When laws are for breaking

A relatively obscure case in Norway shows just how different the United States is from the rest of the industrialized world.
The Oslo Stock Exchange was halted by unusual trade action. It seems two Norwegians were trying to manipulate stock prices.

We believe the two are behind a number of cases of price manipulation. They have set purchase and sales orders that have not been real, because they have had another motive, namely to move prices, "said Stenberg.

In other words, they did exactly what every single bank on Wall Street does every single day. In New York it is called High Frequency Trading. In Oslo it is called getting six years of jail time for breaking the law.

So who is right? Is Norway some Socialist Hell for not allowing the free market to work, allowing faster traders to skim profits from slower traders? Or are laws in the United States too lax, allowing people to take money from the system without adding any value, thus destabilizing the economy?

To answer that we need to look at a couple more examples.

What's a capitalist to do?

AIG's Joe Cassano - An American Tragedy

By Numerian

What’s a capitalist to do when he loses $500 billion and almost single-handedly destroys the global economy? In Japan you would bow deeply in public and express the deepest possible remorse and shame, that is if you already had not committed seppuku. In America, where the Ayn Rand ethos of objectivism reigns supreme, you weasel your way out of any explanation or regret, while riding off in the sunset with your undeserved fortune.

Joe Cassano, former CEO of AIG Financial Products, could have chosen the Ronald Reagan Alzheimers defense: “I have forgotten everything that happened.” That was the route taken by AIG Chief Risk Officer Robert Lewis, when he along with Cassano appeared yesterday before the Financial Crisis Inquiry Commission. Lewis, unlike Reagan, had to act like he actually had Alzheimers to make this defense plausible.

Cassano could have used the “I was too dumb to know what I was doing” defense, which would have at least have been plausible. Instead he chose to brazen it out in front of the Commission, arguing that everything he did was perfectly correct and legal, and any losses were the fault of somebody else.

We know everything he did was perfectly legal, because both the SEC and the FBI have dropped any plans to charge Cassano with criminal activity, which was one reason he was able to appear before the Commission and be so openly unrepentant for what happened. We also know that nothing he did was correct, which even a cursory reading of the public record will reveal. Cassano built an untenable portfolio of credit default swaps, selling these insurance contracts to banks around the world anxious to protect themselves if the US housing market tanked. He earned billions in fees for AIG and $300 million in bonuses for himself, but when the housing market did indeed tank, his losses totaled half a trillion dollars and destroyed AIG in the process. AIG was taken into the bosom of the US Treasury, and the American taxpayer made good all the losses the banks would have experienced had AIG been thrown into the bankruptcy courts.

The biggest fraud that you haven't heard of

Fraud traditionally occurs behind closed doors. The larger the fraud, the more chances of its existence leaking out to the public. Only after the scheme has blown up does the news media report it.
Fraud has a short lifespan once it is subject to the harsh rays of sunlight. It is only a matter of time before the lies on which it is built come crumbling down.

Last week a massive case of fraud was exposed to the light, but because it hasn't imploded yet the mainstream news media isn't reporting it. In fact, the media seems to want to ignore the facts.
Why? Not because they question the facts, but simply because of the subject of the fraud - precious metals.

Lehman Brothers - If you are experiencing Déjà vu, that's because it is GroundHog Day!

The shit has hit the fan and Lehman Brothers was busy cooking the books before they imploded. Where have we seen this before? Let's see, we had Enron, Worldcom, Citigroup, accounting scandals, AIG scandals and here we are.

Maybe we got a bail out because it is within bankruptcy court these discoveries are made. With a Lehman Rescue would we ever have known this latest rip off and scam?

Below is a Dylan Ratigan show clip, where he explains what Lehman Brothers did, in a nice visual and analogy so you can grasp the magnitude.

Why we are headed into Depression

It may be the one-year anniversary of an amazing stock market rally, but economists are sounding rather pessimistic these days.

A growing expectation of a double-dip recession is evident in a new poll of financial executives...the poll found more than half of financial executives predicting another downturn, and most expecting jobs recovery to lag into 2011.

The predictions don't end with just this poll. Nouriel Roubini is also warning of a second leg down, and even more disturbing is this report.

Indian Fish in American Waters

This is the name of a low-budget movie which is billed as a romantic comedy. I did not find it either romantic or funny.

The "romance" occurs between Naveen who comes to the NY-NJ area on an H-1B visa and an Indian-American woman who is the friend of Bobby, the guy who owns the body shop that is his "employer". The drama, romance and comedy - such as they are - result from the cultural divide between the FOB (fresh of the boat) and ABCD (American-Born Confused/Compassionate Desi).

I urge everyone to watch it (it is available on Netflix), if only to see the business practices of body shops that bring hordes of H-1B visa holders to these shores. On the very first day, Bobby tells Naveen the rules: