for example, recently produced a white paper about leveraging social media that it is using as a recruiting tool. More than one-third of the firm's 12,000 advisors have registered with Erado, LPL's social media archiving service. Notably, LPL is reaching out beyond the advisory world's favored social media sites—Facebook, LinkedIn, Twitter and YouTube—and is studying the suitability of both Google+ and Pinterest. And, by the end of this year, LPL advisors will be able to tap into the firm's various marketing platforms from their mobile devices.
"Social media is not a standalone, not a silver bullet," notes Marissa Fox-Foley, executive vice president of marketing for LPL. "But we are certainly seeing the power of it as a communication and amplification platform. I'm hearing from the wirehouses and other financial advisors that they are following news more on Twitter than on Bloomberg. That's where people are going today for true information updates. That's fantastic."
One of the challenges of social media is that there is no metric yet to measure hard dollars when it comes to return on investment—or, as Dinino labels it, "juice."
"This is one of the biggest points of discussion right now. A lot of social media leaders are going to senior management to get a budget for this, but you can't get a budget unless you can convincingly say there's a positive effect," observes Jesse Mark, a research analyst with the consulting firm kasina. A new report authored by Mark shows that a solid majority of asset managers and insurers, 87%, are now using social media—in large measure because advisors and investors are demanding it.
In the absence of a metric to track results, Mark suggests that product manufacturers and individual advisors ask themselves this key question: What do you stand to lose by not being on social media?
"What is your loss on the lack of investment? How many referrals are you losing out on? How many potential customers are you losing because you are not engaging with them on social media? What about damage control?" adds Mark. "What happens if someone is badmouthing the brand and you're not there to hear it?"
Dinino says there is still a lack of understanding on the part of many advisors when it comes to the sheer power of social media as it relates to defining and deepening the advisor-client relationship.
"It's an extension of your brand and an avenue to connect with clients and prospects at levels that were impossible before. For example, say you host a charitable event and post pictures of it on your Facebook page. This paints a picture of your firm, of you, and your expertise. This is something that can't be communicated by a company brochure," he adds. "It humanizes the relationship."
And while there are no hard metrics to measure a return on the dollar, Dinino says there's lots to be said for learning how many new people clicked on your Facebook page or LinkedIn profile, the search terms they typed to find you and the online venues they are using to visit your website. "That's marketing gold," according to Dinino.
Brian Lauzon, managing principal of AdvisorAssist, a consulting firm in Pembroke, Mass., is particularly high on corporate blogs and Twitter for his investment advisor clients. In fact, he supports posting online blogs with links back to Twitter as a replacement for monthly or quarterly newsletters and snail mailings. In other words, save the Freedom stamp.
"We're living in a real time world. It's going to be a long-term process for advisors but over time, everyone will be doing this—particularly as the average age of your client base get younger," says Lauzon.
Moreover, he adds, prospects will increasingly vet their advisors by researching them online first. "If they don't see anything, they may wonder why not. That may not be a neutral but a negative," Lauzon notes. "For the foreseeable future, this is part of marketing and a growing part. Turn the clock forward, I suppose anything can happen."
The Blogger
When advisor Neal Frankle started his personal finance blog in 2009, it was to build up an audience for a book he was writing. The blog, WealthPilgrim.com, took off and Frankle abandoned the book project. Today, the blog is a standalone business that generates advertising revenue and receives over 100,000 visits a month.
Frankle, 55, heads Wealth Resources Group, an RIA with $80 million in assets under management in Agoura Hills, Calif. The blog has resulted in two clients—one of them, his biggest.
"Personal finance is something people are really hungry to read about," says Frankle, who posts commentary four times a week. On top of that, most personal finance bloggers aren't financial professionals, which Frankle believes gives him an edge.
His twin goals with WealthPilgrim are to educate and generate revenue. His hope: that within three years the blog will rival his financial planning practice. "What I do is what I love, which is the writing," he says. "I have so much fun with it. I would do it for no money." —E.U.
The Networker
In just 20 months, Jude Boudreaux has built a fee-based wealth management firm from scratch—and he says he couldn't have done it without the help of social media.
"I knew when I started it was going to be a large part of how I was going to market myself going forward," says Boudreaux, 34, founder of New Orleans-based Upperline Financial Planning. "Ultimately, we're selling ideas. There's space for people to have a voice and say something different, and social media is a great outlet for that."
An advisor for five years, Boudreaux has used Twitter to build up the "soft connections" in his network. Recent tweets include his takeaway on a new PBS series, a riff on penguins and a retweet of a link to an article on refinancing.
"I'm trying to meet new people who have the same interests I do that I like. It's a rapport builder," says Boudreaux, who has over 2,000 followers on Twitter. "Typically, people want to get to know you and like you before doing business with them. Hopefully, I'll be the person they think about when they have a question about planning. It's no different than going to a networking function. It's the same thing—it's just a matter of where I am when I do it."
At the moment, Boudreaux has 30 clients. At least four first connected with him on Twitter. —E.U.
The Listener
Barry Glassman, 42, doesn't regard Twitter so much as a broadcasting platform—but as a listening post.
"Many people are confused about Twitter because they believe: 'Why should I do it? I don't want to be the next Ashton Kutcher or Usher.' In my opinion, 80% of Twitter is listening and following," says Glassman, whose McLean, Va.-based firm, Glassman Wealth Services, has $525 million in assets under management. "And no compliance department in the world is going to find any reason to complain about listening."
Instead of reading the Wall Street Journal, Glassman follows reporters on Twitter as they're breaking stories and seeking news sources. Glassman, an advisor since 1994, has built several relationships with reporters as a result of his presence on Twitter. He also follows industry leaders like Michael Kitces and other people he respects like Bill Gates. And he's taken it to the next step, following some of the people that Bill Gates follows.
"Most people don't enter this realm because they think they need to tweet a lot. They don't," says Glassman. "This is personalized content by others I respect. That's big. If you keep it from being a distraction, you can use it to your advantage. I know it's making me smarter, more knowledgeable and, I think, more effective and efficient for the families we serve." —E.U.


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Last-gasp goals from Robbie Keane and Kevin Doyle saved the Republic of Ireland's blushes as they came from behind to edge to a dramatic 2-1 victory against Kazakhstan.
Giovanni Trapattoni's men looked set for an embarrassing defeat when Kairat Nurdauletov glanced home after an insipid first-half performance from the visitors.
Kazakhstan controlled almost all the second half until Keane scored from the penalty spot after 87 minutes and Doyle blasted home in the dying seconds.
Until the final five minutes of this game it appeared the Republic were set to stoop to a new low under Trapattoni, who had come under fire for the country's dismal Euro 2012 campaign, and a number of off the field issues that have since followed.
Trapattoni had promised that this game would be the start of a new promising era, but for the majority of this game his team were easily taken apart by Kazakhstan - a country more renowned for a fictional movie character who wears a neon mankini than footballing prowess.
The eastern European nation did play well inside the half-empty Astana Arena, but their previous record in qualifiers is abysmal, and had it not been for a questionable penalty, and for a bit of quick thinking from substitute Doyle, this could have been the final nail in the Trapattoni's management of this team.
There was no indication that the Republic were going to put on such a first-half horror show in the opening minutes as they started strongly.
James McCarthy, making his first competitive start, saw his low curling shot tipped wide and John O'Shea's deflected header just missed the target.
The Kazakhs started to settle in to their rhythm, however, and threatened through Tanat Nusserbayev.
The FC Astana forward drove at the Republic defence, but his threaded pass to Alexandr Kirov went to waste after the full-back mis-timed his run.
Panic spread in the Republic defence moments later when a cross trickled through to the back post where Ulan Konysbayev was lurking but Keiren Westwood sprang off his line to come to the rescue.
The Republic were struggling to make any impact on the game and often resorted to lumping the ball to Jon Walters - a tactic that failed almost every time.
The one time the Stoke man did look effective in the first half was when he played a neat one-two with Simon Cox, but the Nottingham Forest man, playing out of position on the wing, fired in to the side-netting.
Keane had a quiet first half, with his only contribution of note a darting run which led to a penalty appeal that was turned down after a challenge by Mikhail Rozkhov.
The 300 travelling fans bellowed at their team, but they did very little, with Sean St Ledger's weak header summing up the visitors' limp first-half performance.
The opening goal that had been coming for a while arrived nine minutes before half-time when Genrikh Shmidtgal swung in a wicked corner and Nurdauletov glanced home from 10 yards.
It was almost 2-0 moments later. Westwood parried Konysbayev's shot in to the path of Nusserbayev but he could only hit a post.
Despite their sub-par performance in the opening 45 minutes, Trapattoni did not make any changes at half-time.
Worryingly for the Italian, the Kazakhs remained on top.
Shmidtgal probed the Republic defence with a foraging run and Nusserbayev powered a volley over the bar as the away side struggled to get in to the game.
Trapattoni finally made a change just before the hour when the ineffective Cox was replaced by Doyle.
The Wolves man scurried straight in to the box and went down under a challenge but his penalty appeal fell on deaf ears.
Trapattoni nervously checked his watch on the touchline as his team kept failing to trouble the hosts.
Nusserbayev fired a low shot just wide of Westwood's goal before being substituted to a standing ovation from the home crowd.
Glenn Whelan tried a long shot that summed up the Republic's desperation as the clock ticked on with no equaliser.
Baurzhan Jolchiyev managed to wrestle his way through a dormant Republic back four but Westwood pulled off a terrific save to deny the substitute what surely would have been the winning goal.
The away side plugged away and were handed a way back in to the tie three minutes from time when Keane was bundled over in the box by Rozhkov and the referee pointed to the spot.
The former Tottenham striker showed nerves of steel to calmly dispatch the spot-kick to the Kazakh 'keeper's right.
The Republic completed their stunning comeback in the final minute when Doyle latched on to Stephen Ward's knock down and volleyed home from close range.